Colombia’s government will declare an economic emergency on 28 September and freeze roughly 55 trillion pesos in agricultural credit. The move gives farmers three to four months of payment relief before a forecast El Nino event takes hold. Agriculture minister Indalecio Dangond announced the plan this week, describing it as protection for an export base worth close to $11 billion a year.
The decree needs presidential approval and signatures from every cabinet minister before it takes effect, under a constitutional provision that allows the government to act on economic emergencies. Once signed, it will let banks suspend three to four months of loan repayments across the farm credit portfolio without damaging any producer’s credit rating. It will also extend loan terms to two years, lowering monthly repayment amounts for affected farmers.
Seven export sectors, one forecast
Seven export sectors fall under the freeze: coffee, cacao, palm oil, sugarcane, flowers, avocado and citrus, alongside passion fruit and tilapia farming. Combined, they account for roughly $11 billion of Colombia’s annual exports. That scale explains why the government is moving before the weather event has fully arrived, rather than after.
“The Superintendencia Financiera will immediately allow banks to freeze at least three or four months of debt payments without damaging any producer’s credit rating,” Dangond said. Stretching loans to two-year terms, he added, would cut immediate repayment amounts and give producers what he called a lifeline.
Forecasters now put the probability of a very strong El Nino between the final quarter of 2026 and the first quarter of 2027 above 90%. There is a 75% chance it becomes the strongest episode since 1950. Colombia has already recorded four consecutive quarters of atmospheric and oceanic conditions consistent with the pattern, according to the government’s own tracking.
A regional pattern of pre-emptive moves
Colombia’s decision fits a wider pattern this year of governments acting on El Nino forecasts before losses appear rather than after. In Southeast Asia, a separate but related dry spell has already turned into a weeks-long haze emergency as drought conditions intensify seasonal fires. Colombian officials are hoping a freeze on credit terms now will avoid the kind of scramble other exporting nations have faced once an El Nino event is already under way.
The credit freeze does not extend export financing or address currency risk, both of which matter for farmers selling into international markets. Peru, another major Latin American exporter, has kept expanding its own export base this year despite the same El Nino risk. Peru’s avocado shipments are climbing to new records even as the weather pattern builds.
For Colombian producers, the near-term question is less about the size of the credit relief than about how long it lasts. A three to four month freeze buys time through the immediate onset of drier conditions. But an event that stretches into 2027, as some forecasts suggest, would test whether a single round of debt relief is enough to carry export farmers through it.
Banking sector officials have signalled they can implement the freeze quickly once the decree is signed, since the mechanism relies on existing regulatory powers rather than new legislation. That speed matters for a government trying to get ahead of a weather pattern rather than react to it once losses have already appeared. Coffee growers in particular have welcomed the timing. Credit relief announced before planting and harvest decisions are locked in carries more practical value than the same relief offered after a bad season has already played out.
The broader test for Colombia’s approach will come once the El Nino event actually arrives. Rainfall deficits, if they materialise as forecast, would hit some of the same export sectors the credit freeze is designed to protect. That would leave the debt relief and the weather risk moving in parallel over the coming months, rather than one following cleanly after the other.
