Category Archives: Coffee

Riding astride coffee yield and quality in Nicaragua

Riding astride coffee yield and quality in Nicaragua

René Mendoza, Javier López, Ivania Rivera and Warren Armstrong[1]

Good coffee

“Do you know why I invited you to this coffee shop?, a European buyer, who is also a grade Q coffee-cupper, asked me. “Because they told me that they serve quality coffee here”, he responded to his own question. With that the waiter came up, and he asked for an expresso – coffee with more flavor and texture. When we were served, he took the first sip and made a face, “this is garbage.” Why? I asked. “There is no coffee shop in this country with good coffee, and we are in a coffee growing country!” His words shook the floor under me, and I came back at him, “you buy coffee throughout Latin America, where have you tasted good coffee?” Taking another sip of coffee, he said, “In Colombia, in Bogotá, even in the poorest coffee shop you find good coffee.” “Well… we are a coffee growing country, but the culture of coffee shops is new,” I said to him, “like looking for a needle in a haystack.” Looking at me with a certain amount of compassion, he said, “That explains it, but it does not justify it.”

(Based on a conversation between René Mendoza and a coffee buyer in 2019)

Coffee quality is expressed through its aroma, fragrance and flavor, the fact that its beans are healthy and clean, that they are dried well, grew on good soil, and in the company of other crops…Behind these attributes and actions are dozens of human hands in several phases and moments. That quality is relatively stable over time, as the French proverb says, “Price is forgotten, quality remains.” Prices can be like milk when it is boiling, they go up and down, while quality is more stable. What is happening with coffee quality in Nicaragua? The cupper-buyer in the story gives us a troubling indication: it could be that we do not have a good taste for coffee, and even so produce good export beans. Maybe.

Responding to the question, in this article we describe the situation of coffee yield and quality, we explain reasons why, we propose a path for improvement, and in the end provide conclusions that summarize the findings and leave the reader with the approach that should guide us. Even though the story about “good coffee” refers to national markets, and specifically to that of coffee shops, in this article we work more on coffee exports, whose quality is also connected to the quality of the coffee offered in the coffee shops of the country. We do this in good measure from the experience of Aldea Global, an association that sells more than 150,000 qq of coffee a year, and from the space of the dry mill where we want to look at the coffee chain, including its production and commercialization.

1.    Coffee Yield and Quality

The prices of goods and products in markets frequently vary, as do interest rates on money; in contrast, the productivity and quality of an agricultural or non-agricultural product are less unstable, change more slowly. In the last 40 years the productivity of several crops has been maintained with minimal variation: for example, coffee, the crop that this article addresses, varied from 9.23 to 12 qq export coffee per manzana[2] over a 50-year period!

Prices for coffee vary every day in New York (international point of reference) and in local markets; while the demand for quality coffee is increasing in international markets. In the 1990s there were few brands, among which fair-trade brand stood out. In contrast, in the current millennium there are dozens of brands  (rainforest, bird friendly, utz, 4C, Nespresso AAA, café practices, etc) and denominations of origin or geographic indication (Juan Valdez, Colombia; Marcala, Honduras; Blue Mountain, Jamaica; Volcán de Oro, Guatemala; Tarrazú, Costa Ríca) which illustrates the growing world demand for a quality product. Nevertheless, precisely when the demand for quality coffee is increasing, the yield and score that measures the quality of coffee in Nicaragua is dropping: see Graphs 1 and 2[3]. The yield we refer to is the quantity of pounds of parchment coffee (with 50 % of humidity) that are needed to get 100 lbs of export quality coffee (with between 10-12 % of humidity) – subtracting  a number of pounds of imperfect coffee (broken, black, severe insect damaged, withered beans). The quality score, for its part, measures fragrancy, aroma, taste, acidity, body, uniformity and sweetness of the coffee. This is expressed by cupping points: from 70-80 is “common or commercial coffee”, 80-83 are “specialty coffees”, 84-89 “regional exemplary plus +”, 90-95 is “Exemplary coffees” and 95 and above are “unique coffees”[4].

Graph 1 shows us that to get 100 lbs of export coffee in the middle of the 1990s 215 lbs of parchment coffee was needed, then 3 more pounds, and since 2010 it shot up requiring 232 lbs by 2020. In that same period the rate of imperfect coffee has increased from less than 5lbs/qq in the 1990s (and export quality coffee of 96-98%) to more than 10 lbs/qq in 2020 (and export quality coffee of 85-90%). The same thing is happening with coffee producer families, in the 1990s with 18 to 19 buckets of raw cherry coffee they were able to get a load of coffee (200 lbs of parchment coffee), and in 2020 that load required more than 22 buckets of raw cherry coffee, “My coffee weighs less and less” observe the small producers.

Graph 2 shows us that coffee quality, after jumping between 1990-2000 from 80 to 84 (range of “regional exemplary plus+”), thanks to the differentiating actions of cooperatives within the fair trade framework (Mendoza et al, 2012; Mendoza, 2012[5]), has been systematically dropping, finding ourselves now in “specialty coffees” with scores of 82, 81 and 80. Organizations that are looking for quality coffee are going find it with difficulty: a score of 84 you will find in no more than 15% of total coffee, the rest is “commercial coffee” with scores below 82.

 

Table 1. Evolution of coffee production, Central American countries (in 1,000 sacks of 60 kg)
1990/91 1999/00 2009/10 2018/19
Honduras 1568 2985 3603 7328
Nicaragua 461 1554 1871 2510
Guatemala 3271 5120 3835 4007
Costa Rica 2562 2485 1477 1427
El Salvador 2465 2598 1075 761
Panama 215 166 138 130
Source: http://www.ico.org/historical/1990%20onwards/PDF/1a-total-production.pdf

So while markets are increasing their demand for quality coffee, because the societies´ tastes are improving and differentiating, and countries like Colombia; and Costa Rica are out ahead responding to these international and national demands, and Honduras is taking huge steps in production volume, quality, organization and branding[6], Nicaragua is being overlooking and is losing terrain (See Table 1 that compares the production volume among Central American countries from 1990/1 to 2018/9: Costa Rica, El Salvador and Panama are going down; Guatemala is maintaining their levels; Nicaragua is growing and Honduras is unstoppable). Even though we are paying attention to volume, let us focus on our question: What is causing this systematic drop in coffee yield and quality in Nicaragua?

2.    Elements that are affecting this quality and yield

These healthy or broken beans, with good favor or undrinkable, are determined by human actions in the space of farms, wet mills (pulper, washing and drying) and dry mills (drying, hulling reprocessing and selection). After looking at Graphs 1 and 2, what are their causes? The three responses commonly heard are: there is a scarcity of labor, and therefore the coffee ferments on the plant itself; that producer organizations increasingly are buying poor quality coffee from intermediaries and non-members, which is why their own members become disillusioned with their organizations, and have quit producing quality coffee; and that the State, in contrast to Colombia, Costa Rica and Honduras, is not investing in coffee growing, nor in positioning the country internationally.

These three responses have some basis. In this section we will focus on two elements of the context, climate change and lack of liquidity/resources, and within this framework, coffee growing culture and the dry milling process.

2.1  Climate variability

Climate variation, combined with farm neglect, affect coffee quality and yields. We provide three elements that illustrate this fact. The first, in 2012 this combination of factors contributed to the fact that coffee rust and anthracnose wiped out a good part of the coffee (Mendoza, 2013[7]; Brenes et al, 2016), particularly the varieties of caturra, maragogipe and bourbon –varieties of the arabica species. Caturra constituted more than 60% of the coffee in the country, considered to be a high- quality variety[8]. As a consequence, caturra coffee plants were replaced by catimor plants; catimor is more resistant to rust, has the potential for producing larger volumes, but has a modest contribution to coffee quality. Catimor today represents more than 60% of the total coffee in the country.

The second element, mold and coffee with phenol. One hears more frequently that coffee has “severe mold” and even “phenol”. The mold is from over fermentation, be that on the plant itself, or because the pulped and washed coffee was not immediately dried, which in turn is due to rain, heat, or lack of coffee pickers. The phenol is the change in the chemical composition within the bean as an effect of drought and heat in the coffee plants, as well as the storage of wet coffee; coffee in humid environments gets dampened, generating fungi that produce the taste of mold and phenol. Generally, when cupped these coffees are classified as “undrinkable”.

Finally, withered beans, beans that even though red, have a ripe side and another speckled side; small beans also are an effect of climate change. In the last 3 cycles coffee has been observed that had a good appearance, but had small hair or fuzz that was left on the bean, which is due to lack of water. These types of affected beans are on the increase, made worse in the 2019/20 cycle due to the fact that during 2019 there were droughts of up to 30º C, and very hot early mornings, which caused uneven and misshapen maturation. If between September and October it either rained a lot, or it did not rain at all, that affected the ripening of the coffee, which, no matter how good a job is done in the wet mill, will result in insect damaged and spoiled beans. All this has affected the coffee yield and quality. Table 2 summarizes the physical defects of the beans and their possible causes

 

Table 2. Coffee defects and their causes
Physical defects of coffee Causes
Climate change Beans with brown or black coloring Lack of water during the development of the fruit
Misshapen and wrinkled beans Poor development of the plant due to drought or lack of nutrients
Beans with small and dark perforations Attack by insects (coffee berry borer or weevil)
Scarcity of resources Yellow colored bean Problem of soil nutrients
Management of farm and wet mill Shell bean Over ripened raw cherries picked up from ground
Broken/chipped/cut bean Poorly calibrated pulper
Withered bean Prolonged fermentation

 

Beans with changes in its normal coloration Prolonged storage and poor storage conditions
Beans with intense yellow caramel or reddish coloring Delay between picking and pulping
Silverskin, can tend toward reddish brown coloring Dirty fermentation tank, use of contaminated water, overheating, storage of wet coffee.
Management of dry milling Flat bean with partial fractures Coffee walked on during drying process; hulling of wet coffee
Bean with white veins Dampened after being dried
Source: based on Federacafe – Comunidad Madrid, http://cafe-noticias.over-blog.com/article-36108278.html

2.2  The “suffocating embrace” of prices

Added to this adverse environment is the so called “suffocating embrace”, which is a harmful embrace that is asphyxiating the peasantry. With the “left arm”, coffee prices go up and down, like milk when boiled, but seen over a 100 year period producer prices are decreasing in terms of the final value of coffee (Mendoza y Bastiaensen, 2003; Mendoza 2013[9]); and with the “right arm”, the prices of farm inputs are systematically rising. So, this “big embrace”, the price of coffee dropping and the prices of inputs and capital rising, is suffocating producer families. If costs of production surpass $100/quintal, and the price of coffee drop to close or equal to $100, it is difficult for coffee to receive its 3 fertilizations, 2 moments for shade management, weeding and 4 leaf sprays a year. If the application of inputs drops, that not only affects the volume of coffee, but also increases the rate of imperfect beans, and lowers the cupping score – for example, it is difficult for a bean with little fertilization to ripen properly. In addition, the catimor variety, that has more potential in terms of production volume, also is more demanding in terms of fertilizers – what has a greater yield, eats and drinks more.

This “embrace” was more suffocating in the last two years (2018 and 2019). In the 2018/19 cycle coffee prices dropped to $98 in September 2018, and to $100 in December 2018, while prices for agro-chemicals rose by 30%, as a result of the new tax policy in the country starting February 28, 2019[10]. In addition, due to the political crisis of the country, financial institutions (formal banks and micro-finance organizations) decided not to provide credit, except for Aldea Global, that instead expanded their rural credit portfolio and geographic coverage; due to that same crisis, international coffee buyers signed fewer purchase contracts, contracts that tend to allow cooperatives to get loans from the social banking sector. In other words, producer families did not have resources, which is why they applied little or no chemical or organic inputs. The effects of this are expressed now in the 2019/20 cycle in higher rates of imperfections and lower coffee quality.

Organizations are also experiencing another type of “embrace”. With the “left arm” they feel international pressure for better coffee quality, and with the “right arm” the parchment coffee (APO) that they receive from the producers is of lower quality. Between 1996 and 2010 it was just the reverse, the demand for quality coffee was less, and the producer families were providing better quality coffee, which is why it was relatively simple to sell large volumes of coffee. They were the times when the international perception of the quality of coffee in Nicaragua was good; that perception changed over the last 8 years, the coffee quality of the country is in question, correspondingly buyers are diverting their paths to other countries.

2.3  Coffee management on the farm

Even though climate change and the scarcity of resources through the “suffocating embrace” are having an impact on coffee yield and quality, coffee growing families also are experiencing structural changes within themselves. Producer families who established their coffee farms and other crops starting in 1990, after the “big war”, are getting beyond 60 years of age, which is why part of their offspring are taking on farms now divided up through inheritance.

This transition from one generation to another is facing challenges. First, farming is less diversified, it is more specialized in coffee or cattle or vegetables. This means that, in the case of coffee, families receive income practically only once a year. Secondly, a good number of the generation that are taking over farms now, inherited that culture of “coffee growers”, with the difference that now they only have 2 or 4 manzanas of coffee, and many times those manzanas are affected by rust and anthracnose. Third, with the end to the agricultural frontier, crop rotation with uncultivated areas is reduced, and with that, land has lost fertility (“it is tired”); the low application of inputs is only able to maintain production volumes, which is why the farm is less profitable for them. Fourth, the work culture “from sunup to sundown” of the older generations has ended, the new generation that grew up under the belief that “a pencil weighs less than a machete” mostly works only in the morning; and many times, erroneously interpreting what it means to be “coffee growers”, only want to “be in charge”. With only 2 mzs of coffee!

Consequently, that generation in transition that feels itself to be “coffee growers”, lack income in the months from March to October, in a context of climate changes and under the “big embrace”, have not been careful with their farms: i.e. take care to regulate their pulpers, not pulp too early nor wash too late, but respect the fact that coffee needs 12 hours of fermentation, calibrate the pulper depending on the coffee variety, being watchful over the drying…In a parallel fashion, the communities where they live seem to have lost that social warmth that encouraged them to cooperate, now they have less or nothing in their gardens (“my Mom´s green thumb”), and nearly work only on coffee, so have less reasons to exchange…The absence of that social cushion seems to put a damper on their economic life.

2.4  Coffee management in the dry mill

The dry mills receive the coffee that is the fruit of the effort of those producer families who find themselves economically, socially and environmentally asphyxiated. That is why this coffee comes in the form of shell beans, broken beans, with strident flavors, insect damaged, moldy, or healthy, clean beans with acidity and great flavor and aroma…In the dry mill they can take some actions to improve that coffee, even though their possibilities for maneuvering are reduced.

They cannot reduce the imperfection rate, they measure it, and can reprocess the coffee to achieve a certain level of quality, and with a certain number of defects that the markets demand. Likewise with the mold, even severe mold can be removed in drying with the sun; in the case that they are not able to get rid of that mold, they separate that coffee so that it does not affect the rest of the coffee, and sell it separately.  They can manage it in micro-lots and have more control over its defects, mix varieties and improve something of its quality; but nothing more. They can also keep the yield from dropping too much, if they avoid trails of coffee on broken plastic or loss of beans from moving coffee from one place to another.

They can do that, if the dry mill is managed honestly, transparently and with access to the right technology. It is common to hear workers of the dry mills say that “they switched out the coffee” of such and such cooperative, or such and such members, that “the coffee got mold in the truck because there was no patio space to unload it”; or hear managers say that “they reprocessed it twice” without the owners of the coffee being present to know if they really did “reprocess it”, and whether they did it because it was necessary, or only to earn $2 or 3 per quintal, or that the “yield was 235 lbs for 100lbs” without there being proof of the weight, and control over the movement of the coffee in the reception area to the patio, to the warehouse, to the huller, to the sack…In many cases, those rumors are unfounded, but as the saying goes, “where there is smoke there is fire.”

Also from an external perspective, it is heard that buyers are looking for scores of 84, and in the dry mill, on not finding coffee from anywhere with that score, and on not being able to improve coffee quality based on re-processing the coffee with less than 5 defects, “they send coffee with a score of 82 saying that it is 84”. This might work once, in the short term, but in the medium and long term these practices of deceit undermine good relationships with buyers.

Even when the dry mill is managed honestly and transparently, they can incur in deficient management and neglect the importance of being committed to coffee quality. They could order containers of coffee with 11 defects, and that in the end they are prepared with 10 defects. It could be that a lot of coffee is classified as second quality, because it has fermented beans or some other damage, but that it is recoverable as first quality coffee with timely cupping, preparing the coffee with a smaller number of defects and working on it with different preparations. These errors can be due to the fact that there was a change in personnel, and this new staff did not have enough training and coordination to be watchful over the coffee drying; or it could be due to inefficient organization, top-down with office managers, which limits the responsibility of each person and makes them dependent on doing work that only is directed from above. A form of vertical organization that takes agency away from the people doing the work digs its own grave. If dry mills only bet on volume, not quality, they mix coffee indiscriminately, not guided by the cupping scores, even worse if the container to be sold is commercial grade 79, 80 and 81. They even store coffee with different weights, without controlling the coffee yield [resulting from the milling process]

The management in the dry mills also has to do with technology. The drying is done by the sun and hundreds of people, mostly women, under an unforgiving sun. Given that workers´ pay is low, we assume that they are not thinking about coffee quality, but about that sun and the time when the day will end. The consequence of that type of drying is that the beans end up uneven and over-dried. Also, most of the dry mills work with old processing equipment (huller, densimeters, vibrating bean separators, elevators, mechanical driers and electronic bean selectors), or new equipment from cheap brands, instead of the latest generation in quality and technology.

Concluding this section, the causes of coffee yield and quality are found throughout the chain, from the farm to its roasting. A family can pick just the red beans, and even so lose  quality for not drying it quickly enough, or because of lack of space in the dry mill, it is left wet for two days. Several actors can make the effort to achieve good coffee, but the increase in temperature and drought can affect the coffee plants. You can have quality coffee, and even so damage it when the appropriate technology is missing – the latest generation. The quality is changed, not from one month to another, but in terms of years and decades. Coffee, and farming itself, is a long- term art, and involves several hands and minds.

3.    Governing coffee

In the years between 1990 to 2000, it was the cooperatives who took on the leadership in improving coffee quality in the country; they did it in a context of relative peace, slight impact of climate change, and more than anything inspired by the fair trade movement. Today the context is different, climate change has worsened, the generational transition has not found its way and the fair trade movement lost strength and became bureaucratized[11], even so, cooperatives and associations can promote the improvement of coffee quality again. How? Figure 1 shows the importance of combining a coffee farming culture with an alliance for a quality cup and principles of well-being, and processing that adds value. These three mechanisms, mediated through coordination in learning, can make a difference. These are not proposals that are pulled from the sleeve of some magician, nor just the result of data analysis and literature, they come from observing and experiencing in the field this combination that the figure expresses as the pathway.

The first pillar, differentiating action on the part of producer families. That they renovate and repopulate their coffee fields, and scale up in their treatment of coffee processing. They can recover varieties of arabica coffee with high quality potential, and grow them under agro-forestry systems, adapting their management in accordance with their variety[12]. A problem with catimor, for example, is when the producer gives it the same treatment that he gives a native variety; catimor should be picked when it is red (not speckled nor green), providing it more fermentation time than the caturra variety. To feed the soil (fertilize it), the chemical or organic input should be based on the formula resulting from the soil analysis. For the producer family to get those inputs, it must have in-kind credit under arrangements with input companies that lower their prices by volume purchasing, which is what Aldea Global does, and it works. They can experiment with coffee  processing (wet milling); for example, so as to not mix qualities in the pulping stage, they can have a water tank that serves as a separator of floater of green, empty or poorly formed beans; or manage the fermentation by coffee varieties.[13]. This requires a new culture of being coffee producers, who are motivated by a spirit of studying their realities (farms, families and communities), observing them, investigating new information, recording data, analyzing it, being guided by soil analyses and climate forecasts to manage their farms[14]; all this is more possible with the current generation, which has higher levels of formal education, and makes more use of the internet.

The second pillar, the construction of direct connections between buyers and groups of producer families, based on quality cupping scores and principles. In terms of quality, each producer turns in coffee individually, and the dry mill can manage it by group and lots, register the information and have the coffee cupped by farm, so that buyers are guided by the cupping score; a family receives payment/price based on the quality of their coffee. It is assumed that they will invest more to improve the quality of their coffee even more.

In terms of principles, Aldea Global has developed a procedure and mechanisms for providing incentives for good agricultural practices, which can inspire other organizations in the country. What does Aldea Global do? It provides awards for compliance with principles, like having an orderly farm, not using prohibited chemicals, paying laborers in compliance with the labor regulations in the country, management of honey waters, protection and conservation of nature, environmentally friendly practices, recycling containers. These awards depend on the score that each member achieves; producers with a score of 70% have access to “x” amount of award per quintal;  those that achieve 80% a bigger award, those with 90% an even bigger award, and those who achieve 100% get the “big” prize.

There can be producers who might receive a good price because of their cupping score, and not receive an award, if they get less than 70% in terms of their compliance with the principles. Even though it is more probable that a producer family with more than 70% compliance with principles would have coffee with a cupping score higher than 82. The logic is that complying with the principles is taking care of the farm and the well-being of the family, which is also going to be expressed in coffee quality and in good yields. Consequently, if buyers (national and international) and certifiers visit these producer families, and help them to establish themselves, they will be betting on the quality of family life, which leads to quality coffees in a sustainable and lasting manner.

The third pillar, the organization of the dry mill guided by values of honesty and transparency. To add value to coffee quality, the administration of the dry mill must have a counterweight in an autonomous board of directors with the capacity for supervision, and the owners of the coffee (members, cooperatives or organized groups) must have access to see the patios where their coffee is found, review their labels, be there at the moment of hulling, and review the data registry on the weight of the coffee at reception, on the patio, in the warehouse, before hulling and after hulling. With this three-way relationship of counterweights (administration, board members and owners of the coffee), the dry mill can manage micro-lots of coffee that come from different geographies of the country, and using different types of drying (natural, with honey and washed). This implies coordinating along the entire chain; for example, natural coffee implies picking only the red beans (none green or speckled), raw cherry coffee is transported that same day to the patio for drying, thus keeping the coffee from fermenting. The micro-lots of more than 50qq export coffee can be treated with differentiated qualities and respond to the demand of small roasters in the world. It also implies making use of appropriate technology (latest generation), like an industrial plant that treats coffee from its raw cherry state, thus preventing coffee from losing weight (2-3% in the fermentation and another 2-3% for the 12-13 days of drying) and conserving its quality.

These three elements of improvement are possible if a culture of learning is developed among the different actors around coffee. This is cultivating a spirit of investigating, observing, asking questions, recording information, taking notes, analyzing information and making use of the technology that todays world offers, including technology for massifying soil analyses, so that information flows to producers.  The producer family can manage catimor or maragogipe varieties if they learn how to do it in a differentiated way; coffee drying will add value if people know how their actions make a difference…Without awakening the worm of doubt that each one of us has inside us, any work will be boring, and any information will pass under our noses without us noticing; guided by questions and a procedure for organizing and analyzing information, every human person will be mobilized, taking on their task as a mission that is worthwhile carrying out.

4.    Conclusions

Failure is simply the opportunity to begin again, this time, more intelligently. Henry Ford

We began the article with the question about what is happening with coffee quality. That word quality is an aperture to agriculture and our society, it tells us on a small scale what is happening to us. And what is happening? Coffee yields and quality in the country are getting worse. What is the reason? Climate change, prices (of coffee and inputs), neglect of the farms and the not very transparent management of the dry mills, which are concentrated in few hands. The latter can be seen in light of the type of drying-hulling in countries like Guatemala and Colombia, where drying is done on the farms themselves and in grassroots organizations, without the drying and hulling being concentrated in few hands; or in countries like Costa Rica, where an industrial plant processes coffee from its raw cherry state to its hulling, with a positive effect on coffee quality.

In contrast to Colombia, Costa Rica and Honduras itself, Nicaragua has not had a State that invests in coffee growing with a long-term perspective. There has not existed an institute that studies each coffee variety, or that has laboratories for innovating varieties. The State does not regulate the weighing of coffee in commercial trading, and within the dry mills. There are no financial incentives nor human recognition for producing quality coffee. There is a need for a State that would work to position the brand of coffee of the country in the outside world, and that at the same time might work for the population to replace sugar with a good taste for coffee.

But at the same time Nicaragua has more than 30% of coffee producers organized into cooperatives and associations. Among those organizations is Aldea Global, which is committed to the use of technology and information, which it takes to the producers to manage their farms based on soil analysis and climate forecasts[15]. Also, Aldea Global is committed in the long term to improving coffee quality and yields based on technology that would help o control the temperature and humidity of the beans, and based on automated systems with sensors. These elements will guide the technical assistance provided to producer families and in the dry mills.

The fact that yields and quality are dropping is an opportunity, to paraphrase Henry Ford. Of course, Ford himself was surpassed by the Toyota industry, in spite of that, his phrase continues to have value[16], particularly seen as a society. How can coffee quality be improved “more intelligently”? Organizations (cooperatives, associations and businesses) must join efforts to organize a space for learning around coffee farms in association with other crops. Without investigation-learning, the different actors will be walking in the dark, and the producers, like oxen, will prefer their old yoke and sell coffee to traditional intermediaries, without concern about yields and quality, which means that in the long run the entire country will lose, including the producers themselves. A producer family can fill itself with passion, learn and seek their own vision, if organizations become democratic, transparent, efficient, and if together they organize information supported by technological and informational innovations, like big data and artificial intelligence (machine learning). This type of organization, like Aldea Global, having this learning infrastructure, would be able to accompany the entire coffee chain and other crops.

The old Fordist model continues guiding a good part of the coffee in Latin America, also expressed in its political structure of exclusion and inequality; so it is that we hear that “more volume, more earnings”, which lead us to coffee shops that the story at the beginning of the article talks about. Nicaragua can recover ground and position its quality coffee based on adopting a culture of learning, supported by information management and the latest generation technology. It could be that money might be a limiting factor in this, but like the history of so many innovations teach us, more important is the vision of transforming the countryside, pursuing product quality, pushed by families who are improving their lives. In this way we could hear that “the better the quality, the better our lives” which could include improving our own taste for quality coffee. It is not a matter of “adding money” and having coffee quality, it is a matter of “thinking more and running around less”, as they say in “tiki-taka soccer”.[17]

[1] Javier, Ivania and Warren are from Aldea Global (https://aglobal.org.ni/), president, vice manger and manager, respectively; René is a consultant to rural organizations and a collaborator of the Winds of Peace Foundation (https://peacewinds.org/). Even though most of the authors are from Aldea Global, we maintained objectivity in the analysis, and we added data and experiences of Aldea Global when they were needed.

[2] According to the 2017 Annual Statistics from the Central Bank of Nicaragua, the average coffee yield in 10 years between 2007 and 2017 was 11.97qq/mz; in the  2018 Annual report, a certain amount of improvement was noted between 2014/5 with 14.7qq/mz, and in the following two cycles 2015/16 and 2016/17 with 16.5qq/mz. We still do not have data for the last two cycles (2017/18 and 2018/19). For a study on the decade of the 1980s, see José L. Rocha, 2003, “Revolution in Nicaraguan Coffee Growing” in: Anuario de Estudios Centroamericanos. San José: Universidad de Costa Rica 29 (1-2).

[3] Both graphs are based on information from several coffee buyer organizations, and on data that we have followed since the 1990s, seer: R. Mendoza, 2003, La paradoja del café: el gran negocio mundial y la gran crisis campesina. Managua: Nitlapan-UCA; R. Mendoza, 2013, Gatekeeping and the struggle over development in the Nicaraguan Segovias, PhD thesis, University of Antwerp..

[4] The classification by scores is based on: Susana Gomez, “¿Cómo se determina la calidad del café?” en: QuéCafé, https://quecafe.info/como-se-determina-la-calidad-del-cafe/

[5] R. Mendoza, M.E. Gutiérrez, M. Preza and E. Fernández, 2012, “Las cooperativas de café de Nicaragua: ¿Disputando el capital del café a las grandes empresas?” en: Observatorio Social, Cuadernillo No. 13 El Salvador, http://www.observatoriosocial.com.ar/images/pdf_cuadernillos/cuader13.pdf; For English version see: https://peacewinds.org/wp-content/uploads/2020/02/Articulo-CAFENICA-Cooperativas-english.pdf ;  R. Mendoza, 2012, “Coffee with the Aroma of Coop” in: Revista Envío No. 372. Managua: UCA https://www.envio.org.ni/articulo/4558

[6] According to the International Coffee Organization (ICO), in 2018 Honduras was the seventh largest coffee producer and exporter in the world. In the last 10 years it has become the largest producer in Central America; in Latin America it is behind Brazil and Colombia. While the weight of coffee in farm production value dropped in Nicaragua, El Salvador, Costa Rica and Panama, in the case of Honduras it increased between 1980 and 2011 (G.C. Brenes, C. Soto, P. Ocampo, J. Rivera, A. Navarro, G.M. Guatemala y S. Villanueva, 2016, La situación y tendencias de la producción de café en América Latina y el Caribe. San José: IICA y CIATEJ).

[7] R. Mendoza, 2013, “Who is responsible for the Coffee Rust Plague and What can be done”, in: Envio 379, Managua: UCA, https://www.envio.org.ni/articulo/4664

[8] In terms of the effect of coffee rust and anthracnose in the region, Nicaragua was the country most affected; the neighboring country, Honduras was not much affected at all (See: Brenes et al, 2016).

[9] R. Mendoza y J. Bastiaensen, 2003, “Fair trade and the coffee crisis in the Nicaraguan Segovias. In: Small Enterprise Development, Vol. 14.2.

[10] If we add other costs to this, like labor, the situation is even more “asphyxiating.” Note that even though the price for a bucket of picked coffee is the lowest in Central America, the fact that a load of coffee (200 lbs of parchment coffee) that required 19 buckets prior to 2016, currently requires more than 22 buckets; this means that the producer families are paying for an additional 3 buckets, which increases the cost of production, which does not necessarily benefit the workers.

[11] Samanth Subramanian (2019, Is fair trade finished? The Guardian, https://www.theguardian.com/business/2019/jul/23/fairtrade-ethical-certification-supermarkets-sainsburys) analizes how Fair Trade (FLO), based on prices, is losing ground with the abandonment of the FLO seal on the part of large corporations, questioning whether fair trade is achieving what it promises, and preferring instead to organize their own seals and mechanisms to measure their social, economic and environmental impact. We have also warned from Central America about the involution of fair trade, see R. Mendoza, 2017, “Toward the Reinvention of Fair Trade, or “Hacia la re-invención del comercio justo”, en: Tricontinental, Bélgica, http://www.cetri.be/Hacia-la-re-invencion-del-comercio?lang=fr

[12] Aldea Global supports agro-forestry systems: 1,320 of its members are implementing it in 1500 mzs. There are also other organizations in the country that support these system; what is unique about Aldea Global is that they do it with the purposeof producer families improving their coffee quality.

[13] These experiments include testing the form of management common in Costa Rica, of receiving raw cherry coffee, and in a mechanized way, separating ripe beans from speckled and green ones, and then passing the uniform ripe beans directly from the pulper to the mechanical drier, eliminating fermentation. Ivan Petrich (2018, “Fermentación: Qué es & Cómo Mejora la Calidad del Café”, https://www.perfectdailygrind.com/2018/07/fermentacion-que-es-como-mejora-la-calidad-del-cafe/) explains the advantages of aerobic and anaerobic fermentation for coffee quality.

[14] For people of any age, but particularly young women and men, we have a guide to help them become students of their realities. See: René Mendoza, 2019, Jovenes y la oportunidad de construir puentes hacia el futuro. Una Guía para investigar e innovar. Managua: Nitlapan-UCA. It is also available at: www.coserpross.org . Aldea Global has information on more than 12 members with whom it works, information that anyone can access.

[15] Aldea Global is the only organization in Nicaragua that, starting in March 2020 will have their own first version of their app, to pilot providing personalized technical assistance by cell phone to 150 producers. The biggest challenge in this will not be providing that information, but using it. The app is a software progran that those 150 people will Access through their cell phones.

[16] A  2019 film “Ford vs Ferrari”, directed by James Mangold and written by Jez Butterworth, John-Henry Butterworth and Jason Keller, shows the change that Henry Ford II underwent in the competition with Ferrari. That precise moment of change: not just producing quantities of vehicles but winning competitions, illustrates the spirit we are seeking.

[17] Style of Barcelona where they pass between one another while opposing team wears itself out running after the ball, and when an opening appears, attack the goal.

Cultivating the golden bean: Volume and quality

Cultivating the golden bean: Volume and quality

René Mendoza, Fabiola Zeledón, Elix Meneces, Hulda and Eliseo Miranda[1]

Up until 2010 we buyers who were looking for quality coffee, we first would come to Nicaragua. After 2010 we no longer did, first we go to Costa Rica, then Honduras … (Coffee buyer).

In the 60s and 70s tons of people came to Nicaragua from El Salvador and Honduras looking for work, now we are the ones who go to those countries, looking for work. (Flavio Cardoza, producer).

In the dry coffee mills imperfect coffee reached double digits in this 2019/20 cycle: 10%…15%; black beans, faded, chipped, full black beans, insect damaged beans…The fungus moved from “slight” to “severe” and smelled like fish. On the farms of producer families instead of doing “three passes” (three passes of picking red and almost ripe coffee during the coffee season within 2 months), they saw themselves forced to do only two, and even only one pass, because of lack of pickers (labor), while they neglected to regulate their coffee pulper which resulted in those broken and chipped beans. What makes the coffee quality and its production drop? In this brief article we list 4 basic elements on coffee farms in Madriz, Nueva Segovia and Matagalpa, and at the end we offer some suggestions.

What affects coffee production and quality

The literature is full of technical reasons. We list what we observed in this 2019/20 cycle, and what producer families commonly say, based on their own observations, as well as the staff in the dry mill.

Figure 1 shows two scarce resources and two limiting structures, which have a high impact on coffee volume and quality.

A first element is the reduction in nutrients for the coffee plants. In the 2018/19 cycle, the prices for coffee were low. In September 2018 it dropped to $98, and in December 2018 it was at $100, while the prices for agrochemicals rose, as a result of the new tax policy in the country. Not only that, but the financial institutions implemented a policy of loan restructuring without providing new loans. In other words, producer families saw their resources dry up, which is why they applied little or no agrochemical or organic inputs. This had a repercussion on coffee quality, which was seen in the current 2019/20 cycle, precisely when prices went up, reaching $123 on December 16, 2019. Consequently, producer families thinking was “I am going to receive now  the same thousand córdobas as last year; this season money is tight, in spite of the fact that prices are better than in the last cycle.”

A second element refers to the scarcity of labor. Pickers are going to coffee fields in Costa Rica and Honduras. Their argument: “They pay us better there, in addition we pick more than we do here.” Isn´t it the same coffee? Yes and no. Most of the coffee of Costa Rica is sold as specialty coffee at better prices; while Honduras has passed Nicaragua in production volume. Both countries have greater productivity, even though in Honduras it is due more to increase in area. This means that the person who picks coffee on small farms in Nicaragua, picks less in a day because the farms have less production; in addition, the price paid “per lata”[2] is low, and varies between 30 to 50 córdobas, plus food, per lata. “It doesn´t work for us,” the pickers complain. Producer families argue that they would prefer to pay all in cash (without food), but the pickers want food, and many of them pick very little, and by midday are already out of the fields and asking for their 3 meals. This situation means pickers are scarce, the consequence of this is that the coffee is not picked on time, with a corresponding loss in volume and quality.

A third element is the mentality of believing themselves to be coffee growers in mono-cropping systems. The producer families who established their farms with coffee and other crops, starting in 1990, after the “big war”, are now getting beyond 60 years of age, which is why their offspring have been taking over farms already “cut up into pieces” through inheritance. Given that in the last 15 years families have become dependent on coffee as a mono-crop, a good number of these offspring, as new family units, inherited also this culture of feeling themselves to be “coffee producers” with 2 to 4 mzs of coffee, which at the most produces 10qq export coffee per manzana, which is why they lost the culture of working “from sunup to sundown” in taking care of the farm, and no longer go out to pick coffee on other farms. Their problem is that they inherited coffee fields affected by coffee rust and anthracnose, which they have to replant now on land which is more worn out (low fertility). Consequently, that combination of feeling themselves to be “coffee producers” and at the same time not having income in the months between March and October has them “underwater” in financial and marriage crises, which is why the children are growing up without Fathers, while they neglect their farms, the regulation of their coffee pulpers, drying, diversification…

The last element is the variation in the climate. Rains were expected for December, which help the grain thicken and ripen; but it did not rain, rather the temperature increased, which is why a good part of the flowering period was lost and the coffee with little liquid did not thicken. The beans that were able to thicken did not reach their optimum level. Many beans, on being picked, pulped and washed, looked as if they had been dried for 6 days. The rains that started on January 10th were not expected, were unnecessary, their prolongation for more than 10 days damaged the roads, reduced the time for picking the coffee, and made it difficult to transport the coffee, and hindered the sun drying process.

The combination of these elements has the power of undermining plans and commitments, and above all, making the families depressed before the harvest ends.

Recovering coffee, the farm, the community

Figure 2 lists the ideas that lead us to confront the 4 elements that affect coffee volume and quality.

Some people from that generation that is now passing 60 years of age are still a good reference point. “My Dad gets up at 4am, drinks his coffee and goes out to work the farm; if in the morning he goes to town to do some task, and returns at 4pm, he still goes to the farm.” (Rebeca Espinoza, Samarkanda). If we add to that culture of dedication to work, youth dedicated to studying their realities and innovating, the families could save resources and invest them, doing their numbers, producing fertile land that would provide them product volume and quality.

If that combination responds to a long term perspective, one that avoids “cutting property into pieces” and children growing up without Fathers, and is committed to the diversification of the farm and  processing what they produce, these families could mobilize their members for activities like coffee picking on their own and their neighbor´s farm, and would attract workers from other places.

If we cultivated that work and study culture under a long term perspective, in a space of renovated cooperatives, the members of both sexes and different ages from the same community could cooperate better, and improve their collective actions, like transporting, drying and milling their coffee in their own community, selling any of their products, producing their own farm inputs, protecting and saving water, or preventing domestic violence.

Conclusion

Recovering the coffee quality that we achieved between 1996 and 2005, which the buyer refers to at the beginning of this text, is a challenge. Getting our people to stay in the country picking coffee, which Flavio observed in hindsight, is another challenge.

Both challenges are not achieved with the hundred year old ideas of the elites: “More inputs, more production”, “better price, more quality”, “investing only in coffee to buy the food for the year”, “the more members there are, the better the cooperative”, “farming is something men do”. The consequences of this cookbook, sadly reproduced by most of the farm cooperatives today, are destroyed families and farms, degraded environment, and the advance of elites expelling the peasantry from their communities.

Addressing those two challenges is possible with families that change as people, as they build a new type of cooperative, one in which families cooperate with one another to generate new technologies, organize and analyze new information, and add value to the coffee and a dozen agricultural products.

[1] The authors are part of a network that facilitates the training of cooperatives governed by their members.

[2] Lata refers to old cooking oil cans that were used to measure picked coffee beans for paying workers. The term is still used, although the measuring is now mostly done with 5-gallon plastic buckets.

Drinking coffee as an act for peace

Drinking coffee as an act for peace in times of polarization

Nicaragua is once again extremely polarized. It is enough to compare different posts on our nica-update to see diametrically opposed views of the ongoing crisis. We post them not to imply that each perspective is equally true, but rather to recognize that important segments of the population hold contradictory views of what is happening and its underlying causes. Even more important are its implications for the future governability of Nicaragua –for any government to be sustainable, it will need to find a way to incorporate the interests of those holding the opposing viewpoint, no matter how “mistaken” they may be judged to be. We certainly learned this lesson at the end of the “contra war” in the early 1990s.

To contribute to the development of this understanding of the conflict, our close ally in Nicaragua, Augsburg University´s Center for Global Education and Experience, has developed an online course that delves into those two perspectives. The Crisis in Nicaragua: U.S. Destabilization or a Democratic Movement?

For our part, given that our major focus for the last few years has been accompanying Nicaraguan cooperatives, we have redoubled our efforts to support their economic and social enterprises in spite of the risks in these times of crisis, because we see them as potential oases of peace. Cooperatives generally have members of different political and religious perspectives who come together to achieve economic and social benefits for their members. By nature, they have to negotiate the accomplishment of common goals with members from different viewpoints.

Furthermore, the history of Nicaragua is full of examples where political violence starting in urban areas ends up claiming many more rural lives, as both sides recruit peasants by offering to meet their historic demands when they come to power. But consistently, after the conflicts end, while a few might end up benefitting, the effective political power of the peasantry remains largely unchanged, in spite of the many promises.

We see our contribution in this context to be helping cooperatives be successful economic and social enterprises in these difficult times. Because when successful, they contribute to the sustainability and stability of their territories, and thus lessen the attractiveness of purveyors of violence.

The problem is that because of increased country risk, credit to the countryside from both banks and microcredit organizations has largely dried up. No access to credit severely cripples the ability of cooperatives to play this role in their communities.

Since 1997, WPF has lent $3.7 million dollars directly to cooperatives and grassroots rural organizations, and has lent another $7.5 million to national microcredit institutions founded to support the rural sector. Even though these numbers show we are a small overall player, we intentionally set out to lend to groups that had never before managed a loan, precisely to help them establish a credit history, and thus open up other sources of credit to them. As a result, a number of cooperatives, and one now very large rural microcredit organization, have “graduated” to the point where they have “outgrown” the amounts we can provide, and now receive much larger amounts from a variety of lenders.

But as a small, private foundation (i.e. one that does not receive donations from the public), we cannot survive very long if those loans are not repaid. Correspondingly we have an overall loan loss rate of only 3.59% in this same period.

Even in this time of crisis, WPF has made loans to grassroots cooperatives worth just under $168,000 in this 2018-19 coffee cycle. But the risks only increase with this next coffee cycle, as economists point out Nicaragua now faces macroeconomic instability. Economic actors continue to send dollars outside the country, and international reserves continue falling. Specifically, this raises the specter that even though we make loans to grassroots coffee cooperatives, and they are able to export their coffee, once the payment for their coffee enters the country, the government may not allow those dollars to leave, thus making payment impossible.

The only way around this problem is to “triangulate” the loans, i.e. include the international buyers in the loan contract, where the buyers, once they have received the coffee, agree to transfer the amount of the loan and interest directly to WPF´s account in the US, sending the remainder to the account of the cooperative. That way the cooperative does not lose access to an international lender for not being able to make a transfer of dollars to the US.

We have already used this mechanism with a number of cooperatives. But given the new risks, we realize it has to be required for all our loans. The problem is in this last coffee cycle the number of contracts between cooperatives and international buyers actually dropped precipitously, while the number of contracts with “local buyers” increased to a similar degree. This strategy would not work with local buyers, because their payment to us would still have to overcome the hurdle of sending dollars outside the country during a possible ban.

Yet our research has shown that these local buyers are actually exporting all the coffee they buy. Given the uncertainty, it appears that previous direct international buyers are working through these intermediaries to source their coffee. This means that in this time of crisis, cooperatives are getting even less value for their coffee, as these intermediaries take a chunk of the money that previously went directly to them. Just when cooperatives need to be supported to promote local stability, they are even more hobbled by the new buying methodology.

WPF for some time now has been working with a team that accompanies some 50 cooperatives. Even before the crisis our team had been working with the cooperatives on issues of internal organizational effectiveness, equity, transparency, and effective member participation.

Now as a contribution to peace, we are willing to continue lending to these cooperatives, in spite of the risks. We want to form an alliance with coffee and cacao buyers interested in making a concrete and real contribution to peace in the countryside by buying directly from grassroots producer cooperatives. This is particularly important for this next coffee cycle.

We would not expect buyers to buy anything less than quality coffee, and the cooperatives we work with, in addition to providing the normal samples required by buyers, could also provide them with abundant information about their members, as many of them have done internal surveys, and even facilitated their member families developing their own “Family Investment Plans”.

Such an alliance would provide quality coffee to buyers, and would provide important income to coffee producers, thus enabling them to be oases for peace in their territory. In this sense, drinking coffee coming from such an alliance would effectively be an act for peace in Nicaragua.

Buyers and roasters interested in contributing to peace in this way in Nicaragua can contact us at marklest@gmail.com. We would also appreciate support from any readers in helping us make contacts with coffee buyers and roasters.

 

 

 

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

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

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

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

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

Pull down full article here

 

Dismantling the large estate with cooperativism

Dismantling the large estate with cooperativism

René Mendoza Vidaurre with Edgar Fernandez[1]

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

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

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

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

1.     Mental frameworks and their origins

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

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

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

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

2.     A check on the hacienda: the cooperative

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

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

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

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

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

3.     Transformation of  mental models

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

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

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

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

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

The Patient Is Ill

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[pull down full article here]

Awaking to normality, an antidote for market control

Awaking to normality, an antidote for market control

René Mendoza Vidaurre[1]

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

Every cloud has its silver lining. Old saying.

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

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

In 12 years they had completely “flipped the tortilla”

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The ongoing awakening

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

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

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

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