Cooperatives embedded in a differentiated and diversified economy

Cooperatives embedded in a differentiated and diversified economy

René Mendoza Vidaurre with Elix Meneces, Fabiola Zeledón, Hulda Miranda, Esmelda Suazo and Luis Daniel Meneces[1]

Coffee is more than coffee

-Honey, you seem pensive, what is going on?

Tasting this coffee, I ask myself, what am I drinking?


-The coffee is produced from the water that exists in the coffee plant. A good plant adapts to the soil where the water comes from … Over the years the coffee tastes like that soil and the other plants that permeate it through the pollination of bees.

-You are profound, what is soil?

-It is particles produced in an infinite variety of soils for millions of years, particles that through human action become a particular terrain–that is why we hear people talk about “my land”.


These terrains are produced in multiple stages. The coffee plant (from the Turkish word kahve, and in Arabic is qahwa) appeared between the IX and XIII centuries in Ethiopia, and in Yemen in the XV century, then in the Middle East, Europe, northern Africa and Latin America … The coffee plant adapts to different soils and altitudes. The workers interact with the plants and the soil, some even meditate on them. If there is no diversity of insects on a coffee farm with citrus trees, plantains, avocados, and cedar trees, pesticides have barged in. The laws of governments and certifiers come into play. The markets make coffee dry, washed, natural or honey coffee, and it ends up being espresso, capuccino, moca, latte…, it is cupped and packaged…

-Wow!, in other words, this coffee is more than just coffee!

This parable shows us how while sitting down to drink coffee we are really savoring millions of years of natural and human life. It is not just coffee, wine, potatoes, carrots…it is more than that. Behind a farm with coffee and several crops there is a history of thousands and millions of years, where nature interacted with human actions, organizations and institutions. Coffee is water, soil and land, it is a diversified farm and it is the human energy of many generations. It represents rights, policies, economic transactions and spirituality.

Fabiola Zeledón, an advisor of rural cooperatives, tends to say that “the farm expressed the mood of the family”, because the farm is the result of the energies of those who work it. This reminds us of Jesus of Nazareth, his response to the Pharisees two thousand years ago (Lk. 19:39-40):

39 Some of the Pharisees who were among the people complained to Jesus:—Teacher, reprimand your disciples!

40 But he responded:—I tell you that if they keep silent, the stones themselves will shout”.

Jesus was referring to the stones of the temple, in the construction of which enslaved people shed their sweat and blood. The temple of stones could shout. The farm also could shout, as Pope Francis said in Laudato Si, “the cry of the por is the cry of the earth”.

Even though there are a variety of agricultural systems, in this article we focus on a diversified agriculture that resists the pounding of the mono-cropping system, which is the cause of the cry of the poor and the earth. From this point, if a diversified farm is an expression of social and environmental equity, how can cooperatives embrace it, instead of eroding it, surrendering to mono-cropping systems?

1.     Introduction

“Put your eggs in different baskets” and “staggering income and food throughout the year”. Historical diversification strategy of the peasantry

Talking about diversification is nothing new. Historically, the indigenous and peasant strategy precisely has been diversification, expressed in “putting your eggs in different baskets” (if the eggs in one basket break, there will be the other baskets- products), and “staggering income and food” throughout the year. This strategy has happened generally on the horizontal level of diversification, something like the poly-cropping system on farms, and it has functioned in agricultural frontier areas and in communities relatively isolated from towns and markets. Why? Any family that lives a day or two days travel from town cannot go every week or two to town to buy products to meet their needs; they will go to town two or three times a year with “corn that can walk” (pigs or turkeys), or blocks of raw sugar, to supply clothing; they will look to grow corn, beans, a bit of sugar cane, raise poultry and pigs, process their lard, water their garden or oregano, cilantro, mint, and chili, being as self-sufficient as possible. The members of each family participate there, in the raising of poultry and pigs, and also the processing of lard and the tasks of harvesting and cleaning basic grains.

The problem in the new millennium is that, practically speaking, there are no more agricultural frontier areas, the population and their proximity to markets have increased, and the harassment on the part of the elites over their lands, products and labor has intensified, while the soil has lost fertility, water is getting scarce, and the instability of the climate is on the increase. This problem is made worse when peasant agriculture tends to give way to the mono-cropping system, and to its logic of “more agro-chemicals, more production.” This, in turn, has meant that mothers are outside the farm, because the effect of their gardens and raising of chickens and pigs has been reduced, and young women and men are migrating from the countryside, because they look on the farming of their parents as something boring, and that experiences more months of “dead time” when food for the table gets scarce.

Within this context these strategies of poly-cropping, in addition to falling into the peasant curse of remaining a producer or raw materials, inexorably is on the wane, while the mono-cropping system speeds up their impoverishment and environmental degradation. What can be done then? One response has been that peasant families organize into cooperatives and empower their communities. Nevertheless, in most cases the cooperatives are absorbed by elites, who “wed them” to mono-cropping systems. How can cooperatives be recovered on the basis of diversification systems? A first response we have provided in other articles, that when the members of a cooperative come from the same community, and their services are located in that same community, that tends to strengthen the peasant economy of their communities. This is a basic condition, for the cooperative to be embedded in a community economy that gains ground in the face of the mono-cropping system.

To take advantage of this condition, the challenge is transitioning from a type of anti-peasant embeddedness (mono-cropping agriculture and a cooperative with only the business “foot”), which is what Polanyi would call “a market society”, to combining what is differentiated and diversified – horizontally and vertically – of embedded peasant agriculture with the two “feet” of the cooperative (associative and business feet), which Polanyi would call “societies with markets” (see Figure 1). How can that step be taken from one agricultural system to another, when it also implies transitioning from a market society to a society WITH markets? In the section that follows we study this first harmful embeddedness, and then in the other two sections we work on virtuous embeddedness.

2.     Mono-cropping and the business “foot” of the cooperative

Comparative advantage: producing a good at lower costs than others; buying the rest of the products in which you are not competitive (David Ricardo, classical economist, 1772-1823).

Strategy of mono-cropping companies.

The elites subject societies through markets, and promote the disappearance of the peasantry through mono-cropping agriculture. That is, plantations of just one crop, be it sugar cane, peanuts, sunflower seeds, palm, soy, pineapple, large livestock, coffee or cacao, they are imposed with technological patterns (intensive use of agro-chemicals and mechanized labor), in extensive and increasingly larger areas, decreasing the demand for labor, and committing to ever larger production volume – it is the logic of comparative advantages. That market force uses the cooperative itself to promote this mono-cropping agriculture, to such an extent that today to speak about an agricultural cooperative is practically the same as saying a mono-cropping cooperative.

Some organizations, to soften that reality of mono-cropping cooperatives or to camouflage them, call them “specialized cooperatives”, and they conceive of the members as farmers who have several crops for consumption, and a commercial crop to generate income (“cash crop”) that could be coffee, cacao, bananas or block of unprocessed sugar. Hence there are financially successful cooperatives that have credit services, markets and technology for just one crop, or, in the case of serving several crops, they respond with a mono-cropping logic – per crop and not to diversified systems. This mono-cropping agriculture for decades and centuries has done damage to the peasant economy and the environment, something well documented by hundreds of studies.[2] Part of those effects is expanding the area for coffee, peanuts, cacao, pineapple, soy beans, sunflower seeds, or sugar cane, accompanied by environmental degradation (soil erosion, dried up rivers, deforestation and loss of biodiversity), the proliferation of pests that become more resistant to insecticides, and molding peasant behavior toward strategies of “putting all the meat on the spit” (one crop, one market), of the culture of receiving payment once a year, of “the season” (one harvest in the year that pays for debts, food and goods) and that depends increasingly on agro-chemicals, like glyphosate, which replaces workers, affects human and natural health, and wipes out the gardens of peasant homes. The result of these effects is that slowly the peasantry is dispossessed of their land and their organizations, while their curse of being producers of raw materials intensifies.

There are sugar cane cooperatives in countries like Bolivia, for example, that only administer the sending of the sugar cane of their members to the sugar mill, and are the vehicle for the companies to do the mechanized labor and application of agrochemicals in the cane fields. They are cooperatives whose members, previously peasant families who diversified their crops, work on just one crop, and they are left practically as spectators of that crop, because the companies are the ones who plant the sugar cane, do the weeding, apply the agrochemicals, harvest and transport the sugar cane; the member is watchful that those tasks are done at the appropriate time, and in the end receive 2 or 3 dollars per ton of cane. The large sugar companies do not even need to buy land to take it over, instead counting on the cooperatives and governments to establish their control.

The expansion of mono-cropping happens even through organic agriculture, a commercial farming system that emerged in the 1960s in Europe and Japan, countries whose populations demanded organic products in opposition to the companies that recycled used chemicals in the Second World War in “pest control” farming practices. But in time these organic products, regulated with norms and certification programs, were inserted into capitalism as a simple substitution for agrochemical inputs.  Box 1 illustrates the prohibitions for a crop to be certified as organic: there they assume that the members apply agrochemicals to basic grains and gardens, which is why they prohibit them.

Fundamentally it is a rejection of diversification. The paradox is that this organic agriculture is promoted by organizations and companies concerned about the environment, but precisely this mono-cropping character is the opposite of environmental sustainability. A cooperative, even one organizationally rooted in its community, that continues to embrace an agriculture of mono-cropping, be it organic or not, divorces itself from nature, separates people from one another, and undermines the productive bases of peasant families.

The most dramatic effect of elites through the mono-cropping system is their influence over a type of despotic leadership, and their appropriation of peasant organizations, proletarianizing them with or without land. How do they do this? The trader grows their business through one crop, no matter what the product is, believes himself to be indispensable for having money, coming in from outside the community, and having contacts outside the community where he can go to sell it, which is why they focus on the product, not the person, they respond to the market. For that trader the community is just a place where there are products. This is the model that permeates the cooperative. This is what we illustrated above with the sugar cane cooperatives in Bolivia. Let us look at other cases, now referring to coffee and cacao cooperatives in Central America.

On molding the cooperative around one crop, the coffee or cacao cooperative administers their harvest collection, processing and exporting from the town (municipal or provincial capital), and it makes the member family stay only within their farm, tied to a raw material. The rule is: (manager of the cooperative), “give us your product, we will take care of the rest”/ (member producer) “I am a producer of raw materials, the rest does not matter to me”. This institutional setup has made the “business foot” of the cooperative set itself up as the foreman (administrator) of the market, the trader, who pushes the farming of the mono-crop, takes charge of “the rest” of the product outside of the farm. For those activities of harvest collection, processing and commercialization, the only things needed are money, manager, technicians and a president who is one more signature for the checks – from this comes the rule: “money makes even a monkey dance.” Within this structure, and for the business to function, the member does not count, is not needed, even if he does not turn in raw material, that structure (the “business foot”) can resort to traditional traders and buy it in that arena, and then pass it off as a product of the cooperative. This logic has been supported by financial and state institutions, as well as buyers, who are only committed to mono-crop farming; for example, a private or social bank does not finance diversified systems, they finance mono-cropping agriculture – cattle, coffee, sugar cane or soy beans.

As we can see, this embeddedness of the mono-cropping system and the business foot of the cooperative, supported internationally, is anti-peasant and makes the social and environmental inequality worse. The challenge of getting beyond this path is clear. Consequently, assuming that we already have rooted cooperatives, with members who come from the same community, how can a new path of embeddedness be built between a differentiated and diversified agriculture in the community itself, and a cooperative organization with two feet, the business and the associative feet (di2 +  2 feet /community)?

3.     Differentiated and the two “feet” of the cooperative

We said that the indigenous peasant diversification strategy worked under certain circumstances, conditions that now are different in the new millennium. In this and the following section we start from the strategy, and we re-conceptualize it in a way that responds to the circumstances of the current millennium. Peasant farms and economies need to develop a production that is differentiated and a diversification that implies innovating horizontally (on the farm) and vertically (agro-industrialization), which requires a level of coordination made possible with the active participation of each member of the peasant family organized into cooperatives, which operate with their business as well as their associative feet. Let us begin with the differentiation of products, not betting on the volume per crop, maybe not even volume per area, but quality of life – because the farm is more than just a farm.

Let us look at products as differentiated from both focused and multiple perspectives. Seeing differentiated products from a focused perspective means that there are certain activities and products that require cooperative forms of organization, and others that do not. Organizations which are formed around products known as commodities, standard products, tend to fail; for example, a family that produces corn for their consumption and to sell it through mediation, does not need to join a cooperative to repeat the same process, because individually and as a family they already store their corn for 6 months (corncobs above their stove and cured corn in the storeroom). This family does not need a cooperative to store their corn; unless the family needs financial liquidity at the time of the harvest, and then after 3 or 4 months needs corn, just when the price of corn is double or triple the price when they sold it. In that case a cooperative is needed which, covering its costs of storage, can resell them their own corn.

Producing and selling corn in the former case is not a differentiating activity, which is why it does not need to be part of a cooperative. While the latter operation of buying and reselling the corn, saving them 100% of their resources, is a differentiating activity, which requires collective actions, which is why a cooperative is needed. That same is true in the case of beans or other products.

There are products that require a group of producers to coordinate among themselves to do certain practices in a standardized way in order to access certain markets. Then a cooperative is needed. For example, producing quality coffee requires a certain amount of coordination in the organoleptic management of high value varieties, picking red cherries, pulping, drying and hulling by lots; the collection of milk requires a certain amount of synchronization in volume, hygienic practices, delivery of product on time and a place with refrigeration, be that to be sold as milk or processed as cheese; cacao for chocolate requires uniform fermentation and drying; organic agriculture requires learning and making organic fertilizers and natural insecticides, as well as markets that channel the products toward consumers committed to healthy foods; selling vegetables to demanding markets requires homogeneity in size, quality and packaging of the product, in addition to synchronicity in volume and time.

This industrialization and commercialization require coordination and synchronization among several families, which is more possible within the framework of rooted cooperatives; an individual peasant only goes as far as their fence of piñuelas, they do not sell their raw materials, but can sell them through their cooperative. A leader of a cooperative in Honduras said, “the beautiful thing about our sales network of the cooperatives is that the products of other organizations come into our Multiple Services Business (distributor), and then are sold to our peasant stores”.

Now let us get into the differentiation of product with cooperative coordination from a multiple perspective, which refers to the fact that, regardless of the products, the cooperative cultivates a long-term vision to the extent that it can see the “big picture” – different determining factors coming from their own history, the global and local power structure, the challenges of all of humanity and/or glimpsing promising visions of the future. The members see, for example, the benefits of ecological or agroecological agriculture in the long term, and get the big picture of climate change; consequently, the peasantry rethinks their autonomy, conceiving an agroecology that “Incorporates ideas on an agricultural approach more connected to the environment and more socially sensitive; focused not only on production but also on the ecological sustainability of the production system” (Altieri, 1999:17). A leader of the La Voz de Atitlan Cooperative in Guatemala said (Mendoza, 2016d):

After more than 20 years working in organic agriculture, now the changes can be seen. Our lands produce more coffee, and any other crop that we put in the plot produces more and better harvests. This coffee has a good market. We only had to realize that we needed to improve our production and we needed to save our cooperative.

The members understood that small actions mobilize communities, they see their farms as small laboratories, they  see their cooperatives as a schools of collective entrepreneurship, and the community as pluri-versity. The members understand that coordinating among themselves for differentiated products makes their cooperative a different organization. Note: in the following section we will see vertical differentiation, as another form of the multiple perspective and structural empowerment of the peasantry that organizes itself.

Clothed in this focused and multiple perspective of embedded products and cooperatives, it follows that the cooperative makes the different actors coordinate among themselves, from one member to another, and follow up committees are organized for the technological, agroecological, transportation or processing coordination in the territory itself. For example, if the coffee drying would once again become a role of the producer family itself, and the hulling was a function done by the cooperative, the reports of theft of weight in the harvest collection centers and the dry mill in the town, or claims that their sacks of coffee were replaced by other sacks in the dry mill warehouse, would come to an end, because a good part of those tasks would be done on the farm and in the homes of the member families themselves, and in cooperatives rooted in their territories. In this way, the more agroecological or differentiated production practices the peasantry takes on, the greater autonomy it gains, while at the same time it makes the cooperative operate in agroecological systems that make any action more distinctive.

4.     Diversified and the two “feet” of the cooperative

This differentiated production should also be accompanied by diversified production; agroecology, for instance, cannot be understood without diversification. Diversification implies resolving the dilemma of increasing production and generating added value to peasant production. Here the cooperative comes into play, through it we deepen the horizontal diversification (crop association and rotation, and the combination of crops with small and large livestock on the farm) and we enter into vertical diversification (processing of farm and forest products – e.g. pine needles for crafts, wood for rustic furniture).

How can we innovate in agriculture? Let us look at some examples along those lines. Innovating in agriculture is thinking about it as “floors in a building”: crops that spread like watermelon, pipian squash, pumpkin or chayote, are like the first floor; plants like vegetables are the second floor; plants like cassava, beans or corn are the third floor; bananas or papaya are the fourth floor; citrus and avocados are the fifth floor; finally wood and energy trees are the sixth floor; all them in accordance with the energy flow coming from solar light and wind.

Another example is varying the form, while at the same time having common spaces for fostering friendship. This is the case of trellises of grapes, passion fruit or chayote, that can be established horizontally, under which families place seats for moments of friendship and conversation. Or these trellises can be set up vertically, “trellises stood in a line”, that increase the amount of productivity in the same space, and also function as wind breaks. Another case of form with enormous productive, organizational and philosophical meaning is mandala agriculture (in Sanskrit “sacred circle of energy” from the Maya and other cultures like Buddism[3]), producing in circles, combining sizes and the demand for energy coming from solar light and wind, organizational movement in circles (e.g. Apaches), and as a philosophy of life where energy is channeled under the premise that energy is what moves change.

Farming combined with smaller livestock is another open vein in innovation. Poultry in open fields (on diversified farms) that fertilize the crops, capture insects and clear weeds, and at the same time product eggs and meat. Innovating also in the garden (“My Mom´s green thumb”) and natural medicines.

This horizontal diversification should be thought of as linked to vertical diversification: agro-industrialization. This is a way of beating the peasant curse of not moving beyond “your piñuela fence”, condemned to only producing raw materials. How can this be done? For example, collecting, hulling, roasting and grinding coffee in the community itself for different markets; this implies learning how to use the pulp, honey water and coffee hulls as ecological inputs, which generates more jobs and energizes the economy of the community where the cooperative is located. The same can be said about sugar cane for processing granulated sugar blocks, which at the same time are an input for different products like granola, bread, natural medicines and some twenty traditional products; while its wastes are used for alcohol and making molasses (cattle feed) and organic fertilizer.

This vertical diversification is possible when the entire system is carried out in the same territory and is led by a cooperative that functions with both of its “feet”: its business and associative feet. Both feet are needed because high levels of coordination are required between people to respond to the diversity of value creation activities, the diversity of crops directed at different markets, and their degrees of agro-industrialization. With these practices, the dependency and veneration of the members toward the manager, who is located outside of their community, gets diluted, because it is within the community that most of the economic, social and cultural value is generated. The dependency on mono-cropping agriculture of just having activities in the months of the “season”, is replaced by ongoing tasks throughout the entire year on the farm and in the home. The dependency on the work of just the men is replaced by the mobilization of family labor for an endless number of activities that differentiated, diversified and agro-industrialized agriculture requires. Because it is difficult for us to imagine a cooperative of just men growing crops, raising pigs and chickens, and at the same time making marmalade and pine needle baskets, which is why the active participation of women and men, as well as youth, is strategic. In addition, a horizontally and vertically differentiated and diversified agriculture has more possibility of no longer being boring and unpleasant.

This embeddedness of differentiated and diversified agriculture within the “two footed” cooperative, when it happens, breaks up three anti-peasant models. The model of a type of strong man leader who, for just having one crop, turns into a trader of the only crop of the cooperative; the model of the masculine cooperative that for just having one crop and only being a producer of raw materials (e.g. just the sale of wet coffee, cacao pulp, standing sugar cane on the farm itself), lives closed off in just one phase of mono-cropping, while excluding women from the economic activities; and that of a cooperative composed of people over 50 years of age, that combined with the institution of inheritances of “the sow does not shed its lard until it dies” and the rule that “you have to have land to join a cooperative”, closes the door to new members, administering little by little the death of its members, their assets, and their own history. When these models are broken up, women and youth burst in with their different ideas and abilities, while those over 50 have their energies and perspectives renewed, promoting that diversified and agro-industrialized economy, a change that reaches the table itself with a varied and nutritional diet: flavored soups, marmalade, roasted coffee, chicory…

How might this process be seen from the side of the community? If the community diversifies, it builds a new form of commercialization. The land would not be prostituted for just one crop, nor would they depend on agrochemicals, nor would they bet only on volume for only international markets. They would produce land for that differentiation and diversification just begun. The community would demand greater variety of fresh and processed products, they would protect their forests, water and biodiversity, because it would become part of their circle of life. Families would generate income throughout the year, while at the same time their costs would be reduced, because they would produce their own organic inputs…The community would be fun, happy. People from outside would feel an attraction for that community, and it would become even more energized.

5.     Conclusions

It is time to see what we have learned with this article. Having a framework that “coffee is more than coffee” we formulated the question about how the cooperative can embrace diversified agriculture. Throughout the article we made a distinction between two marriages, one damaging and the other virtuous. The former is the mono-cropping system married to a type of cooperative that only functions with its business foot, a marriage that de-peasantizes, degrades the environment, while it rubs the wound of the peasant curse of being condemned to a raw material logic, The virtuous one is a differentiated and diversified agriculture wedded to a type of cooperative that functions with its business and its associative feet, and that breaks down the peasant curse.

We respond to that question along the lines of the virtuous marriage. First, the context in the new millennium requires an institutional change to prevent the de-peasantization underway. Second, the historic peasant strategy of diversification to overcome the peasant curse of being left to embracing raw materials, we re-conceptualize as differentiated products and diversified and agro-industrialized agriculture based on more innovation and collective coordination concentrated in their communities. Third, this virtuous marriage is possible only if women and men of all ages participate actively in this transformative process.

This institutional change means that the image of cooperative as equivalent to one crop, raw materials, and older men collapses, gives way to an inclusive cooperative that looks inward, to their community, diversifies and agro-industrializes in order to consume and sell better. In this type of cooperative there are not many reasons for the board members to leave their communities, they earn their legitimacy in their communities.

In the introduction we made it clear that a cooperative rooted in its community is a basic condition for taking the step of carrying out a differentiated and diversified agriculture. Now that we are getting to the end of the article, we conclude: to develop differentiated products and a horizontally and vertically diversified agriculture is to sustain that deep-rooted cooperative and consolidate that community autonomy, which is building societies WITH markets. All of this is inscribed within the material institutional change, even though the farm is more than something material, does it mean that the participation of women (mothers and spouses) and youth from both sexes also produces changes in the people´s subjectivity? Surely these changes are not an automatic outcome, as if the structure determines the superstructure (ideological sphere) or that they change by the mere fact of joining the cooperative, or vice versa, but rather something more complex, something very important that should be studied and innovated on, and then written about in coming articles.

[1] René is a collaborator of the Winds of Peace Foundation (WPF), a member of the COSERPROSS cooperative and an associate researcher of the IOB -University of Antwerp (Belgium), Fabiola, Hulda and Esmelda are cooperative advisors,  and Elix and Daniel are leaders of a new model of cooperativism.

[2]For recent studies, see: Gudynas, E. (2013). Extracciones, extractivismos y extrahecciones: un marco conceptual sobre la apropiación de recursos naturales. Observatorio del Desarrollo, CLAES, 18, pp. 1-18. Also: Seoane, J., Taddei, E. y Algranati, C. (Eds.), 2013, Extractivismo, despojo y crisis climática. Buenos Aires: Editorial El Colectivo. For a case in Central America and another in South America, see: Silvetti, F. and Cáceres, D.M., 2015, “La expansión de monocultivos de exportación en Argentina y Costa Rica. Conflictos socioambientales y lucha campesina por la justicia ambiental”, in: Mundo Agrario, 16.32

[3] For the Mayan mandala system, see: Tucci, G., 2001, The theory and practice of the mandala. New York: Dover Publications Inc. For the Tibetian mandala system, see: Tsering, M., 2015, El Mandala en el arte y filosofía de la cultura tibetana. Doctoral thesis. Spain: Universitas Miguel Hernández de Elche

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