No 8

The coffee sector, bastion of equity in Colombia

August, 2012

Added Value

The coffee sector, bastion of equity in Colombia

The coffee sector is not just one of the main economic driving forces in Colombia, but a bastion of equity concerning distribution of land property.

After the Colombian Coffee Growers Federation’s, or FNC, “Sustainability That Matters” Report 2011, the Gini coefficient for land distribution in the coffee-growing sector is 0,70, which contrasts with the 0,86 index for general distribution of rural property in Colombia.

The Gini coefficient for the coffee sector was calculated from figures by the Federation’s Coffee Information System (Sica), whereas the general Gini index for the rural sector was calculated by the Agustin Codazzi Geographic Institute, among other entities.

The Gini coefficient or index, which varies between 0 and 1, is one of the more effective measures of inequality for the distribution of income or goods. It tends to 1 when distribution of the analyzed goods is totally unequal, and tends to 0 when it is totally equitable.

So, besides giving means of support to more than 563 thousand coffee-growing families, and being one of the main sources of foreign currencies for the country, the coffee sector is a factor of equity not only for the rural sector, but for the Colombian economy as a whole, since it contributes to reduce the multidimensional problem of poverty on a national scale.

“Distribution of property in the coffee sector is more fair than in the rest of the rural sector, and it also shows a trend towards the highest equity, a situation that contrasts with process of rural property concentration in Colombia during the last decade,” the report says.

Among other finds in the document, the higher equity of land distribution at the sector is a constant feature in all coffee departments. And contrary to the process of land concentration in Colombia during the last decade, the coffee sector tends toward equity, as the Gini coefficient moved from 0,75 in 1997 to 0,70 in 2011.

There is also a positive correlation between departmental Gini indexes for the rural and coffee sectors; that is, a higher equity in Colombian coffee sector brings a better distribution of rural property as a whole. This contribution by the coffee sector to equity in rural property concentration is twice important, since Colombia is still one of the most unequal countries in Latin America.

The Colombian coffee sector’s boosting effect on economy may also become a point of reference and a model to look at for the rest of Latin America, seen as the most unequal region in the world.
Rafael Mejia, president of the Colombian Agriculture Society, or SAC, says the lower concentration of land in the coffee sector is explained by geography and the very nature of crops. “Coffee is grown in hillsides, not in plains or high plains. Land concentration is very different in the coffee sector when compared to the rest of the country,” he pointed out. “A geographical issue has contributed to that, as well as a cultural one. In coffee zones, there are inheritances and lands are divided: one farmer who owned 20 hectares, now owns 4, as he had four children,” he said.

“And economies of scale are not the same. That’s why the Colombian Coffee Federation has invested so much in infrastructure, education, modern technology and research,” he added.

The SAC’s president recognizes the coffee model shows some advantages, such as cooperatives, which contribute to democratize the Federation and can be taken into account by other sectors.

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