Category Archives: Coffee

Toward the Re-Invention of “Fair Trade” (updated edition)

The height of injustice is to be deemed just when you are not. Plato

Even an honest man sins in the face of an open treasure. Saying.

The VII song of the Odyessy tells how the goddess Circe warned Ulysses that the sailors of those waters were so enchanted by the song of the sirens that they went mad, and lost control of their ships. To not succumb to that enchantment, Ulysses asked that he be tied to the mast of the ship, and that the oarsmen have wax put in their ears, and ordered that if he, because of the spell of their song, would ask that they free him, instead they should tighten the knots. So it was that Ulysses and his oarsmen were saved, and the sirens, failing in their objective, threw themselves off the cliff.

Facing unfair commercial relations, Fair Trade (FT) emerged as an alternative so that people who organized might improve their lives and be a space of solidarity among different actors beyond their countries´ borders. Nevertheless, in our case study in Nicaragua and Central America, we show that the institutional structure of power relationships under the market control of elites is like the sirens in the myth, capable of seducing the FT network, turning it against its own principles, and turning solidarity into just a bunch of words, numbers and papers. How can FT tie itself up so as to not succumb to the song of the sirens, and in this way, grow, enhancing its FT alternative principles? To respond to this question we take as a given that there are exceptional cooperatives, organizations, and people who confirm the importance of organizing and cultivating global solidarity, and that there are successful cooperatives, in countries in the south as well as in the north, in FT as well as outside of it. Nevertheless, in this article we study certain practices of the FT framework that seem to indicate its involution, and on that basis we suggest its reinvention. To do so we focus on coffee, which constitutes 70% of the volume of what is sold through FT.

Pull down full article here

 

Dismantling the large estate with cooperativism

Dismantling the large estate with cooperativism

René Mendoza Vidaurre with Edgar Fernandez[1]

You have to look at coffee like the fingers on a hand; the first year we plant, the second year the coffee develops, The third year we harvest, the fourth we harvest more and the fifth year the coffee begins to decline       R. Mairena, President

The cooperative works for me: it sells my coffee at a better price, it gives me credit. And it guides me in growing coffee. M.D. Gómez, Member

Plato in his book “The Republic” tells the story of the cave. A group of prisoners remained chained in a cave since their birth. They cannot turn their heads, they can only see the wall in the back. Behind them is a corridor and a bonfire. Men are passing through the corridor with different objects which project shadows on the wall because of the light. The prisoners believe that the shadows of the objects are real. One day one of the prisoners is freed and seeing the light from the fire, the people, trees, lakes and the sun, realizes the origin of the shadows and that they are only shadows. He returns to the cave to free his fellow prisoners, who on hearing that the shadows were only shadows, do not believe him, make fun of him and treat him as if he were crazy. This allegory reveals the strength of mindsets (tacit beliefs that rule the lives of people).

What is this kind of mindset in a cooperative? How can a cooperative free itself and build its own way? We explain this mindset, study it seeking to change it: we do it from the experience of the Solidaridad Cooperative in Nicaragua[2].

1.     Mental frameworks and their origins

“The large estate provides, and the farm is a drain”, “we always need a patron”, “the patron knows and decides, the rest obey”, “only one crop, more inputs, more production”, “the dumber the fieldhand, the more hardworking they are”, “ the cheaper you pay the fieldhand, and the cheaper the land is, the more money can be made”. These beliefs sustain a hierarchical and discriminating framework, internalized by a good part of our society.

This mentality was refined over centuries all over. By 1880 Matagalpa had an indigenous population with more than 200,000 mzas of mountainous land, most of it was expropriated by the State for coffee; the mindset was in line with the myth of mestizo Nicaragua (J. Gould): “coffee, a civilized crop, indigenous an obstacle for civilization.” Thus between 1889 and 1895 there were more than 200 foreigners in Matagalpa. In time, in the zone of Arenal, Thomas, Manning, Crespi, Harrison and Vita formed large estates. Vita founded the Aranjuez estate (hacienda), later bought by Potter, then by De Savigny, later on turned into the first mountain hotel and later Somoza turned it into a Sanatarium for people with tuberculosis. From the start of the XX century up to now, temporarily interrupted by the war in the 1980s, the following haciendas were formed: El Quetzal, Marsellesa, Monimbo, La Aurora, El Paraíso, El Paraisito, Los Helechos, Santa Ana, La Esperanza and La Minita. The Solidaridad cooperative is in Aranjuez and El Arenal, has an indigenous past and is now surrounded by haciendas.

The hacienda system was imposed with State backing. Racism and dispossession mechanisms went hand in hand, which is the origin of that mentality that persists even in our times. In the 1990s a hacienda closed the road on 62 members of the Carlos Rodríguez cooperative, forcing them to sell their lands at the price that the hacienda had set. Currently the El Quetzal hacienda closes the road after 6pm, thus leaving the communities “closed in”, communities where its own workers live, as well as some families who are members of the cooperative. After 2010 several haciendas of the area have been facing a drop in the production of their coffee, the soils are exhausted, the exploited environment no longer produces: more inputs, more dead soil, the more coffee is exposed to full sunlight, the more the soil is washed away with the rainfall.

The very act of explaining the origin of that mentality awakens people. The hacienda has built itself by taking. More inputs and mono-cropping has led to greater soil deterioration. Closing roads no longer leads to cheaper land, nor does it force the hand of producer families. The “stupid” fieldhand, leaving the hacienda, has become a farmer.

2.     A check on the hacienda: the cooperative

The 63 members of the cooperative have more than 300 mzs of land and produce about 7,000 qq of export coffee. The cooperative collects and exports 60% of the coffee of its members, 30% of that as quality coffee. 20 years ago most of these 63 members were fieldhands – some of them foremen – of the haciendas, they were families with little or no land, some of them producing some flowers and vegetables. Of the 63, some 25 members produce between 30-100qq export coffee per manzana, producing more than some haciendas. A small producer of Aranjuez, who is not a member of the cooperative, with 5 mzs of coffee, won the 2017 Cup of Excellence Award with 91.16 points. That is quality coffee! Diversified coffee farms with bananas and citrus, and not mono-cropping haciendas, produce quality coffee, not just standard coffee. All of this makes the land increase in value, puts a check on the hacienda, and in addition the hacienda sees its earnings decreasing.

It is easy to find examples to illustrate these results. There is a member who is a single mother who lives off her 2 mzs of coffee and bananas, that produces enough for her to support her mother and married daughters. Another member of the cooperative was able to intensify his coffee with bananas and citrus through the cooperative, and left his job as a fieldhand of the hacienda. There is a foreman who became a member of the cooperative and ended up being president of the cooperative.

What has generated this change? Well, the cooperative! Its strategy? First, it understood the importance of regularity in the application of inputs (urea and leaf sprayed fertilizer) that coffee needs in order to produce more, which is why the cooperative provides in-kind credit so that, under technical supervision, each member family applies it and pays for it with that same coffee, for which the cooperative finds markets. Secondly, they got past the biannual nature of coffee (one good year of production and the next year low production), pruning 25% of the coffee each year, and systematically renovating their old coffee plants. Third, the member families are concentrated in a microterritory and receive credit services, technical assistance and collect the harvest right there, which reduces their transaction costs and facilitates a close relationship between members-leaders and members-administration. Fourth, strong leadership pushing the cooperative in new challenges in a calm, gradual way; “directed credit”, “piloting direct exporting with a small amount”, and “getting into milling with low volume”; they do it as they establish relationships with the social banking sector, coffee buyers and chemical input companies.

Seen from the results, organized small scale production provides more and better farms, good for the people and good for the environment. Nevertheless, seen from the processes, following a different path from that of the hacienda, the response is two pronged: increasing family ownership over their production, but not over their organization. On the one hand, the discipline of applying inputs every 30-35 days on their coffee, and selectively pruning 25% of the plants has become a custom, and thereby a tacit law; as well as turning their coffee in to the cooperative, paying their loans and waiting for a better price. On the other hand, the mindset planted by the hacienda persists: “more inputs, more production”, “without the president we would fall”, “information is not up to date and does not get to the members”, “decisions about credit and who can have a better price for their coffee are not made in the organs of the cooperative”, “a buyer even chooses 10 members to buy their coffee”, “we members rely on the president, we only come in to get our loans and our payments”, “the members who do not increase their production will not increase it no matter what we give them”, “if we apply the rules of the cooperative we would be left without members”, “let the member with the most volume of coffee set the price”. A good part of the cooperative and some of its allies breathe in this mindset.

The benefits of the cooperative for the member families and the environment, for Aranjuez and el Arenal are visible, but their durability depends on changes in their mentality. As Saint-Exupéry said in his novel The Little Prince, what is most important is what is invisible. Taking your own path involves getting off the path of the hacienda.

3.     Transformation of  mental models

In addition to increasing production, the cooperative proposes increasing coffee quality, diversified farms with environmental sustainability, stronger relationships with the social banks and buyers, members who study their farms, and good relations between members, leaders and workers. And they are on that path. One member who studies and experiments: “I make a selective leaf spray, because I am watching over my plants, I recognize the coffee bore or rust, I observe it daily, if it progresses, I spray it, if it does not progress, I enclose it”; “I spray the entire coffee field, for prevention”; “ before putting a chemical on it I test it a little”, “what I learned when I had organic coffee I continue applying, I spend less and it goes further”, “I have coffee trees for repopulating and to sell”. The member/leader, the one that asks questions, accepts positions of responsibility and exercises them, complies with the rules of the cooperative and the decisions of its respective bodies, is still a subject under construction. Relationships with the workers, encouraged by a coffee buying organization, are making progress: “Coffee with a union aroma” (https://www.youtube.com/watch?v=_SD3QBJ7r_U&feature=share)

For that the cooperative is refining its strategy. First, it is strengthening the observation and study that led them to determine the regularity in the application of inputs, this time to get beyond the belief of “more inputs, more production” to “more observation and management, more quality production”, including mixtures of coffee in micro-lots. Second, it is keeping its decision to have an office and services in the same territory, trying to get their sons and daughters to participate in the life of the cooperative – as members and personnel-staff. Third, it is making the policies and rules of the cooperative be applied, that decisions come from the organs of the cooperative, that members, board and administrative staff be subject to those agreements, and that the international allies respect and strengthen that institutionality. Fourth, the distribution of earnings based on updated information be posted on the wall- information on loans, financial statement, balance statement, volume of coffee collected, services of processing and exporting – so that the member families might come in to be informed, because informing is forming.

The Solidarity cooperative has taken a giant step: it stopped the hacienda. But even though it is at a standstill; it is still intact; the member families, even though are progressing in production and organization, are dividing up their land through inheritances, and their cooperative instrument continues being a challenge. The myth of the cave could change in the cooperative framework if the 4 elements of the strategy – observation, territory, institutionality and transparency – are carried out as the origin of its “light”, that would let them dismantle the mindset of the hacienda (“shadows”) and discern a new path. Their challenge is also the challenge of the entire world.

[1] René has a PhD in development studies, is an associate researcher of the IOB-University of Antwerp (Belgium), collaborator of the Winds of Peace Foundation (http://peacewinds.org/research/) and member of the COSERPROSS RL cooperative. rmvidaurre@gmail.com Edgar is also a collaborator of the Winds of Peace Foundation.

[2] We talked with the member families, their leaders and staff and we facilitated workshops in Aranjuez. This article is the result of that collective learning with the member families that observed their farms and reflected on their cooperative. We are grateful to J. Koldegaard for his comments on the draft of this article.

The Patient Is Ill

As one who has tended to be drawn to the Fair Trade (FT) label on a wide range of products, I have always been pleased that some of our cooperative partners in Nicaragua are part of that movement. Their participation has simply felt right, and just, as they have sought to connect with a consumer base around the world which has been eager to support the small producer effort. It has seemed a “win-win” circumstance about which both the end user and the producer could feel good. But there is a growing cause for doubt about both the fairness and the trade in FT, and reasons for all of us to take a closer look at the evolution this once- (and future?) empowering concept.

In a very well-researched and analytical article authored by researcher(and consultant to WPF) Dr. Rene Mendoza, he has undertaken a close look at cooperatives in Nicaragua and other  Latin American countries , to assess the effectiveness of the FT movement.  After studying the symptoms and complaints of the cooperative “patients,” he has also offered a detailed diagnosis of the ailments, including contextual  analysis of the pathology which is draining the energies from cooperatives and their members.  His conclusions should provide all parties interested in the FT ideals with both understanding of the disease and hope for its cures.

Dr. Mendoza attributes no blame for the spread of the unhealthiness, but does identify the complicity shared by all of the actors within the FT chain, from producer to consumer.  He identifies both the malady and its contagion points and has created a clinical treatise on where it leads if the disorder isn’t treated.

The best news is that Dr. Mendoza’s article includes several prescriptions for healing and recovery.  He does not offer a magic pill for immediate wellness.  And restoration of confidence  in a system that initially hoped to marry producers with well-intentioned consumers, in a win-win undertaking, will require serious treatment. Like any well-considered rehabilitation, the restoration to full health is likely to be slow and demanding.  It will require patience, discipline, a collaborative mindset and re-focus on values.  But full remission is possible.

For anyone who has ever purchased a product under the FT label, or sought to be supportive of small farmers in a small way by purchasing their goods, I encourage the reading of Dr. Mendoza’s work.  WPF has provided a link to this groundbreaking research on our website homepage, under the column with Dr. Mendoza’s photograph, and entitled, “Toward the Reinvention of Fair Trade.”

Read it.  It may change your thinking about that next cup of coffee, or that recent chocolate bar and the truth about how it may have reached your home….

TOWARD THE RE-INVENTION OF “FAIR TRADE” by René Mendoza Vidaurre

The height of injustice is to be deemed just when you are not. Plato

With an open treasure, even the most righteous sins. Saying.

The VII song of the Odyessy tells how the goddess Circe warned Ulysses that the sailors of those waters were so enchanted by the song of the sirens that they went mad and lost control of their ships. To not succumb to that enchantment, Ulysses asked that he be tied to the mast of the ship, and that the oarsmen have wax put in their ears, and ordered that if he, because of the spell of their song, would ask that they free him, instead they should tighten the knots. So it was that Ulysses and his oarsmen were saved, and the sirens, failing in their objective, threw themselves off the cliff.

Facing unfair commercial relations, Fair Trade (FT) emerged as an alternative so that people who organized might improve their lives and be a space of solidarity among different actors beyond their countries´ borders. Nevertheless, the institutional structure of the power relationships under the market rule of elites is like the sirens of the myth, capable of seducing the FT network, of turning it against its own principles, and turning solidarity into just a bunch of words, numbers and papers[1]. How can FT tie itself up to not succumb to the song of the sirens, and in this way, grow, enhancing its FT alternative principles? To respond to this question, we take as given that there are exceptional cooperatives, organizations, and people who confirm the importance of organizing and cultivating global solidarity, and that there are still more successful cooperatives, in countries in the south as well as in the north, in FT as well as outside of it. Nevertheless, in this article we study certain practices of the FT framework that seem to indicate its regression, and on that basis we suggest that FT re-invent itself. To do so we focus on coffee, which constitutes 70% of the volume of what is sold through FT[2].

It should be noted here that this analysis does not presume that all parties in the FT framework will view its conclusions with favor or agreement; indeed, some of the actors within the FT arena are very well-served by the current status of the FT mechanisms. Nor does the author attempt to provide a blueprint for all of the actions necessary to cultivate change. The intention herein is to describe the realities of the FT network as it most often operates, and to draw attention to the ways it could be returned to its original objectives and principles.

[1] Even though strictly speaking currently FT is the organization known as FLO International (Fairtrade Labelling Organization International) and FT-USA (FT-United States), we call “the FT network” the series of cooperatives, certifiers, social banks and buyers who operate under the FT seal.

[2] We have followed the topic of fair trade in coffee since 1996 (See: Mendoza 1996, 2003, 2012a and 2012b; Mendoza & Bastiaensen, 2002).

[pull down full article here]

Awaking to normality, an antidote for market control

Awaking to normality, an antidote for market control

René Mendoza Vidaurre[1]

“I am fine”, he says, while in the jaws of an alligator. Popular saying.

Every cloud has its silver lining. Old saying.

The parable of the “boiling frog” says that if we put a frog in a pot of boiling water, the frog will immediately jump out of the pot; on the other hand, if we put the frog in temperature that is low, and do not scare it, the frog will remain there; if we then increase the temperature, the frog will not do anything; the more the temperature increases, the more dazed the frog remains, and even though there is nothing keeping him from getting out of the pot, it will not leave; and ends up being boiled. Organizations (members and organizations) tend to be like the frog, in the face of sudden events (coups, electoral results, unpopular decrees) they react and take to the streets; while in the face of a gradual dispossession of their resources and even their own organizations, they tend to adapt, some even enjoy appearing to be victims, and when they realize it, they are already “boiled” like the frog.

In this article we present one of those organizations, the La Voz Cooperative, located in the municipality of San Juan La Laguna (in the Lake Atitlán basin), Sololá Province, Guatemala. We studied their process of awakening, and then, so that they might continuously keep themselves awake, and at the same time contribute to a formation with justice, we suggest an important collaboration between the cooperatives and the universities.

In 12 years they had completely “flipped the tortilla”

I visited them in 2004 and again now in 2016. In 2004 the historical tensions that existed in the municipality of San Juan and San Pedro over land and other resources were still felt, in fact some people from San Pedro continued buying land in San Juan and had the best coffee fields in the municipality; the chalet owners (mostly foreigners and people from the city of Guatemala) took over the shores of the lake, one of the 7 marvels of the world. The La Voz cooperative had their wet mill, they stood out for their frequent rotation of leadership, while the organic coffee yields of their members were equivalent to 60% of conventional coffee yields.

In 2016 the picture I found was very different. Some people from San Juan had purchased land and coffee fields from people from San Pedro and almost none of that previous tension between San Juan and San Pedro was felt. Hurricane Stan in 2005 and Tropical Storm Agatha in 2010 made the water level increase in Lake Atitlán, and with that a lot of land in dispute disappeared. The cooperative is changing; in addition to a wet mill, now they have a cafeteria where they roast 5% of their total coffee and they sell it packaged and in cups of coffee; 95% of the rest of the coffee they export; they have a clinic for women; they produce organic fertilizer to sell to their members; the coffee quality has improved (cup scores of 94 and 95) and their yield is the reverse of 2004, now their conventional coffee is equal to 60% of the per manzana yield of their organic coffee. Some of their members are buying land again.

“If you do not flip the tortilaa, it burns.” The cooperative had flipped the tortilla, taken a big leap, and along with the cooperative San Juan had also improved. What were the keys that openned the door of improvement for the cooperative in a matter of 12 years?

‘Hit rock bottom’ with the crisis, trust in themselves and move forward again in alliances

Paradoxically, the principal key was undergoing a harsh crisis and waking up right before “getting boiled.” Between 1993 and 1995 the cooperative received a loan for nearly a half million dollars from a social bank and two userers; and in that same period doubled the amount of their organic coffee exports, buying another 50% from third parties and passing it off as fair trade and organic coffee from the cooperative. The cooperative did not receive most of that loan, and did not receive anything for the shady deal for the other 50% of the coffee (earnings for the purchase and sale of coffee to a friendly market that was paying a good price + US$20/qq fair trade premium + US$30/qq organic premium). This obviously was possible thanks to the complicity of part of the board and the administrative staff, who acted behind the backs of the cooperative, even though they did do it in their name, with the complacency of the certifiers, banks and coffee buyers, who obviously saw the numbers double on paper and kept quiet.

“In just one period we disgraced ourselves”, said a member of the cooperative, while refering to the fact that the elections of the board members are every two years, and that one period was enough to “disgrace” the cooperative. In this period during which the temperature of the “pot” was increasing, “the frog” (the members) were calm, they did not perceive the change in temperature. The following period (next two years) the collectors arrived because they had fallen into arrears, the board members and the members were concerned, but the situation appeared to be under control. They needed one more period to realize that “they had exported double the amount”, it is then that they met in the assembly to ask the ex-board members what had happened, and analyzed the causes along with the members; and met with the banks, the certifiers, the buyers and the aid agencies. They worked to reach agreements, changed the organic certifier, and the members of the cooperative bodies began to look at the administrative management. Thus they freed themselves from being “boiled” like the “frog.”

Now outside the “pot”, the leaders look at their awakening in retrospect:

“If a member spoke well, we would say that that member was good, we would say let him be president, and we would nominate him for president. We would trust what the manager or president would tell us: “such and such a project is coming…sign here.” That is fine, we would say, and we would sign. We would not verify the minutes to see how it had been left. They only would come to tell us. We signed and we signed. There was no control over the travel allowance of the manager, nor over the salaries that they got. We let them sign the checks for the employees. The manager in one period was even the legal representative of the cooperative. We would change everyone in each period, there were meetings, but we did not know how to exercise those roles. The credit committee would allow the board to authorize the loans, and we would say that that was good. As the legal represenative the manager would negotiate and talk with the buyers and the banks; we were afraid to talk with a business person and we were happy that the manager did so. Going to the capital was something we really did not want to do…” (board member of the cooperative).

The members saw themselves as adapting to something that was making things worse for them. First, the “normal” (signing minutes and checks without verifying, naming board members and meeting without playing their roles, putting people who spoke up more into positions of responsibility, allowing the manager to be the legal representative, the administration to sign their own checks, the board or manager to authorize loans instead of the credit committee, avoiding conversations with buyers and the banks) emerged as “abnormal” for being from a cooperative. This is waking up. Secondly, realizing that the instigators for taking over the resources of the cooperative were from inside and outside the cooperative, this made centuries of beliefs evaporate about “the foreign auditor has the last word,” “the person with the college degree is trained to lead organizations”, that “we always need a patron” (someone who directs us “from above”), and that “we indigenous are not capable of speaking or traveling”. Third, the formality of the cooperative had absorbed them: that leadership rotation was the solution to corruption, and that the audit of international aid organizations ensured that everything was normal. “That is fine, it is fine”- they would tell them while reviewing the paperwork that the small mafia had organized. Fourth, they laughed when they realized that culturally as families they had closed themselves off to learning new ideas, they had said that “a ladino could not teach an indigenous about coffee”; and that idea had blocked them, they could hear them but not listen to them. Fifth, the force of the market (individual interest to maximize profits) was like the fire that increased the temperature of the pot, it was a logic that had penetrated the minds of the members and the fair trade organizations, and had connected them to the normal practices of the first point, the unfavorable beliefs of the second point, the demanding formality of the third point, and with that cultural prison of the fourth point. This is the environment that made them repeat to any visitor: “we are fine.”

With all these points and the decisions that they made, they had taken a giant step: waking up in time and getting out of the “pot.” Nevertheless, this did not guarantee them that they would not fall into another “pot”; in addition they were “half boiled” by the time they got out; the members did not trust their cooperative, while many aid agencies withdrew, and other suggested closing down the cooperative and founding another one. How did they rebuild trust and move forward again as a cooperative? They put their house in order, they defended themselves against legal suits, they negotiated their debts, and at the same time they invested and found good markets for their principal crop, coffee.

First, the cooperative learned the lesson that the associative side of the cooperative (board, oversight board and committees) had to understand AND manage the administrative side of the cooperative (cafeteria, exports, fertilizer production, administration, credit, clinic), and had to be zealously careful with the decisions that each side (associative and business) had to make. This lesson they began to put into practice.

Secondly, the cooperative, with its bodies and management, built beneficial relationships with different actors. With aid organizations and the State, administering resources efficiently. With social banks, honoring their debt, in spite of the fact that only part of those resources had gotten to the cooperative, and the fact that the social banks had failed in their scrutiny mechanisms to ensure that the loans went to the cooperative and not a small mafia. Building relationships with a new organic certifier, looking for one that “visited the countryside.” And with the coffee buyers so that the demand for more quality might be combined with price differentials.

Third, the “associative-business” awakening also implied a “awakening in production technology”. This implied recognizing that there was a lot to improve in their production areas, and that the training sessions from the state institutions on the coffee market were useful and necessary; then they began to listen to the trainings and observe their fields. It also implied deciding to have a full time technical promoter (who would accompany the members in their fields, as well as produce organic inputs, earthworm and compost fertilizer) that the members can buy. In this way, slowly, they perceived that a responsible management of organic coffee would yield sustainable fruit in the long run, something beneficial even for including different associated crops with the coffee, and for understanding that an open mind with a long term perspective is important.

Fourth, adding value to their coffee, getting into the roasting and grounding of coffee, and opening a cafeteria for the public, has multiple benefits. On the one hand, it has allowed you to know more about the yield of coffee, for example, that 1.20 pounds of export coffee is equal to 1 lb of roasted-ground coffee, or that 1 pound of roasted, ground coffee comes from 7.4 pounds of cherry coffee, and that you can get 25 cups of coffee from that one pound. This information is important to them when negotiating differential prices with coffee buyers, because both organizations, the cooperative and the buyers, understand how unjust the New York price is, when it says that 1 pound of coffee is worth US$1.50, and that same pound in the United States or Europe, now roasted, ground and packaged, is worth 10 to 20 times more, and let´s not even talk about once it is turned into 25 cups of coffee. On the other hand, the cafeteria is also a door to agro-ecological tourism for people connected to the coffee trade and for the public in general; this creates an environmental awareness and allows people to understand how coffee economics works and how it is part of the culture of the communities of San Juan; and also deepens the relationship between the cooperative and the organizations with which they are connected.

The ongoing awakening

“Every cloud has it silver lining.” The crisis was serious, but at the same time, awakening to it allowed them to make a difference in 12 years. They learned that the relationship between the associative and business parts is the engine of cooperativism; that the formality of leadership rotation is basic, but insufficient; and that a relationship of alliance is a double edged sword, it can be a relationship of complicity for dispossessing the members of their own organization, or it can be an alliance so that they “jump” out of the “boiling pot”, improve the lives of their members, and contribute to non members. If the relationship of the organizations is only with the president or the manager, based only on “papers”, they are on the brink of being dispossessed. If the relationship with the organizations is with that associative/business interaction mediated by immersion processes and transparency on both sides, they are on the brink of repossession. This is the biggest contribution of the La Voz cooperative to the associative world.

After these two large steps forward, are they out of danger of being “boiled” like the “frog”? The response is no. In fact, it is said that human beings are the only animal that trips over the same stone. What can be done to keep danger away? In the history of social movements we learn that, after being mobilized “from below”, even the best leaders tend to believe that the people can only be mobilized “from above” – from a political vanguard, manager or market. The cooperative needs mechanisms that would allow it to mobilize itself “from below” (members) to detect in time any increase in “temperature”; that the associative side supervise the administrative side – like the rotation of leaders – it is good, but not enough. How can it be done? Based on research, we should work on an alliance between the cooperative and the University around the formation of students and new associative leaders. Concretely, the cooperative and the Rafael Landivar University (RLU), I mention the RLU because of their historic interest in contributing to a society moved by social justice and not by market justice, should invest in a cafeteria on the central university campus and then in each branch; that cafeteria would be the gateway toward an ecology of knowledge (the science that is taught is ONE knowledge, there are other knowledges produced for example by the indigenous and peasant families of San Juan, and other knowledges); and that relationship would allow the RLU to have a privileged source for formation, and the cooperative would have an opportunity to study itself in a contextualized way.

“What good can come from San Juan de La Laguna?” ask those who are mobilized “from above”, like the prejudiced elite asked some 2 thousand years ago: “What good can come from Nazareth?”. In this article the La Voz Cooperative teaches us that working within a plural framework of alliances, keeping the focus on organized families, may be the best antidote for any organization that fights for justice and peace to avoid being “boiled” by market fundamentalism that says that you have to study a major or organize yourself exclusively to make money.

[1] René (rmvidaurre@gmail.com) has a PhD in development studies, is a collaborator of the Winds of Peace Foundation (http://peacewinds.org/research/) and an asociate researcher for IOB-University of Antwerp (Belgium).

Up On the Roof

We’ve had some typically hot days this summer in Northeastern Iowa, a combination of high temperatures and high dew points that make simply being outdoors a challenge for many.  It’s what we dream about in the depths of winter, but the dream often becomes more of a nightmare in its reality.  How soon we forget!  On one of those recent days of high heat, my wife and I took our morning walk with the dog early, so that we might capture whatever cool airs of the night might remain.  It was a sweaty hike, nonetheless, and I know that all three of us were looking forward to getting back home to air-conditioning.

As we approached the midpoint of our walk through the local college campus, we passed by the twin dormitories rising up from the valley and towering over the upper campus.  The roof of the buildings caught our attention, as they had brightly-colored banners around the entire perimeter of the roof; workers there were busy with preparations for their day’s labors.  Up on the roof.

I’m not sure what the temperature might have been up there at 8:00 in the morning, but I know that the summer sun was already intense where I was standing, in the shade of some trees below.  The forecast for the day called for temperatures near 100 degrees Fahrenheit.  I felt an immediate empathy for these guys knowing that, “up there,” without access to shade and with the additional stress of physical work, they would endure a real threat to their health this day.  I said out loud, “Boy, I’m sure glad that I don’t have to up there, doing whatever they’re doing.”

And then my wife and I engaged in an effort at one-upmanship, trying to think of the various jobs that might prove to be most challenging on a day like this: road construction people, field workers, fire fighters, farmers, roofers, cement workers, and so on.  In each case, we responded with an exaggerated respect for the people who filled these important roles in our lives, and rejoiced in the knowledge that neither of us would likely ever have to bear the agony of such work in an oven atmosphere.

By the time we had exhausted our lists of grueling work in hot conditions, we had moved on through the campus.  In front of the main administration building, a man stepped outside.  Wearing a crisp white shirt and colorful tie, he moved quickly to his car parked in front, probably eager to get the air conditioning turned on.  The contrast with the outdoor workers was not to be missed.

The episode got me to thinking about how we value people and their skills, and how we value work in our society (and in most others).  There aren’t many of us who would choose to repair a roof or walk a field on such a day as this.  For those of us working in more forgiving environments, we are very grateful that we have never been forced into such labors, or at least for longer than a summer’s job.  But somehow the value we place on such efforts tends to be modest.

Most of us have never walked a farm field in the hot summer sun.  But we eat the food that is grown in those fields.  We drink the coffee that is nurtured in the rural outreaches of Nicaragua.  We wear the clothes of cotton spun from vast fields that may be picked by hand.  We treasure our cell phones imbedded with silicon and other raw materials which often are mined by physical labor.  We have a difficult time envisioning our lives without our amenities, and yet ascribe only moderate value to those who provide us with them.  And yet it is their work that foundationally holds us together in many ways, and allows us to do the other things that we want and need to do.  (I know little about milking cows or fixing a toilet.)

It’s too bad that it takes a blistering hot day or a frozen winter’s night or water gushing into our homes to suddenly and fully appreciate the importance of some work.  The practitioners of such work are undervalued, until the moment we need them.  And while I certainly don’t intend to discredit anyone else’s work, whatever its makeup may be, I carry inside an unwavering respect for those whose work is done with physical strength and integrity of purpose and sometimes in uncomfortable conditions.  Some say that it’s menial work.  I say that it’s essential service.

I suppose that’s what Labor Day in the United States is all about.  We just seem to have forgotten about it on most days.  My train of thought may seem to have little to do with a foundation working in Nicaragua.  But I wonder how many Wall Street bankers or CEOs could raise a crop to harvest?….

 

 

 

 

 

 

Of Vision and Purpose

While we’re busy preparing for the second Certificate Program for rural cooperative members and managers, technicians, second-tier coop representatives and others, the focus is on methodologies.  After all, we’ve spent portions of the past ten years describing organizational strengthening techniques used successfully in the U.S. in hopes that it might spark interest in the Nica countrysides.  Now that rural producers have asked for greater detail about initiatives like open book management, Lean continuous improvement and organizational transparency, the workshop facilitators are eager to deliver such particulars.

As mentioned here previously, Winds of Peace will have the great good fortune to present Brian Kopas and Alex Moss,  gentlemen whose organizational experiences in the fields of organizational Lean and open book management are extraordinary, and therefore of great potential application to this Nica workshop.  They  possess enormous knowledge and practical experiences, they have already provided materials for the introduction of their topics, they are counseling us in our respective workshop presentations and they will be huge resources for the inevitable questions and challenges that are encountered during the workshop.  (Where people are intent upon learning, their questions and challenges are essential.)

But as I consider the wealth of knowledge that will be available to our audience in September, I am cognizant of another critical piece to the process of teaching and growing an audience: the vision.

Underlying all the operational processes and applications, there must be a vision, a mission, a purpose, a theme for the hard work that the attendees will encounter if they seek to bring an entirely new basket of ideas to their farms and coops.  There must be a core principle that can re-direct and drive the improvements consistently, even when the newly-acquired skills might occasionally seem to become stale or seemingly inapplicable for some  reason.  In moments of frustration or temporary setback, that motivator can keep an organization together, to persevere and regain solid footing for the next advance in their collaborative strength-building.

Some organizations employ a vision, a stated “picture” of what the future might be like.  Others prefer the idea of a mission, an intrinsically important undertaking whose outcome has the capability of delivering fundamental, positive changes.  Still other groups elect to use the language of values, citing social or moral tenets that shape their beliefs and actions.   But whatever words are used, the reality is the same: in order for human beings to change, to adapt, to move from their comfort zones, they universally crave a “cause,” a fundamental, personal reason to do that which is difficult to do.

In the case of the very successful Panamanian cooperative La Esperanza de los Campesinos (the Hope of the Peasants), that bedrock upon which their success has been built is in the historical presence of Fr.  Hector Gallegos, whose spiritual and liberation theological teachings centered the coop members.  (See “A Cooperative That Regulates Markets” by Rene Mendoza.)  For a company like SRC Holdings in Springfield, Missouri, the birthplace of open book management, the bedrock was the liberation of employee thinking and intelligence through information sharing and involvement.  For Winds of Peace Foundation, the bedrock has been the  liberation of financial assets to address the dangerous gulf between the poor and the wealthy.  Initiatives come and go, but the calling for the each of these organizations survives because of the depth of its existence.  These organizations must do what they do.  It is in their organizational DNA.

The coops represented in the Certificate Program will need to identify and embrace their own “calls to being. ”  For some, the cause is already deeply engrained and sustaining the direction of the members.  But for others, the identification might be less certain and less steadying.  Maybe it has never been articulated in terms of a vision.  Perhaps there are several purposes that have been embraced by the members, with no single mission emerging as the great unifier.  In some cases, maybe the issue has never even come up; coop membership was simply a way to access funds for the next planting cycle.  Whatever the case, every coop will require  something to hold onto when the vagaries of weather and middlemen and coyotes of the marketplace interject their disruptions into plans for prosperity.  What will the coops bedrock prove to be?

When Brian and Alex bring their skills to the Certificate Program, it will not be due to monetary gain (they receive none) or for notoriety (the program will take place in the deep countryside, away from media notice).  They will present no political cause, no self-service nor personal advantage.  They will spend more than an entire week out of their professional and personal lives because of deep-seated values that inform their senses of servant leadership and responsible stewardship.  The lessons and know-how they teach may change between September and the next time they are invited to work with such an audience, but the reasons for accepting such an invitation will not.  It is, after all, who they are.

Sometime during that first week of September, we’ll be interacting with some very eager Nicaraguans who know precisely who they are….

 

A cooperative that regulates markets

A cooperative that regulates markets

René Mendoza V.,

With Sulma Y. Leiva, Rigoberto Martínez and Ruperto Mejía[1]

It is easy to stop one person, but difficult to stop 100.

 When people discover the power of community and the transforational force of Christianity, nothing can stop them. Héctor Gallegos

 

Many cooperatives in Latin America tend to end in three ways. Some are stillborn, the result of external decision making, organized by the State or international aid. They last as long as there is an injection of external economic support. Others turn into businesses, implementing the social aspect like something similar to “Corporate Social Responsibility”, that is, charity to provide good publicity for the company. And others are privatized by small elites and managed at their whim. In these three cases, the member families end up affected, their dream of accessing better markets (for products and capital), of being trained and cooperating to resolve problems, falls apart. In the face of this reality, the Hope of the Peasants Cooperative in Panama seems to express a real hope. This article summarizes what this cooperative is and explains the secrets behind its success.

What is the novelty behind this cooperative? It is an organization that is 47 years old and has 1,235 members, the only one in Central America that manages commerce through a distributor, 2 supermarkets and 5 branch supermarkets within a network of more than 20 groups, among them other cooperatives. It is also the only cooperative in Central America with a coffee roaster that is processing 100% of the coffee it collects under two brands (Café Tute and Café Santa Fe). It is a cooperative that redistributes 40% of its earnings through social policies, and 60% directly to the members. And it is a cooperative that has influenced the market in a district of 16,000 people, made the weighing of the products bought and sold more fair, and instituted the idea that being a business person is selling products at low prices. In other words, we are in the face of a cooperative that is regulatng the market in the interests of its members and the communities of Santa Fe of Panama.

What are the secrets to the success of this cooperative? Said figuratively, there are three codes that interact to “open” the “lock box” to the success of this cooperative; codes that “open” in a context of adverse power relations and in a place with a history of resistance – the indigenous in the face of the Spanish invasioin, and the Tute Mountain uprising with the rebellion of the students against the Panamanian Guardia. This trilogy of codes are the internalization of values expressed in the mission, the counterweight and social cohesion mechanisms that accompany the smooth running of the cooperative, and the sustainability of the cooperative and its members.

The sense of mission happened during the gestation and birth of the cooperative, under the influence of the priest Hector Gallegos, who was disappeared after three years in 1971. Jacinto Peña recalls that precise moment when the cooperative began in 1969:

We woke up to the injustice of the wages, the fraud that the stores pulled off with the weighing of the products and their prices. So we decided to form a cooperative. But how could we start a cooperative if we did not think we had any resources? So Fr. Hector threw out a 5 cent coin in the middle of where we were seated, and asked, “How many pieces of candy can we buy with that coin?” “Five!” we responded. Others present looked in their pockets for a 5 cent coin. And others as well. The priest held up 10 coins and said that we had enough for 50 pieces of candy and sent a young boy off to buy them. It was 12 noon, we were all hungry. That same boy passed out the candy to the 50 who were present. The priest asked us again, “what does it taste like?” Someone shouted, “it tastes like heaven!” The priest concluded, “that is how cooperativism is done.” The next week a group from Pantanal bought 1 quintal of salt to sell, and in El Carmen each person began to save 10 cents a week. That is how the hope of the peasants got started, our cooperative.

This gestation was the connection between the institution of cooperativism (something external) and the transformational religious institution (something internal) in a group of small producers (something local). Facing an adverse context of large producers paying them low salaries, and stores cheating them with weighing and prices, they woke up and saw opportunities in national lands that they could work and having stores on the basis of their own resources. Learning, discovering the hidden side of things, made them change: the poor can save and can work on their own land; they can come together and share the force of their faith to build justice. This is then their mission.

Throughout the history of the cooperative, in the good times and the bad times, the counterweights and group cohesion have been important to them. The Board of Directors, the Oversight Board and the Assembly function, addressing strategic decisions and taking care of one another; while 92 workers on the business side are responsible for the operational part. They are not judge and jury; the management cannot decide for the board nor viceversa. In addition there is a group of the founders of the cooperative who, whether they hold posts or not, remain vigilant over the course of the cooperative. There is high rotation among the board members, while the founding leaders remain. There is a lot of cohesion among the 92 workers, which is incentivized by a pretty equitable difference in salary, the distance between the highest salary and the lowest is 2 x 1, when the rest of the institutions and organizations tend to have a gap of approximately 10 x 1 and even higher. The interaction between the associative side (bodies) and the business side of the cooperative generates mutual oversight for the smooth running of the cooperative, something that has allowed it to overcome various administrative crises over the years.

The sustainability of the cooperative and its members completes the trilogy. The sustainability of the cooperative has been achieved following the two principles of Fr. Hector: “overflowing measure”, which is giving more in weight instead of giving less; and maintaining low prices for the sale of products “because no popular organization should steal from the poor.” In terms of the sustainability of the members, the cooperative uses 40% of its surplus for scholarships, aid and incentives for the producers, and the remaining 60% is directly redistributed to the members, according to the amount that they have bought from the cooperative. In other words, the general population buys from the cooperative because of the low prices, and the members benefit not only from the prices, the loans and the incentives, but also from the surplus. This nourishes the sense of ownership that the members have over their cooperative. Recalling the biblical phrase that “where your treasure is, there your heart will be”, the heart of the members is in their cooperative.

With this foundation, the cooperative faces the market dangers that stalk it daily. What are they? The fact that the business side, in a country like Panama based on a service economy – money for money – might take over the associative side of the cooperative; that the centralization of decision making and the concentration of resources, that has so many times eroded other cooperatives in Latin America, might seduce the new generations; and that the logic of external subsidies and subsidies from the cooperative itself, instead of the Law of the Talents (Matthew 25), might be raised up as the social part of the cooperative. These are dangers that the cooperative has known how to deal with, regulating markets to the benefit of human beings, something it has done throughout its 47 years.

This reminds us of the distinction that Brafman and Beckstrom (2008) make in their book, “The Starfish and the Spider: The Unstoppable Power of Leaderless Organizations, precisely about the difference between the spider and the starfish. They both are similar in the sense that their arms are attached to a central body; but they are different. If you crush the head of a spider, you kill it. While you cannot find the head of the starfish. If you cut it in half, it becomes two starfish; if you cut off its arms, they produce even more. Dark forces believed that by disappearing Fr. Hector they would do away with the peasant movement of Santa Fe. The Hope of the Peasants Cooperative is like the starfish, it reproduces itself and multiplies itself by 10 times 100. The more decentralized it is, the closer it is to its mission, and the more it recovers its formation and character as a peasant movement, the more it will be like a starfish, the hope of the peasants of Latin America.

[1] René (rmvidaurre@gmail.com) has a PhD in development studies, is a collaborator of the Winds of Peace Foundation (http://peacewinds.org/research/) and an associate researcher of IOB-Antwerp University (Belguim). Sulma is the president of the “La nuez de oro” Cooperative, and Rigoberto and Ruperto are from the Mangle Association of El Salvador.