About 80 per cent of the investment in opening new coffee haciendas took place between 1880 and 1895 in Cundinamarca, and between 1890 and 1900 in Antioquia. Although there were coffee-producing peasants, who responded favourably to the opportunities opened by organized buying, the merchants were in the forefront of development, and their participation was decisive for the future of coffee.

Two central aspects that turned the merchant into large-scale coffeegrower and -exporter are analysed in this chapter. In the first part, the social environment and political ties of the merchant families of Bogatá and Medellín are discussed in general terms. There is also an analysis of their tendency to diversify assets, given their fear of excessive specialization.

In the second part of the chapter, the incentives and obstacles facing the merchant-turned-planter are examined. The advantages offered by investment in coffee can be summarized as follows: the high profitability of coffee production when it was linked to exports; the relative security of this investment in an inflationary period; access to external credit with interest rates 50 per cent lower than any available in Bogatá or Medellín; and, finally, the abundance of good lands and the availability of labour. The obstacles to profit must also be recorded: the necessity to invest considerable sums of capital; the slow initial rate of return on investment; the risks of expropriation and disruption of production in periods of political instability; the risk of contracting debts in gold when the rate of devaluation was increasing; and the fact of being subject to an uncontrollable cycle of international prices.