Category Archives: Ownership

On Seeing Solutions

If you have read many of the offerings at this site, you will know that my background includes a long and in-depth relationship with employee ownership.  I served both The ESOP Association and The National Center for Employee Ownership, the national associations which promote employee ownership, was President of the Minnesota Chapter of the ESOP Association for two terms and in 1998, our employee owned company, Foldcraft, was recognized as the Outstanding Employee Owned Company in the Country.  Yes, I was immersed in ESOP.

As a result, I continue to receive newsletters and employee ownership-related materials, usually nodding in affirmation of the great performances that are featured therein.  Shared ownership worked then as it does now.  So I was not at all surprised to read the latest results of the annual Economic Performance Survey (EPS), summarized in the November 2018 issue of The ESOP Report.  Once again, employee owned companies performed exceedingly well and, in many cases, significantly outperformed their non-employee-owned peer companies.  Since the EPS was launched in 2000, the majority of responding companies have recorded increases in profits for every year but two (2002 and 2010) and increases in revenues for every year but one (2010).  The exceptions noted above reflect the nationwide economic downturns of the prior years (2001 and 2009).  Even in those challenging economic times, 29% or more of ESOP companies responding to the survey reported that profits and/or revenue increased.  And there’s the lesson for our cooperative partners in Nicaragua.

We have chosen to work within the cooperative sector by design.  For the essence of cooperativism- shared ownership- is the same motivator as in employee owned endeavors.  We have always believed in the power of collective wisdom and work; the employee ownership model simply brought some new tools and direction to the coops with whom we work.  Notions of shared benefits, transparency, broad participation, financial literacy and the importance of a cohesive cooperative culture are not natural outcomes with ownership: they each need understanding and practice.  And maybe especially that last item, culture.

As is true in the most successful employee-owned companies, the participants of a coop have an essential need to fully understand the collaborative nature of their organization.  It’s not enough to join a coop in hopes of benefitting from market presence or volume buyers.  Every coop member must understand the machinery of the coop, and the cog that each represents to keep that machinery running.  Without that individualized participation, it’s like trying to win a baseball game with a first baseman who won’t field the position, when every position is vital.  It’s what makes up a team.

But an individual’s impact on organizational culture is more than just fielding a position.  It’s the absolute knowledge that one is part of something bigger than self, that there is strength and security and a sense of “we can do anything together” that inspires and drives the group to thrive.  The strength of collaborative work fashions a safety net that is nearly impossible to replicate individually.  For organizational success, cooperative members must embrace the idea that “we are in this together.”

For Winds of Peace Foundation, that message has remained unchanged over the past dozen years of our focus on coops.  It has been the mantra of the most successful employee-owned companies in the U.S. since ESOPs came into being in the 1970’s.   If the collective efforts of a cooperative are truly in synch, and the rewards of the collective work are truly shared, stability ensues.  Members begin to recognize the rhythm of success.  Momentum builds.  The mindset of the organization transforms to one of expected progress, rather than hoped-for survival.

Cooperatives are not the mirror image of employee-owned companies.  Nicaragua is not the U.S.  But the reality of ownership is universal.  It engenders a characteristic that transcends most of the lines which separate us.  That’s why the truth of shared ownership is as real in Nica as in Nebraska.

And that, in turn, is what makes cooperatives so exceedingly important in Nicaragua today.  Challenging economic times?  With threads in the fabric of the country literally unwinding every day, the nation is in desperate need of institutions that are grounded.  Cooperatives have the ability to be just that.  They can create economic hope.  They can provide a shield of security against dangerous moments.  They can maintain a strong sense of structure when other  forms become distressed.  The coops can represent deep roots against tides that threaten to wash away the groundwork of community.  (For a deeper look into this truth, take a look at Rene Mendoza’s posting in his Articles and Research portion of our website.)

I loved the concept of employee-ownership from the first moment I heard of it.  I was amazed at the power of its best tools, broad participation, open books and financial teaching.  Thirteen years ago I became astonished to learn that the coops of Nicaragua were so similar to U.S. ESOPs in both their difficulties and their needs.

The universal nature of the power in ownership continues to this day.  I never imagined, however, that its importance and potential might figure into stabilizing an entire nation.  But a dream and a reality sometimes are one in the same….




The power of a shared vision in peasant-indigenous cultures

The power of a shared vision in peasant-indigenous cultures

René Mendoza Vidaurre[1]

In the film “Spartacus” on the slave rebellion in 71 BC we recognize the strength of a shared vision. After twice defeating the Roman legions, the gladiators/slaves fell before the legion of Marcus Crassus, who says to thousands of survivors: “you were slaves and you will be slaves again, but you can save yourself from crucifixion if you turn Spartacus over to me.” So Spartacus takes a step forward and shouts, “I am Spartacus”. The man by his side also steps forward, “I am Spartacus”. Within a minute all shout that they are Spartacus. Each gladiator/slave choses death. Why? Following Peter Senge (1990, the Fifth Disciplne) they are not expressing loyalty to Sparacus, but to a shared vision of being free in such a profound way that they prefer dying to being slaves again. “A shared vision – says Senge – is not a idea, not even an important idea like freedom. It is a force in the hearts of people.” In this article we lay out some long term visions, show their importance for lasting change, and we take note of the role of organizations related to the peasantry of our millennium.

Millenary Visions

That vision of being free emerged as a profound human aspiration in the face of the slavery system, a fire that neither the cross nor death were able to extinguish. In the movie the lover of Spartacus comes up to him and reveals to him that his vision will be realized, “Your son will be born free!” 2089 years later that powerful vision continues present in the foundation of our societies.

Another vision, one of democracy, emerged even before in the years of 500 BC. Even though it excluded 75% of the population (slaves, women and foreigners), that vision arose based on assemblies, building institutions under the power (cracia) of the people (demo). 2500 years later, in spite of the fact that the elites flipped that vision to where democracy exists only under the control of a minority, that Greek vision based on assemblies continues moving millions of hearts.

The vision of the reign of God was sketched out by Jesus of Nazareth, son of a peasant woman and a carpenter, in 30 AD. In a hierarchical and despotic patriarchal world, Jesus envisions the possibility of a “kingdom” for those who are looked down upon – who might be like children, destitute and who would build peace, a reign that is small and becomes big like the mustard seed. Since then, that vision of the kingdom, in spite of being androcentric (king-dom), has mobilized millions of people. It is a vision that made Luther in the 1500s challenge the institutional church and translate the Bible into vernacular languages so that people might have access to God without religious intermediaries.

In the XVIII century the encyclopedists (1751-1772), living at a time with a minority of educated people, envisioned “putting up a wall against barbarism.” That vision of making “papers speak” has moved humanity with revolutions and fights against racism and extreme poverty. It is enough to see the movie “The Power of One” filmed in 1992, based on Africa in the 1930s, to recognize the vision of the encyclopedists, that learning to read made a difference. It is also the advice that we heard from our grandmothers in the countryside, “study, a pencil weighs less than a shovel.”

Even though the idea of organization and the construction of the State emerged with capitalism in the XVI century, societies envisioned alternative forms of organization to the control and rule of capitalism and the State. Thus the cooperative emerged in England against the textile industry and in Germany against usury, under the conviction of joining forces in line with the ideas of associativity of Saint-Simon, Fourier, Cabet and Owen. Along these lines the agrarian cooperative movement in the United States from 1870-1910 made explicit the cooperative vision of democratizing the economy (L.Goodwin, 1978, The Populist Movement). This alternative vision, of joining forces –“elbow to elbow we are much more than two”, as Mario Benedetti would say – to democratize the economy continues moving millions of people who are organizing.

Finally the non violent vision of M. Gandhi (1869-1948) in order to achieve the independence of India from the British empire, and improve the well being of both. That pacifist movement saw that “humanity cannot free itself from violence except through non violence”, that “eye for an eye will leave everyone blind” and that “there is no path for peace, peace is the way”. His methods in accordance with that vision were the use of hunger strikes, the “salt march” (salt satia graha) that affected the principal source of taxes for England, and being coherent in his actions and ideas (he made his own clothes and was a vegetarian). That movement inspired Martin Luther King in the United States and his vision of a society where people were treated equally, regardless of their race. And Domitila Barrios of Bolivia walked the same route in 1978 with a vision of a country without fear overthrowing the dictatorship of Banzer peacefully, in the words of Eduard Galeano:

I was seated in the principal plaza with 4 other women and a poster that said: “We come from the mines, we are on a hunger strike until the military dictatorship falls.” People made fun of them as they went by. “So just like that 5 women are going to overthrow a military dictatorship! Hahaha, what a great joke!” And the women, unmoved, in solemn silence…After the 5 women they were 50, then 500, then 5,000, then 50,000 and then half a million Bolivians that came together and overthrew the military dictatorship. Why? Because those women were not wrong, fear was what was mistaken.

All these shared visions connect hearts by common aspirations. Yuval Noah Harari (2011, Sapiens: A brief History of humankind) tells that in human evolution homo sapiens differentiated themselves from other species like chimpanzees by their ability to invent myths capable of mobilizing millions of people to cooperate. Visions belong to that genre, they are real, palpable and move incredible forces born from human hearts.

Peasant and indigenous visions

In our days we hear visions that, like those quoted, are mobilizing a good part of humanity. Scrutinizing them, we understand that they are both new and connected to millennial flames. Let us start with the oldest. Our ancestors that lived close to 2 million years ago as hunters and gatherers envisioned human survival based on agriculture, which led them to domesticate plants and animals between 9500 and 3500 BC. Since those years in our DNA is that tense vision of humans subjugating nature or plants like soy beans, wheat, sugar cane and sunflowers multiplying at the cost of “domesticating” humans (Yuval Noah Harari).

Following that vein, the vision of peasant families has been to have land. In the 1970s in Honduras (Azomada, Lempira), the peasants saw idle land taken away from their ancestors and recognizing that fire that came from their grandparents to “recover a piece of land to produce on it”, took those lands as thousands of peasants have done on the face of the earth. In 1985 when the war was raging in Nicaragua, the State moved 74 indigenous families from Cusmapa and San Lucas to Samarcanda (San Juan del Rio Coco), organized them into cooperatives to confront the Nicaraguan Resistance, as had happened in so many places in the country; one of the leaders, Claudio Hernández recalls, “to get land with coffee we risked our lives, and we accepted being treated as fieldhands and soldiers”; the paradox was that many of those involved in the Nicaraguan Resistance also were fighting for land.

In the 1980s Ricardo Falla S.J. put that vision into words: “a peasant without land is like a being without a soul.” In 1993 I went to La Primavera in Ixcan, Guatemala where hundreds of families that returned from Mexico with the signing of the peace agreements were working the land collectively; at one dinner that a woman shared with me, she whispered: “help us, my husband was killed by the military, I want a piece of land to leave to my children, that his death not be in vain!”; it was a vision shared by families of Mesoamerica and beyond.

Being a farmer is more than having land. In Nicaragua Marchetti and Maldidier (1996, El campesino-Finquero y el Potencial Económico del Campesinado Nicaraguense) detected that peasant vision: “I dream of that day in which my friends visit me and say, what a beautiful farm you have!” The land would not just be a plot with annual crops on it, but a diversified farm with permanent crops. In Honduras, Carlos Cantoral from Terreritos (Nueva Frontera) in the 2000s, sketched out what food sovereignty and peasant autonomy is, echoing our ancestors thousands of years ago:”being a peasant is producing what my family eats, without depending on anyone” – without a debt with the usurer, without giving in to the intermediary, and without lowering your head in the presence of the politician and religious leader. And again in Honduras Porfirio Hernández de Trascerros (Nueva Frontera) in 2018 describes those who lose that vision: “even having cattle they walk around money in hand looking for their corn grinder,” unfortunate is that family that does not first ensure their food. These are the families that resist being a clone of mono-cropping, families that grow their corn and produce their food on more and more diversified farms, which gives them the freedom to generate their own thinking and experiments.

Being a farmer and processing what is produced to ensure food “in green and mature times” has been a vision for thousands of years. Humanity learned to dry meat under the sun in its era of hunting and gathering, and in the years of 3000 BC made bread, and the Incas stored potatoes as starch, exposing potatoes to the sun during the day and to the cold at night. In this vein we find the peasantry of the XVII and XVIII centuries envisioning agro industrializing raw material in their communities. That vision, in spite of being squashed by capitalist industry and later by the socialism of Preobrazhensky and Stalin, persisted within Europe itself. That is why there are around 1100 flavors (brands) of beer in Belgium today, or vineyards and wine in Trentino, Italy. And it persists in Latin America. In Honduras in 2008 (Laguna de La Capa, Yoro), in the face of the “vocation” of the agricultural frontier to receive a peasantry whose grandchildren migrated with sugar cane and sugar mills defeated by the slavish rule that “only the rich make sugar”, the COMAL Network and peasant families started to process granulated sugar in the community itself. Cirilo George from the APROCATY Associative Enterprise put that fire into words, “we will not go back”, referring to the fact that individually they fell with their sugar cane into that destiny and that slavish rule, but organizing themselves, they made that vision of agro-industrialization palpable, as the Manduvirá Cooperative of Paraguay has done.

Having land, being a farmer, processing food…and selling! What a chain of visions! Even though the peasantry sees itself at odds with commerce, their aspirations include commercializing in order to cooperate. Within this perspective, in Honduras (Encinos, Intibucá) in the midst of intimidating polices under the Alliance for Progress of the 1960s and 1970s, women and men who would walk for days through mud to buy what they were not producing, envisioned “bringing in a store managed by us the Lenca peasant ourselves, right here.” That community, like the members of the La Unión Store (Taulabé, Honduras), Maquita Cosunchej of Ecuador, or the Hope of the Peasants Cooperative in Panama, overcame the old rule that “peasants and indigenous are no good at selling, only at planting.” Maybe individually it is difficult for a peasant family to sell, they say that it is a “betrayal of a promise” (buying oneself in order to later sell), but organized, it is another story, because “the market is really relationships of people coming together, getting to know one another and trusting one another”– Peter Druckers would say to Peter Schwartz (1996, The Art of the Long View). In the 1990s again in Honduras a dozen leaders of several organizations, among them Auristela Argueta, saw a vision that continues to light up deep Mesoamerica: “we now have land, we are producing our food and something more, a market for selling and exchanging our products.” That aspiration that markets can connect organized people to one another, was the seed that gave rise to the Comal Network of Honduras.

What is distinctive about these visions and the imperative to see them

These visions, far from the current ones that businesses tend to express to generate capital or the blueprint of organizations to find donations and “to put a patch on the problem”, move human determination through time and are like flames that do not go out, in search of a greater good. What distinguishes them? They are born out of crises, when that which should die, does not, and what should sprout, does not, as A. Einstein used to say: “creativity is born from anguish as day from night.” Adversity is overcome by “swimming against the current” and connecting oneself with centennial and millennial human aspirations that, like tectonic plates, shake even the most solid land, like that outrageous belief that a divine being or the market writes your destiny. They are understood by people discontent with the status quo, that question their worlds, see other possible realities, expand their mental horizons and really believe in their capacity to create the future because they experience it daily. They are shared visions that emerge from personal visions, and not from adhering to visions prepared by managers or consultants; they derive their energy and commitment precisely from the fact that they come from personal visions.

These shared visions reorder life. If your vision is that your family eats what you produce, that makes you reorder your farm, the work of your family and your relationships with your neighbors, and if that vision is shared by other people of an organization, this reorients the organization toward that vision. They are concrete visions, here and now, visions that make them encounter the stranger and discover themselves. They are visions that cause changes day to day, brick to brick, seed after seed, the drop of water that breaks stone.

In the face of these visions of future frameworks that we want to create, the challenge for peasant and indigenous organizations is to encourage their members to express their visions, understand them, and embody them in agreements and new rules to support the peasantry, the basis for food and assurance of environmental sustainability for humanity. For that purpose, the more an organization opens itself to learning, the more it tunes its ear to hear the visions, the more it takes out a pencil to take notes and ruminate on them, the more it reinvents itself, breaking rules like “the older one gets, the less one changes”, “the more one studies, the more one forgets about where they came from”, and “the more power one gets, the more farther they get from the people”. A peasantry that organizes itself and awakens to the fact that they can create their future, is more connected to the vision of Jesus, feels more the vision of the gladiators/slaves, seeks to have more democratic assemblies, aspires more the path of non-violence, makes agriculture an art, and weaves more of their own thinking. Shared visions, in the midst of the tensions and adversities of all times, move human mountains and help us to be generators of long term changes that started just yesterday.

[1] René has a PhD in development studies, is an associate researcher of IOB-University of Antwerp (Belgium), collaborator of the Winds of Peace Foundation ( and member of the COSERPROSS Cooperative RL.

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” (

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 ( and member of the COSERPROSS RL cooperative. 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 construction of a just peace in Colombia

The construction of a just peace in Colombia

René Mendoza Vidaurre[1]

Colombians, weapons have given you independence, but only the law will give you freedom.

Francisco de Paula Santander (1792-1840), Colombian leader

The law of the jungle should not be the law that our children follow

Seanna Wolf, ex Irish prisioner.

The weak can never forgive. Forgiveness is an attribute of the strong

M. Gandhi

Colombia is the country with the highest level of inequality, the oldest democracy and the longest armed conflict in Latin America. It is a country that now has the opportunity for peace, strengthen its democracy and reduce its inequality, particularly the agrarian inequality. Will it be able to take advantage of this opportunity? Far from showing majority support, and improving laws so that they be given freedom, as Santander would suggest, the peace process appears to polarize society even more, making the “law of the jungle” bleed their social leaders, and contrary to the words of Gandhi, making forgiveness a sign of weakness. How can changes be generated that would lead toward peace with justice and shared prosperity? That question concerns us in this article.[2]

1.     Introduction

The signing of the Peace Accords in November 2016 marked a before and after in Colombia. Society is involved in a broad debate. The most repeated words are: peace accords, reincorporation, reinsertion, demobilization, ex-combatants, reconciliation, normalization, forgiveness, illicit crop, territory, guerrilla, comrade, partner…They are disputed words: “worthy reincorporation into the legal system” versus “reincorporation of the communities against the system of injustice”; “normalization” versus “Who is normal?”; “peace accords of the government and the FARC” versus “rural communities do not know these accords and the governors of the regions are opposed to these accords” and “we already disarmed them, now let´s do what is in our interests, let´s ensure that they do not return to dissidence”; “Colombian democracy is the oldest democracy in Latin America” versus “it is a mafia-like, oligarchial and corrupt democracy”. They explain the meanings: “partner, in the war we would hunt some animal and the family would give us rice, or we protected them and they gave us food, that is why we would call them partner”; “demobilized from weapons, but mobilized by the ideals of justice and democracy”. And solutions for attracting excombatants abound: solidarity economics, inclusive business, cooperativism, corporations, Jesus Christ Savior, production projects…

After 52 years of war between the Revolutionary Armed Forces of Colombia (FARC) and the government, and even in the process of negotiation with the National Liberation Army (ELN), society seems more polarized about the peace process. The October 2016 plebiscite revealed this reality: half of the country said it should be ratified, the other half said no. What explains this polarization that is capable of undermining the peace process? There are at least two attitudes (see Figure 1), one that is cultivated by a society at war, manipulated by elites and resting on a brutal, even though resisted, inequality[3]; and the other that sees the peace process as the opportunity to economically, socially, and politically democratize the country.

Inequality is the key element for explaining the realities of Colombia, be those the armed conflicts or the successes that the peace accords might have. Consequently, following the words of Stiglitz in Bogotá in February 2017[4], “there can be no sustainable economic prosperity unless that prosperity is shared”. How can changes be generated that in the long term might lead toward a peace with justice and shared prosperity?

In this article we reflect on this question taking inspiration from some experiences in Central America, having shared with different actors in the framework of international events in Bogotá, and listened to friends in Colombian academia who are working so that this peace opportunity might help democratize the country. Our motivation is the conviction that if the most unequal country in Latin America deepens its democracy, all of Latin America will feel those winds of inclusion and democratic aspiration.

2.     Perspectives on peace and democracy

Here I identify two models of interpretation of the conflicts and democracy. The first model is “top down”, from war to peace and from authoritarianism to democracy; or polyarchy, a system for containing the pressure of the masses for social change, where decisions and mass participation are reduced to choosing leaders in elections controlled by elites (Robinson, 1996, 2002, 2014[5]). In this perspective the conception is that the armed struggle is an obstacle for democracy, that democracy generates a society without conflicts, that society resolves its contradictions competing for votes, and is modernized based on free trade competing efficiently. Correspondingly, judicial and electoral reforms are done so that laws guide the masses, and the (neoliberal) economic model is fine-tuned, understanding that peace is established on the basis of development; and development means economic growth and the extraction of natural resources to the benefit of an elite (traditional extractivism), or neoextractivism that, as Escobar observed (2012)[6], is also to improve social infrastructure (education and health) and reduce poverty – in other words, the extractivist model is invariable- what varies is whether it is only for an elite or for more,[7] and whether the State plays an active role (iun the neo-extractivism).

The second model is the “bottom up” one, where the idea is that armed conflicts were, and now the social movements are, the basic conditions for resolving historical contradictions and promoting a sustainable democracy (Robinson, 1996, 2002, 2014). Correspondingly, the participation of the population is promoted with their respective life paths, that peace is established with alternatives to development where economic growth and markets, as Gudymas and Acosta argue (2011[8]), are subordinated to the model of wellbeing understood holistically, with social, economic and environmental sustainability. In this framework, peace is achieved to the extent that inequality cedes and the (neoliberal) economic model changes to one of collective well being.

Figure 1 and the words within which the entire country moves can be reread in the light of these two models. From the first model the peace accords express the victory of democracy over the armed struggle, which is why those who are demobilized should submit to the law, ask forgiveness for their fighting and integrate themselves into the neoliberal economy and formal democracy, while the government provides material and legal benefits to the disarmed groups and ensures order. From the second model the idea is that the armed struggle opened an opportunity for democracy to deepen, disrupting State institutions and markets within a perspective not of intensifying development, but of providing space for development alternatives, because it is precisely the reigning development model that produces the inequality and armed conflicts.[9]

Making these perspectives explicit can be reflected in the role of the State, the FARC, social movements, academia, the churches, cooperatives and international aid agencies. Let us give two examples. The first example, academia, following the example of model 1, it is seen armed with categories and methodologies that have sustained the model of development that has generated the inequality and that is opposed to peace; or, following model 2, it can be seen proposing new categories and methodologies coherent with the development alternatives model. The second example, international aid, following model 1, believes it knows the realities of the rural communities and it knows the solutions, which is why it aligned up project writers to hunt for profitable “production projects”, or that at least in the short term would keep ex-combatants from taking up arms again; or, following model 2, democratizes their decisions and opens itself up to understanding the multiple realities of the peasant, indigenous, and afro-descendent communities, and takes the risk of listening to and responding to solutions that maybe do not fit in the neoliberal economic model in which it tended to locate itself. Being part of the solutions and contributing to peace begins disrupting our own attitudes and comforts, that maybe are as authoritarian and centralizing as those of any institution or organization that we are happy to criticize.

3.     What is concealed and what is sought to change

Having this broad perspective, we notice that the armed conflict with the FARC began with two key concepts, the agrarian reality and democracy. The Historical Commission on the Conflict and its Victims (2014) published 12 essays of authors who studied the causes and effects of the conflict in Colombia[10]. Even with different perspectives, all of them agree on the fact that the agrarian issue and the fragile liberal democracy were determining causes, which is why in their recommendations they highlight the fact that changes should happen in land use and access, and that work be done on an economic model where equity would prevail. If Colombia is the most unequal country in its income (CEPAL, 2017), the inequality is worse in the agrarian reality: the gini coefficient for income, where 1 is equal to complete inequality and 0 is equal to complete equality, was 0.530 and the gini coefficient in rural property was 0.897 in 2015; while that coefficient for income improved, because it dropped from 0.564 in 2009, the coefficient for property went up from 0.885 in 2009.

The agrarian question refers to landownership, its use, technology and markets. The key in that is access to ownership of the land. The graph and table 1 show that in the same period of the armed conflict inequality for access to property in Colombia has gotten worse: the Gini Coefficient from 1960 to 2014 went from 0.868 to 0.897.[11] In the same period 0.5% of total owners with more than 500 Hectares of land went from having 29.2% of total land to having 68.2%; while around 88% of total owmers with less than 20 hectares went from having 17.3% to only having 8% of total land[12].

Table 1. Comparison of number of APUs and land used by range of size
1960 2014
<5 66.7 5.4 70.5 2.7
5 to 20 20.4 11.9 18 5.3
20 to 50 6.7 12.4 6.2 5.8
50 to 200 4.7 24.2 4 11
200 to 500 1 16.9 0.8 6.9
>500 0.4 29.2 0.5 68.2
100 100 100 100
Source: IGAC (2012) Atlas of rural property distribution in Colombia; 2014 Agricultural Census

The cause that generated the armed conflict intensified. This is even worse if we take note of the increasing use of mono-cropping and extraction of natural resources, as well as the financial barriers (e.g. credit in accordance with “capacity to pay”) and commercial barriers (free trade treaties) that affected around 80% of the property owners of the country. The impact of that reality on the country is alarming; socially, Colombia is the country with the largest number of internally displaced people in the world, and “violation of human rights has become a habitual practice” (Oxfam Internacional, 2017)[13]; politically, it is fragile democracy because of its liberal institutions where the connection between arms and politics prevails (Gutiérrez, 2014)[14]. Peasant, indigenous and Afro-descendent communities have suffered the dispossession of their means of life and culture, creating uprootedness and extreme poverty, which has contributed to the armed conflict. Behind that inequality and its impact are hundreds of years of distrust between peasant, indigenous and Afro-descendent families and the families of that group of less than 1% backed by the State and the ideas of “development”; this reminds us of the historian Wolf, who says that the French peasantry at the end of the XVII century had included a phrase at the end of the Our Father that they would pray every night before going to bed: “ and from justice, free us Lord” – that “justice” (State) that dispossessed them from their land and territories,[15] and which the agrarian scholar Machado (2009:54[16], confirms: “the facts show that State action continues breaking up medium size rural property, while large traditional property is not transformed, and small ownership gets even poorer; in other words, the State and society are supporting a bimodal rural structure in ownership as well as in their forms of controversial and not very efficient exploitation, that does not help promote economic growth; in addition, it is a structure that destroys natural resources, undervalues the rural reality and creates conflict between rural society and national society.”

At the same time, that agrarian reality should be qualified. In 1940 the urban population was 30% and in 2012 it was 74%, which is why obviously the weight of the agrarian reality and the notion of what is rural has changed drastically. We do not know the reliability of the Censuses for making distinctions about those changes; but given the large extensions of land that the war included, and the typical problems of legality and forms of land acquisition that our countries of Latin America have tended to suffer, it could be that the table on land ownership would vary, that that bimodal structure might be less and that therefore that structure might express more potential than it now expresses.

The peace accords happened within that context of the incease in inequality and the awakening in society that another economics subordinated to life and democracy is possible. In spite of the fact that after a year there may have been no land distribution yet, while the political opposition defending that 0.5% of large property owners is growing, the peace accords do provide an opportunity for the country to democratize. The question is: will it? Following the mentality of model 1, the problem and its solutions are understood as something technical-administrative, like a “lack of”, precisely to conceal that inequality produced by the fragile formal democracy and the conventional economic model – and to that we would add a perspective closed to the bimodal structure that only sees land and crops. Following the mentality of model 2, the problem and the solutions are understood within the framework of power relationships, change in the power structure (questioning land ownership) and in the people through a different model of improvement – and with that we would add an agrarian perspective that includes land, crops, crafts and recreation of identity). Consistent with the historical perspective and the data presented, we understand that the inequality is above all a problem of the assymmetry in the power relationships, not a technical or administrative problem.

4.     Danger of using peace to heighten the inequality

The bigger risk is that in the name of peace that oligarchic belief is imposed that peace needs more development: economic growth with (neo)extractivism of the natural resources and mono-cropping. It is like saying, the regions of the country are impoverished because of lack of “development”, when it could be the opposite, they are impoverished because of too much “development”.

It is probable that this 0.5% of owners, maybe connected to the finance industry, agroindustry, commerce and the communications media, might see the peace accords as the opportunity to increase their wealth, in addition to legalizing the land that perhaps they obtained through illegal means. That is, far from ceding an inch of land and understanding its importance for peace, they see it as an opportunity for the expansion of the agricultural frontier (in addition to being able to use 70% of the arable land which is unused), new areas free for extraction and mono-cropping, repurchase of land that eventually the State might give out, cheap labor and members of private security bodies among the disarmed, zones free from the FARC in order to control them with armed criminal groups[17] and drug trafficking networks that respond to the demand of the US market, expansion of the financial and agro-chemical industries, “controlable” cooperatives that collect their harvested products and intermediate inputs to them…To take advantage of these opportunities they make use of trade rules, commercial treaties, usury, credit rules[18] and the rules of making policy; and they see the opening of roads, schools and health centers as support.

In a parallel fashion, the avalanche of more-of-the-same solutions makes the disarmed and the rural communities – peasants, indigenous and Afrodescendents –confused. “Inclusive businesses” where the anchor are private enterprises under the principles of “more volume, more profits” and “economies of scale”; cooperatives that discipline their members in mono-cropping, aid organizations responding with projects to “the lack of” technology, knowledge, capital and markets; bilateral aid agencies that with one hand support their own extractive companies and with the other finance actions that would mitigate the effects of climate change; religions (Catholic and Protestant) that win over individuals who would recognize their sins and find forgiveness and glory in the beyond. It is institutionalized technocratic conceit: elites believe they know the realities of the communities, they believe they have the solutions (money, knowledge and decisions) and they believe that change comes from above, while they are moved by a mentality of seeing the agrarian reality as in the past, only land, crops, technology and markets; the worst that can happen is to see the disarmed as agricultural producers and that agriculture is a matter of having land, equipment, inputs and buyers for what is produced.

These solutions also express centenarian and even millennial hierarchical structures. The mono-cropping structure is sustained by a transnational hierarchical structure – be they enterprises, aid industry, Churches, States or academia. The guerrillas also come from a hierarchical Leninist structure of “democratic centralism”. What is common among them is the centralization of decisions in an elite based on informal rules located in the mentality of model 1, not on rules like the Constitution of a country, that statutes of an organization, the agreements of assemblies or the rules of Afro-descendent communities. What is also common in them is the belief that there is nothing good in those “from far below”, and that is why the technician, priest and politician work on persuading. This institutionality, in good measure, tends to be reciprocated by those who are “from far below”, who have internalized that without the boss, commandante or patron, life has no direction; in addition, it becomes a social code: an ex-combatant that shows up to work on a mono-cropping hacienda is familiar with their “order-obey” structure; it seems normal to an activist of a social movement, turned into the director of an aid agency, to have the power to approve projects.

How can this danger be confronted where some good local institutions and communities with strong social and economic networks are being battered? “Everyone for themselves” is a common reaction, ex-combatants and ex chiefs who will seek their own paths in different areas and spaces; others will insist on the promised tangibles goods; many will organize to depend on external resources; in this dynamic, those who persist in their struggle for equality and justice, beyond individual benefits, will be described as terrorists, considered rebels[19] and candidates to be excluded from external benefits and to be part of those leaders physically assassinated[20] and then “assassinated by neoliberalism”. “Everyone help one another” would be more strategic; that is committed to the viability of family agriculture (small scale production or peasant economy) and crafts that would generate autonomy and energize the communal level; a peasant family that diversifies in agricultural and non agricultural activities, uses markets to scale up their income and ensure their food. Within this framework, if that family organizes in a cooperative to resolve collective problems and negotiate resources that inject energy into their production systems and endogenous institutions, they will be contributing to mobilizing their communities and with that, the resurgence of a more just and peaceful society. This does not deny the existence of monocropping and large transnational enterprise, but restrains it, makes visible what is at play in society and shows that it is not a matter of “persuading” and of responding to “the lack of”, but of creating the appropriate conditions in which changes happen in the mentality of society and its institutions

5.     Imperative to focus the direction and the prospects for building an arduous peace

This step requires that the different actors (State, academia, aid organizations, Churches, popular organizations, unions, FARC) rethink their actions. Not only should they support mono-cropping and “the lack of”, but above all families in their agricultural and non agricultural activities, forms of organization and logic in territories of indigenous and Afro-descendent communities, and communities that as Arjona (2016) shows have diverse social institutions, which would have to be understood before prescribing “development” for them. Here we deal with the how.

Figure 2 illustrates the form of relationship between the aid organizations and the communities –populations, disarmed groups, small scale producers or family economy (agriculture, home made products, non agricultural activities). There we see that there is a certain amount of dispersion between the organizations and institutions and they have different discourses with the different rural communities – peasant, indigenous and Afro-descendent. But they coincide in relating to the communities through the “intermediate stratum of development”, who are the technicians, promoters, religious and aid workers. This “stratum” connects two worlds, that of the aid agencies and institutions, and that of the communities[21]; even though in practice the “intermediate stratum” might be more a prolongation of world 1, it tends to turn into world 3, interpreting world 1 and 2 from its perspective. For example, the State through the Reincorporation and Normalization Agency (RNA), has hundreds of technicians going to the communities, as do the aid agencies, churches or the FARC through their structures and technicians responsible for writing projects, encouraging and facilitating organizational processes. We predict that the peace process will be consolidated in its version of responding to “the lack of” with goods and services coherent with the perspectives of model 1, or its version of responding to the democratization of the country coherent with the perspective of model 2, or combining both versions, to a large extent depending on the work of this “intermediate stratum.”

What is common in this “intermediate stratum” molded by world 1? It tends to avoid the fact that the root of the problem is the inequality, underlying a mentality of the rural reality as equivalent to agricultural area and families in need of equipment and infrastructure, and assumes as a mandate the clamor of the aid agencies (“we want production projects”) and that of the government (“we are going to finance viable projects in market economies”). They assume that the work is persuading – be that about tangible goods like replacing illicit crops, the gospel, rules of associativity, productivity, commerce, democracy or gender equity. Each one has their reference in something external to the community: the religious, in the Bible; lawyers, in the laws of the country; agronomists, in the manuals for monocrops, the promoters of cooperativism, in the Statutes…All of them march to evangelize the communities in order to hear what they want to hear, and then returning to their offices they can also make the aid organizations hear what they want them to hear: number of technicians trained, people empowered, projects approved, people benefitted, cooperatives…

John P. Lederach, a Peace Accord advisor, said: “peace is achieved when each Colombian has respect for differences and establishes constructive relationships with the other, with that other that it has not wanted to, or not been able to listen to, for more than a half century[22].” Specifically the challenge is that this group from the “intermediate stratum of development” would overcome their logic of persuading and be capable of listening and observing, processing what is heard and observed, and learning from their conversations under the principle that “light comes from striking stones” – that light can be an idea about a project, awakening to alienating processes and their profound traumas, or paths for collective action. And that then, that “intermediate stratum of alternative development models” can talk with the organizations of world 1 and contribute to their change.

Let´s illustrate this perspective with the formation of a cooperative. According to the logic of persuading, a cooperative is organized with 40 hours of training in cooperativism, they name their manager, and it is provided resources and markets for their products; as a result, the criteria of success is forming hundreds of cooperatives without considering that this type of cooperatives fail quickly or end up being run as private enterprises in “cooperative” clothing[23]. With a logic of learning, the cooperative is organized when its members wake up in the face of an adversity,[24] and because they realize that there are obstacles that they cannot solve on their own, discover the value of their own resources, and that there is another way of organizing outside of the hierarchical structures of mono-cropping and the boss-followers – or as José M. Navarro would say, a member of the La Fábrica cooperative in Barcelona, “a cooperative enterprise opposed to capitalism”. Along this path the member families, studying their realities and experimenting with changes, discover their capacity to innovate, their citizenship (rotating leaders, complying with their rules and agreements, supervising that compliance), administering and investing their collective resources and strengthening their connections with the rest of the community, and recreating new identities within the framework of new realities that look beyond the agrarian reality seen as equivalent to crops. Table 2 shows some elements of this type of cooperative that responds to its members, and that it is possible to produce within a framework of mutual learning and in alliance with the three worlds in accordance with each specific context, and thanks to the creative and catalyzing role of the “intermediate stratum”.


Table 2. Keys for successful cooperatives
·       Interaction between the associative side (organs) and the business side (administrative-technical)
·       Effective functioning of the holy cooperative trinity: oversight board, administrative council and assembly
·       Organization around differentiated products (e.g. specialty coffees, organic products) because it requires coordination among several families, geographic concentration
·       Distribution of earnings and definition of goals in the assembly
·       Based above all on their own resources and on endogenous institutions (of aid)
·       Accounting system that generates updated information to be used by the administration and the cooperative´s organs
·       Organizing 1st tier cooperativen on the basis of their members, and organizing 2nd and 3rd tier on the basis of the 1st tier cooperatives, and not the reverse.

This way of working, illustrated with the formation of a cooperative, requires accompaniment with a mentality of going to learn from the communities, from the disarmed groups. Said figuratively, the families in the communities know 50% of their problems, risks and opportunities, and their accompaniers (the restructured “intermediate stratum”) know the other 50%. The innovations emerge from among both sides (“from the striking of the stones”). Correspondingly, this group of accompaniers needs to unlearn in order to learn, increase their capacity to observe and dialogue so that together with the families they detect innovative practices and rules. In this way technicians and promoters will get ideas that they can turn into projects, experiments or initiatives; religious discern that God is in the people who seek justice and organize; administrators learn that the accounting information is not a tool for domination but formation (“informing is forming”)…The best guide that this type of work is on the right path is that both, the families and the accompaniers, awaken to the extent that they are learning.

For this purpose it is fundamental that all the actors from the different worlds rethink their role[25], in particular academia and international aid agencies. Academia, in order to contribute to the formation of that “intermediate stratum”, should produce appropriate categories coherent with model 1 as well as model 2. For that purpose it should organize basic research (e.g. sector analysis of agro and non agro) along with specific research combined with experimentation in specific territories, whose results would be the basis for organizing training. This, nevertheless, requires that academia understand that the source of knowledge is not just imported theories, but different communities with their multiple realities, all of them in need of being conceptualized within a framework of alliance and not just applying theories; and that requires that they include in their gamut of methodologies the organization of thoughtful immersion processes on the part of professors and students in those very territories[26]. The best critiques and policies of conventional theories, and rereadings of the land ownership table, will come from seeing the realities from the multiple perspectives of the countryside.

This strategic change from the “intermediate stratum” and the work of decolonialized academia, requires an active and renewed role of international aid. For this role, international aid should review their own practices in the last 3 decades, practices questioned in the entire world (see for example, Anderson et al, 2012)[27] because their aid has generally helped the type of “development” that has contributed to the inequality and have “ngo-ized” organizations (unions, cooperative and associative organizations) and social movements, dispossessing the families of their own organizations. This revision implies that the aid organizations in Colombia quit waiting for “production projects” from the “intermediate stratum of development”, and influencing the type of projects and centralizing decisions about those projects. This implies that they contribute to creating institutional environments in the territories where the different actors of each territory and the “restructured intermediate stratum” study those realities and produce ideas that really matter to them, and that the decisions about the projects that emerge be decentralized. It implies that the international aid agencies be conceived as allies of the peasant, indigenous and Afro-descendent communities, in favor of democracy and the reduction of inequality in those very territories – allying is like falling in love, and this requires that the “boyfriend” or “girlfriend” (aid agency) moves to the territories where their partner is.

If the communities feel that they have allies in academia and in aid agencies, who join their voices to those of the communities so that their leaders do not continue to be murdered and that they value the fact that they organize on the basis of their own good – and correcting the bad – institutions, then the peasant, indigenous and Afro-descendent communities with different degrees of connections with the FARC and other actors, will take their steps for improvement, will mobilize, will make their decisions more democratically and will understand that the reduction of inequality from the territory itself – with geographic variations – is possible, necessary and just.

6.     Conclusions

The agrarian and (neo) extractivism realities continue to weigh economically, socially and politically on the country, which is why peace should be built on the basis of reducing inequality. The greatest obstacle to the peace process is the institutionality that sustains that inequality. This institutionality has to do with elite economic groups that want to consolidate the peace process with the same mechanisms that caused the armed conflict, and with an agrarian mentality from when the rural population were the majority in Colombia. These mechanisms are expressed in the extractivist and mono-cropping neoliberal economic model moved by the law of the jungle, even though clothed in democracy, a model that has been called “development” or “motors of the economy”. The paradox is that an attempt is made to consolidate peace with the same measures that led to the armed conflict.

This “development” model is clear, seen as the economic model of the elites; but it is not so clear to us that the actors who declared themselves in favor of peace had a functional modus operandi for this model. Because it would seem that there is not much difference between centralizing the decisions of approving “profitable productive projects” and the decisions of the political and economic elites concentrating land, between academia that believes it has solutions in imported theories and the aid organizations that believe they know the future of the peasantry without studying it, or businesses that think that the market knows more than any human being, between the hierarchically organized FARC and the Church and families also organized hierarchically…This shakes up our minds and wakes us up!

If waking up matters a lot, we identify the most important point of change is the “intermediate stratum of development” (administrators, technicians, aid workers, religious) who have served to convince the world of indigenous, peasant and Afro-descendent communities about the world of “development”. We suggest investing in retraining this “intermediate stratum”: that they move from a logic of “persuading” and writing projects for “the lack of”, toward a logic of “learning” and identifying along with the communities ideas in accordance with the different routes and rural institutions in which they move; from prescribing to knowing how to negotiate in the midst of uncertainty. To do so, we argue, the work of the university research centers and international aid agencies is needed; the former with alternative categories to the “development” model, and the latter constituting itself as serious allies of the different communities, recognizing that they are sources of knowledge and seeds for a more democratic and just society.

The peace process in Colombia is a global challenge that generates optimism. In Japanese culture we find two meanings for the word “optimism”: rakutenteki, the feeling of the future that a young person has about their adult life, and rakkanteki, when people accept their problems as challenges to be faced[28]. This optimism (rakkanteki) encourages us to review our own mentality and to recognize that peasant, indigenous and Afro-descendent resistance is also our resistance to inequality and the mechanisms that sustain it. Peace is possible, in spite of “development”, under the spirit of Santander, and as the “effect of justice” (Isaiah, 32:17).

[1] René has a PhD in development studies, is an associate researcher for IOB-University of Antwerp (Belgium), a collaborator of the Winds of Peace Foundation ( and member of the COSERPROSS RL. Cooperative.

[2] I am grateful to the comments of A. Bendaña, E. Baumeister and J. Bastiaensen for their commentaries on a previous version. The text is a draft to be improved and commented on by each person who reads it.

[3] CEPAL, 2017, Social Panorama of America Latina 2016, Table I.A1.2, shows the gini coeficiente for income for 14 countries in Latin America. In 2008 or 2009 Colombia is the country with the greatest inequality (0.564) and for 2015, even though it improved, continues being the most unequal country in Latin America (0.530). See:

[4] Stiglitz, J., 2017, “Challenges    and       Opportunities      for         Colombia’s        Social    Justice   and Economy”, power point presentation, see: I am grateful to A. Grigsby for suggesting this text.

[5] Robinson, W., 1996, “Promoting Polyarchy: Globalization, U.S.,” in: Intervention and Hegemony. Robinson, W., 2002. Remapping development in light of globalization: From a territorial to a social cartography, in: Third World Quaterly, No. 23.6. Robinson, W., 2014, “Democracy or polyarchy?” in: NACLA.

[6] Escobar, A., 2012, “Alternatives to development”, in: Transition Culture. Dave Chapman´s interview of Escobar, See:

[7] It is thought that neoextractivism is generally the case of Bolivia and Ecuador, but more and more used in several Latin American countries.

[8] Gudynas, E. y Acosta, A., 2011, “El buen vivir o la disolución de la idea del progreso” in Rojas, M. (Coord.), La Medición del Progreso y del Bienestar. México: Foro Consultivo Científico y Técnico, in:

[9] This duality of “development” / alternatives can also be seen in the duality between contemplation (leisure) and work (business) from the ancient times of Greece up to our times. It has moved from favoring contemplation to giving the highest moral value to work (business), passing though the religious thought of Calvin where leisure (contemplation) became sin and business like the glory of God (see: Rul·lán Buades, G., 1997, Del ocio al neg-ocio… y otra vez al ocio. Papers 53, 171-193. It is a duality that model 2 would seek to connect to one another.

[10] The 12 essays of the Historical Commission of the Conflict are in:

[11] Using indexes like THEIL, instead of Gini, the inequality is even worse. A more detailed study probably can demonstrate the weight of the medium strata, more than a bimodal structure, which would be important in light of more appropriate rural policies.

[12] For a more detailed study of the Agricultural Census in Colombia, see: Oxfam International, 2017, Radiografía de la Desigualdad.

[13] See Oxfam International in Colombia:

[14] Gutiérrez, F., 2014, “¿una historia simple?” en los 12 ensayos de la Comisión Histórica del Conflicto y sus Víctimas.

[15] Wolf, E., 1982, Europe and the People Without History. University of California Press.

[16] Machado, A., 2009, La reforma rural, una deuda social y política. See also UNDP, 2011, Colombia Rural, razones para la esperanza. Informe Nacional de Desarrollo Humano 2011,

[17] Arjona (2016), contrary to the idea that war zones are chaotic, lawless zone, finds communities with social institutions where the armed structures becomes de facto governments and communities with strong justice institutions capable of negotiating with the armed groups. See: Arjona, A., 2016, Rebelocracy: Social Order in the Colombian Civil War. Cambridge University Press.

[18] The norms for providing credit include “lending money to people with the capacity to pay.” This supposes that those who are not in monocroipping and do not have large areas, are outside of the credit system. This type of mentality was turned upside down in Bangladesh by Yunus and his team, in the 1970s they proved that everyone is capable of paying and that the bank needs to adapt to their realities. If more than 50% of the food comes from peasant families, why doesn´t the financial system respond to that reality?

[19] Hale (2002) observed in Guatemala how international organizations make distinctions of the indigenous organizations between the “permitted” ones, those who drop their agendas to take on the agenda and rules of international aidm and the “rebels”, those that resist and respond to the agenda of their members-communities. The former are given financial support and the latter are not. See: Hale, Ch., 2002, “Does Multiculturalism Menace? Governance, Cultural Rights and the Politics of Identity in Guatemala” in: Journal of Latin American Studies 34.3 Cambridge University Press.

[20] See the newspaper el Tiempo (17-Octubre-2017), “Líderes asesinados, la mayoría en zonas claves para la paz”:

[21] Academia (Universities and research centers) also are part of the block of aid organizations, but their relationship with the communities tends to be sporadic, which is why we have not included them in the figure, while their relationship with the “intermediate stratum” is strong because that “stratum” was trained in the universities and they also organize training courses in solidarity economics and other topics directly for that “stratum”.

[22] Interview of John Paul Lederach, “La paz lo construye cada Colombiano”, El Espectador, June 8 2016. See:

[23] Honesty is not lacking in the organizations of world 1 (figure 2): “it does not matter that these cooperatives or projects are not sustainable years later, the important thing is gaining time so that the ex-combatants do not go back to war”.

[24] The adversity is the inequality in land access, the commercial mediation that steals from them in the weighing of their produce, quality control and in prices, or in usury. A savings and loan cooperative that organizes in the face of usury, for example, begins on a good step, because having awareness of the adversity means having recognized (studied) and having realized that bringing their own resources together they can avoid the usury.

[25] For example, for the business actor, the persepective of Kaiser is interesting (2012, La fatal ignorancia La anorexia cultural de la derecha frente al avance ideológico progresista, He observed that the business class and the right in Chile “do not understand nor believe in the power of ideas and culture as decisive factors of the political, economic and social evolution”, and that they only focus on productivity, technology and financial incentives, forgetting that human beings are moved by beliefs, values and ideas transmitted by the family, schools, books…Kaiser thinks that that bourgeoise and that right fell into a mental anorexia that opened the door to the left. From our perspective, that mental anorexia also is shared by the left and most of the organizations and international aid organizations today.

[26] Mendoza (2015) describes this methodology, precisely based on an experience of a Research and Development Institute in Nicaragua, that for some years was capable of based a good part of their proactive innovation on that methodology of immersion. See: Mendoza, R., 2015, “Inmersión, inserción, escritura y diálogo: Mecanismos de aprendizaje para el desarrollo territorial”, en: Bastiaensen, J., Merlet, P. y Flores, S. (eds), Rutas de desarrollo en territorios humanos. Las dinámicas de la vía láctea en Nicaragua. Managua: UCA Publicaciones.

[27] Anderson et al, 2012, Time to Listen: hearing people on the receiving end of international aid.

[28] This notion of optimism was expressed by Kishida Junnosuke, chief editor of the Asahi Shinbun newspaper, to the question of Peter Schwartz in 1984. See: Schwartz, P., 1991, The Art of the Long View. New York: Doubleday.

Toward the re-invention of fair trade. The case of Central America.

Toward the re-invention of fair trade. The case of Central America.

René Mendoza Vidaurre[1] and Johan Bastiaensen[2]

The Fair Trade Movement (FT) emerged in the face of unfair trade mediation as an alternative so that people that organize might improve their lives, and to be a space of solidarity among different actors beyond national borders. Nevertheless, in our case study on Nicaragua and Central America we show that the institutionality of the power relationships under elite market governance has been capable of setting FT against its own principles and turning solidarity into a mere formality. How can FT resist this market force and at the same time deepen its alternative FT principles? Taken as given that there are cooperatives, organizations and people that prove the importance of organizing and cultivating global solidarity, in this article we study certain practices of this FT network that seem to point to its involution, and on that basis we suggest that FT needs to reinvent itself. To do so we focus on coffee, which constitutes 70% of what is sold as FT.


The FT movement began in 1964 within the framework of the UN Conference on Trade and Development (UNCTAD). In 1973 trade in FT coffee began with Guatemalan cooperatives under the brand of “Indio Solidarity Coffee”. In the decade of 1980s the volume of products increased, and their design improved: solidarity stores sold combinations of coffee, tea, honey, sugar, cacao, nuts, bananas, flowers and more. In 1988 the “Max Havelaar”[3] seal began operating. In 1997 the Fair Trade Labelling Organization was created (FLO) so that producer families could confront their adversities and vulnerabilities and improve their organizational skills (MacDonald, 2007). But, according to Taylor et al (2005:204), after having an ATO (Alternative Trade Organization) governance structure with strong roots linking consumers and producers, it shifted toward an impersonal brand and the search for market niches under a conventional strategy. In 2011 FT-USA and FLO divided, the former preached “fair trade for all” increasing even more the volume of coffee traded from producers without regard to whether they were members of cooperatives or not (Valkila, 2014).

Parallel to this division, the FT seal faced even more challenges – more competition from other seals with attributes similar to FT. Many coffee buyers and roasters opt for the direct-trade approach instead of fair trade. Many cooperatives face a mixture of governance and “privatization” crises with their resulting turn toward less democratic governance structures. This is an expression of a context of the all absorbing neoliberal market, in which FT increases its volume getting into the conventional market, while it neglects a good part of its principles of transforming unjust trade relations.

This all absorbing context is shaping the actors, and at the same time is shaped by them. This directs our attention to the relationship between the structure and the actors (Long 2001). The structural perspective by itself runs the risk of determinism, while just looking at the actors and their actions runs the risk of voluntarism. Structures are expressed in rules and regularities, collective and persistant phenomena, while social actors produce and reproduce the structures, interpreting them in their actions. The structures, like conventional or FT mediation, limit and facilitate the action of the social actors without 100% determining them.

Within this structure-actors framework, we propose that FT resolve this paradox of growth with involution by going back to being “alternative” as it increases its current growth, deepens its democratic structures and improves its capacity of governing those markets. To do so, we work with a foundation of information and analysis from various sources[4]. First, we reviewed studies on FT, analyzed secondary data and tested the process of weighing coffee from its cherry to export state, including cupping parallel to what the organizations did. Second, we talked with managers of companies, individual merchants and producers, coffee buyers and roasters from FT and direct trade, inspectors of the certifiers, cooperatives in Europe, social bank officials and directors of international aid agencies; within this framework we studied outstanding cooperatives and associative enterprises in each country in Central America (see Mendoza, 2016a, 2016b, 2016c, 2016d and 2017a). Third, since 2010 we have worked with 35 first tier cooperatives in Nicaragua (20% of the total first tier coffee) and with various organizations from other Central American countries, accompanying them in their actions and reflections, an immersion that has given us an understanding from inside the cooperatives. Finally, we organized spaces for reflection where we triangulated information and analysis with the members, staff and board members of the cooperatives.

After this introduction, we present the innovative character of FT. The second section describes the context of the neoliberal market that is absorbing what is innovative of FT. The third and fourth sections discuss the involution processes. The conclusions summarize the principal findings and suggest a path for the re-invention of FT.

1.     The novelty of fair trade

From our experience, there are at least two obstacles keeping small producer families from getting out of poverty: the extended family, and their position in the network that mediates their access to markets. The institution of the extended family is a protective network that keeps their members from getting poorer and enables them to survive, but at the same time it keeps them from organizing into other spaces to improve their lives. It is an example of what Woolcock and Narayan (2000:232) have called ‘bonding social capital’: protective social and solidarity networks useful for the survival of poor people, but with the risk of limiting the creation of connections and initiatives that go beyond the close circle with limited opportunities for growth. The latter refers to the mediation network that combines usury, low prices for their products, and cheating on the weighing and the quality control of their products, mediated by relationships of subordination where “the height of poverty is not having anyone to exploit you.” Because in moments of extreme urgency (e.g. illness of some family member) that network provides a certain amount of protection. The institution of the extended family keeps its members from falling into extreme poverty, and at the same time keeps them from getting out of poverty; and the commercial-financial mediation is a mechanism for dispossession combined with palliative help.

the face of both institutions, FT responded with an alternative perspective and path. Figure 1 shows the FT framework: cooperatives, certifiers, social banks and buyers who operate under the FT seal. On the right side is the chain of actors what revolves around coffee, and on the left are the organizations that support that chain. In principle it is social justice and not the power of the market that moves these product chains, actors and social relations. Consequently, first, for the producers to avoid usury and ensure the supply of the product, they receive loans through their cooperatives on the part of social banks and coffee buyers (companies, stores and cooperatives from countries in the North); a good part of that credit is pre-financing worth 50% of the value of the product that they are going to buy at an interest rate of zero.

Box 1. Purposes of FT according to Cafedirect


We reinvest the profits of your purchases in the producers and their communities. This is in addition to the FT premium that we pay the producers. As a minimum we reinvest a third of our profits, and so far we have reinvested more than 50% of our earnings. We believe that the producers are the best ones to decide how these earnings should be invested in their communities, and so since 2009 the development projects have been managed by Cafédirect Producers’ Foundation (CPF), an aid organization led by producers for producers.


Cafédirect 100 grams Label.

Second, to keep the producers from falling into extreme poverty because of the price paid for coffee, and to incentivize sustainable agriculture, FT sets a minimum price of $1.40/lb, provides $0.20/lb as FT-premium, $0.30/lb as organic premium and a quality bonus for an additional amount that varies by buyer. (See Figure 2 for the historic comparative evolution between market prices and FT prices).

The FT premium is tied to a plan that the cooperative establishes (Fairtrade, 2009) where $0.05/lb is for families to improve the productivity of their coffee (FT-FLO, 2011. The organic premium goes directly to the producers.

Third, in order that the product be traceable and trust be built up over long term relationships, there are organizations that certify compliance with agreements and policies; for organic coffee international certifiers do it, for the FT premium and practices FLO CERT does it; the buyers stick to what the certifiers say, and the social banks to their financial analysis procedures and commercial contracts.

Fourth, a direct relationship is established between consumers and producers where the FT earnings the producers themselves manage in their communities, families and farms (see box).

FT, in addition to its economic face, is also social, political, environmental and cultural, as its eleven principles indicate: opportunities for economically disfavored producers, transparency, trade relationships, payment of fair prices and salaries, no child exploitation, gender equity, decent working conditions, skill strengthening, promotion of fair trade, environmental protection, and the preservation and defense of identity.

Here we highlight the combination of trade, finance and production in a transnational structure of north-south counterparts, with a pluralistic framework of principles of equality and equity. This leads to the families organizing, improving their production, their lives and their identity in family and in the community, and cultivating a direct relationship with consumers. FT is a space for transnational learning and social, economic and environmental transformation, with a commitment of the countries of the north to those of the south, and of consumers to producer families.

2.     All absorbing market and international aid structure

This novel FT network has become involuted. Here we describe the market and international aid conditions that – in our judgement – have slowly absorbed FT.

2.1  Tendencies in the dictatorship of the market

Stiglitz (2016) reminds us that the restructuring of market policies increased the inequality and slowed the growth of the economy. Milanovic (2016), studying 20 years under neoliberal policies between 1998 and 2008, found that 1% of the population (the plutocrats of the world) and the middle class of emerging economies of Asia were the winners. Neoliberalism presents us a “natural market” without social and institutional roots, while it promotes markets rooted in the interests of international capital with manipulated regulation. In contrast to this myth of the biased market, we understand markets along the lines of Polanyi (2001), as socially and institutionally rooted. The FT movement constituted a type of market rooted in producer families and consumers under the idea that an “alternative” market is possible and necessary to reduce the inequality. How is that market relationship expressed around coffee, the crop which we are using to look into FT?

Considering the formation of the price of coffee in the last 80 yrs, the historical tendency is that the producer families have been losing over time. In the decade of the 1930s, the price to the producer was 33% of the final value of the roasted and ground coffee (Wickizer, 1943), it dropped to 27% in the decade of the 1970s (Clairmonte & Cavanagh, 1988), 15-20% in the decade of the 1990s (Pelupessy, 1999), 10% in 2001 (Mendoza & Bastiaensen, 2002) and 11.67% in 2009 (Mendoza, 2012b); in other words, it went from 33% to 12% in eight decades[5]. The gap between the consumer price and the amount the producer gets has widened; the FT idea that the consumer would pay a higher price to redistribute more to producer families apparently has not happened even within FT itself – producer families do not get more advantages from being part of FT (see Valkilia, 2014; Ranjan, 2017). A second idea of FT was avoiding the intermediary sector to benefit producer families, but it seems that this intermediating sector is the one that has most benefitted, grown and made even more difficult the ideal of communication between producers and consumers. Stiglitz (2002) argued that the problem was not globalization, but its management; 15 years later, Stiglitz (2016) recognizes that its management did not change at all. The case of coffee seems to also be an expression of that reality.

On looking into the increase in the value of coffee, we find that the final product has more and more inputs that have increased its aggregate value. This is part of what is called the “supermarket revolution” managed by the demand side, where the wholesale distributor defines the rules and governs the entire product chain (See Reardon et al, 2007). Consequently, if the market demands a certain type of coffee, all the actors rush to respond with the quantity and quality of the coffee defined by the moment. The market has been demanding differentiated and quality products. Countries like Colombia and Costa Rica have conquered the markets for speciality coffees (e.g. close to 50% of the coffee of Colombia is sold as specialty coffee).

In contrast FT, it seems, grew in volume and not so much in terms of product differentiation. The FT seal, in addition to being expensive, nearly the same as the FT premium (Valkila, 2014), has lost its attraction to consumers; several seals have emerged proclaiming different environmental and social attributes; buyers like Green Mountain and Starbucks have dispensed with the FT seal; other buyers and roasters have opted for the direct trade approach, because in addition to ecological and quality coffee they want the additional price paid to reach the producers, and not be left in the administrative structures of the organizations. Other models have also emerged, be they in response to the market or as alternatives to it; the Starbucks model, revolutionizing the coffee shops of the world with its own seal; the Capeltic coffee shop in Mexico that emerged from an alliance between a cooperative in Chiapas and the Iberoamerican University, connecting consumers with producers (see Colsa, 2013); a cooperative in Panama that organized the coffee chain from production to roasting (see Mendoza, 2017a). These last two break the elite market model and show that the relationship between producers and consumers, a FT ideal from the 1980s and 1990s, can be achieved by another path different from that of FT.

2.2  International aid within FT

In the same period in which market power rooted in elite interests was growing and FT grew in volume, international aid was increasing. Based on the experiences that we know in Central America, we argue that a good part of that aid helped to “inflate” the cooperatives around the demands of the market, and made the arrival of projects be translated, in the eyes of the members, into FT benefits, contributing to the fact that the organizations neglected efficiency and effectiveness, which accelerated the FT involution process.

A good part of investments in dry and wet milling, offices and laboratories were the product of external donations. Generally the technical assistance staff of the cooperatives, many times including the management/administrative areas, were paid by international aid. So the cooperatives, without yet having an economy of scale and the profitability that would have allowed them to have management structures, joined that existing practice of having managers and technicians[6]. That staff, in turn, responded more to those who were paying them, and less and less to the families who were the owners of the cooperatives. These structures, given the boom of projects and fair trade and organic premiums and extra payments, did not have a problem of providing benefits to the members, who believed that those benefits were for being efficient cooperatives and for selling their coffee through FT. In other words, international aid subsidized FT, particularly the growth of the intermediary sector, “inflated” the costs of the certifiers, who charged more because the cooperatives “were receiving donations”, and unloaded tasks of the certifiers onto the technicians of the cooperatives, and contributed to the fact that the cooperatives took on salary structures and investments that were not in accord with their organizational capacity and level of economic growth.

The distorted situation that FT imprinted on the cooperatives became a problem when international aid reduced its donations to Latin America beginning in 2008. Then something of the real world appeared: member families who had not improved the productivity of their farms in spite of years of good coffee prices and international aid projects; empty first tier cooperatives, some not even collecting coffee; cooperative structures with administrative-management staff with high salaries unrelated to the economic capacity of the cooperatives. In other words, while the dictatorship of the market rooted in large capital intensified, the drop in international aid “deflated” the supposed capacity of the cooperatives, they began to feel the problems, some sold their assets, others went broke or resigned themselves to having cooperatives privatized by the new elites, and some re-emerged as efficient organizations responding to their members.

3.     Mechanisms that involuted FT

So far we have seen how the force of the market rooted in the elites and the international aid industry gave shape to the FT network and the cooperatives; they subjected it to the demand for undifferentiated products (commodities) turning the cooperatives into simple companies and “ngo-ized” them, making them dependent on external subsidies. In the last 8 years those forces intensified, reducing FT to just its economic part, and so FT divided, its seal lost competitiveness, its product became more standardized, another approach and organization, like direct trade gained ground and another model appeared that was able to link producers and consumers. Meanwhile trade inequality and injustice intensified; just like the global inequality that Milanovic made evident.

Figure 3 summarizes the mechanisms that led the cooperatives to involute, and the FT structure that produces that involution and the glocal (global and local) power that sustains it. As a cooperative takes on each one of the four mechanisms, it is legitimated in its fall by the FT network and is pushed along by the glocal power structures. In this fall, the cooperative gets privatized and governed by ideas commonly known as “neoliberal.”

3.1  Mechanisms that entrap the cooperatives

How do these mechanisms work? Once an organization is trapped by one mechanism, it pushes it on to the next and so on. Many organizations, even when they fall into the third mechanism, can maintain the formality of their organization – meetings of its bodies, minutes and financial statements – while its insides get eroded, but when they fall into the fourth mechanism, the cooperatives end up as privatized entities.

3.1.1      Mediation and the “lottery culture”

When we compare the conventional chain with the FT chain, the price to the producer, in relative terms (% of total aggregate value), is smaller in the FT chain than in the conventional one, even though in absolute terms it varies: sometimes it is a little bit bigger. There are two reasons for this: the consumer price of FT coffee is higher but its distribution through the chain (roasters, buyers, importers, exporters) is relatively detrimental to the producers; the FT premium and the organic premium for coffee get to the members (producers) in an unequal way: some have not gotten anything for many years.

For greater rigor on this data, we triangulated information starting from the members themselves, a process in which we saw the manipulation that is done of the members. In the house of the member we reviewed their receipts where the amount of coffee that was sold was noted, and the prices that their cooperative paid them. We saw that there are cooperatives where the members have not benefitted from initiatives financed by the FT premium, nor have they received the premium for organic coffee for 4 to 6 consecutive years; there are cooperatives where the members have received an organic premium of US$29/qq and even US$15/qq in FT premium in cash and physical investments; and there are cooperatives whose members have received the two premiums between both of those extremes.

Table 1. Intermediation Costs (cyclo 2016/17) (in US$)
1st tier cooperative (exporter) Successful 2nd tier cooperative Failed 2nd tier cooperative
Exporting 8 8.6 8.6
Havest collection and processing 10 10.7 13.5
Administration 6 6 10
Taxes: income and municipal 2.9 2.9 4
Financial costs 2 3 6.5
Total 30.9 33.2 44.5
Source: based on interviews of cooperative managers and administrators.

We saw that the intermediary part of FT has grown. This is where the structure of the cooperatives, certifiers, social banks, roasters, distributors and FLO organizations is found. This structure that has grown would also be limiting producers, consumers, FT cooperatives from having a more fluid relationship. In the national intermediate sector of coffee exporting countries, what is noteworthy is the fact that the difference in costs (exporting, administration, processing, taxes and financial expenses) between the FOB price (export value) and the price paid to the producer is enormous. They go from US$30 up to US$45 from cooperative to cooperative. The tendency seen is paradoxical: if the cooperative is a second tier one and has high volume, the gap is larger; if the cooperative is a first tier one, with less volume and members, the gap tends to be smaller. This is paradoxical, because it should be the reverse, more volume of coffee exported, the smaller the per/qq costs, and therefore the price paid to the producer should be greater.

If the cooperative belongs to its members, why are the fair trade and organic premiums and the profits in many cooperative getting stuck? First, the intermediate sector has grown by the force of the neoliberal market and the predominant type of international aid, as well as because key actors of this intermediate sector manipulate the rules of the entire FT system. Secondly, the FT certification and organic product costs in terms of their fixed amounts as well as the burden of technical work on the cooperatives are considerable. Third, coffee productivity is not increasing, and some cooperatives are trapped by the “lottery culture” mechanism, of storing in the warehouses coffee that was purchased in hopes that the price would rise and thus “win the lottery”, and many times they do not get those expected prices.

When the cooperative loses in a cycle then – as happens in slot machines – they try to “make up for it” in the next cycle; in this process they do not follow the decision making processes of the associative side of the cooperative, as the members lose confidence in their organization and the FT network. These loses, added to the complaints or rumors of the members about what is happening in the cooperative, exasperate the management and some leaders, who see themselves under pressure to consider other options, like the one that follows.

3.1.2      Purchasing coffee from third parties

Before the 2006-07 cycle 100% of the coffee that the cooperatives exported came from its members. In that cycle international coffee prices began to increase, and the entire FT system grew in volume; for example, cooperatives in Nicaragua went from 10% of total exports of the country in 2006-07 to 28% in the 2011-12 cycle, a great increase normally channeled through FT (Mendoza et al, 2012; Mendoza 2012a). Also in that 2006-07 cycle the purchase of third party (non member) coffee began on the part of the cooperatives, under the argument that they needed coffee to fulfill the contracts with the buyers; and it was with the 2011-12 cycle that purchasing coffee from third parties took off, in some cooperatives comprising up to 70% of their total exports.

What is the problem of buying coffee from third parties? Conventional coffee bought from buyers, against whom the cooperatives emerged, is exported as if it were the coffee of the cooperatives. In some cases, that conventional coffee is exported as if it were organic coffee, due to the deficient control on the part of the certifiers, and because of the increasing independence of the business side of the cooperatives which circumvents the associative side of the cooperatives. Given that coffee purchases from third parties (coffee buyers and non member producers) lacks any quality control of that coffee, mixing it with the coffee collected from the members affects the yield (conversion rate of APO coffee to APS coffee), and thus the quality of the coffee of the members. So the cooperatives that most buy third party coffee prioritize their resources for those purchases, which is why the members do not get zero interest loans, some get loans at interest rates of between 12-20%, and the rest do not get any credit at all. The more a cooperative buys coffee from third parties the less it responds to its members.

In a parallel fashion, there has been a drop in the amount of their coffee that the members have been turning in to their cooperatives since the 2006-2007 cycle. In a study of 33 cooperatives in Nicaragua, we found (Mendoza et al., 2011) that only 32% of the coffee production of the members was turned into their cooperatives. In other words, the members sell their products to other markets, and many times end up falling once again into the historic practice of the “sale of future coffee”, an institution that is a producer of poverty (Mendoza et al., 2013). Others show the resistance strategy that the producer families call “for one dirty deed another”, whose logic runs like this: “if they are buying coffee from all over and are passing chemical coffee off as if it were organic coffee, then if I get some money I will put chemicals on my coffee and not say anything;” “I will only sell the cooperative a little, in case it gets some project funds.”

Under this mechanism, the business side of the cooperatives responds less to its members and does not listen to their complaints, because it can buy coffee from third parties with having them demand transparency, reports, loans or technical assistance. For the administrative structures of cooperatives like this, it is cheaper to buy coffee from third parties (without providing credit, technical assistance nor reports), and in addition it allows them to take advantage of the quality of the coffee of the cooperatives for themselves (lower the yield of the members which means paying them less); while the members and their cooperatives are being cleaned out.

3.1.3      Coffee yield in the dry milling process

In the beginning of the 1990s the cooperatives criticized the private owners of the dry mills for cheating them in the weighing (measuring the degree of moisture) and in the quality control of the coffee in the dry mill. In the face of the market demand for better quality coffee, the cooperatives and the FT network understood that the quality of the coffee could be improved, cheating in the weighing could be avoided, being fairer in the yield (from APO to APS), lowering the costs of the dry milling and getting better prices for the coffee. So they invested in the construction of dry mills and laboratories. In the first decade of this century the quality of the coffee in the cooperatives was felt in the country and around the world, as well as the importance of the cooperatives, and with that the importance of the small producer families (Mendoza et al, 2012; Mendoza, 2012a). In the second decade of this century, within the context of the intensification of the control of the market structures, because of the withdrawal of international aid and the damage the coffee rust caused on the plantations, and the fact that the members did not feel that they were being reimbursed for the improvement in their coffee quality, in large numbers they changed from the caturra variety to catimor, a variety that is productive but of low quality. So a good part of the members began to complain again, this time against their cooperatives, about the fact that they were being cheated in the weighing (measurement of degrees of moisture), the measurement of the imperfect coffee and in the determination of the quality of their coffee.

How does this happen? A first dispute is over the weighing: if the scales are calibrated in the different harvest collection centers that a second tier cooperative tends to have, there would be no problems. Nevertheless, in many cooperatives the scales in the harvest collection centers are not calibrated to the central scale in the dry mill, so that is where the complaint comes from that “it weighed so much here, but there (in the mill) they said it weighed something else,” at a loss higher than what tends to be lost in transporting the coffee.

The second dispute is about the moisture content of the coffee, that also has to do with weight – table 2 shows data with pretty fair percentages, above which question would be raised. The institutionalized rule for 6 decades now is that there is nothing intermediate: it is either wet coffee or sun dried. If the coffee is wet, 56% is discounted and if it is sundried or moist 42% is discounted. An experience of a first tier cooperative that exports coffee is revealing: “The coffee from my cooperative has a 49% yield; one day I took 100 lbs of wet coffee and I dried it on the patio of the dry mill until it gave me a reading of 12% moisture content, then I put it through their mill and it gave me a yield of 76%; the manager of the mill did not believe me. I did it in their mill! (Leader of a first tier cooperative). This case is exceptional, it is worthwhile to think about what is in play with the yields (conversion APO to APS). One of the achievements of the cooperatives in the decade of the 1990s was that their members got accustomed to turning in sun dried coffee (42%); while in recent years the complaint is that that sundried at 42% is being considered more and more as if it were wet coffee.

Table 2. Nicaragua: Calculus of coffee yield (lbs)
APO (lbs) Moisture (42%) Total without moisture (lbs) Milled (16%) Total APS (gross export) Imperfect (1.5%) Net exportable
206 (minus 0.5 lb for defects= 205.5) 86.31 119.19 19.07 100.09 1.51 99.20
APO = Arabica sundried parchment; APS = Arabica dry parchment (gross export).

The dispute is over the procedure for determining those percentages, and particularly on the rule of sun dried or wet. There is a technology called Moisture Determinator that has a screen to measure the moisture in the coffee to be exported, which should have between 10-12% moisture content. But generally that tool is not used in the harvest collection centers, and in some cases where they use it they come back with ranges that respond to “sun-dried” (42% means 0 lbs discounted), “moist” (42.46% which means a discount of 6 lbs) or “wet” (46-56%) which is a discount of 14lbs.

The third dispute is over the percentage of the hulling. Table 2 it appears as 16%, but in many organizations it tends to get up to 18%. The variation depends on the variety (e.g. the hull of catuaí coffee weighs more) and the quality of the coffee, and also on the treatment it is given. Table 3 shows the manipulation of the APO coffee conversion to APS coffee. The accepted conversion ratio is between 2.02 and 2.06 qq APO to 1qq of APS (gross export). Nevertheless, in the last six years that conversion ratio in many cooperatives, and historically in the businesses that own dry mills, has increased from 2.06 to 2.10 and even 2.20, and in some cases higher than 2.30. In the table we see that 100qq APO in a 2.6 ratio is equal to 48.5 qq, and those 100 qq in a ratio of 2.20 ends up being 45.45qq APS, a difference of 3.09qq APS, which at a price of US$160 qq (minimum price+premium) is US$490. A small producer with 1.5 mz of coffee that produces 10 qq APO loses just in the dry milling close to C$14,000 (US$490), much

Table 3. Coffee yield in the dry mill (assumption: 42% moisture content)
APO APS Price (U$ 140 + 20) Total value
Ratio Lbs QQ Lbs QQ
2.02 10000 100 4950.50 49.50 160 7920.79
2.06 10000 100 4854.37 48.54 160 7766.99
2.12 10000 100 4716.98 47.17 160 7547.17
2.16 10000 100 4629.63 46.30 160 7407.41
2.18 10000 100 4587.16 45.87 160 7339.45
2.20 10000 100 4545.45 45.45 160 7272.73
Ratio of 2.06 to 2.20

(4854.37 – 4545.45)

-308.91 -3.09 160 -494.26
Source: based on a series of interviews of owners of coffee mills, buyers and supervisors of harvest collection and processing areas.

more than the value of the FT premium itself. If his second tier cooperative exported 50,000 qq at a 2.20 ratio, using 2.06 as a reference point, its members lost 1,544.5 qq (US$247,131).

Table 4. Defect equivalency table
Primary defects Secondary defects
Defects Total defects (equivalents) Defects Total defects (equivalents)
Full Black beans 1 Partial black 3
Full Sour bean 1 Partially sour 3
Dried cherry 1 Parchment 5
Fungus damage 1 Floater 5
Foreign materials 1 Immature bean 5
Severe coffee bore damage 5 Withered bean 5
Shell 5
Broken/chipped/cut 5
Dry hull or pulp 5
Light coffee bore damage 10

A fourth dispute is over the percentage of imperfect coffee (see Table 2, dark columns). In the decade of the 1990s the cooperatives also improved the quality of their coffee, and the members got accustomed to delivering clean coffee, and in times of low prices the coffee buyers demanded quality and the coffees traded by FT became known for their good quality (Valkila and Nygren, 2009). This is where the alarm over reports of high percentages of imperfect or second quality coffee comes from. How does imperfect coffee get calculated? 350 grams of coffee are taken and from that amount the number of defects are identified (see Table 4). Then they are weighed and the percentage of imperfect beans is obtained. For example, 4 primary defects are added up and 3 secondary defects, each one of them is weighed (let´s say 5 black beans = 2 grams, , that 2×100/350 grams = 0.57%); likewise with the other defects. Then the imperfection rates are added up and let´s suppose there is a 2.5% imperfection rate in the sample. That is what is then applied to the total coffee through the simple 3 rule. Strictly Higher Grown coffee is specialty grade coffee with 8-10 defects, among which there can be no primary defects.

Coffee buyers define the limit of defects for the coffee that they acquire: the smaller the percentage of defects, the more the coffee is worth; and if the buyers ask for coffee with less defects, the more the dry mill works in response. The possibility for manipulation in the imperfect coffee consists in the following: “if the buyer asks for 12 defects as a limit for such and such a price, and the managers ask whether they can accept 15 defects, and if the buyer accepts, the managers report the required 12; the difference of three, weighed in grams and expressed as a percentage of exportable coffee is the managers´earnings” (cupper of a dry mill). This happens because there is no control nor supervision on the part of the owners (members) of the dry mill.

Finally, the control over the sieves (size of the beans) and the quality of the cup. There are sieves from sizes 10,11,12…up to 20. Exportable coffee is from size 15 on up. The buyers propose the price of the coffee depending on the size of the sieve. If they want coffee from 17-18 size screen, they pay more than for coffee from 15-16 screen, and if in addition they want coffee that score 85 or higher in quality, the price goes up. The quality of the cup of coffee is calculated on its aroma, acidity, body, flavor and residual flavor, the points are added up and 50 additional points are added (Chemonics International Inc., & Star Cuppers de Centroamérica, 2005). The larger the sieve and the better the cup, the more the coffee is worth, and more work is required to choose the coffee that meets these requirements. The possibility for manipulation consists in that the coffee from the cooperatives has good size and cups well, and therefore would get a good price and require less work, but the members do not know that, so the members are paid as if their coffee did not have such high quality and good size.

If the cooperatives progresses to the point that their members turned in sundried coffee (42% moisture content) and better quality coffee, why did the conversion ratio reach and surpass 2.10 and the rate of imperfections go up? It has to do with the increasing purchase of coffee from third parties – which generally is of lesser quality and has more moisture content – with the manipulations described that respond to the interests of the administrative staff responsible for the negotiation and management within the dry mills, and with the reaction of the members that neglect the moisture content and quality of their coffee under the tactic of “one dirty trick deserves another.”

3.1.4      “NY price + 10”

Some cooperatives that have been trapped by the mechanisms described above end up going broke, others survive because the management structure accepts proposals from some export companies without their members knowing about them: “NY price + 10”. In this case the export company proposes exporting their coffee (the coffee of the company) under the name of the cooperative, which means using the export license and FT certificate of the cooperative. For that operation the cooperative receives US$10/qq for the FT premium, and the company gets the NY price + US$10/qq of the premium. If the transactions are for 20,000qq, for example, the cooperative, without having collected coffee, “only providing their documentation”, earns US$200,000, like the private company. If the cooperative has organic certification, an additional $15/qq is added on.

These transactions, that according to our sources are increasing year by year, generally are done by the management structure of the company and that of the cooperative. In most cases, given the confidentiality of those transactions and the huge gap between the management structure and the members, there are enormous personal earnings at the cost of the cooperative and the FT system. This reveals two governance structures, that of the companies with their managers, where they have control mechanisms under the oversight of their “operational owners”, and that of the cooperatives with their management structure, where the control mechanisms on the part of their “owner-members” (members through their bodies) are deficient. This phase means that the cooperatives have gotten to the extreme of being practically privatized, even though they present themselves as cooperatives.

Summarizing, the payments get stuck (FT premium, organic coffee premium, quality differential, cooperative premium, additional payment or adjustment), there are losses through weighing and moisture content, the purchase of third party coffee to the detriment of the entire FT chain, manipulations around the percentage of imperfect coffee and the quality of the coffee, and renting out the FT seal and the organic coffee certificates to private companies. This shows the dominance of disastrous mechanisms and the absence of cooperative control mechanisms from its associative side, which leads to the business side of the cooperatives privatizing the cooperatives.

3.2  Institutionality that facilitates the fall of the cooperatives into the disastrous mechanisms

It would be difficult for a cooperative to fall into these mechanisms if the FT system, in addition to the role of the members and the bodies of the cooperatives, were fulfilling their functions rigorously, transparently and in accordance with the objectives of FT. How does the FT system facilitate the cooperatives falling into these mechanisms? We note down four modalities: the primacy of formality and form, the idea of the cooperative as an economic individual, the depoliticized perspective of organizations, and the modern asymmetrical relationship of infidelity.

3.2.1      Formality and form

Formality refers to the requirements to be met to access credit or a specific certification. Form is the way in which an organization operates. Certification and the analysis of the cooperatives tends to be reduced to the formality of aspects prepared by the management structure of the cooperatives, mediated by a relationship of trial-exam. This includes signed minutes of the monthly meetings of the administrative council, records of activities on organic farms, organic certification forms, the legal documentation of the cooperatives, financial statements and data on production areas and volumes.

For example, the record of information on each organic farm is not analyzed by the certifying organizations nor by the cooperative, it is just a formal requirement; likewise the data format on each member and their farm kept by the cooperative. Formality indicates that the organizations are the ones that request the inspection of the organic certifiers, so they make the request at the end of the harvest, when they are now ready to export, which conditions the certifier to have to stick to the formality of reviewing the product in the context of the dry mill, and have to rely on the data received. The certifiers are not accustomed to corroborating the origin of the coffee noted in the report prepared by the administrative staff of the cooperatives, according to which X quantity of coffee is from such and such a cooperative and from such and such a member.

The financial statements and the audits are difficult for the members to learn about; even if the members would hear about the report, they are left overwhelmed by the sea of numbers. The audits are a simple formality to say that everything is going well and that “you should correct these receipts and add up those items in X table.” It is thought that that financial report is for the bank or any aid agency. The same thing happens with the information on yields, quality and prices paid.

Added to this formality is the way aid organizations operate, mediated by an asymmetrical relationship between the person giving the test and the one being tested, which makes the administrative staff of a cooperative cultivate the logic of complying with what the aid agencies ask for, and makes the aid agencies cultivate the logic of being like a judge who issues rulings (approves, punishes, suspends and cancels certifications, approves or rejects loans). This same relationship happens when the organizations visit a member to “verify”; in the face of this, the member prepares to “pass the test”, in other words, sticks to the orientation of the technical/administrative staff. In other words, the conditions of the formality and form create a favorable atmosphere for the administrative staff to de facto govern the cooperatives.

This modus operandi of the organizations is mediated by market relationships. Some organic coffee certifiers charge by volume of organic coffee exported and/or by the producer size, which incentivizes the certifiers to work with organizations that have more volume and that have producers that produce larger volumes, which in turn conditions them to comply only with the formality, not “going to the countryside”, because that would require more time, and in addition any attempt to investigate more about where the coffee came from could lead the cooperative (the management structure of the business side of the cooperative) to prefer to hire another less demanding certifier, which would be a reduction in the income of the certifier.

How did things get to this point? FT emerged as a movement. Still in the decade of the 1990s the cooperatives in Central America felt proud to be exporters and cooperative members. They would receive visits from FT organizations in an environment of social commitment and learning under the spirit of being an alternative path. This process of FT became professionalized. Certifiers drew up their procedures, controls and ways of working, while the cooperatives turned into businesses that would sell coffee and NGOs that would execute projects turning in reports to the agencies. Slowly alongside that the movement nature disappeared, which at one time emphasized personalized relationships.

These institutionalized practices limited the FT organizations from detecting when conventional coffee from third parties was passed off as organic coffee and as if it were a product of the cooperative, because their way of verification ended with the table of information prepared by the administrative staff themselves, and because their own interest was reduced to the financial return. They did not detect when the minutes to the non-existent meetings were fabricated; and if they fulfilled their role, the person signing the notes would say that he/she were in the meeting, because that person takes on the attitude of someone passing a test, saying what the organizations want to hear. Even though they might know that there are leaders that are in those posts forever, outside organizations stick to the legal documents that provide evidence that the leaders were just named to their posts. So in the organic coffee certification, it does not matter whether the product is organic or not, what matters is fulfilling the formality; the buyers are content to receive the “certification”. The entire chain operates this way.

3.2.2      Perception of associative organizations as homogenous entities

This institutionalization and professionalization entails two ideas. The idea of homo economicus, a rational individual who maximizes his/her earnings and erodes the “alternative” procedural and movement character, moved by the idea of homo reciprocans, the idea of human beings who seek collaboration. We distinguish between “individual interests” where the interests of certain individuals prevail, and that of the cooperative, where the individual interests of its members would have to prevail – which is coherent with that Sen advocates for in “ethical individualism” and not “methodological individualism” (see Bastiaensen et al 2015). The problem is that the organizations that form part of the FT system perceive the cooperatives as if they were something homogeneous, as if the cooperative was an expression of only the business side, only in the figure of the manager, and as if the cooperative was just something economic. So they deal with the manager believing that with that they are automatically contributing to the cooperative.

If the perception is that a cooperative is like an individual, the formality and form developed by the organizations to certify and make decisions on loans and purchases end up being optimal. If it is an “individual” before an organization, it assumes that it only has to be based on the formality, and stick to its form; if all the information is centralized, this type of relationship is reinforced. On making a cooperative equivalent to the management, outside organizations legitimize their permanence in that post, while at the same time getting around the entire organizational apparatus that cooperativism entails.

In light of this perspective, that individual is not obstructing the functioning of the organs and rules of the cooperative. On the contrary, that person is a hero who is sacrificing for the cooperative, something that the managers themselves end up believing: “Without me, the cooperative would go broke in a matter of months.” And if the cooperative buys coffee from third parties and becomes a type of intermediary, and if those practices are questioned by the members, the first to defend the decisions of the leadership of the business part of the cooperative tend to be the actors of the FT apparatus: “it is to fulfill the contracts and benefit the cooperative.”

3.2.3      The assumption of de-politization

If institutionalization (and professionalization) killed the movement nature of FT, and the idea of homo economicus made the alternative perspective of FT disappear, the third element of organizations is their conception of the cooperatives – and all the FT network organizations – as depoliticized organizations where the political is reduced to administrative procedures. Under this idea, the asymmetries and the injustice that we have described in the FT chain are left invisible, concealed a formality, e.g. to confirm that the organic coffee from a cooperative is really organic a lab test is required that costs US$300 according to the certifiers, something that could be part of the formality, but it is something that the certifiers do not tend to do, “because that test the cooperative itself would have to pay for, and the cooperative does not want to do that.” Does it sound reasonable that a certifier would pay US$300 when it earns $3,000, 10,000 or 20,000? Our hypothesis is that the certifiers that were founded to ensure that the organic products were organic, end up being prisoners of the idea that business is business. The same thing happened with the banks and coffee roasters and buyers.

The cooperative is seen as only economic – also by critics of FT like Griffiths (2012) who sees the political as something that disrupts the economy. The actors of the chain appear to be focused on the business of producing, processing and selling coffee and on credit services. This is consistent with the conventional approach of the economy, of increasing production by just adding inputs, a slogan that is also repeated by the producers who think that with credit (or more projects) they could improve their production Trapped in this perspective, the prominence of the management and administrative and technical staff increases. This separation of the economic from the political and social, like the separation of the visible (input and output) from the invisible (power relationships, human capacities) makes the focus of the role of any committee to be economic. It is not perceived that the lack of committee functioning, the mutual “lack of oversight” and the formality of the general assembly are expressions of political decisions. The marginal role of the leaders linked to the associative side (the social aspect), and the role of the administrative/technical staff linked to the economic aspect, is the result of that separation and negation of the political aspect in their own actions, which precisely is an expression of the political aspect, concealed by the administrative aspect.

3.2.4      Modern infidelity

The logic of “the justice of the market” is imposed. The social banking sector is built on the purpose of generating earnings; so, if before they worked only with the cooperatives, now they also work with private enterprises. In the case of FLO, their excision can be seen also as an expression of a double standard: it emerged to work only with small producers, now FLO divided into its FT-USA expression also works with large coffee plantations (large business owners), in the face of (or against) precisely those from whom FT emerged. Among the buyers, for example, Green Mountain established itself in good measure within the FT brand, and now can do without the FT seal to dedicate themselves to generating profits, because the FT seal has lost weight in terms of consumer demand – “Business is business.” So the FT seal, which was a means for the small producers to sell their production, was turned into a means for large companies to expand their markets.

This disloyal practice toward those “from below” is reproduced along the chain. “From above” the idea is that those “from below” should be loyal, without protesting and leaving[7], integrated into the logic of the market; if a cooperative has difficulties in honoring its debts with the social banks, the buyers are in solidarity with the social banks; if the certifiers or social banks certify or provide credit to a cooperative without investigating the organizational functioning of the cooperative, or without verifying if the organic coffee really is organic, no one complains, no one sees that those actions are damaging for the cooperative: there is no loyalty to the producers families, the members of the cooperatives.

3.3  Power structures and the hollowing out of the cooperatives

Cooperatives would not fall into these mechanisms if their members really acted as members, if their organs really functioned, and if their staff and organs responded to the principles of cooperativism. The involution of FT also happens due to the action of a small elite who, behind the backs of the cooperatives and the FT system, have been taking over the cooperatives and FT.

Seen from the region, the second tier cooperatives concentrate investments thanks in good part to the premiums, quality differentials, cooperative premiums and profits. They are the door to certifications, banks, markets and FT organizations; to information and external relations; and they are the ones who have what the organizations want: reports, records, meeting minutes, information. Seen from the perspective of the entire FT chain, an iron circle exists among the second tier cooperative, the buyers, certifiers, and social banking sectors.

Historically the patron and the foreman used to live in the same area as the peasants; that proximity created more vertical control (from patron to the foreman, and from the foreman to the peasant) and kept the peasant families from taking advantage, like paying with less product or working less than planned. The patron kept control over the foreman through informal rules and through the knowledge of what was happening in the terrain; thus he was able to keep the foreman from taking advantage in his favor. Since the decade of the 1980s this structure became globalized: in FT the equivalent of the foreman is the administrative structure. They manipulate the chain because the “new patron” of FT is geographically far away, and because the chain is infested with formalities and does not know the local reality. A constant in the new structure has been the fact that the peasants (members of the cooperatives) continue to be excluded from this structure, and at the same time reproduce this structure.

This structure is a historical institutionality of patron client relations which says: “the peasant has no right to ask for information; the patron is the owner and it is his right to not share information.” The FT structure intensifies this institutionality: to the eyes of the member families, the management structure, and behind that structure the FT organizations, appear to be the patrons that have the right to not provide information. And in the light of these patrons, the members appear to be ignorant or incapable of improving the quality and productivity of their coffee.

This reminds us that historically peasant families have lacked strategic allies. Organizations have come in to use them: some came to form communal banks and ended up creating their own banks and financing large producers who have been dispossessing small producers of their resources. Other organizations arrived to sell products with the peasant families, and then consolidated that intermediation, left the peasant families as providers of products. And others came in to swell the rants of guerrillas and soldiers, who, after toppling dictators, left them abandoned to their own fate.

Under these conditions the first tier cooperative were not able to have an influence on the second tier cooperatives. If they tried, they faced a wall: “FT and the social banks say that you cannot replace me, because my signature is on the contracts”; if there a manager who is a favorite of FT is changed, they say, “if you change the manager, we are not going to buy your coffee” – FT “encourages the buyers to commit for the long term, which tends to prioritize the role of the technical staff, because they stay longer than the elected leaders” (Taylor et al, 2005: 203). If committed scholars seek information from the FT organizations, the response is, “we only provide information to the cooperatives” – understood as the small group that manipulates the mechanisms and keeps the leaders and members from knowing the financial and commercial reports.

This type of transnational collusion is what has emptied most of the first tier agricultural cooperatives of their content. Most of them no longer provide savings and loan services, some are not even collectors of the coffee harvest. Their boards do not meet monthly, even though “minutes” of monthly meetings do appear. Their members do not know what decisions are made in their cooperatives. The notion has become internalized that the motivation for being a member of a cooperative is only financial and that you have to depend on the patron to receive favors (loans, projects).


The FT movement and cooperativism are public goods of humanity and their role should be contributing to equity and democracy in our societies. Both emerged as alternative movements, but slowly have tended to be an expression of the “iron law of oligarchy” (Michels, 1915). The difficulty then was mediation as a producer of inequality, and the challenge has been doing away with usury and accessing markets through a transnational alliance. Nevertheless, if we calculate the injustice through costs, weighing, dry mill yields, not getting premiums for fair trade, organic, nor quality, donated projects… The large amount of producer families who are impoverished does not surprise us, nor the small amount of families who get out of poverty. The system of injustice is like a spider´s web, it traps the weakest and leaves them at the mercy of the large spider of capitalism. The paradox is that this FT structure would be reinforcing that mediation that dispossesses the peasant families of their cooperatives and worsening the inequality.

Taylor et al (200) identified the problem of FT in its governance structure, tensions between the democratically elected bodies with leadership rotation, and the continuity of the technical staff in the organizations, and therefore suggest monitoring and auditing from FT. Valkila (200) argues, in the case of organic coffee, that the most marginalized producers with low productivity are trapped in poverty under the organic FT system. In this article we follow the direction of Taylor et al (2005) about governance in the FT structure, which in the last 7 years has become a challenge; we coincide with the findings of Valkila (2009) and we believe that it is explained in the whole FT network. So we find that FT is an expression of an organizational problem in the whole FT network, a governance structure absorbed by the conventional market. Within this framework quality coffee and organic coffee do not receive differentiated prices for the producer families, nor do they make a difference in terms of the unjust conventional market, the benefits of FT have been captured by glocal mediation, and that FT structure tends to worsen the most despotic power relations of rural society.

How has this happened? A small group has been becoming aware of FT and has been capable of manipulating it to their own benefit. From the member, to the president, manager, inspector, sellers of coffee, up to the consumer of coffee, all act in good will. It is the system expressed in mechanisms that make the inequality and poverty worse, and that institutionality is embedded in informal rules that respond to a social order of exclusion and controls tons of formal rules. That institutionality operates in accordance with the ideas of the “rational individual”, fordism, the hacienda and has a hierarchical organizational character, from which they reduce the political to an administrative formality, make the business side wipe out the associative side in the cooperatives, and erase the “fair” in FT. This system for two decades now has been globalized, capable of producing an involution of FT. When that system operates, it is an expression of the saying: “in open treasure, even the just sin.” Under these conditions, whatever model, even direct-trade which has emerged in recent years is – and will be – absorbed.

Why recover fair trade? We are coming to understand the problems and the consequences of FT and commercial mediation. We are living a phase of scarcity of external resources that makes it difficult to continue covering the injustices in FT, and makes the members ask about the FT and organic premiums, the premium for quality coffee, the weighing, APO-APS conversion rates, the cost of certification… Consumers are also beginning to ask. The involution of FT can be a “door” that closes, and at the same time it can be a “window” that opens.

Why rescue fair trade? The more differentiated a product is, the more the cooperative movement is needed (with transparency and effective bodies) and the whole FT network (with transparency, combining institutionality and movement, results and processes) and the more families can improve their lives (generating more income, learning more, cooperating more and contributing more to their cooperative). The more democratic the FT network is, the more possibilities there are for transforming rural societies, reducing poverty and inequality.

How can FT be rescued? Donovan et al (2017), using the value chain approach, and interviews of leaders in the coffee, vegetable and milk chains, suggests that this approach be broadly applied for greater collaboration among the actors outside and inside the chain. Nelson (2017), summarizing studies on the impact of FT, states that FT needs “to learn about its effectiveness in different contexts and places of the value chain to find ways of responding in a flexible way and adapted to local conditions and their assumptions.” Meyer (2017), studying community banks in Brazil, conceives them as community social enterprises that create and govern the commons as response to the deficiencies of market and state institutions, from where we could understand the FT chain as a chain of community social enterprises.

Based on these authors and taking more concrete steps, we talk about two modalities, and within this framework we list some changes. First, attracting groups of people that would build connections between rural society and the FT system, making the first tier cooperatives really be cooperatives. Mendoza (2016), studying the contribution of cooperatives to peace in Central America, found that there were hundreds of religious and lay people between 1950 and 1980 who, inspired by the changes happening in the church back then, connected with rural societies and built bridges between a good part of that society and organizations in favor of change. Observing that a good part of that rural society, expelled to the highest mountains of Central America, currently has the better quality coffee in the region, it is important that groups of people like those religious and lay people mentioned above return to the countryside, this time to decisively contribute to the reinvention of FT. This is possible if we build connections with the movement side of the Church that is now starting to open up, and with universities so that the students might be trained with a missionary sense to build those bridges – between the FT system and that part of rural society that historically has been destitute.

Secondly, building bridges with immersions organized in the south and in the north (Mendoza, 2015). So that the generation of professionals that work in the FT system, who did not live the experience of the first generation in dealing with unfair trade and families that organized into cooperatives, might have immersion opportunities (living three weeks with member families) to become aware of the reality. Immersion does not automatically awaken awareness, but it does provide the conditions for it to happen. Or, just as religious mediation made it possible for the religious to leave their chapels and look for God among the poorest, thus transforming religious mediation itself, so also the mediation of FT can make it possible for its members to seek and build justice among the poorest, actions through which they might transform FT mediation itself.

Under these two practices we list some possible changes. That the members turn in more than 32% of their production to the cooperatives: 40, 60% or more. That the certifiers, buyers, social banks and cooperatives might put their audits, data on organic certification, sale prices as stipulated in the contracts, costs of processing the coffee, yields in the dry mill (degree of moisture, hullingm imperfect coffee and quality of the cup), amounts of loans made to clients on a webpage. That the first tier cooperatives might develop savings and loan services, increase their own equity, be responsible for collecting the coffee harvest and measuring its moisture content with appropriate technology and decide on 100% of the use of the FT and organic premiums. That rotation of leaders and managers in their posts be a reality. That the second tier cooperatives specialize in coffee processing to the extent that their income and costs allow them. That the FT and organic certification be done directly with the first tier cooperatives.

With this model, producers will recover trust and improve the quality of their coffee, and consumers will appreciate drinking quality and organic coffee, knowing that they are contributing to peasant families and the mitigation of climate change. Corruption will be limited. The dignity and importance that managers, technicians and cooperative leaders have will be recovered. The social banks will recover their loans with less cost.


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[1] Collaborator of the Winds of Peace Foundation (US) and associate researcher of the Institute for Development Policies and Management (IOB) and member of the COSERPROSS RL Cooperative.

[2] Professor of the Institute for Development Policies and Management (IOB), University of Antwerp, Belgium and associate researcher of the Nitlapan Institute, Central American University (UCA), Nicaragua.

[3] Multatuli (pseudonym of the Dutch novelist and ex colonial administrator, Eduard Douwes Dekker) wrote a novel in 1860 with that title (Max Havelaar) where the protagonist with that name resigns from his position as colonial administrator in Java (Indonesia) over colonial abuse, forcing the producers to plant coffee and sugar cane instead of basic products, and imposing a tax system on them that produced famine. The book created awareness about the fact that the wealth that was enjoyed in Europe was the product of the suffering of the population in other parts of the world. This in turn gave rise to an ethical policy that consisted in returning that wealth, by educating some native groups loyal to the colonial government.

[4] We have followed the issue of coffee since desde 1996 (see: Mendoza 1996, 2003, 2012a and 2012b; Mendoza & Bastiaensen, 2002).

[5] If the calculation was done on a cup of coffee, the producers get relatively less than 1%. This is due in good measure to the costs of the other ingredients and processes involved in getting a cup of coffee in coffee shops

[6] Subsidies covering costs of organizations is a generalized practice in Latin America: See the Ceibo case in Bolivia (Bebbington, et al 1996) and that of Soppexcca in Nicaragua (Donovan & Poole, 2017).

[7] Hirschman (1970) proposes the concept of exit, voice and loyalty. If there is a possibility or protesting (having a voice) there is a possibility of loyalty and the risks of abandoning the organization can be reduced.

How to keep from tripping over the same stone twice?

How to keep from tripping over the same stone twice?

René Mendoza Vidaurre[1]

If they keep quiet, the stones will cry out (Jesús, Lc 29.40)

“I already saw that movie”, said the drunk, on seeing the animation of the lion that roars at the beginning of many movies. In the beginning of the 1990s, dozens of women from Marcala (Honduras) began to be trained to defend their rights and cultivate an awareness of equality, to “marry to live together and not to be the property of anyone”, “leave the house to participate in workshops on learning”, and “overcome conformism”. Over the years they understood that that awareness and that fight against violence would require generating their own resources, “on earning some money you can decide what to buy for the house”, so they envisioned an organization that would help them to have land, produce on it, and sell their products. So in 1988 they founded the Coordinator of Women Peasants of La Paz (COMUCAP), and learned that “organization is for bettering oneself and not for being envious”, and that “it is beautiful that both the man and the woman work, you have what you need to eat and you can rest.”

As COMUCAP grew in number of members and economically they acquired investments for processing coffee, aloe and juices; they exported coffee and sold soap, shampoo and juice; they bought land and planted it;M and many projects came in. Nevertheless in 2012 they learned that their organization of 283 women members was about to fall off a cliff. What had happened? What had pushed them to the edge? How could they move away from that cliff? In this article we try to respond to these questions, precisely to “not trip over the same stone twice.” Behind the animation of the roaring lion there is a movie that has not yet been seen. Let´s look at it.

  1. Crisis Situation in COMUCAP

An independent audit revealed that the debt of COMUCAP was close to one million dollars, that the assets of the organization had a lien on them due to the debt, that a piece of property bought for $150,000 had not been turned over to the organization, and that it was not clear where resources from international aid had gone. This information raised the eyebrows of the members in the 2012 assembly. Other data followed: 100% of the coffee exported was organic and fair trade, in the last 3 cycles prior to 2012 they had exported close to 10,000 qq of export coffee; a good part of that coffee was bought off of individuals who were not members, close to 1,000 qq of coffee was from the coordinator of COMUCAP herself, whose quality surprisingly scored at 85, while the coffee of the members was equal to or less than 81; the yields (from 1 qq of cherry coffee to export coffee) were dropping; the premiums for organic and fair trade were confused with project financed by international aid, making it impossible for the members to see that they had not received neither premiums. The crisis was even more harsh because it coincided with the arrival of the coffee rust on the plants, that not only lowered their production yields, but in many cases anthracnose came behind the rust leaving the coffee fields with dead trees.

What had happened? From the beginning the board of directors had granted the coordinator a General Power of Attorney, with which she was able to take loans out of the bank, buy and sell the assets of the organization and sign international aid projects. They had technical and administrative staff subordinated to the coordinator, whose daughter was the commercialization manager for all the COMUCAP products, her sister was the manager of the aloe plant, and her son in law was the coffee manager. The board of directors was used only to sign checks. The reports to the annual assembly appeared to be “sharp” bathed in a sea of numbers, reports that were legitimated by the representatives of international aid as “transparent”. The audit and fair trade and organic certification inspections would confirm every year that “everything was in order.”

The coffee rust and the “human rust” had bashed the organization of the 256 members. Obviously all those losses and debts had to be assumed by the members. All this is like the animation of the roaring lion, because this type of movie is repeated in many parts of Latin America. Nevertheless, as the philosopher Heraclitus said, though we bathe in the same river, we never do it in the same water; the next section responds to the question about what things pushed COMUCAP to the edge of the precipice. Let´s sit down to watch this film.

  1. Process that pushed COMUCAP to the edge of the cliff

Problem: COMUCAP in 2012 was on the edge of the cliff. What pushed it therer? To help, let´s use the “5 whys” of the methodology of Lean: find the cause of the problem, then the cause of that cause, until we reach the root cause. This methodology was developed in the 1950s by Taiichi Ohno, Toyota pioneer ( It is the methodology that is behind Aristotle´s idea in seeking the origin of movement: “everything that moves is moved by something” and there is a “motor” that moves everything. That is why we ask ourselves 5 times “why”. See the Table with the 5 “whys” for identifying the “tripping stone.”

Why was COMUCAP on the “brink of a cliff” –debts, poor administrative management and a hold on their assets? The members and aid organizations listened to information in the annual assemblies, but it was information that was not telling them what was really happening. The staff was subordinated to the family that coordinated COMUCAP and the board of directors relegated to being “only for show”, to sign checks; even a leader turned into an employee for two years signed checks as if she were the president. In other words, they would produce information in a disloyal way for the organization and in a way subordinated to the coordinating family.

Why did they not have access to the real information. A good part of the 256 women had been trained for 10, 15 and 20 years in negotiating their rights, managing funds for groups, political advocacy and values like transparency and equality. Why then did they not demand the real information? “Because we fell asleep”, said one of the historic leaders: they stood by. Ther trust in the coordinator was blind and total, because since 1993 she had trained them in women´s rights, and used to tell them that “she worked for the women”, she was from a family with resources and they nearly worshipped her: “having what she needs to live and she works for us” they would say with gratitude, feeling themselves blessed. One member could not be mistrustful when the reports would be presented before the international aid organizations, who would repeat “everything is in order”. One member could not prove that she did not receive the organic nor fair trade premiums for her coffee when the fair trade and organic certification audits would conclude “that everything was in order.” If everything was in order, it was logical to conclude that the information that they were being presented was correct, and it was obvious that if a member dissented, she was running the risk of not being a beneficiary of the next project. It was like feeling like an ant under a transnational elephant that grew and grew.

Why did they stand by? Because they left the decisions in the hands of the coordinator who had an administrative role, and was part of the staff of the organization, not elected by the assembly, as were the women on the board. The decisions that should have been made in the cooperative bodies (board of directors, committees and assembly) and supervised (oversight board or auditing body), were taken on by the coordinator. For the members the coordinator was “the gate” to the market and to international aid projects, and for the fair trade buyers and the aid agencies, the coordinator was the gate to the women leaders and the members. If a aid representative would visit a member, she would say marvelous things about the coordinator, and if a member visited Germany, the buyers would say wonderful things about the coordinator. So COMUCAP functioned as if it were a private enterprise where the 256 members were the poor beneficiaries, defined as such by the coordinator herself: “the women of the board are not capable of administering even 100 lempiras ($5).” This woman who did training on rights saw them as ignorant and those who financed projects and bought coffee saw her as the “Honduran Che Guevara.”

Why did they leave the decisions in the hands of the administration? Because the millennium institution of “we always need a patron” absorbed them. The women had been trained to defend their rights in their homes and to seek equality with their husbands. And this they were doing, supported by an office of COMUCAP itself. Nevertheless, they did not expect that “the patron” would appear in the “new guise”: who would subordinate the staff with loans and salaries, control the members on the basis of projects, and the leaders through travel allowances, and ran COMUCAP as something independent from the members. Like a large estate owner who believes that the land and everything on it is his, or like the holder of an encomienda in the colonial period that would receive land “including the indians that lived on it”, she would repeat to them: “without me COMUCAP would not exist, everything that is here is because of me” – meaning that everything was hers.

Why did the old “patron-client” institution absorb them? Because even though the women woke up about their rights and the importance of generating their income to sustain that awareness, COMUCAP was an external product with members dispersed in several municipalities, started on the basis of external resources and not on the basis of the contributions of the members; and because they did not learn to lead the organization through its organs (assembly, board, oversight board), and in accordance with its rules (statutes), because “we felt it was far away, someone else´s”. That is why they would hold an assembly once a year, as if an organization would have so few decisions that merited meeting only once a year; the board members were content to sign checks and travel every now and then; the groups never met with their boards; a member who needed something from COMUCAP would not propose it in the group meeting, nor to her group board, she thought it was not her right but a favor, which is why she would go directly to the “big honcho.” This lack of ownership and effectiviness in leading the organization left COMUCAP in conditions where the proverb “in an open treasure even the just sin” became a reality. COMUCAP had become a “factory” where a member would become a beneficiary, a leader subordinated, and a coordinator with a social vocation would become the big honcho (patron). Here is the root of the problem – “the motor” as Aristotle would say.

  1. The energy to get out of the crisis

The member assembly in 2012 heard the results of the audit. There was a mixture of everything: silence, murmurs, rage, impotence, feeling of having been betrayed…Some returned to their homes, and recalling the sacrifices that they had made for so many years, cried wanting to hear an echo in the universe. Others moved to defend the offices and the coffee and aloe business of COMUCAP, because the coordinator, her family and allies did not even want to turn over the assets with liens on them. They spent 3 years in hard legal battles, negotiating with the banks, getting the aid agencies and the buyers to see the obvious facts of what was happening, getting the members to trust again, looking for money to buy coffee, looking for markets for their coffee, their aloe, their shampo and juices.

On this path they continued to wear themselves down and had financial losses. The interest and arrears for the debt grew year by year, even though negotiating they were able to get considerable relief. They lost the best coffee areas to the labor lawsuit from the ex-employees, and had expenses on lost trials. They had international coffee buyers who decided NOT to buy their coffee under the logic that “COMUCAP without the “big honcho” did not exist, and because, as one leader said, “a dozen stars will fall from the sky before they ¡recognize that they were mistaken.” And a star did fall! The representative of an aid agency recognized: “I believed in her (the coordinator); forgive me because I did not believe in what you were telling me.”

What really caused the beginning of the change in COMUCAP? Each year an audit would be done, fair trade and the organic certifiers also did audits. There were more than 17 bank accounts because the aid agencies wanted their money to be administered separately. The results indicated that none of that ensured good administration. It is very possible that without the support of two people who worked in 2 aid agencies, who detected the problem, recommended an independent audit, and accompanied the board for some time, and without the awakening of the new board, COMUCAP would now have fallen off the cliff or been completely privatized by the coordinator and her family.

Crisis happens when what should die, does not, and what should be born, does not. After 5 years COMUCAP has been able to grab ahold of some “rock” and not fall off the cliff, in contrast to the prophesy of those who opposed it. Nor has it moved away from that “cliff”, the risk that it might trip over the same “stone”, described in section 2, and fall even harder off the cliff is real. In other words, that which should die still has not died. How can it move away from the cliff, or build a bridge to cross it? For what needs to be born to happen, we suggest three steps (see attached Figure) under the sequential order that follows: awareness and vision of the members as a reference point, looking inward where their roots are, and looking outward to be accompanied.

First step, start from the awareness and vision of the women members. Awareness: “everything that exist is there because we sweated with our fellow members with the sacks of fertilizer planting coffee, aloe, cooking, leaving the family on their own.”; as Jesus would say, if they keep quiet, the stones from the aloe and coffee business and the orange and coffee farms, WOULD CRY OUT. The original vision of dozens of women: COMUCAP started to sell the products of its members and accordingly built equity in their homes and communities. To sell whose products? The products of ITS members!

Second step, finding a solution to the root of the problem, ownership and operating within the democratic mechanisms of COMUCAP. There is their new “motor”. Their “break even point” is not buying coffee from whoever and however, it is not adding new members as best as possible. It is going back and building trust in each family, each group, the board of each group, the asembly, the board of directors, the oversight board and the staff that they have. COMUCAP now has 505 members. Let us recall popular wisdom, the stronger the daughters and sons are, the stronger their parents will be – in other words, the stronger the families are, the stronger the groups will be, the stronger the groups are, the stronger their board and their staff will be, and COMUCAP will be stronger.

Third step, weave alliances with people (and organizations) like those who helped them to begin the change in 2012 and who left them the secret for getting ahead: study the reality itself, wake up to what the study finds, and be accompanied in the process of change.

For these three steps the notion of stewardship helps us: our lives are a breath in the life of the universe, our participation in an organization like COMUCAP is at the most a tenth of a human life: a leader who lives for 90 years will hold posts for less than 9 years, a salaried worker will not be there for much more than that. In other words, while we hold positions of responsibility we must give the most of ourselves serving the 505 women, many of whom are single mothers taking care of their grandchildren, assuming the roles of mother and father. Stewardship, according to Block (2013, Stewardship: Choosing Service Over Self-Interest), is “the willingness to be responsible for the wellbeing of the organization, working in service of those who surrond us, instead of controlling them. It is responsibility without control nor compliance”.

Can the 505 women and the organizations that consider themselves to be their allies let die what needs to die, and give birth to what need to be born? The lionesses of Marcala are roaring: this movie has barely begun.

[1] René has a PhD in development studies, is an associate researcher at IOB-University of Antwerp (Belgium), collaborator of the Winds of Peace Foundation ( and member of the COSERPROSS cooperative RL.


Community, that circular mobilizing utopia

Community, that circular mobilizing utopia

René Mendoza Vidaurre[1]

Utopia is on the horizon. I walk two steps, and it moves away two steps, and the horizon runs ten steps further. So what good does utopia serve? For that, for walking. Eduardo Galeano (1940-2015)

Once they discover the strength of the community, they will be able to do anything. Priest Héctor Gallego (disappeared in Panama in 1971).

The myth of the “harmonious” community was held by anthropology (see: Redfield R., 1930, Tepoztlan, a Mexican village: A study in folk life) until the 1950s, when Lewis (1951, life in a Mexican village: Tepoztlan restudied), restudying the same village that Redfield did, found that communities are disputed spaces mediated by power relations. In spite of the fact that this myth was debunked, it continues to attract followers: “living community”, “autochthonous community”, “peasant community”, “indigenous community”…; and they idealize it again as “harmonious”, at times as “exotic” to be directly visited, and other times as opposing globalization (Pérez J.P. Andrade-Eekhoff K.E., 2003, Communities in Globalization, the Invisible Mayan Nahual). In this article we describe a peasant-indigenous community in Honduras and argue that, following Gallegos, their disputed processes indicate steps with their diverse forces, this time in glocal (global and local) spaces, and that this path shows the utopia and horizon of Galeano, which the allied organizations of the communities –also conflicted – pursue.

  1. Glocal economic transformation
Events in the community
1975 Los Encinos Peasant Store
1996 Alcoholics Anonymous (AA)
1999 Juan Bautista Community Store
1997-2003 Introduction of vegetables and marketing (IAF: Honduras Foundation for Agricultural Research)
2003 APRHOFI: Intibucá Association Of Vegetable and Fruit Producers
2003 Los Encinos Store joins the COMAL Network
2010 Introduction of irrigation systems (USAID, State agreement, EDA)
2011 EMATE: Los Encinos Thread Craft Enterprise
2011 Recovery of APRHOFI
2012 Introduction of Ecological Agriculture
2012 ESMACOL:Lenca Alternative Community Multiple Service Enterprise. (7 stores are the owners of Esmacol)
2016 Introduction of greenhouses


The community of Encinos, with a population of 500 and  Lenca roots, emerged at the beginning of the XX century[2]. In the last 42 years this community has experienced big changes in their agriculture, forms of organization and access to markets, one part with national and international aid organizations, and another part based on their own funds. It is the product of a millennial indigenous culture and globalization, as ideas and resources came to this place. How did this transformation happen? See the above Table .

The 1960s and 1970s were marked by changes in the social doctrine of the Catholic Church with the II Vatican Council (1962), through which radio broadcast schools came to the rural areas that taught reading and writing and encouraged people to organize. And the Alliance for Progress of the United States came in to prevent the contagion from the Cuban revolution, pushing governments to permit the emergence of the National Association of Peasants of Honduras (ANACH) and the National Union of Peasants (UNC). In that context, a group in Encinos envisioned a store in and for the community, while in other places they envisioned a piece of land to leave to their sons. It was a time when they introduced potatoes and began to plant by “ploughing” their cornfield. It was when they built leadership coordinating families using their own resources.

The decades of the 1980s, 1990s, and 2000s were times of international conservatism in religion and economics, and a boom time for international aid. The struggle for the land was blocked by the law for farm modernization (1992), and the protection of the agro-food basis for the country was removed with the free trade agreement (CAFTA, 2004). The arrival of Popes John Paul and Benedict made the priests return to their parishes. Projects from organizations with physical investment and training crossed the rock and barbed wire fences. In this context organizations multiplied, and a group of leaders from various organizations envisioned “if we already have land and are producing on it, we need markets to sell our products”. Thus the COMAL network emerged in Honduras, and another additional store opened in Encinos. It was a time when vegetables and irrigation were introduced to Encinos, and the tug of war with the markets began. It was when they built leadership based on negotiating external resources.

The decade of 2010 found Honduras under the coup, additional reforms to the law of agricultural modernization, the approval of the anti-terrorist law that criminalized social protests, international aid withdrawing from Central America, a Catholic Church that seemed to be reanimated with the arrival of Pope Francis to the Roman Curia, and a world concerned about climate change. It was a period in which the COMAL Network saw itself forced to end mediation as a wholesaler of products, while the leaders of Encinos envisioned organizing enterprises to improve their stores and sell their products. Accordingly, along with 5 other stores from other municipalities of Intibucá, they bought ESMACOL as a distributor of products, recovered APRHOFI to sell their potatoes and vegetables to supermarkets, introduced greenhouses and sustainable agriculture practices to increase their productivity and lower costs, and organized another associative weaving enterprise in a decentralized fashion. It was a time when they built a leadership connecting the resources that they had (stores, distributor, renovated agriculture and commercialization enterprise) and cultivating relationships with the few aid agencies.

  1. Circular dynamic in process

This description appears to be an expression of a virtuous circle between technological change, markets, organization and financing. It is more than that: see the figure inspired by a 4 layer onion. The organizations (stores, distributor, commercialization enterprise, weavings), the introduction of potatoes and vegetables and investments in irrigation systems and greenhouses, reveal that there is an interaction between the technological, social, economic, cultural and spiritual aspects. In other words, new crops and greater productivity (technology) implies more cooperation between families (social), which generates costs and income (economic), which requires changes in habits (cultural) as agriculture intensifies and deals with the market, this has repercussions in the spiritual-religious life of families, and this in turn on technology…

This network of organizations and changes creates prospects for improvement. There is a technological change (farm), business change (administration and entrepreneurial initiatives) and change in social relations with external actors. Multiple perceptions can be appreciated in this dynamic: in the business administration staff, in the members of the producer families, in the consumers in – and outside of – the community, in the aid agencies determined to “manage and execute”, and the leaders moving about in various “waters”. What explains this 42 year old circular process? In addition to what is described in section 1, we point to two facts. First, after several decades of cultivating the same areas, in the 1970s the weariness of the land began to be felt (decrease in fertility), due to that institution of “I will sow as I have always sown”, handed down for generations. It gave way to “ploughing”, at the same time that they organized the peasant store as a way of getting closer to a market that they could control. Second fact, like in many communities, in Encinos alcoholism reduced them to “measuring the streets”[3], and put the very existence of the store at risk. So Professor Jenny Maraslago saw this, suggested a solution and created the conditions for the change. This is how Bernardo González remembers it: “The professor in 1966 said,”it makes me sad to find these intelligent young men in the gutter”. Then the professor brought us the rules of AA and introduced us to a professor friend from AA. Encouraged by my older brother, we would meet continuously, and look, we quit getting drunk, from that day on everything changed.” 20 years later we find those young people no longer in the gutter, but leading the organizations.

These two changes contributed to creating the conditions so that Encinos in the following years would multiply their organizations. Nevertheless, seen from our times, the changes that occurred emphasize the technological-social-economic-cultural-religious elements that are the first layer of the onion (See Figure), while the changes in the other layers of the onion – on the level of the individual, family and community – are slight. On the community level, it is estimated that half of the population is outside of the described organizations, which means that there is exclusion and internal dispute: “they are conformists” vs “they do not let us in, only they eat”; in fact, 4 or 5 last names in the community underlie all the organizations, they are families whose commitment has generated organizations and benefits, and at the same time are the “bottlenecks” of local power, the door to external organizations. On the family level, the stores in the last 10 years have not included  even one new member, not even their own sons and daughters, which is not strange given that the institution of land inheritance favors the sons, and does not discharge the inheritance “until the pig sheds it lard”;  in addition a quick survey shows that the existence of children outside of marriage is similar in both organized and unorganized families. On the individual level, centuries-old beliefs have nested in their minds: “there are children outside of marriage because the women allow it”, in other words, following the mentality that “the man has the rights”, and “the woman is to blame”, something tremendously discriminatory. At the same time, all these points are in silent dispute: daughters who work in agriculture demand their rights, and wives who raise their voices against  unfaithfulness (“if he does it to me, I will do it to him”).

The changes in the first layer are unsustainable without changes in the communal, family and individual areas. It is like “learning to fish” assuming that there will always be water in the river, and if the water is diverted for mono-cropping, held back by dams, or dries up from deforestation? In 1975 they woke up to the possibility of bringing in a store for the community, and in 1996 the rules of AA and the discipline of not drinking liquor for 24 hours renewed indefinitely, showed them a path for waking up to harsh realities. How can that capacity for change be expanded on the individual, family and community levels in synergy with the different initiatives achieved so far? Once again the image of the onion helps us to respond to that question: all the layers appear to be separate, but they are united by the root of the onion. In the next section we identify that root.

  1. Mobilization of forces under democratic mechanisms

The elites of the world predict that “economic growth generates democracy”. Encinos shows that is not true. It is important to “manage” the economy with democratic mechanisms where the entire community moves and cultivates a capacity to awaken their consciences in the face of each new reality.

These mechanisms include that the rules (statutes) of each organization be respected, their organs (board of directors, oversight board, assembly) make decisions, there be interaction between the associative side (organs) and the business side (administrative and technical staff) without any side replacing the other, the rotation of leaders be done and the fact that one person would take on various posts be avoided. As they study their realities, the corresponding bodies include policies so that sons and daughters of the members might join the organizations, and exclude those who fall into gender violence, and/or after forming their family, have children outside of marriage. That part of the mission of the organizations be to help the other half of the community, that has been left invisible for the aid agencies, to organize  their own initiatives. That the external organizations contribute to the communities being vigilant about compliance with these mechanisms, and coherent in their democratic processes, overcoming the neoliberal institution of “managing and executing” that goes along the lines of the idea that “the economy generates democracy”, and that instead listens to the forces in the communities and translates them into ideas that are backed by other organizations.

This reminds me of the dilemma of the pons asinorum (bridge of asses) of St Thomas: the asses cannot cross the river because they cannot find the bridge. In our case the “bridge” are these democratic mechanisms interlinked in different spheres – individual, family, community and global – interacting with the economic, social and religious organizations. This is the mobilizing circular dynamic. Nevertheless, many times what happened to the asses happens to us, in spite of the fact that we see the bridge, we do not cross the river on it; and other times we say we did cross it, without really moving from the side of the river where we are. In contrast, the professor alluded to above saw the challenge of crossing, saw the bridge (AA) and brought them to the community of Encinos, and they crossed over!

The priest Gallego said that when people discover “the strength” of the community, people can “do anything.” The writer Galeano said that utopia “serves for walking.” The community of Encinos teaches us that utopia is on the other side of the river, and reveals its strength in the “bridge.” Can we see that bridge and cross the river on it? Here is the dilemma.

[1] René has a PhD in development studies, associate researcher of IOB-Unversity of Antwerp (Belgium), collaborator of the Winds of Peace Foundation ( and member of the COSERPROSS Cooperative.

[2] The success of the peasant store of Los Encinos we describe in : Mendoza, 2016, “Honduras: las comunidades organizadas valen ¡y mucho!”, in: Tricontinental.

[3] Popular saying to refer to way drunk person staggers from one side of the street to the other.