Colombian President Juan Manuel Santos Announces Agriculture Reform To Appease Protesters; Will This Affect Starbucks' Colombia Plan?

on September 13 2013 12:37 PM
Colombian strikes
Farmers and coffee workers from the Colombian province of Nariño blocked roads and transportation for almost three weeks. Twitter/@lunnita7

After three weeks of strikes and protests all over Colombia, President Juan Manuel Santos has announced a slew of reforms to the country’s agricultural policy that might end up benefiting Starbucks, the world's largest coffee chain. Santos, whose popularity has plummeted from an approval rating of 89 to 34 percent since the movement started, outlined on Thursday a Gran Pacto Agrario (the Great Farm Pact), which hopes to put a stop to the strikes and renovate the obsolete and troubled farming industry in Colombia.

“The protests have made us rethink how we plan the sector’s development,” he said during the presentation of the plan. “We expect this Pact will make our agricultural sector modern, forward-thinking.”

The plan’s key points establish the end of penalizing extra production, the creation of a commission on price controls and more popular participation in the decision-making process. Representatives for coffee workers, farmers and truckers will join officials from the Ministry of Agriculture and will be heard when discussing bills and proposals, overseen by a deputy minister for rural development, still to be named.

The news was met with lukewarm reception, and some attendees, like Héctor Centeno, spokesperson for the farmers in the provinces of Boyacá and Cundinamarca, left the premises while Santos presented the proposal.

Andrés Espinosa Fenwarth, a Colombian management consultant who used to work with the Ministry of Agriculture, was optimistic about the reform. He told Colombian newspaper El Tiempo that “the plan is a response to the claims of a historically neglected sector of the economy.”

The reform comes at the right time, as the country restarted bilateral trade with Venezuela, which had been halted since Nicolás Maduro stepped in as Venezuela's president. The reform might also help pave the way for the arrival of coffee giant Starbucks (NASDAQ:SBUX), which is expecting to open its first store in the country by the end of next year.

The Seattle-based company, which is currently the largest buyer of Colombian coffee beans in the world, has assured that it will only serve local produce. CEO Howard Schultz, who visited Bogotá in the midst of the protests, assured that the company's intentions were to honor the Colombian coffee tradition in its entirety. "It would make no sense to collect or roast coffee beans somewhere else to later sell them in Colombia," he said in a presentation held in August.

Schultz assured that Starbucks' presence could only mean a rise in the production and consumption of coffee in the country.

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