This audio was recorded live at the first World Coffee Producers Forum in Medellín, Colombia in 2017 and was later transcribed from the recording.
You can access all of my archived material from the event here.
Former U.S. President Clinton and Colombian President Santos
Moderated by Roberto Velez, CEO of the Colombian Coffee Growers Federation (FNC, the host organization)
Recorded: 11 July, 2017
Transcribed: 24 April, 2018
[Abrupt beginning of recorded material]
Moderator: …good to have you both here. First let me tell you that I’m starting my career as a moderator, this is the first time I tried to do this. So please forgive me all my mistakes. I’ll try to do it as smooth as possible.
Secondly, I normally know when the moderator talks too much then the full panel goes down. So I’ll try to talk the least, and I’ll leave it to both of you Presidents to give us your insights.
Here we are, twenty-five million families around the world live on coffee, that means around one-hundred million people. And if you take indirectly involved in coffee, we would be talking about five-hundred million people—close to ten percent of the world population then is touched by this magic bean.
So, without further ado, let me ask you, President Clinton, the first question. As President of the United States and a former president and head of the Clinton Foundation, you’ve been a leading voice and a doer in the world, in the fight against poverty and promoting social stability and democracy through economic development all around the world—of course, in countries like Colombia, Latin American countries, Haiti, and most of the Africans. Can you share with us your [inaudible 1:48] experience on how to tackle the biggest challenges and and the [inaudible 1:59] of developing countries and what to do in the countrysides, in the coffee growing areas? Please, President Clinton, we’d be glad to hear you.
00:02:10 President Clinton: Well first of all, thank you, and thank you Mr. President, Mr. Mayor, the Governor, let me say how honored I am to be back in Colombia, especially in Medellin. Yesterday, I got to see the fruits of peace. It, it, for those of you who don’t come from this part of the world, it is inconceivable that we have could have had this meeting, in this place, even a few years ago. Yesterday I went up to Comuna Siete [sic], commune 13, which is about twenty-eight stories, straight up in the air, and I rode, what to me is the most important infrastructure project in Colombia, because at my age I never could have climbed the hill. So I rode the escalators up.
And, what’s that got to do with coffee? If you go up there and you know anything about what life was like before and you see what life is like now, you see that peace is better than war, and cooperation is better than conflict, and economics is about addition not subtraction, it’s about multiplication, not division.
There are people here from Indonesia, when I worked in Indonesia for the United Nations, after the tsunami, one of the things we tried to do was to get the coffee growing, going back in Aceh, and uh, Starbucks was of enormous help, and they actually had, before the tsunami, this long-standing civil conflict in Aceh, which was settled after the earthquake, I mean after the tsunami, because people saw all the death, all the destruction, and they wanted to begin again and they knew they had to do it together, and coffee became a symbol and a way they could make a living.
So, my experience, besides Aceh is largely confined to the work we’ve done in Haiti, where we established, with La Colombe, the Coffee Academy, found buyers for the coffee and then got more people back into the coffee business. It’s interesting, Brazil’s the number one coffee producer in the world, a hundred and thirty years ago Haiti produced more coffee than Brazil, then everybody else. And it was, so, we worked there, we worked in Rwanda, and other parts of East Africa, where we established an academy and a coffee roasting facility.
The farmers told us that the most important thing we did was to give them good quality beans, good instruction, and materials for growing, and the means to inter-crop, to grow other things, so that they could earn more money even with the variation of coffee prices. Then, when other places and buyers started to copy what Colombia pioneered with sustainable practices, it helped.
But I think you know…the world population is going to grow. The average age in most countries is going up now. There will be more coffee drinkers. However, the price will vary from year-to-year, as we all know, and we all know why. So I think the most important thing we can do is to see coffee as an anchor of rural development.
I also believe now that it’s more important than it was when I started working on this, many years ago to take climate change into account. Ethiopia, for example, is the largest producer in Africa, of arabica coffee and they could lose an enormous amount of their crop just because of climate change. The, one of the things that’s been, what I was talking to President Santos about last night, is our foundation has worked with two of his islands; San Andrés and Providencia, to try to come up with a plan to go to 100% clean electricity. The president of Costa Rica is here. His country is now more than 99% clean electricity. This also generates more in rural areas, reduces the cost of electricity and gives you more money to put in. So I think that we need to see coffee as the anchor of a more stable, rural society, that in a troubled area like Colombia can help people move away from terror and violence and an economically distressed area can help people make a living where they grew up and not have to move to cities, putting more pressure on the strained resources of government. And I think we have to do it, given the details are different in country-to-country, with constant training and more affordable, if we buy in volume, more affordable inputs and then better supply and distribution chains.
In Africa, for example, you might be interested to this; that typically when farmers live on, in remote areas where theres, the roads are so limited, and no farmer has wheeled transportation, when we started working there, the farmers were paying 80%, I mean half of their income, 50% of their income, just to get their crops to market. Before they had cell phones, they didn’t know wether they got an honest price or not. So we just tried to give everybody a cell phone and then take the crops to market, with storage where necessary. So they could get a good price and they only paid a fair cost to move the crops to market, not half their income. That’s not a problem in some places.
So the, I would say you need a national strategy, we have to take climate change into account, and you need to see coffee as an anchor crop. In Colombia, which has the largest number, I think, of birds, separate bird species, on earth, somewhere around 1900. And Brazil and Colombia are the first and second-most biodiverse countries in the world, you can also make sustainable coffee production a part of eco-tourism, which is also true in Costa Rica.
So, that’s my theory. If you wanna know how to make this work, first you gotta make coffee work. Second you have to ask if the coffee growers get a fair percentage of the end-price of the coffee. If I pay three or four dollars for a cup of Starbucks, in my little town, in New York, I don’t really care, as long as I know that Starbucks is out there trying to do what I saw them do in the beginning in Rwanda and Aceh and modernize it. I just want the farmers to get a fair deal.
Second, you should think of how coffee can be used to fight climate change, both in preserving the soil, and in diversifying crops and in reducing the inequality between urban living and rural living in country, after country, after country. If you have a comprehensive strategy and then you just take these things one thing at a time, I think it can make a real difference, as I think it is in the places I’ve had the privilege to work.
00:10:59 Moderator: Thank you Mr. President. Let’s go to President Santos.
President, after, after your talk and hearing you, how you fluently see the coffee world, we now know that you are a true coffee man. We heard some voices talking about ‘why don’t you producer, we producers get together and why don’t we agree to something?’ It’s not the first time in history that we sit together. Can you recall, and tell us some of the efforts from the coffee growers through history to try to agree and move prices and uh, and do something to make a better living, please?
00:11:51 President Santos: Thank you Roberto, and uh, President, and let me start by saying you’ve come many times to Colombia. But this is the first time you come after we finished our war. And this peace that we now are starting to construct has been the effort of many people. But among them you have been extremely important. Not only were you the person who launched Plan Colombia, which was fundamental to what we have now, but also inspired us when we took steps to start the peace process. So, what you said, what you did yesterday, of going up the cable here in Medellin, and you say this is unthinkable some years ago, you have a lot to do with this and from forty-nine million Colombians; ‘Thank you very much.’
00:13:06 President Clinton: Thank you.
00:13:09 President Santos: Of course there’ve been many efforts around, in the last forty, fifty, sixty years, the International Coffee Organization established in 1963, 54 years ago. And, it was established because coffee was then and is still now a very important commodity. Not only in economic terms, but in social terms. Sixty countries produce coffee and most of the countries have small producers. So the effect on the social fabric of all these countries is enormous. And to maintain a dignified income for the producers has been an objective throughout all these years.
And the, we’ve been, we’ve tried many things. The International Coffee Organization, it was established to regulate prices, regulate quotas. It worked very well for some time. I believe that, for many, for many [inaudible, mic problems] thank you, for many people, during the existence of the coffee agreement, the, the [audience laughing at continued technical problems].
Okay, the coffee agreement meant a lot to Colombia. That was a period of tremendous prosperity in the coffee regions, which allowed us to invest more the well-being of the whole region. And, and when the International Coffee Agreement collapsed there were many efforts and even during the agreement when we could not agree on the price and quotes the producers made many efforts. There was an association of producing countries at that time and still now, the difference between the price of a cup of coffee in the United States, or in Paris, or in Tokyo, compared to what the producers receive is, I would say, obnoxious, the difference. Three dollars and fifty cents for example a cup of coffee in Starbucks in New York, the producer in, say, Costa Rica or Honduras, or El Salvador, or Uganda, or Cameron, or Kenya, or Colombia receive less than five cents. Three dollars fifty and the producer receives less than five cents.
So, the effort to gain just a bit, not something extravagant, just a small percentage, to increase the effect in the social fabric of all these sixty countries would be enormous. But to organize something that is effective, you need institutions. If we agreed with Honduras and El Salvador and the African countries the Central American countries, let’s, let’s do something to restrict the out-flow of coffee to control prices, you need institutions in all those sixty countries, which we don’t have right now and you didn’t have at that, at then, so it’s difficult.
We tried, we tried to counteract the tremendous influence and concentration from the buyer side in the coffee exchanges in, in the exchange in New York and, and London especially. We even made a fund, I was, it was called Pan Cafe, we put four-hundred million dollars at that time, because we were suffering from, for example, Colombia sold its coffee through, what we called special deals; a buyer agreed to buy five-hundred thousand bags of Colombian coffee and he said ‘ship those bags every month during the next ten months and we will price each shipment according to the price of the coffee exchange in New York at certain dates.’ And what happened? The buyer sold that day in the exchange, lowered the price, he lost a few dollars in the paper exchange but purchased this coffee much cheaper, at a great profit, in the physical transaction.
So we tried to do a counter-measure through Pan Cafe. We were with, I remember there was a great, a very smart Salvadorian who managed that fund. He started and everybody who participated started to be investigated by the U.S. authorities for manipulation of the markets. So that went, that deal went wrong.
So that, there have been many efforts. And something today, today, the best wall you can construct, is to pay better to the coffee farmers of Central America. This is [interrupted by applause] in that, in the rural areas, that’s where poverty is concentrated. That’s where you should invest more. There’s no other commodity that has a better effect in the well-being of the rural areas than coffee.
So, any effort that we can agree to, with the buyers, with the whole chain of the industry to pay a bit better the producers would be in the benefit of everybody. Because today the amount of inventories in the world markets is very, very small. If something happens in, a big frost in Brazil, or something, climate change makes us more sensitive to, to the coffee volatility. If something happens now, dramatic as it happened in 1975, 1977, and so many times, and we run out of coffee. This is the worst thing for the roasters, for the buyers, for the sellers, and for the producers.
So it’s in the interest of everybody to make some kind of friendly agreement; to buy a little better, to pay a little bit more to the producers. Because that will guarantee the supply, which is extremely important for the whole chain, and you continue, as you said President Clinton, to in, to maintain the growth of the consumption overall. And again, the benefits, social benefits of the social fabric of sixty countries, more than twenty-five million families will be enormous.
So yes, we’ve made a lot of efforts, they have all failed. But we must continue to try.
00:21:21 Moderator: Thank you President Santos, I think the message is clear; this is a matter of agreeing the full chain rather than just a part of the chain.
And on that, I would like to ask you, President Clinton, one of the biggest success of the bipartisan foreign policy in the U.S. was Plan Colombia under your leadership and administration. We ended up the period pointing each other, and blaming each other for consumption and production and on that, a key concept that had to achieve was the co-responsibility, understood as the need for all parties involved to address the problem together.
The coffee value chain faces more or less the same threat. It’s, we still, and we think that there’s a need that all the members and all the links of the chain, we will be co-responsible, for the next one. That’s, starting from a coffee producer, up to the one that serves the coffee cup, would be together, thinking on how to make sustainable, the full chain.
It seems, from our point of view, that industry players may be thinking how to keep the right supplies at the right price, whereas the farmers want a decent living. How can we reconcile all those positions? How can we agree ourselves?
00:23:16 President Clinton: Well, let me first say, I want to thank President Santos for what he said. Well we have many people here who don’t come from Latin America, so in case you didn’t understand what he meant I will translate it again. When there’s all this talk about putting a wall up in America to keep undocumented immigrants out, the Mexicans were singled out, there was no net increase in immigration from Mexico to the United States from 2010 through 2015. Why? Because they could make a living at home.
Now maybe it picked up a little because they had problems in the last couple of years . There was, however, an increase in narco-trafficking, partly because of the vulnerability of the economies in Central America. Costa Rica has the highest per capita income in Central America by a very large margin. It’s also the greenest country in Central America, perhaps in the world. So they make money out of coffee, plus eco-tourism, plus lower power rates, plus having the money then reinvesting in education and healthcare.
Recovering balance in the Honduran, the Salvadoran, the Guatemalan economies. The economy is very, very important. That’s what he’s saying. And our foundation, along with Carlos Slim’s foundation, you know we work in a lot of these countries, and we try to help diversify the economy to make coffee an anchor but have supporting crops and get people a way to make a living and also a reason to say ‘no’ to narco-trafficking. And I thank you for what you said there.
I believe the answer to your question is that in every place we’ve had a shortage of two things; one is, everybody should imagine and try to agree on; what would you like rural Colombia to look like in five years or ten years? If you’re Indonesian and you’re thinking about everywhere you grow coffee, what would you like it to look like? If you’re Kenyan, and we just gave, I’m, my wife and daughter and I have probably drunk the coffee of every country represented here, because we’re all probably addicted to it and endlessly curious.
But Kenya, has a constant battle with deforestation, because poor people, when they run out of money cut trees down and use it to make charcoal and sell or to heat. Then they do better and then they don’t. So, we just gave Kenya an environmental map, my foundation did, which shows you in every piece of land in the country, what’s there, what’s happened to the topsoil, what’s the composition of it, where is the sun shining best where’s the wind blowing best, what are your options. Everybody needs a plan they have to adopt. Then, the governments need the support of the coffee buyers, the big companies, in building the capacity to execute the plan.
The big difference in my life now, since I’m not President, and when I was President, I spent all my time fighting political battles and then trying to answer two questions, the two main questions in politics; what are you going to do and how much does it cost? Wanna cut taxes? How much you gonna cut ‘em? Where will the money come from? Wanna have a peace process, give people a different life? How much you gonna spend on it? The problem with government today, where all of you can help, is that the more trouble the place is, the less capacity it is likely to have, to actually figure out how to do these things. So now, in my life I spend all my time trying to answer the third question; whatever you want to do, and however much money it costs how are you going to do it? How do you turn your good intentions into positive changes? So I, I in a way answered the question you just asked me in my opening remarks.
I think you have to get the coffee farmers more of the end-price of coffee, but you have to do it recognizing that if you’re selling coffee in places where the cost of living is much higher than it is in the places where it’s grown, it’s always going to be a small percentage of the final price of the cup, you just want it to be a little more. And so you have to work that. Is there a way to help people up and down the chain, cut their costs so their profits down’t go down, but the farmers’ incomes go up? I think it’s a mistake to think that coffee alone can save a rural economy. Coffee can be the bedrock, because when people are, you take Brazil…we were talking about this last night, Brazil’s the largest coffee producer in the world now and nobody’s taking down, as far as I know, the, once you plant the coffee tree, then, and they start to produce, there’s a pretty strong incentive not to tear them down, right? The only reason the rain forest get’s torn down, it’s a lousy idea because the topsoils’s so small, they tear it down and graze cattle and grow soybeans for a year or two then it’s gone, the only reason they do it is they have no other land.
Coffee can become an anchor to keep vegetation and even other trees up. But someone needs to be thinking about this. First you need where we wanna be, then you gotta have really good plans for, literally what are you gonna do in this district as opposed to that district as opposed to the other to fill out the branches, what other crops you’re gonna grow? What are the things that people are going be able to do? What are you gonna do with the revenues that you generate? How could they, if it takes energy to do it, how are you going to cut the energy price by taking advantage, almost every place here, on all continents, has a lot of sun. And most of you have a lot of wind. And the price of both, in generating electricity, has gone way down. So ironically, reducing the emissions from burning diesel and heavy oil, will increase economic growth and increase net profits to poor farmers, if you do it right.
But my own view is, how I spent, literally, virtually all my time since I left, from being in the government, trying to figure out actually how do you do these things, or getting people together who know a lot more about it than I do and letting them talk about that. You have to start with a big goal, then you have to break it down into pieces, don’t put too much on coffee, ride coffee. Because you, the, the consumptions gonna go up, but think about, well how can I get other crops, how can I reduce deforestation, how can I preserve the soil, how can I preserve the species? In Latin America that’s a huge deal. Species are disa…, other life forms are disappearing from earth at the most rapid rate in 10,000 years. No one has any clue what the consequences of life will be for everyone in this audience under thirty years old. Not a clue. But you can say you care about it but if you don’t have a strategy, that literally enables a poor farmer any where in the world to make a living, you’re not going to do anything about it.
So anyway, that’s my advice; ride coffee, but don’t depend only on it. Use it to grow other crops, diversify incomes, and get more dollars, I agree with what President Santos said, but if, there’s not enough work being done, by enough people to answer all these “how” questions. If you can’t answer the “how” question, you know, I love to brag on Costa Rica but it’s easier to do in Costa Rica than it is in Brazil, this is because of scale. It’s no accident that a lot of the best-run countries in the world are smaller ones. Because your span of control is better. And it’s no accident that the President here takes a lot of grief for what he’s trying to do to bring peace, because he’s dealing with a lot of moving parts, including people in the part of groups that wants war for political reform, and later just became protection rackets for the narco-traffickers. What he wants is for people to stop being killed, to stop doing stupid things, to give his country a normal future, to have everyplace feel as safe as I felt yesterday on those escalators. But figuring out how to do it is a different thing.
So my advice is, if this organization wanted to do something, it’s to get a lot of people who actually do these “how” questions, and they can’t only be from coffee producers, they can’t only be from coffee buyers, and they can’t even only be from people in the coffee business. You want to ride coffee into the future, not depend only on it. It’s not fair to the people who grow it, it’s not fair to the people who sell it, it’s not fair to the people who buy it. But it’s a magical resource—if you do it right.
00:34:58 Moderator: Thank you Mr. President. President Santos, there are not many Colombians that have made, and been so instrumental players in turn around of Colombia in the last eighteen years. As Minister of Finance, at Plan Colombia’s inception, as Minister of Defense at Plan Colombia’s implementation, as a President that was able to end the conflict with Farc a few months ago, and finalized the disarmament process a couple weeks ago, what do you think is the role that rural Colombia will play in guaranteeing the democratic stability in growing the economy that we are all looking forward.
00:35:42 President Santos: Thank you for question, because coffee has a lot to do with, with the answer.
When we started to negotiate with the Farc, we said very clearly; ‘we are not going to negotiate a revolution by decree.’ Meaning that we were not going to negotiate our fundamental policies. We are going to negotiate a way for you to lay down your arms and integrate into our democratic system and continue with your ideological fight, through legal means and without violence.
And they said ‘but, we need to tell something to all the guerrilla members and people we’ve been fighting for through all these fifty years.’ And the, we started to talk about the rural areas and suddenly we discovered that there was no major difference between what they were asking for and what we had planned in our own development plan.
So, the only, the only item on the agenda that had to do with public policy that we included in the negotiation was rural development. And we negotiated a series of investments and actions from the government to bring development to our rural areas. And this is what we had to do with or without the Farc, because the poverty is concentrated in the rural areas because the huge differences between the inequality is concentrated in the rural areas and if you want to have a sustainable country, in terms of development, not only in the environment, but socially and politically you need to narrow the gap. So if you invest in the rural areas, you guarantee sustainability in the long run.
So, what we have, the big challenge, and the big opportunity, more than a challenge, it’s an opportunity, in a world that is starting to become very worried about where food is going to come from, and Colombia is one of the few countries who has this capacity to expand in a major way, the production of food, then the big opportunity that we have with peace that we did not have before because the conflict was in the rural areas and the state could not go and develop those areas because of the war. Now we have a tremendous opportunity. And, we were talking yesterday with the Colombian coffee producers that we want to expand the production of coffee. We have more or less fourteen million bags a day, fourteen, fourteen-and-a-half, we want to expand it. I was thinking about eighteen. But a major coffee buyer who knows Colombia very well, he’s here now with us, and [inaudible] , over there, with his wife Sabine, he said, ‘No, you should, you should be more ambitious. You go for twenty, twenty million bags, six million bags more of production in Colombia.’ We can do that. Now, that we have freed almost half of our country, that we could not develop before.
So, the big challenge now is, and not only coffee, there is many, many types of food that we can produce, is to use, for example, the experience and I think in the world there’s no better experience than what you, your institution, the Colombian Coffee Federation has done to, to take development to the rural areas. Because they have been very smart. The Coffee Federation has in a way done what you were mentioning, President Clinton, they not only tried to pay better the producers, they pay take infrastructure; roads, lower electricity costs, schools, hospitals, they take development. That’s why the quality of the coffee grown in Colombia in coffee regions, the well-being is much higher than the rest of the rural areas, still.
And I think this is a great example, and we have a tremendous opportunity now that we have peace. Because then we can go. Before, any constructor of a road simply say ‘I won’t go there because I will be kidnapped, I will be extorted, or be killed.’ Now we have a different situation. So the opportunities are enormous. And the experience of the coffee over, coffee has done during the last fifty years in Colombia, last ninety years, we celebrated yesterday the ninety, ninety years of the existence of the Colombian Coffee Federation, which has been, has had a history of, paralleled history with the development of democracy. I even did my, my thesis in the university, of how Coffee had been instrumental in the stability of the Colombian democracy, which is probably the oldest democracy in Latin America.
00:41:53 Moderator: Thank you president Santos. President Clinton, you have witnessed many peace processes in the world. And you’ve been a leader in institution building and economic development. After the peace agreement that President Santos reached with the Farc, where do you see Colombia in twenty years time, as a country, as an economy, as a society, and as a member of the international community, can you tell us a little?
00:42:21 President Clinton: Well, the answer is it depends on what you do with it. It depends on how you’re going to implement it, and whether it produces both security and peace on the one hand, and the benefits of peace. The thing that’s so important about this escalator up the mountain I took yesterday, is it’s a visible benefit of peace. People move around more quickly and more comfortably, their lives have improved. It’s like a tangible thing. And I think the uh, Colombia is so blessed with natural resources and with stunning diversity of them, and with incredibly gifted people. You know I think if you can preserve the security and have more balanced growth, the place will be unrecognizable in twenty years, in a good way.
I think if you don’t do something, we, all of us, don’t do more, to combat climate change the chances are that between the loss of your, the large numbers of your species, anything from organs, uh orchids to birds, and if there’s more poverty in rural areas, then I think there’ll be constant pressure to keep coca production high. In other words; one of the reasons this conference is so important for Colombia is in the end, people would rather do the decent thing than the wrong thing. But if you make them make a choice between feeding their children and not, they’ll feed their children. Some people will always take advantage of any system and abuse it. But most people, everywhere in the world, are decent people, are hard-working people. They want to raise their children in dignity. And they want to feel at the end of their lives that they’ve done a good job. Most people everywhere. So I think the whole key is, can we deal with the big threats outside, mostly of climate change and species destruction and can you increase security and economic opportunity so that the goal that other Colombians are interested in, which is living in peace, and have a more legitimate economy, with less reliance on coca production, I think if you do that, twenty years from now you won’t recognize the place, in a very good way. It’ll be, there will, you will be doing things that are unimaginable. I wish I’d be around to see it. It’ll be great.
00:45:36 Moderator: Thank you President Clinton. Let me ask you the last question and uhm, and it was President Santos in one year will be out of the office more-or-less. Can you give President Santos one advice as a former president, what to do?
00:45:52 President Clinton: Well, first of all if you listen to him today, he knows a lot, you look at him, he’s got a lot of energy, and I hope that he will devote himself, at a minimum, to doing what I talked about. You know a lot of people don’t agree with him on the details of the peace process. This is normal. Everyplace I go this is a, you know, I just read an article yesterday that said that ‘President Bill Clinton’s most important peace legacy was in Ireland and the crazy fight over Brexit may reck it.’ I won’t bore you with the details. Who knows. Here’s what I know; there are very few permanent victories or permanent defeats in political, social, economic affairs. What you want is a permanent effort to bring people together instead of tear them apart and to lift them up instead of pull them down. And what I found was, when I left office, you could do a lot of good when you’re not in office. You have to basically trade power for influence and effort. But I hope he’ll do that. Because he’s worked very hard to do something he strongly believes in and the process of proving it is only just begun.
00:47:38 Moderator: Thank you President Clinton. I think we could all listen to President Santos and President Clinton talk for the next two or three hours, but uh, time has run out so I would like to thank President Clinton and of course, President Santos for being with us today. For sharing very, very deep thoughts with us; what to do, how to move, so please, I ask, just ask you for one more round of applause. Thank you very much.
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