René Mendoza, Fabiola Zeledón, Elix Meneces, Hulda and Eliseo Miranda
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” 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.
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.
 The authors are part of a network that facilitates the training of cooperatives governed by their members.
 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.
The revolution and the agrarian reform came, people knew the word and their eyes were opened, many organized into cooperatives and received land, seed and technology, and they said “we are in power.” Within years they sold the land and forgot even the word. They received it, and lost it.
A woman received a cow and in months paid for it with a calf, which was given to another family. She understood that the cow pays for itself, she felt that she paid back, and made an effort along with other families. Paying back is improving.
(Based on a conversation with Gregorio Solórzano, Municipality of Cinco Pinos, Chinandega, Nicaragua)
This parable recalls the historic rules of indigenous and peasant communities. If the action of “giving” is connected with “paying back”, like the woman with the cow and the calf, their lives improve. While “receiving” unilaterally, without “paying back” to the community, creates a false world (“we are in power”) where people are left worse off (“without land and power”). The paradox is that “paying back” is not losing, it is gaining: it makes the person “make an effort” within a collective framework and community space.
That collective framework constitutes the paradoxical difference. In the case of the woman who received a cow and paid back with a calf, an arrangement (agreement, rule) underlies which she fulfills, an arrangement that is connected to a virtuous millennial indigenous institution, “giving-receiving-paying back”. In the case of the beneficiaries of land on the part of the government, a damaging arrangement underlies it, subordinating oneself and depending on the government, something that leads them to be connected to another historical institution, this time a counterproductive institution, “easy come, easy go”; people lose and the government loses. The gaze of the woman is toward the community, while the gaze of the people in the cooperative is directed outside the community.
Giving-receiving-paying back is growing in collective spaces mediated by rules that are connected with virtuous endogenous institutions of the people themselves. Within this framework, how can distributing (“paying back”) in the cooperatives be the key for growing with equity? Perhaps diminishing is growing?
In this article we study these questions in light of the cooperatives, even though it can be generalized to associations, associative enterprises or NGOS with initiatives under the framework of the social and solidarity economy. We start conceptualizing distribution as a different idea from the neoliberal economy, where the market is the great distributer. Then we look at five ways for the distribution of surpluses: legal reserve, cooperative reinvestment, social-educational fund, direct resources to members, and retribution by way of a member´s rights. Then we work on how to carry them out. We conclude reconceptualizing equitable distribution as a cooperative concept and one from the social and solidarity economy, that goes along with the democratization of cooperatives, and connected to endogenous institutions of the peasantry.
1. Distribution rules and policies
In capitalism “the invisible hand” attracts resources and distributes them with inequality, in dependence on the financial power of the actors, their connections, the support of the State for elites (e.g the policy of low taxes for mono-cropping enterprises), and guided by the rule “even the monkey dances for money”. The mediation network captures the resources and returns them as money that buys new products (and labor), mediated by institutions that worsen that inequality: usury, future purchases (crop lien system) and indebtedness. The capitalist, be it merchant, banker or industrialist, is the absolute owner of the surplus.
Polanyi (1976), in an anthropological study, worked on the idea of reciprocity, distribution and interchange. For the topic that concerns us he says: “distribution designates the movements of ownership toward a center and then toward the exterior”, and added, “distribution depends on the presence to some extent of centrality in the grouping”” (1976:7). Santana (2014: 91), rereading Polanyi, indicates that “what is unique here is that there must be trust and loyalty to be able to group the assets in that centrality, knowing that later it is going to be returned in an equitable way.” Let us reread both authors: resources come toward a center, let us say toward a cooperative (like taxes to the State), from there is “goes outside” of the cooperative, to the members in an equitable way. For those “movements of ownership” to happen, there has to be “centrality in the grouping”, which is possible if there is “trust and loyalty”. Without trust and loyalty, there is no “movement.” When is there trust and loyalty that takes resources to the cooperatives and makes them be “paid back”? Our argument: there is trust and loyalty when the rules of the cooperative, connected to endogenous virtuous institutions, guide the cooperative from its beginnings with a societal and communitarian perspective. In other words, the cooperative, from and for the communities, is responsible for the distribution with equity.
Cooperatives currently, nevertheless, are formed and achieve a partial “movement”: they attract resources from dozens of their members, but it is difficult for them to “pay back” the surplus and pay them back in an equitable way. There is the challenge. For that reason, there are written rules. What are they?
Cooperatives include in their statutes, following the laws of each country, the distribution of profits. Cooperatives include a percentage (%) for legal reserve, % for the social or educational fund, % for distribution among the members according to their contributions or economic transactions in the cooperative – note that improvement in the price of the raw materials is not mentioned as “distribution of surplus”, because it is not, the surplus is calculated after the annual financial year. This is consistent with the principles of historic cooperativism: among the Rochdale principles of 1844 is the “payback of surplus”, then in 1966 the International Cooperative Alliance (ICA) reformed those principles and replaced it with “the surplus belong to the members”, and finally in another reform in 1995 the ICA said “the economic participation of the members”; in all of them the spirit of the distribution of surplus is maintained. These rules can be connected to the virtuous institutions of agrarian societies, giving-receiving-paying back, the gift that Mauss (1979) described.
Consistent with this cooperative and communitarian principle, the International Fair Trade Movement (FLO), begun in the 1980s and 1990s, in their policy of offering better prices to products coming from families that are organized, included a “fair trade premium”, which in the case of coffee, for example, is US$0.20/lb., a fund so that the members of a cooperative might decide to use it in educational, health projects, and farm improvements or investment in processing installations. Other buyers tend to include also a “cooperative premium”, a fund that the members might decide to use for collective investments that would benefit everyone.
In addition to rules, cooperatives have mechanisms for complying with them. They have their oversight board, the assembly, the education committee, there is also the administration with accounting that issues financial reports. In some countries the State has a role of comptroller of the cooperatives. The international fair trade organizations include their FLO certifier that audits the use of the Fair Trade premium and the democratic processes of the cooperative; social banks require financial statements and balance statements; aid agencies ask for audited reports and evaluate the projects that they finance, and in some exceptional cases withdraw their support when the cooperative fails to fulfill their rules for equitable distribution; likewise some companies that buy coffee or cacao.
Having gotten to this point, what do we observe? In spite of having rules and mechanisms for distribution, it is rare the cooperative whose members participate in the decisions on the use of the social fund, reinvestment fund, or on the cooperative premium; it is rare the cooperative that is transparent with its members on the use of these funds; and it is rate the international aid agency or buyer who ensures this transparency, and that the surplus be distributed. In other words, the rules of the cooperative and the organizations are systematically not met; consequently, there is no confidence nor loyalty, which is why the “movement” is in only one direction: the resources from the members go to the cooperative and then to the companies (fair trade, direct trade, or independents), who do not “pay back” the surplus to the members. The rules of the cooperative and the organizations do not end up connecting to the virtuous endogenous rules.
2. What opposes the distribution of the surplus
Even having rules and mechanisms, why do cooperatives not distribute their surplus? It seems a matter of adding and subtracting, of knowing rules, signing and complying with agreements; it is not a technocratic matter, that a “scholarly” person might resolve; it implies adding and subtracting, showing the strength of the old anti-cooperative model, and of perceiving their own attitudes. Here we start with three interconnected responses, of the several that exist. See Figure 1.
First, the “business foot” of the cooperative, and organizations-international enterprises coincide in the fact that the business (sale-purchase of the product, disbursement-payment of the loan and execution of the project) works, not so much that the cooperative works.
They are content with the protocol, written and legal proof about the functioning of the cooperatives, proof that the elites of the cooperative learn to quickly fabricate: minutes that prove that the organs meet, audits with authorized signatures, financial and narrative reports including registry of data, and even members “trained” to repeat what the organizations want to hear, when some organizations visit. This practice, in turn, is read by the members as something that confirms their ideas that the cooperative does not change at all their way of working and selling their products: “If the organizations says that it is fine, surely it is fine, as we have always worked.” This is the formal structure that covers over the fact that the cooperative does not distribute its surpluses in accordance with its own rules, and the millennial aspiration of indigenous and peasant families.
“The peasant is interested in selling his product, he is not interested in whether there are surpluses”. This phrase presidents and managers of cooperatives repeat, along with buyers and international aid agencies, as well as technicians and boards of NGOs. This phrase underlies century old institutional practices. What are they? It is the institutionalized idea in the hacienda owner or the capitalist, that they have the exclusive rights to surpluses, that the peasantry were born to sell their labor and/or their raw materials. It is the same idea that the peasantry reproduces: “My country ends with my fence of piñuelas”, says the peasant family; “they pay my wage, that is all I ask”, says the working person (field-hand or peon); they never ask themselves about the surplus that their work or their product generates, they take it as given that it is not theirs. That institutionality absorbed the cooperatives and made them forget about the reason for their origins and their rules for distribution, and with that buried even more that indigenous-peasant right to the value that their work creates. So it is that the members demand that they increase the price of their sun-dried coffee, cacao pulp or their sugar cane; in some cases they demand an “adjustment”; “if we got credit as a cooperative so that you pay us a certain price for coffee, and if you paid us as the market price a little less than that set price, then pay us the adjustment”; no one demands their surplus; the presidents and managers behave like the hacienda owner or capitalist. Figure 2 illustrates this institutionality: the worker reaches the wall of their days wage, the peasant their fence of piñuelas, the “business foot” of the cooperative goes as far as the “wall” of the port, and the buyers-roasters-distributors to the sale or even the cafeteria. Each one, and in each wall, seem to follow the rule of “I don´t touch you, and you don´t touch me.”
Second, the organs of the cooperatives are left bound up, because their rules are replaced by others that respond to what Polanyi (2001) called the “market society”, and respond to colonial and patriarchal structures. One of those rules is: “To distribute, first you have to grow.” This rule comes from neoliberalism, that “economic growth is development”, from trickle-down economics: capturing the wealth of the members so that the cooperative might invest and accumulate in the short term, and benefit the members in the long term. This “development” and that “long term” with “benefits”, nevertheless, tends not to arrive; in other words, “they do not pay back”. Consistent with neoliberalism, the cooperatives assume that “distributing decapitalizes the organization” and they embark on the path of the “big headed dwarf”, whose head is large and is made of steel (concentration of physical investments and resources), and whose feet are clay (impoverished members who do not participate in the decisions of their organizations nor rotate offices). In this logic the managerial staff or the president tend to end up feeling themselves to be the true owners of the resources of the cooperative, that it is “their effort”, while the board members tend to abandon the volunteer nature that their offices imply, and seek any gap to take advantage individually, be it through travel allowances, loans on top of loans, or benefitting themselves from the donations that the cooperatives eventually might receive. Also consistent with neoliberalism, the fair trade and direct trade bodies reduce their relations with the cooperatives to just the financial aspect, and treat the cooperatives as just “businesses”.
Distribution, expressed in colonial rules, says to the members: “We always need a patron.” The field-hand depends on the patron, who “provides” for him (future purchase of his labor), like the peasant depends on the trader who “provides” for him (future purchase of his product). For them, this “providing for” is the best “distribution”; they know no other. This is what penetrates into the cooperative where the members confirm naturally that they never had rights to the surplus.
Distribution is also expressed in the heart of the family. There, the patriarchal rule says, “The father decides to leave the inheritance to the eldest son, and that will be carried out when he dies.” That will is conceived as something sacred. The family is an institution that attracts resources because of the family labor of its members, and in the end “pays back” (inherits) in an unequal way, leaving tacit that that older son is going to distribute the inheritance among his brothers and sisters, and what happens? Not always, but generally, that older son takes over the inheritance, or sells it and squanders it. That family institution also penetrates into the cooperative, where many times the person who occupies the presidency or management is seen like that “eldest son”, while the rest of the members are submitted to his will, in spite of the fact that they are the “parents” (owners of the cooperative) of that “eldest son.”
The cooperative, guided under this capitalist, colonial and patriarchal spell, tends to start with enthusiasm and when it capitalizes, the board members or the administrative staff turn into elites, exclude those who question them, and privatize the cooperatives. Thus, W. Berrios, from the CAFOD aid agency, observes, “In my years of work in Central America I have seen that it is in the maturation curve that the cooperatives go broke.” Infrequently they restructure the cooperative into a private enterprise, but many times they make it function as a private enterprise sheltered under the legal status of a cooperative, or under the discursive mantle of the social and solidarity economy. In both cases the members are treated as simple sellers of raw materials.
Finally, there is dovetailing between the mentality of international organizations (buyers, banking institutions, certifiers and aid agencies) and that of the members. The international organizations turn a blind eye to the lack of compliance with the rule of distribution, because, following Streeck (2019), “the policy of distribution only function in nations; in world society there are donations,” global governance “is not democratic”, because “above the nation-state there is only the “international free market”, which consists in large enterprises that are free to do whatever they want.” That mentality leads them to have a mentality of turning a blind eye to distribution, which coincides with the mentality of the members, who have never had access to surpluses, they always saw them as something that belonged to the patron or intermediary, from there it is that the members also turn a blind eye to their right that they be “paid back” (distribute) the surplus. This is what Figure 2 expresses with the walls, “I don´t touch you and you don´t touch me.”
3. Distribution of the surplus (“paying back”)
How can cooperatives unbind this adverse triangle and distribute the surplus? By distribution people tend to fall into two beliefs: that it is “distributing financial surpluses” and that it is “distributing all the surplus to the members.” From here comes the idea that “distributing is decapitalizing.” In this section we break down what equitable distribution of surplus is, expanding the content of the distribution already described in the rules of cooperatives.
Let us start with the attached graph. This illustrates the components of this “paying back” that include collective forms (legal reserve, reinvestment fund and social fund), and the individual forms that the members receive directly (distribution to members and payments when they leave the cooperative). The percentages in the graph are arbitrary estimates, they vary depending on the laws in each country, and the decisions of the cooperatives agreed upon in their statutes.
Note that this graph breaks with the belief that “distributing decapitalizes”: the reinvestment fund refers to the fact that their own fund or their own “capital” grows in accordance with the percentage approved in the cooperative. The assumption in the graph is that exercising distribution in the five ways, combination of collective-community and individual distribution, builds trust and loyalty, which makes the members turn in their products to their organizations in larger amounts and with better quality; from here distribution instead allows the economic transactions of the cooperative to increase, and therefore the entirety of their funds grow; in other words, ”decreasing” (paying back or distributing) is “growing” in resources. The graph also shows the underlying reason for cooperativism, that it is not to accumulate just to accumulate capital, the cooperative is a means, and the members and their communities are the end (final objective). We break down these funds in what follows, including some important remarks.
3.1 Components of collective distribution
Let us describe those funds that are in the statutes, let us clarify and add what they can have which is unique. “Legal reserves” is to cover losses that eventually the cooperative might have during the year in the economic fiscal year; it is a financial cushion that prevents the cooperatives from going broke. In the case that there are no losses, that reserve could swell the investment fund, or, for example, cover legal paperwork expenses, the opening or updating of bank accounts, the legal defense of the cooperative in the face of lawsuits from third parties, the legal defense of the members in cases that affect the cooperative, or to have legal counsel in the face of certain situations or issues.
“Cooperative fund” or “reinvestment fund”, belongs to the cooperative. In addition, some buyers tend to increase the price of the product that they buy with a “cooperative premium” or with an “infrastructure fund”, resources that are added to the funds of the cooperative. These funds are to buy equipment that the cooperative might need, repair or enlarge the infrastructure (building, harvest collection center) of the cooperative, and/or to increase the funds of the cooperative itself, which would increase the loan portfolio, or would pre-finance the payment that the members make on receiving products, while they process and sell them – avoiding the need to seek outside credit.
“Social or educational fund”. It is a fund from the rules of the cooperative itself, and is a fund that increases if the cooperative sells its product through fair trade organizations or buyers that condition a certain amount for a social fund. In general, cooperatives use it to finance some demand of the community school, provide backpacks to the children, provide support to the local sports team, or for trainings that their education committee might organize. Even though these initiatives are praiseworthy, physical investment in the school is the obligation of the State for which society pays taxes. The sports teams are going to function with or without the support of the cooperative, the children will go to school with an old or new backpack. Some innovative cooperatives use that fund under the following criteria: invest in something that generates value for the community, that is not the role of another institution, and doing so as a long-term investment. An example of this is the fact that two or three cooperatives from the same community might invest in libraries for children under 7 years of age, story books that their families might borrow to read to them before going to sleep, promoting reading in the family itself, and that the cooperative might organize reading circles with the support of people who promote reading; the long-term impact of this initiative in the creativity and cooperative spirit of the community can be significant.
3.2 Components of individual distributions
Following graph 1, 50% of the surplus of the cooperative is distributed to its members directly. The criteria for that varies from cooperative to cooperative, and depends on the services that they offer. In some cases, it is in accordance with the contributions of each member. In other cases, it is in accordance with the volume of product transacted with the cooperatives that collect the harvest and sell the product of its members. In other cases, it is in accordance with the quantity of products bought in their cooperative. And in other cases, it depends on the amount saved in their cooperative. There are cooperatives with similar services, and that “pay back” under different criteria; for example, the peasant store Los Encinos in Honduras “pays back” 100% of the amount of the agreed upon contribution, while the Esperanza of the Campesinos Cooperative with several supermarkets, “pays back” based on the amount that each member buys from those supermarkets.
These criteria promote the capacity of each member, and increase their trust in the collectivity that the cooperative is. There are members with more financial capacity and do not necessarily have larger contributions in the cooperative; it depends on the trust that the members have in their cooperative, and on the opportunity cost that each member thinks their resources have. In this sense, the biblical parable of the talents (Mt 25: 14-30) illustrates part of what the cooperative looks to incentivize with direct distribution; in that parable three people receive talents, one 5, another 2 and another 1, “in accordance with their capacity”. After a time, the person who received 5 and the one who received 2 double theirs, and the one who received 1 maintained it. In light of this, the person who gave them the talents rewarded the first two, and took away the only talent from the third, “because he who has, will be given more, and they will have an abundance, but he who does not have, even what they have will be taken away from them.”
From the religious context, this indicates that God gives people talents in order to develop them, which reveals an individual vision, where each person is responsible for duplicating their talents. From the cooperative context, one is “paid back” in proportion to the trust and loyalty of that member, demonstrated by contributions, savings, delivery of product or amount purchased; that “payback” is not taken away from them in the cooperative, in contrast with what happens in the parable of the talents, where each individual responds individually with the talents received; instead, there is cooperation among the members mediated by commonly agreed upon rules, compliance mechanisms and there is accompaniment so that each member might increase their capacities; there is individual responsibility within the framework of collective responsibility.
3.3 Compensating by rights those who resign from the cooperative
Following cooperative statutes, the member who resigns from the cooperative has the right to the return of their extraordinary contributions, and the “reimbursement of social assets” (shareable surplus) within a term generally of 90 days. This “departure” arrangement should be thought of and agreed upon from the beginning when the cooperative is founded, even though it is clear that in the beginning, being immersed in making the cooperative survive, no one thinks about this; it should be done, because it is thinking about the future, and because each member should be clear about their rights from the very beginning.
In our societies the member who resigns from the cooperative tends to leave without recovering, many times, not even their contributions; likewise, those who die, their relatives do not tend to receive any benefit that by rights the family members are due. For some members, having joined a cooperative is even a financial loss. In the case that there are voices that are raised about this, some board members pull out the ghost that “distributing is decapitalizing”.
If the cooperative does not pay the member who resigns, or the relatives of those who die, in accordance with their rules and the rights of each member, the cooperative signals distrust in its own future, and sends an erroneous message that they are not members, that the “cooperative does not belong to its members”, which undermines any sense of ownership of those who stay in the cooperative, and those in the community who observe it. If in contrast, the members fulfill the rights that each members has on leaving the cooperative, that they be paid the part that corresponds to them that the cooperative has at that moment, probably that person will leave with a good amount of resources, and happy for having been a member of a coop. In the short term, this is a hard moment for the cooperative, because it is going to disburse in cash resources what it surely needs; at the same time, each member will see themselves in the person who resigns: in the same way that they treat the person who leaves, they will treat me. If the member joined the cooperative with little, and leaves with a good amount of resources, those who remain will ask themselves: if after the cooperative fails, will we be the most unlucky ones? The doubts will keep them up at night. But in the long term, those who are left are less, which means that they will receive more from the future resources that the cooperative accumulates; more than that, each member, seeing that the one who left took what corresponded to him, will confirm that in truth he is a member of the cooperative, that the cooperative really does belong to him.
Let us talk about numbers to estimate the amount that could be due to a person who resigns. What is the arrangement with the member who leaves? A member who leaves or dies, that person or their relatives have the right to part of the assets or resources that the cooperative has generated. Let us help ourselves with an example. If through the use of the “cooperative fund” or the “reinvestment fund”, extraordinary contributions of $100 per member, and donations that the cooperative received, a cooperative has assets valued at $200,000; if that cooperative had 20 members at its founding 10 years ago; then if one of them resigns from the cooperative, they are due $10,000 (200,000/20 = 10,000). This amount could be paid over a term that the statutes indicate, or, if the cooperative does not have the $10,000 available, they can arrive at friendly arrangements for the time frame for the payment.
The biggest impact of this fact, nevertheless, is not in the financial “payback”, but in the fact that the 19 remaining members, and the rest of the community, confirm that effectively the cooperative does belong to its members. This is the seed of incomparable ownership. This implies greater trust, loyalty and the deployment of individual and collective capacities.
Concluding this section, distribution in the cooperative generates equity, and incentivizes the development of each member. An estimate of 40% of the surplus protect the cooperative from losses, increases their investments or their own capital fund, and contributes to the community with unique investment in education. With an estimated 50% of the surplus, the cooperative incentivizes the development of the capacities of each member, their trust and mutual loyalty. And with an estimated 10% of the surplus, the cooperative ensures the recognition of members who leave the cooperative, far from seeing it as a “financial loss”, they recognize the rights of the cooperative member and with that plant the seed of ownership. This collective and individual outcome is the way in which the cooperative distributes its surplus with equity, which is connected to the virtuous peasant institutions of giving-receiving-paying back, expressed in shared labor, sharecropping, and shared harvesting, among other institutions.
Now that distribution with equity appears obvious, along with its importance. How can it be carried out?
4. How to implement equitable distribution
Inequitable pay back… breaks down the organization
The Spanish, Mexicans and US tried to dominate the Apaches; they failed. The Apaches had the nant’an as their leaders, they were decentralized, operated in circles. Their adversaries, as they did with the Aztecs and the Incas, did away with the
nant’an, but the Apaches did not fall apart, immediately another nant’an would emerge. But one day the North Americans donated cattle to the nant’an; since cattle were scarce, the nant’an had the power to distribute them, so everyone wanted to be nant’an, the egalitarian power structure became hierarchical. The Apaches were defeated.
(Based in Brafman, O. and Beckstrom, R.A., 2007, The spider and the starfish. Barcelona: Empresa Activa).
This historical passage shows us that distribution is more than distribution of surplus. It is important to have holistic egalitarian structures that include equitable rules and mechanisms for carrying them out. Before continuing, we cannot avoid comparing this event of the Apaches with the action of the government in the parable at the beginning of this article; the government in the parable, and the North Americans in this other one, seek to subordinate the cooperative or the Apaches, the first donates land to them, and the second donates cattle, in both cases without “payback”, thus they undermine them before their members, leave them not looking toward their community, which causes the cooperative and the Apaches to fall apart. Militarily the Apaches were indomitable, but a simple donation eroded their entire organization, like termites on wood. How did this happen?
The Apaches lacked equitable rules for the distribution of assets donated to their leaders. The North Americans took advantage of that gap, and donated the asset that was the scarcest, cattle, directly to the nant’an and not to the Apache tribe that surely had their own organization. This practice internally stirred up the Apaches, who fought over being nant’an, for having that connection to the North Americans and accessing the cattle; surely, like the managers or presidents in conventional cooperatives, the nant’an said to their tribe that the “cattle had cost them”, that they should be content with what “trickled down”, that they were their “connections”, and that without them they would all die of hunger -or in other words, the evil of the “big headed dwarf” began to corrode the minds of the nant’an and sow distrust in the rest of the tribe. This process led them to become hierarchical structures, and consequently to collective failure; it is what has also happened to most of the conventional cooperatives.
Cooperatives, in contrast to the Apaches, have rules and mechanisms for equitably distributing the surplus (including donations), but they lack democratic processes in their functioning, which is why they do not comply with their rules for equitable distribution. In many cases the cooperatives were started by the State with donations in land or other assets, undermining them from their own beginnings. International organizations (buyers, financiers and donors) have continued on this same path. Like the North Americans with the Apaches, they only connect with the nant’an of the cooperatives (managers or presidents), and they are not interested in knowing the consequences that their actions provoke. How can cooperatives fulfill their rules and make distribution their most valuable attribute for growing equitably?
This point about the Apaches leads us to understand that a cooperative that distributes its surplus with equity is that which, in addition to having rules for it, is democratic and transparent: See Figure 3.
If the organs, in democratic exercise, ensure the fulfillment of the agreements about equitable distribution, that cooperative will embark at a good port. In the case of the Apaches, their organs operated around resisting militarily, including their food, but they lacked the rules for donations and relationships with external actors. We can imagine that the Apaches, in decentralized groups, hunted animals for food; for which they had their rules and they applied them, but not so that some nant’an individually might receive 10 head of cattle as a gift behind the backs of the tribe, even precisely for their tribe.
This combination (rules-democracy) requires, nevertheless, a third foot: transparency. It is depressing to find members who after contributing for 5, 10 or 15 years do not know how to add up their contributions, and that do not recognize their rights over the surplus. It is not just having democratic economic management coherent with the rules themselves and the rotation of members in the different offices and decision making in the corresponding organs, but informational transparency with the members and with the allies. The idea of transparency or accountability in the cooperative is not being subject to trial, measured and humiliated by “the magic of the numbers”. It is sharing information that in turn forms and commits the members. A member can understand that their surplus might be $30 per qq of coffee that they have delivered to the cooperative, if he is informed about how that surplus was produced; otherwise that person will see that surplus as “an award” or a “favor” of the patron, as his historical rules make him see it. Distributing surplus implies distributing responsibilities (democracy) and information; the way “the legal reserve”, “investment fund” and “social fund”; the expenses and income… were produced and used. This information forms people and commits them: the member, based on transparent information, will want to participate in the definition of the goals for the year for their cooperative, and will want to be part of the implementation of those goals, because he recognize that his individual surplus will increase, that the benefits to his community will improve, that if the cooperative increases its reinvestment, any member who leaves will be able to go with more resources. In addition, if the first tier cooperative is a member of a second tier cooperative, the member also needs to be informed about the second tier cooperative, know how surplus is generated in that organization, and how much is due his cooperative, and how much of that amount is due each member. That explanation can happen in an assembly, in visits to each member family, on whiteboards or through brochures, and on the day of the distribution of surplus, combine festivities and information.
Correspondingly, transparency implies being accountable; for example, it is commendable that the credit record include columns for the amount of credit, amount past due and contributions; it is also commendable that the record include the amount that the member is leaving for “legal reserves”, “social fund” and for the “reinvestment fund”; the first format for the record contains control information for the member, and the second format has the accounting of the cooperative to its members. Being accountable in the assembly about their resources expresses the rights of each member, and it is an obligation of the cooperative that each member know that. From here, if the members are informed about each step of their cooperative, they will be committed to their cooperative, if their cooperative faces difficulties, they will sweat the fear of failing and will row the canoe together even in the midst of the biggest waves.
Equitable distribution is possible within a framework of democracy and transparency. There, being a cooperative member is thinking beyond salary, beyond raw materials and beyond exported product; it is thinking about the entirety of the cooperative, and the entirety of the chain of actors where value is created. In other words, it is breaking down the walls of Figure 2 and understanding that what creates value is the human work of the working person, producer, processer, importer, roaster and seller of the coffee in the stores and coffee shops. It is “I touch you and you touch me”, entering into different worlds. This implies including the international organizations and companies, which goes in the direction of global triangulation that we worked on in several other articles, about an alliance of actors that work for equitable distribution.
You read a book from beginning to end. You lead a business just the opposite way. You start with the end, then you do what you have to in order to achieve it.
Harold Geneen, 1984, Managing. New York: Double-day
At the beginning of the article we asked ourselves how cooperatives can distribute (“pay back”) in order to grow with equity. Equitable distribution in a renovated cooperative is very different from the distribution of the market in the neoliberal economy, which is one unilateral way, from society to businesses and institutions, from which there is no “pay back” beyond what “trickles down”.
In the renovated cooperative, and in alliance with global actors, equitable distribution is illustrated in Figure 4.
It is the distribution of surplus combining the collective (social fund, reinvestment fund, and legal reserves) and the individual (direct distribution to the member for their differentiating actions and payment of what by right is due the member who leaves); it is financial and social distribution. Then, equitable distribution implies that the organization be democratic (rotation of officers, collegial decisions and compliance with the rules). Then equitable distribution implies distributing information under the maxim that the more informed the members are, the better their decisions will be.
This notion of equitable financial, social and political distribution (democratic and transparent), mobilize energies and hearts when it is connected to the endogenous institutions of the members, in our case, the peasantry. Consequently, each member feels part of the cooperative, seeks to know its goals, have an impact on them and commit themselves to fulfilling them.
Finally, when the members and their global allies follow equitable distribution connected to endogenous institutions, that is when they see the entirety of the cooperative and the entirety of the value-added chain with equity. Far away are left the “walls” that separated the worlds. Paraphrasing Harold Geneen, we organize a cooperative from its end, from its equitable distribution to the benefit of the members and their local and global communities. The more that is distributed, the more that it grows.
 René has a PhD in development studies, is a collaborator of the Winds of Peace Foundation, member of the COSERPROSS cooperative, and associate researcher of the IOB-University of Antwerp (Belgium). email@example.com
 Mauss (1979: 204-211), based on a type of distribution known as potlach, practiced in Eskimo societies in the Northwest of the US, finds the triple obligation of the gift culture: giving, receiving and paying back. “You do not have the rights to reject a gift, a potlack, because acting in this way makes clear that you are afraid to have to pay back and be left diminished, it is losing the “importance” of your name, it is declaring oneself beaten in advance, or in some cases proclaiming oneself victor or invincible” (p. 208). Marcel Mauss, 1979, Ensayo sobre los Dones. Motivo y forma de cambio en las sociedades primitivas, en: Sociología y Antropología, Madrid. Note that this identified institution is pretty similar to institutions of indigenous communities in Latin America.
 Polanyi, K., 1976, El sistema económico como proceso institucionalizado, en: Antropología y Economía (ed. Godelier, M.), Barcelona pp. 155-178
 Santana, M.E., 2014, “Reciprocidad y Redistribución en una Economía Solidaria” in: Ars & Humanitas 8/1. Slovenia.
 Surpluses result from deducting costs and expenses of the cooperative, amortization (value for deterioration of fixed assets). In associative organizations the term “profits” is used more, which is pretty similar to “surpluses”. The term “earnings” is different, there could be earnings through a discount if a product is sold above its acquisition price.
 W. Berrios, from the CAFOD aid agency, refers to the fact that some aid agencies linked to churches in Europe tend to withdraw their support for organizations that in theory assume the social and solidarity economy approach, but in practice do not follow it, and that instead become part of conventional mediation.
 Several buyer companies left Fair Trade on realizing that their premium payments were not getting to the member families, so they formed another movement called direct trade, to get around “cooperative mediation”. There are also European enterprises and cooperatives that buy coffee or cacao in Central America and want the cooperative that they work with to distribute their surpluses; correspondingly, some of them avoid the second-tier cooperatives and prefer buying directly from the first-tier cooperatives.
 Polanyi, K., 2001, The Great Transformation: The Political and Economic Origins of Our Time. Second Edition. Google Books. (First publication in English in 1957).
 See: Jack Stack, 2002, A Stake in the Outcome, New York: Doubleday. Stack, along with other workers, founded an innovative enterprise in the United States. In this book he recounts how they struggled with this issue from the beginning of their company. If they did it as a company, how much more should a cooperative!
René Mendoza Vidaurre, Mark Lester and Fabiola Zeledón
The unfaithful market
“Bring your coffee and I will pay you 100 córdobas more per quintal than that coyote that is circling you”, Carmelón the trader said by cell phone. Pedro weighed his coffee before leaving on the bus, it weighed 3 quintals. Now in town, Carmelón put the three sacks on the scale and it weighed 2.3 quintals! He paid him 2990 córdobas, at 1300 per quintal. Pedro left dazed: in his own village they were offering him 3600, at 1200/qq; and he would have saved the cost of the transportation and the lost day. He arrived home with a headache. “What is bothering you?”, asked his wife, Julita. “Carmelón cheated me,” he responded angrily. Ah Pedrín, you know very well that the market is like a lover, you cannot demand that it be faithful. Pedrín felt like the earth opened up in front of him, how right his beloved was!
The market is like a lover, you cannot demand that it be faithful“. If it does not cheat you with the price it does it through the weight, if not, it tells you that your sun-dried coffee is wet, and if not that, it tells you to “wait on me.” Price, weight, and quality are structural challenges that can be resolved if people organize into a cooperative. But it is not automatic, most cooperatives are taken over by elites who turn their backs on their members, and turn into traders dressed up as “cooperatives”. Ah, but when the members of a community organize and the organs of their cooperative function, in that community they reduce violence, generate more equality and peace – this is what Esterlina Talavera says, from the 13th of October Cooperative in San Antonio: “In these cooperatives where only one person is in charge, one is not worth anything; in this cooperative, where the assembly is in charge, there I feel like I do have value.” If importers, roasters and sellers of ground coffee in the United States and Europe work with those corrupt cooperatives, they instead sow violence in peasant communities, like what happens with traditional mediation connected to big corporations, but if they work with democratic cooperatives, they support peace with justice.
Under what conditions can small producers, women and men, and small roasters and coffee sellers build communities of peace between rural areas of Central America and consumers in the United States and Europe? Responding to this question in this article, we see that markets can become “faithful” to the challenge of making peace with justice.
1. Perspective and ways of riding the markets
With Mark Lester´s visit to 50 importers and roasters in the United States, we discovered similar perspectives on both sides of the ocean: buyers and producers. He met with roasters who buy from 6 sacks of coffee a year to those who bought containers of coffee; there are peasant families also who produce 4 quintals of export coffee to those who produce 100 or 150 quintals of export coffee. In the face of this situation, there are importers who connect these two worlds: they import coffee in lots in one containers for roasters who want lots of a smaller size than that of a container; they are lots that come from 3 or 5 producers with the same coffee profile, possible through the grassroots cooperatives (1st tier).
He learned that roasters ask for samples of coffee to be able to express their interest in buying; some cup and define their own cup profile, and others ask the importer to define their cup profile; generally they are looking for a score above 82, because they think that is the way that they can differentiate themselves and compete in the face of large corporations whose costs are less because of their economies of scale. The cooperative sends the sample, indicates the volume of coffee that it offers from that sample, and the roaster responds whether they are interested in that coffee or not; as a sign of loyalty, the cooperative does not sell the volume it offered with the sample until the roaster has responded, to do so would be behaving as an “occasional lover”; the roaster or importer responds as quickly as possible, to not do so would be to behave like a “lover”. The roasters prefer lasting connections, it does not work out to each year have a new seller of coffee, because they want to maintain their cup profile; the cooperative also wants to have lasting relationships, especially if the buyer pays them based on quality and there is good deal; this implies that the cooperative also is loyal to its members, only collects their coffee, and thus maintains the same cup profile that it agreed upon with its buyer. It is a loyalty among several actors who revolve around coffee.
Mark found roasters and importers concerned about the sustainability of their enterprises and that of the coffee growing peasant families. If the peasantry with less than 5 hectares of coffee goes broke, the coffee is left in the hands of large mono-cropping enterprises, thus the quality of the coffee would drop because they are committed to varieties that produce volume and they grow them in full sun. This is not helpful to the buyers nor to the peasants. So from both sides of the ocean they want peasant families to increase their productivity (more and better coffee per hectare), and importers and roasters process more coffee in the same physical space. Both sides of the ocean also want diversification and the commitment to coffee quality to lead them to increase their productivity, that diversification would also include sustainable practices with several crops and the agro-industrialization of products, roasters who diversify their markets; university communities that demand coffee from cooperatives…
2. Trust, the beginning of triangulation
Cultivating these described connections and commitments are not possible with conventional practices. Financial organizations provide credit requiring financial statements (indicating expenses and income) and balance statements (indicating assets of the cooperative versus its debts) from the cooperatives; but these in turn tend to hire accountants who “invent” their financial reports, while their members do not have access to that information, and if they do, the numerical chaos is incomprehensible to them. Financial organizations and buyers assume that on signing contracts with cooperatives, they actually are operating as cooperatives; at the same time it is seen that most of them do not redistribute their earnings, they treat their members as any intermediary would treat them; they are cooperatives whose members do not rotate in their posts, nor does their administrative staff rotate in accordance with their merits. So the aid organizations, on learning of these realities, turn a blind eye; thus, trust in people becomes trust in money on the part of a small global club.
Those connections and commitments can, nevertheless, be built based on trust if cooperatives function as cooperatives, if buyers and roasters treat them as cooperatives and not as if they were haciendas, connecting only with the manager or only with their president. How can trust be built? From the work of the Winds of Peace Foundation (WPF) with grassroots cooperatives and its contacts with buyers and roasters, we propose an inclusive triangulation.
Social banks, buyers and second tier cooperatives already practice triangulation, they sign contracts where the cooperative collects coffee with financing from the social banks, and the buyer pays the loan owed by the cooperative to the social bank. But it stays there, they are that club that turns a blind eye to the true functioning of the cooperative and its members. We take up that triangulation, buyers, financiers and cooperatives, but not with second tier cooperatives but with grassroots cooperatives (first tier); and we do not stay there, we do an inclusive triangulation, that implies that part of the contract stipulates the distribution of profits and information, that they be democratic and efficient organizations (that they lower costs), and work in sustainable agriculture. That this inclusive nature be verified by an accompaniment that helps the members govern their cooperatives, and that the transparency between buyers, roasters and cooperatives be reciprocal.
Being inclusive means that the member families coordinate among themselves to achieve a cup quality of 85, improving their soils, assuming the costs of sending coffee samples: not letting the market govern them, believing that it is only a matter of putting up money and moving coffee; it is that we work with members over the entire year and not just in the coffee harvest season, connecting small producers who organize into cooperatives with small roasters. If one actor acts as an opportunist, they damage the entirety of the coordination with the different actors, and they do damage to themselves. If the price in the market goes way up, the cooperatives prefer to stay in a lasting relationship; if the prices of the market go way down, the buyers prefer to stay in a lasting relationship. This is coordinating, trusting and being faithful.
3. Role of accompaniment
There are roasters aware of the fact that peasant families cannot improve their lives if they do not organize into cooperatives, and that is why they seek out healthy relationships with these cooperatives. There are importers who understand the importance of connecting small roasters with small producers who are organized into grassroots cooperatives. There are also foundations, like WPF, that accompany this process of triangulation.
In this role, WPF, in collaboration with a team from the COSERPROSS cooperative, accompanies the grassroots cooperatives, contacts importers and roasters, and because of its connections with Universities in the United States, works so that the triangulation reaches university communities.
Previously WPF did not play this role. It assumed that that role belonged to the cooperatives. But seeing that the cooperatives are being absorbed by structures that sow injustice, violence and environmental unsustainability, WPF took on new roles, of being a hinge in the relationships between cooperatives and buyers, helping to make transparent the agreements between the different actors. If previously WPF provided credit on the basis of bilateral trust with a cooperative, now it does it in the framework of an inclusive triangulation, precisely to build greater trust.
At the beginning of this article we asked ourselves about the conditions in which small producers and small roasters can build communities of peace. We provided three responses. First, small producers and roasters pursue common perspectives; perspectives that start from having similar size, committed to coffee quality, and social and environmental sustainability, innovating through diversification. Second, establishing relationships of an inclusive triangulation where the economic transaction goes along with the economic and organizational democratization of the cooperative and the other allied actors. Third, ongoing accompaniment of these perspectives and this inclusive triangulation.
Under these three conditions trust, mutual loyalty and lasting relationships can be built. This leads us to be concerned about the people. It is a perspective where Pedro and Julita, from the story at the beginning of the article, organized in a cooperative can collect their coffee harvest in their own communities. It is a path where markets can work to build communities of peace with justice, communities that plough the seas.
by Fabiola Zeledón, Freddy Pérez, Claudio Hernández, Hulda Miranda, Rebeca Espinoza and René Mendoza
Juan, president of the cooperative, got off the bus, and walked like a rooster, with his chest held high.
-Greetings, young lady. I am the president of the cooperative
-Good day, Juan.
-Call me “Mr Juan”. I was born a leader. I am the way, the truth and the money, hahaha.
-Ahh… Who said that…?
Didn´t you hear me…? Tell your Dad to send his contributions. I will give him a loan.
A sparrow that was flying around the area, seeing that was happening, crashed against a tree. The bird couldn´t believe what it was hearing!
When at last there was a restructuring of the organs and administration of a cooperative, winds of change were felt. Among other reasons, the cooperative was founded to be a democratic space and a place for learning for the members. Nevertheless, a short time after the changes, the cooperative tends to return to its old course: hierarchical structure, absence of information, disillusioned members, lack of ownership… How things change so as to not change. Why do we trip over the same stone time and time again? Here, in contrast to the sparrow, we reflect on what is happening. Then we add a second question: How can we avoid this stone and walk along the cooperative path without “crashing” into the first tree? In this article we reflect on these questions based on our own experience of recovering a cooperative.
1. That tripping stone
In Chapter 12 to 16 of the Book of Revelation in the Bible, John, from the island of Patmos, warns about the first beast that shows itself to be powerful. But he warns us that its power comes from another beast, that we should not get confused. That second beast also is powerful, but its power is not its own either, but comes from a third beast. Something similar happens in a good number of cooperatives. See Figure 1.
The manager or president personified in a person tends to appear as the patron. He says: “Aid organizations only write to me”; “I am going to give the members directions because you are like children”; “I give you loans”; “You owe me”. The members resign themselves: “to whatever he says”; “we are small producers”; “I go to him for loans”. The leader or patron who centralizes decisions and concentrates resources, ends up believing that there is no need for assemblies, that he was born a leader and that is sacred. If some institution sees that that cooperative is like a hacienda, the patron shouts to the four winds about “autonomy” and against “third party [outside] actors”. He believes himself to be the general assembly, oversight board, administrative council and manager all rolled into one. The members dream of one day becoming that patron; Fanon said that then in Algeria: “The oppressed dream about being the oppressor”.
But his power is not his own. He or she is the face, generally, of a group that is as global as it is local, who live off the control of the resources that revolve around the cooperative. These include buyers, certifiers, agro-industry, State institutions, financial organizations…Behind these acronyms are individuals who manipulate their own organizations. They say: “information confuses the members”; “Buy coffee or cacao in the street and pass it off organic”. The patron senses that he lacks power, that his power comes from that group, so he goes to church and there whispers to himself: “I am not a bad person, I was tempted by money”.
The power of this group is not its own either. It comes from the patron-fieldhand structure, wedded to capitalism. This structure says: “everything is possible with money”; “more volume, more earnings”; “everything has already been studied”; “even God does not like stupid people”. Any natural force or wealth, economic wealth and friends of the member families remain diluted in the face of this structure.
Now we are able to understand how it is that we trip over the same stone. The saying goes: “human beings are the only animal that trips twice over the same stone”. We started a cooperative, and it is trapped by this harmful group, and this group responds to that hacienda and capitalist structure. If our patron is removed from his post, the new president or administrator takes his place, they make him repeat [his term] and keep him as an errand boy, while they make him believe that he is the top honcho! What happened? That structure awaits the new president or administrator as the “spare tire”, once he arrives, they exchange him for the “flat tire”, while the “vehicle” keeps rolling on. So it is that time and time again we trip over the same stone.
2. Walking on the cooperative path
There were elections in the Reynerio Tijerino cooperative. The members were happy.
-Luis Javier Vargas, a member, quoting the Bible, exclaimed: “When the just rule, the people are happy”
-the recently named president, Justo Rufino Espinoza, responded: “Let´s not be overconfident”.
It was a moment of joy, heart, reason and consciousness.
A hummingbird that was flying by, began to sing of joy.
When we began to get tired of tripping, discovering those three “beasts” woke us up. We refused to be that patron, that “spare tire”. The brief conversation between Luis Javier and Justo Rufino reveals that individual and collective combination, between emotion and reason, between hope and reality. A person makes themselves just, they are not born just. “In an open treasure, even the most just sins”, says an old saying, that is why the new president warned: “Let´s not be overconfident”. In other words, the cooperative has to create mechanisms to build trust and produce justice. How can it do so? Here we list some mechanisms.
The first is preparing for each activity. This means studying each situation and reflecting on the notes that we have taken of past conversations and meetings. Claudio Hernández says: “I have been taking notes for years, I can lose anything in my house, but not my notes”. Freddy Pérez adds: “If I would have known that my notes were important for learning, I would have taken notes sooner”. On the basis of notes and other information, we prepare ourselves for each meeting, negotiation and activity – imagining each detail before doing things. In this way we overcome the old practice of the patron, of doing things impulsively, because you feel safe under the shadow of the second beast, we overcome relying on the patron who says “leave it to me, I will solve it”. The more we prepare ourselves and coordinate as a group, the more our confidence increases and the more we help the cooperative.
The second mechanism is realizing that in the cooperative people have the power that comes from interpreting and applying the rules of the cooperative. These rules are the result of the decisions of the Assembly, wedded to the values of our communities. Our patron are the legitimate rules and processes. We guide ourselves by these rules, and we apply them through the corresponding organs. Our loyalty is not to money, but to the general assembly composed of the members, who produce these rules and who every three years elect other members for the different posts. Money is a means; the end are the members.
So if a member is looking for a loan, he goes to the credit committee, and follows the rules that the assembly of the cooperative approved. No one should take the place of the credit committee in a cooperative; it is not like in the haciendas, where the patron is at the same time the credit committee, general assembly, oversight board and manager. Our statutes tell us that profits are redistributed in the cooperative, therefore we must redistribute the profits of the cooperative. In a cooperative each member has rights, voice and vote, without regard to whether they produce a little or a lot, each member has the right to become president, to their part of the profits, and to have a copy of the statutes of their cooperative. In a cooperative the directions do not come down from above, they are made in the Assembly, and in the other organs of the cooperative. “Oh”, said Freddy Pérez, “I thought that being a board member was solving the problems of the members, rather it is the members who solve their problems through the cooperative”. “It pains me what I experienced, I know that I should not lend the money of the cooperative to the members, but I did it again”, expressed Claudio Hernández, recognizing that those “3 beasts” have formed a nest in our minds, but that our consciousness wrestles with them, and that being a cooperative is gaining more and more terrain. “We do not need credit, we need our profits”, insists Josué Moisés Ruíz.
The third mechanism is connecting the inside forces with the outside ones. Figure 2 shows the harmful leadership style, the patron who believes himself to be the door to the cooperative and to outside the cooperative; while Figure 3 shows the style of leadership that a real cooperative practices. If the cooperative is guided by its statutes, the State will legalize its path. If this process happens making its organs function, external institutions and aid agencies will respect the cooperative; they will treat it as a cooperative, and not as a hacienda arranging everything only with the patron. For example, the credit committee will meet with the institutions or organizations that might provide credit to the cooperative. The commercialization committee will meet with commercial enterprises and organizations that provide processing services for their products.
Internally, the members of the organs visit the members, and encourage them to visit one another as members. Members of the commercialization committee visit a member family, see their product and their wet mill, and at the same time come to understand the family in their multiple interests – most deeply felt needs and dreams; it is on this basis that the committee advances in their work strategies. The members of the oversight board, credit committee, education committee and the Administrative Council all do the same. A visit is a blessing that makes friendship and trust, loyalty and truth blossom. The more informed a member family is, the more it contributes with their ideas and oversight to the cooperative; the more connections are cemented in visits that generate friendship, the more the cooperatives become instruments for the majority of their members.
The fourth mechanism is that organizational improvement must improve our farms and homes. The cooperative is not there to apply agrochemical inputs and then lie, saying that we have organic production. Nor is producing an organic crop leaving it “without applying anything”. If we visit the member families, each family should visit their plants every day as well. The cooperative is not there so that our members might consume the coffee dregs, but to consume the best of their coffee, honey, grains, vegetables, bread and the best of their enchiladas…
3. In conclusion
This article is the product of 5 months of tension, and the pursuit of a cooperative to defend its rights, speak the truth and have the strength to change. This process taught us that a small group, in alliance, is capable of making cooperativism contagious. The biggest changes start in our own minds. The rule that “we will always need a patron” or that “leaders are born” comes from the hacienda institution and capitalism, and has built a nest in our minds. How can we get that idea out of our heads? To the extent that we reflect, demonstrating it, trying mechanisms out and being persistent, we can free ourselves from that idea.
At the beginning of the article we asked ourselves why we were tripping over the same stone. Throughout the article we have discovered the “three beasts”, who have trapped most of the cooperatives in our countries. These “beasts” make us trip time and time again.
The second question was how to avoid tripping again. We listed 4 mechanism that we have experimented with: preparing oneself for each meeting and not moving impulsively, following the rules of the cooperative, being a leader who connects with the members and the external actors, and making organizational improvement go hand in hand with the improvement of our production. Our aspiration is that these four mechanisms might help us to get those harmful norms out of our minds that come from the “3 beasts”. Being a cooperative is path that we peasant families need to hone. If we do it, the hummingbirds will be joyful as well, and the sparrows will not longer crash against any trees!
Let us end this article recalling another rule of the patron: “you should not help members, because they are ungrateful”, the patrons repeat. When Sandino decided to not surrender, General José María Moncada said to him, “The people are ungrateful; what is important is living well”. Sandino did not crack. There is no better gratitude than the members recovering their cooperative and closing the door on the thief, the patron, and the three beasts, and follow their own path.
In the midst of the independence days celebrations in Nicaragua, the denouncement by the IACHR of continued repression by the government and lack of civil liberties, the rejection by the government of a high level OAS delegation to find a peaceful resolution to the crisis, the Catholic Bishops Conference issued this pastoral letter. It is a hopeful and faith filled response to the current bleak situation, encouraging non violent change for a more inclusive and tolerant society.
TO FAITHFUL CHRISTIAN CATHOLICS, MEN AND WOMEN OF GOOD WILL WHO LISTEN TO OUR VOICES
Truth and forgiveness are the basis and path to peace
We write to you, while commemorating these days of patriotism, with a look to the present and the future, as was done on Independence day whose new anniversary we celebrate. And since there is no future without memory, the present offers the opportunity to feel pain from our disputes, past and recent. After nearly a year and a half of suffering and pain where we have experienced in our flesh the passion of our Lord Jesus Christ. This encourages us to pronounce the Word of life and hope that comforts wounded hearts and illuminates uncertainty in the face of the evil that stalks us.
The firm basis for a new construction
We can ask ourselves. How can we contribute to the solution of the acute social, political problems and respond to the great challenge of poverty and exclusion? How can we do this in a country which finds itself in a profound political, social and economic crisis, where the beginning of a new stage seems to be appearing, with its corresponding challenges for our democratic coexistence? There are signs that our institutional attire is too tight, and the citizenry expression is emerging asking for profound changes and reforms. The economic inequality, unemployment and opportunities seem an endemic evil difficult to correct, condemning several social collectives to unfair exclusion and invisibility, like migrants, women, youth, people with different capacities, ethnic groups, among others. Is it possible to love the person who closes the doors of their heart to Our Lord Jesus Christ and thereby, to the opportunity to promote a culture of true peace and democracy? Is it possible to maintain hope, when everything seems to indicate that there is no power capable of resolving our crisis? What can be done, if the word of civil society does not count? Is it possible today in Nicaragua to be Catholic and work for an Institution that does not respect conscience, and toys with the hunger of the people? How can so much cruelty to which we have been subjected be pardoned? Is it possible to heal these wounds?
As brothers along the path, the Episcopal Conference of Nicaragua makes these questions its own, and responds animated by faith: Pope Benedict XVI, on inaugurating the Ecclesial Conference of Aparecida, offers us in this respect a brilliant contribution:
“The problems of Latin America and the Caribbean, as well as the world today, are multiple and complex, and cannot be confronted with general programs […]. In this context it is indispensable to talk about the problem of structures, above all, those that create injustice. In reality, just structures are a condition without which a just order in society is not possible. But how do they start? How do they work? Capitalism as well as Marxism promised finding the path for the creation of just structures, and stated that they, once established, would function on their own; they stated that not only would there not be a need for a prior individual morality, but that they would promote common morality. And it has been demonstrated that this ideological promise is false. The facts make it clear”[…] Just structures are an indispensable condition for a just society, but they do not begin nor function without a moral consensus of society about fundamental values, and about the need to live these values with the necessary renunciations, including against one´s personal interests […].
LET US LOVE THE COUNTRY. We also invite you to Love the Country.
The love for country that should prevail above individual goods, if it is as such, Pope Benedict already said it, has to be united with the pillars that provide sustenance to all coexistence: truth, justice, liberty, fraternity, solidarity. And it also requires more subjective virtues, like empathy, the commitment to know and appreciate others, the desire to save the proposition of the neighbor. Otherwise, the very objective pillars of Love for country are weakened and deteriorate with the reiteration of suspicions and disqualifications. And one small pebble is enough to bring down what an enormous effort had been able to raise up. Is this not one of the causes of the unrest, that, in spite of the evident progress, afflicts national coexistence?
Crisis of Trust
One of the reasons that are at the root of the unrest is due to a crisis of trust, which has been transformed in our Nicaragua into an omnipresent virus that infects all the relationships of our lives, and this is reprehensible! Authority is distrusted, institutions are distrusted, good intentions are distrusted and even the viability of projects themselves. This very distrust puts stress on family life, distances us from our neighbors, and creates barriers between groups and sectors. For this reason, the dialogue that we need to solve our problems is seen to be interrupted, curtailed, darkened. And we even distrust its feasibility and effectiveness for achieving the agreements needed […] It is impossible to believe in distrust! It is impossible to educate in distrust! It is impossible to love with distrust! Distrust cuts the fabric of human tissue and makes the beam that holds up the temple, the nation, the home collapse.
For this reason the cultivation of trust has to be enriched with the “culture of encounter”, which implies the more active attitude of taking responsibility for the other, of committing myself to their care, to their growth, to their freedom, because in the diversity that God has given us as gift is also our wealth. It is not just a matter of “tolerating” the one who is different – a minimalistic attitude – but of “celebrating” with magnanimity our differences, expressing them with freedom, with care and respect, to grow the wealth of our ideas and values. Let us think about Nicaragua and love our country, that is the greatest good of life in society. To work for the good of Nicaragua is to care for, on one hand, and to use, on the other hand, this series of institutions that legally, civilly, politically and culturally structure social life, which is configured in this way as a nation. Our neighbor is loved more effectively the more one works for the good of the country that responds also to their real needs, having the wisdom of integrating and including their wounds and disagreements, certainly in this way we will be capable of inaugurating a more demanding and qualitatively more robust democracy. As pastors, we are fully certain that we can do this in Nicaragua. In this sense, we encourage the youth to continue making their contributions to the nation, with their study and training, with their energy and yearnings for justice and liberty, with all the non violent means within their reach. We do it with the words of Pope Francis, in the World Youth Campaign celebrated in Rio de Janeiro: “do not put yourself at the tail end of history. Be active members! Go on the offensive! Play down the field, build a better world, a world of brothers and sisters, a world of justice, of love, of peace, of fraternity, of solidarity. “ (Pope Francis, Speech to Youth, July 27, 2013).
Encouraged by faith we also believe that:
A new culture laden with hope is possible. As long as there are men and women lovers of Truth and love, who hope and believe in a better future, their dreams will not be snatched away from them. “The God that made himself a lamb tells us that the world is saved by the crucified one and not by the crucifiers. The world is redeemed by the patience of God, and destroyed by the impatience of human beings” (Benedict XVI). The flame that we have received of family values needs to be kept alive: our being eucharistic, marian, believers, hardworking, jovial, sacrificial, etc.
“You have heard that it was said: you will love your neighbor and you will hate your enemy. Well I say to you: love your enemies and pray for those who persecute you, so that you might be the children of our heavenly Father…(Mt 5:43-45). These words of Jesus are not easy to live. Since logically they assume swimming against the current. Even for the disciples themselves it was difficult for them to understand and take on that language. Justifiably they said among themselves this language is difficult, who will be able to understand it? (Jn 9:60). Nevertheless, with his deeds and words, Jesus was establishing a new culture: the culture of love (Jn 15:12). Systems of power and oppression are smashed there. Throughout history we have seen men and women who have assumed this mandate of loving without limits: let us recall Saint Oscar Arnulfo Romero, prophet and martyr in the midst of a context marked by hate and death; the Servant of God, Fr. Odorico D´Andrea, who exercised the apostolate of mercy, reconciliation and offered his life for the peace of this country, marked as well by hate and death. They did not renounce Truth and Love, and that is why they did so much good for their peoples. Today our country more than ever yearns to resort to this capacity for loving as a response to the system of hate and death installed in Nicaragua, which attempts to hide the action of God.
It is difficult to be a Catholic Christian in these conditions, but, we exhort you to not quit struggling for our faith. As long as we are faithful to our values, we know that “nothing is lost as long is there is hope to find it” (St. Augustine). Fundamental for each one of us Nicaraguans is “looking at He who sees us” (St. Theresa of Avila), and that we do not give up. He knew that he was going to be crucified. He knew everything that he was going to suffer. Nevertheless, he made the decision to go up to Jerusalem, to the place of his martyrdom. This conviction for his mission, salvific one, made him overcome the obstacles of the enemies as well of those closest to him (Mt 27:1-2; Mk 10: 32.45; Lk 20:20-26). This has to be our conviction in the mission that we have of building together a country with true peace and democracy. In spite of the fact that a brother Nicaraguan might feel misunderstood where he works. In spite of the fact that he might feel judged or rejected by those who are around him, even by his family for thinking differently (Mt 10: 34-36; Lk 12: 51-53), as long as his life revolves around love, in the end everything will make sense. That is why it is necessary to cultivate prayer. God always has the last word. Let us remain with him, like Mary at the foot of the cross (Jn 19:25). Let us hope with faith. Let us do it for God, for our children, for our youth, for our elderly, being faithful to our Church.
To carry out this mission it is important to forgive, as Jesus tells us: “if someone hits you on the cheek, offer him the other. If someone forces you to give him your mantle, give him also your tunic” (Mt 5:39-40). When Jesus asks you to do this, he is not inviting you to act like a fool, but he is inviting you to break with the cycle of violence. This is being wise. Because violence engenders violence, and as our grandmothers say: “fire is not extinguished with fire”. Let us not wait for the enemies of good to take this step, it is us, first of all, who have to take it on, because forgiveness brings with it that peace that we are called to cultivate. If we want social peace, let us first seek peace in our hearts. We need to break the cycle of violence. There are many peoples who have triumphed with peaceful revolution, with the force of values, faith, hope and charity, in a word, with the power of God.
The illuminating Word of the Gospel
In the face of this great challenge, in the Christian tradition, the wisdom of the Sermon of the Mount emerges with beauty and cogency, especially the Beatitudes. The protagonists in them are not the powerful, nor the rich, the erudite, nor those who determine the immediate future of populations. The protagonists are the poor, the afflicted, dispossessed, those who hunger and thirst for justice, the merciful, the clean of heart, those who work for peace.
The Beatitudes invite us to build our coexistence not on iron poorly mixed with clay, but on the rock of the Word of God. And this firmness is expressed, necessarily, in care for those most disadvantaged of our society, who hope that justice might be for them a mother that shelters them, honors them and invites them to the table of all. Not just for pity, which would already be a human sentiment, but so that they might have available that which is owed them in justice.
In the words of Pope Francis, “the future demands today the task of rehabilitating politics, which is one of the highest forms of charity. The future demands of us also a humanistic vision of the economy, and a politics that achieves evermore and better participation of people, avoids elitism and eradicates poverty”. And to achieve this urgent mission he had invited us with great clarity to “travel in pilgrimage to the existential fringes of society.”
Conclusion: Invited to dream
Authorities, friends, brothers and sisters: The Sermon of the Mount (Mt 5-7) is a monument to fraternity. It is based on our common descendancy from God the Father, who does not admit discrimination based on race, sex, creed or lack of belief. A fraternity that, when it is forgotten, leads us to act like Cain, losing good sense and abandoning more human means. It is the madness that leads to preparing rockets and putting trust in weapons of death. This has never been the path. Never! In contrast, when real space is given to fraternity and it is believed in, we can confront one another with the truth, expressed with respect, love, frankness and with affection, and with an untiring dialogue, keeping the doors open to reunion and coexistence in peace.
Invited to dream
Let us recall the dream of Martin Luther King (June 28, 1963), let ourselves be allowed to dream from faith, as bishops of our country Nicaragua: let us dream of a country where we might rediscover graciousness in our personal and institutional relationships; let us dream of a country where people are exactly in the center of our concern and our work; let us dream of recognizing one another as brothers, as sisters, even more fraternal with the weakest, most vulnerable and with those with different capacities; let us dream that the greatest interest not be money but the growth of people and the happiness of their families; let us dream that Nicaragua might be, in truth, a table for all, also for those who migrate seeking in that home new horizons for their lives; let us dream of a country without discrimination of any type; let us dream of a country with its hand extended and face uncovered; let us dream of a just, fraternal and caring country.
Let us dream of a reconciled country! Let us dream of a hopeful country!
PRAY THE ROSARY
Mary is the beloved of Yahweh and Nicaragua belongs to Mary. We invite you to pray as a family the Holy Rosary so that our mother might take to Jesus the intention of being faithful to our mission of building a better Nicaragua for all. Let us cultivate this tradition around our grandparents and parents. It is in the family, “small domestic church” (St. Paul VI), where new leaders are formed with the vocation of service to the country. The solution to our conflicts as a nation start in the family. Let us make our homes into sanctuaries of love.
Issued in the offices of the Episcopal Conference of Nicaragua on the 15th day of September in the year 2019, on the feast of our Lady of Sorrows.
Seal of the Episcopal Conference, and signatures of:
By any reckoning, any resolution to the current crisis will still leave a very polarized society. In fact current government pronouncements fuel the polarization by continuing to refer to the opposition as coup supporters, many of whom were actually FSLN members shocked at the willingness of the government to kill their own people.
But another reason for the polarization – and one of the key arguments the government makes to garner support – is that it has implemented, and continues to implement, policies that benefit the poor majorities, i.e. building public parks, investing in health care infrastructure, rural roads, providing subsidies for production, etc. Any glimpse at the official website el 19 Digital provides daily updated lists of examples. The unspoken but obvious question the government poses to the population is whether another government would implement such policies.
This article stresses how important it is that any future government address this key issue. The position of the opposition is that the current “pro-poor” policies of this government are forms of political patronage, financed with money siphoned from the Venezuela oil deal that Ortega used to enrich his family, and has also used to buy popular support. Therefore some of them argue that such policies should be terminated by any responsible future government, because in fact they are unsustainable. While this may seem a logical argument, if the end result is that the poor feel abandoned again, it will only feed the polarization.
The opposition now legitimately asks the question where the government is getting the money to finance all the police and paramilitary activity. But if a future government is not able to find the resources to respond to the social inequality, it will be asked a similar question about their own increased spending on “security”. Because if history is a gauge, what is saved by cutting social spending, ends up getting spent on social control.
By Oscar René Vargas, published in electronic newsletter Artículo 66
The social inequality that prevails in Nicaragua has reached such levels that it conspires against social harmony, the environment, the security and development of the country.
The social inequality is also violence on the part of the higher social strata toward those “below”, and every day moves us as a country away from the fruits of the Fourth Industrial Revolution.
Important changes have only happened in the spheres of those above, the lives of those below continues not to be of interest the powerful.
This growing inequality is not sustainable, and the way to attack it, the master key, is: employment, decent, well paid, productive work with rights and social protections.
The phenomenon of child labor has its origins in the inequality, poverty and extreme poverty that leads families to send their youngest members out to work, as well as the different forms of domestic violence that force minors to earn their own living.
The discrepancy between the volume of services provided and the meager health results have several explanations of a social, economic and political order, but the deficient and disfunctional public [health] system has a very direct influence with direct repercussions on the most vulnerable sectors.
Also undeniable are the different forms of corruption that have grown like a cancer with multiple metastases in all the health sector to the detriment of the poor.
We are immersed in a mind-boggling and monumental corruption of the Ortega-Murillo government that has lost even the smallest trace of honesty in the so called mafia of power.
All of this are effective obstacles to health care services, and get translated into social inequities and inequalities.
The social inequality must be the future of the country agenda from here to 2030. It is where we should go because the dominant, authoritarian and despotic style of development is not sustainable.
Equality has to be in the center of the future economic policy of a progressive government, because what has increased is the disparity, the inequality between the one who has the most and the one who has the least; the inequality of income, distribution of wealth, opportunities and access to public goods.
In the future the logic of zero corruption has to be implemented, zero cronyism, zero nepotism; eliminate all that blight of the national political culture.
To effectively fight against inequality it is important to close off the tax evasion of big capital and take the case to a national debate.
The country needs a redistribution of income and wealth, above all of profits.
A national debate that would allow us to reach a consensus around a solution to the current imbalance in the distribution of income, social inequality, access to health care, type of education, as well as the appropriation of wealth.
Therefore, the progressive government has to have as its priority objectives: improving equity, reducing social inequality and poverty.
In other words, being in favor of a key point: not imposing poverty salaries as a mechanism for business productivity and bloated profits for capital.
If we should learn anything from these hours of struggle and indignation, it is that without a social and political organization of citizens, the adversities will become a permanent and recurring tragedy from which no one will be exempt.
People dispossessed for so many years collected their savings and gave them to one of their sons, Solin, for him to pay for the coffee that was collected from their own group. Solin had never had so much money; he was like a deer in the headlights. He paid for the coffee. Some of the same people who had saved, behind the back of the rest, went to him to get him to lend them money. Solin first said no, but these people insisted, and he gave in. More people showed up, also from other parts of the country, and he ceded. Solin felt like a little patrón, “The people trust me”, his chest puffed out like a balloon. This path of giving out other people´s money, saying that it was his, led him to lie and believe his own lie. When other people showed him his mistake, Solin offered them money to shut them up, and if they did not accept it, he would slander them. One day he looked himself in the mirror and was frightened to find that he did not recognize himself.
When the owners of the money asked him to give it back, he had lent it all out. “And where is the money?”, they raised their voices. “You have already eaten it,” the theft reverberated like 10, 100 and 1000 years ago. Solin and several of the savers had betrayed their own path. Both took the path trodden for centuries by the old hacienda owners and fieldhands, by the comandante and those who died, by the manager and those who believed themselves to be cooperative members.
This story illustrates what happens frequently in cooperatives. A group of people save, define their purposes, agreed on their rules and then betray that path. The old path trodden by the patrón where the fieldhands follow for their pay, become indebted and to look for a favor, a path also taken by governments and churches (“Holy Patron Saint”), clouds and blocks any other path. In the story this group of people and Solin look at themselves in the mirror, or ask about their resources, and are surprised to be on the old path of dispossession, moving from being “servers” to “being served”. Their biggest tragedy is not so much the use of the money, but the fact that they have betrayed their path, this is the reason for the bad use of the money and the fact that their lives have taken a 360 degree turn, arriving at the same place. How can people who organize be able to follow their own path?
1. Individual-collective duality and the dilemma of betrayal
In organizations that face corrupt acts, there is finger pointing, accusations and complaints. “He is incorrigible”, “he is guilty of bad administration”, “she is not accountable”, “she uses our money for her benefit and that of her managers”, lash out the members. These
phrases in a cooperative belie an individual perspective, accentuated by the religious conservatism of “personal salvation”, and by the neoliberal doctrine where what is important is the individual and not society–there is no such thing as society, said the first female British Prime Minister M. Thatcher in 1987, during the full eruption of neoliberalism. Reproducing this perspective, nevertheless, is a way of “washing our hands”, of showing oneself to be innocent while pointing out others as the guilty parties.
These same expressions, nevertheless, can be read as “spitting against the wind” from the collective perspective. Because the member who is doing the accusing, with or without a title in some organ of their organization, on seeking a loan directly from the administrator, behind the back of his own cooperative, is not exercising his/her role, and/or violates the rules of their own organization; on the other hand, the corrupt administrator establishes himself reproducing the idea of the patrón;: “With 100 cordobas I keep them happy.” Many times even the State or aid organization officials who support the cooperatives borrow money from the managers, knowing that it is money that belongs to the cooperatives. “The spit” also falls on this member and this official who preaches cooperativism. A systematic act of corruption happens, above all, because of the lack of functioning of the respective organs, because of the lack of compliance with the rules of the organizations, and the accounting norms on the administrative side, as well as because of the acceptance of aid organizations*.
The members know the rules and procedures, but they see them as tedious, “paperwork”, “bureaucracy” – high transaction costs, they would say in economics. The members of the organs also see it in this way: “meeting is a waste of time.” While the patrón “from one big roll” decides to lend to them or not. In this process the members believe the administrator about any version about the source of the money, there is no culture of verifying their versions, because, they think, it would be distrusting and ungrateful; for that very reason, they do not ask for receipts either, the patrón does not do receipts – his word is enough! In addition to believing him, they fear him, “a person with other people´s money is capable of anything”, they whisper, so they keep quiet – do not speak in front of the patrón! This is a rule that is resurrected. From here the “vice” of playing with “other people´s money”, more than individual and exclusive of the manager or some president, is a collective “vice”; a collective act causes individual behavior – of corruption or honesty. See the upper part in Figure 1.
“The law is not being applied to him”, state the members and advisers of the organizations. With this they mean to say that organizations have laws, the State oversees compliance with the law; and that aid organizations have rules, and they do not apply them. This, however, continues to assume an individual perspective, believing that by “applying the law” “the patron is going to self correct”. It ignores what the history of any country tells us, “the patrón makes the laws”, be that with his right hand or his left. So we detect that this individual perspective, clothed in a collective and legal perspective, is moved by structures of dispossession; the “accusing”, the “abusing other people´s money” and “preaching laws” make the path of cooperativism disappear, and accentuate the path of dispossession – it is the dilemma of the betrayal. So we perceive that this structure is like rails for a train, it does not matter who the conductor is that is driving the train, nor how many years of schooling he might have, how many advisers and protectors of the law he has, that train will move along the rails; not matter who the administrators or presidents may be, these structures (“rails”) trap the conductors. In this way cooperatives can go broke, while these structures remain unmoved –“in an open treasure even the just will sin”, goes the saying.
At the same time this structure is being challenged. On the one hand, there are some members who cultivate a contingent awareness, that it is possible to make your own path and walk it; and on the other hand there are administrators who understand their role, respecting accounting rules and the collective perspective of organizations, shunning “inflating themselves” like balloons that run the risk of “bursting.” They do not “spit into the wind”, but recreate that collective perspective which finds itself supported by mechanisms that are coherent with more communitarian structures, and consultancies that study these rural underworlds – this is overcoming the dilemma of betrayal. See the lower part of Figure 1.
2. Innovative mechanisms for cooperatives as the vehicle for repossession
“They do not let us be peasants”, shot off a Costa Rican leader in 1991, recognizing the onslaught of neoliberalism in turning the peasantry into workers and “wetbacks”. The “be peasants” has been more coherent with community structures, in conflict with structures of dispossession. It goes with mechanisms that make an alternative path possible, mechanisms that we have been learning from the exceptional organizations in Central America: see figure 2.
They are mechanisms that “de-commodify” peasant life, they involve awakening and organizing, deepening their roots, improving the organization of the commons, and sharing the path in a glocal alliance- because every space is glocal (global and local).
Mechanism 1: Voluntary genesis of cooperativism congruent with community principles
Nearly two centuries ago a group of textile workers in England saved part of their salaries to start a store, and with that stabilize their income and defend their basic needs. In Germany peasants organized to free themselves from usury. In both cases, the people understood that individually they were not able to overcome structural problems, like the low buying power of their salary and the usury that indebted them for life; organized, they could do so. Thus they defined their path and walked it. Over time cooperativism has expanded throughout the entire world and has become a double edged sword, a means for repossession for its members and communities from whence they come, and a means for dispossession when small elites appropriate it for profit. Read the brief dialogue in the box.
From the angle of the genesis of cooperativism, this dialogue shows the incomprehension of the administrator about what a cooperative is, as well as the wisdom of the younger brother about the social rule of “respecting someone else´s assets”. “The need of the other affects me”, says the administrator; precisely the crude “need” of people led to the fact that cooperativism emerged standing under the principle of respecting collective assets. The error of the administrator in this dialogue is providing a loan from money that is not his, and doing it outside of the rules and organs of the cooperative that named him “administrator”; with that he dispossessed the members of their resources, and full of a short term vision condemned needy people to suffering. Being “proud” is abusing “another´s assets”. This deformation results from the individual perspective derived from structures of dispossession.
The cooperative that originated in the will of its members to overcome structural adversities, and does it with rules based on community principles, like those expressed by the “younger brother” in the dialogue of respect for collective goods, is a long term structural mechanism.
Mechanism 2: Rooted in diversified bases
The market demands a product and does not matter whether the one who produces it comes from one place or another; the State and aid agencies behave in a similar way, they legalize organizations or demand changes like “including women as members” without regard to where they come from. From working with cooperatives we learned that a cooperative that is rooted in its micro-territory has more possibilities of walking their walk, of being inclusive…
How to be rooted? Even though the members of a cooperative come from the same micro-territory, deciding that the administration –and therefore the financial transactions – are done in the territory itself, requires making explicit in a reflective way several beliefs written in stone for centuries: “Here they are going to steal from us, in the town there are Policemen and that is why it is safer there”, “no buyer or certifier is going to come out here to our place, we have to go out to civilization”, “here we are living in the brush, the patrón lives in the town”, “that little girl doesn´t know anything about administration, only men who ride on motorcycles know it.”
When the members of a cooperative come from the same micro-territory, and decide that their building and its administration are going to be in the same space, then we create favorable conditions for a good cooperative. The possibility that corruption might emerge and intensify is reduced. The mobility of the members to the cooperative´s building, as well as the attendance of women and men in the meetings is greater. We say that more women and men go to the meetings, because of the geographic proximity and because they do not have to travel to the municipal capital to attend meetings; the women can go to the meeting with their babies and/or children, something that is difficult if the meeting is in the municipal capital. This contributes to the cementing of trust among the members. Also the coordination between the administration and the organs of the cooperative can improve. The care of the members and board members over their administration increases, which is why the security of the resources of the cooperative in that place increases. Accessing information and asking their questions is also more possible.
The payments that are made in the territory itself to the members, be it for coffee, cacao, sugar cane or another crops, has an impact on the economy of the territory. The storefronts and small businesses sell more, new businesses tend to emerge. The interest of the partner of the member, and their children, in the receipts that their Father or Mother bring from the cooperative is greater. The possibility of having lovers under the argument that “I am going to town for a meeting” is reduced. It is like the butterfly effect in a world as interconnected as today´s world is, even more so is life interconnected in a micro-territory and in families.
Mechanism 3: the functioning of the cooperative organs and administration
The fact that a member might understand that organized they can overcome their structural problems is one step, the fact that they can facilitate that because their cooperative is rooted in their territory is a second big step. Nevertheless, there are cooperatives that in spite of having taken both steps, go broke or turn into a means for dispossession manipulated by small elites. The third mechanism is that each member, with or without a title, function in accordance with the rules and organs of their organization, without going “in secret” to the “real person in charge”, because the “real person in charge” in the cooperatives are its rules and organs.
It is easy to say that the organs of a cooperative function according to its rules. But it is difficult for it to happen. The phrase that is read in laws and management, that they are “management organs” illustrates that they are not “decision making organs”, that the power of making decisions was expropriated by the elites. How can the organs be “decision making” and the administration “management”, the former with a strategic role and the latter with an operational role? Apart from the fact that they know their statutes (rules), meet systematically and cultivate connections with their members and with external actors, the key is in the fact that they become learning organizations. How? First, each member is seen as a leader in their community, understanding that the biggest treasure is in their own social territory; consequently, their first task being multiplying their visits to other people, members or not of the cooperative, so that through conversations, they might understand the problems and opportunities that exist in their territory. Knowing them and sharing them is their fuel for pushing the cooperative to improve, and it is their source of ideas for enlightening cooperativism.
Second, the relationship between the administration and the organs is developed to the extent that they organize information, analyze it and on that basis define their policies and strategies to be followed. This provides work content for each organ. For example, information on loans and arrears is analyzed by each organ, particularly the credit committee; the Oversight Board finds one of its principle follow up tasks in this; the education committee, as a result of this analysis, proposes to work on financial education with the members about how to save, invest better and working with more autonomy, breaking with that old institution of “going into debt” and putting up with any exploitation for being “indebted”.
Third, making decisions based on the visits and the data analysis makes it possible for them to make better decisions. A particular area is diversification. A cooperative, even one with organs functioning acceptably, if it continues embracing mono-cropping, sooner rather than later will go broke; if it continues, it will work to dispossess. Promoting diversification, nevertheless, is difficult because of the atrocious structure of international power. Today to speak about agricultural cooperatives is nearly to talk about mono-cropping. So there are “successful” cooperatives that have credit, marketing and technology services just for one crop; the effect of mono-cropping on the peasant economy and the environment have been horrible for decades and centuries. The attached box illustrates the expansion of mono-cropping even through organic agriculture reduced to its dimension as a commodity, and the fact that people of good will from international organizations work against the peasantry while believing that they are “benefitting” them. Visiting and analyzing data leads us to question the origins of our policies and respond to the millennial strategy of peasant resistance: diversification and environmental sustainability. If the organs and the administration of a cooperative focus their tasks on diversification of the farm and agro-industry, their cooperative will democratize a little more, and will include more youth and women in general.
The geographical proximity facilitates organizational functioning, and this, focused on diversification, makes the cooperative be even more rooted, produces new innovative rules and starts the path of being an organization of repossession – of peasant viability with economic and social diversification, and environmental stability.
Mechanism 4: Glocal alliance for the cooperative path
These three mechanisms facilitate changes in the cooperative and in the economy of the member families and their territories, but they will achieve sustainability to the extent that they take on the attitude of a cooperative member. It is not just organizing voluntarily, looking at their territory, making decisions through their organs, it is feeling themselves to be, and being cooperative members. What does this mean?
For centuries indigenous and peasant families have cultivated a mentality of producing to eat. Then in the 1920s in Central America cash crops came in like coffee, sugar cane, cacao, and cattle. In that process they molded a mentality of being a “seller of coffee”, “seller of sugar cane”, or “seller of milk”. Consequently, they reasserted their territory (“country”) in their plot or farm: “My country ends with my agave fence”, they declared, which means that within this area there is a structure and a person in charge, that outside of that is not his world, that his world ends at the fence where the buyers come to buy his products. They do not even sell, they buy off of him. This mentality was intensified by the markets, “I will buy your coffee sun-dried or wet, the rest does not matter”, “I will buy your sugar cane”; likewise national and international aid organizations, allies of associative organizations, with people trained in universities that taught them that only “Inc.” companies produce profits, say to them: “work on the raw materials and the rest will we take care of”, “you are good for harvesting, industry and trade is our thing”.
What is the problem with this mentality? The peasant receives payment for their coffee or milk, that is their world; the other world is that of the patrón, where the profits are; the peasant never is interested in this other world, knowing what their patrón did with his profits; the very fact of asking him was showing ingratitude, insubordination and social suicide – their own people would treat them as someone trying to be his equal. This institutionality has been reproduced in associative organizations and their allies; a member looks for payment for their coffee, sugar cane or milk, they are not interested in knowing whether their organization generated profits or not; in Fair Trade the use of the premium of US$20/qq of coffee is previously defined in social investment, infrastructure… and $5 for the member family to invest in their farm; the premium for organic coffee of US$30 is perceived like this, “premium”, equal to a “roasted cow” that the patrón would provide for them at the end of the harvest, “premium” of a day of fiesta. In other words, the agave fence of the peasant member is “price of NY + premium” (see box); the member family understands that their profits and premiums are not an expression of their rights, but “a favor” (something “extra”, “charity”) of the local or global patrón, that is why they do not ask about it, do not ask for information, nor keep their receipts nor complain over the distribution of profits. Knowing this reality, the patrón (administrator or fair trade coffee buyer) repeats, “with 100 córdobas I keep them happy”, “with pig rinds and booze they leave happy”, “I buy from them at a good price and I give them a premium, whether that gets to the member´s family or not is their issue.”
Complaining over your profits is like being a “beggar with a club”. It is like a woman subjected by her husband, she feels “kept” and without the right to ask him about the “rest of his money”, and it is the mentality of the citizen who pays taxes and instead of complaining that his government reinvest in public works and provide him “good service”, see these works as the result of the goodness of the government (patrón).
The three mechanisms listed need to be complemented by this fourth one, with which we will move beyond this glocal mentality. How? First, building a mentality where the peasant family has awareness about the fact that their actions create value and have unexpected consequences, which is why they can refine their policies and carry out actions of even greater value and impact. This is possible if they observe and reflect on some details; for example, making sure that through the payment for the harvested coffee in that territory positive aggregate effects are generated in the economy of that territory, beyond their “agave fence”; observing the impact of their diversified organic agriculture on their farms as well as on the territory; reflecting on the effect of violating the agreements of their own cooperative, that leads them to lose resources as a cooperative and as a territory. On observing these positive and negative effects, the members can awaken their awareness of being coop members and of moving from their “agave fence” to understand that regardless of their purposes, their actions have a repercussion on the territory. In a parallel fashion, let also global actors awaken and understand that their actions have repercussions on the lives of the peasant people; if they look at a cooperative just as “coffee” or “cacao”, commodities, and believe that by providing a good price and premium they have already contributed to the families, they should ask themselves if they are sure that they have “contributed”; if one person turns into an elite capturing those premiums, are the buyers contributing to the well being of the peasant families?
Second, making relationships between different glocal actors (global and local) be living alliances that are committed to the formation of associativism, complementing the mechanisms mentioned here. This does not mean improving the prices of raw materials. It means that organizations add up all the income (value of sold product +premiums+incentives for quality and other bonuses), subtract their expenses and costs, and from the gross profits they agree to redistribute according to a certain percentage, let us say 50 or 60%. We repeat, it is not a matter of improving the price of the sugar cane or the coffee, it is not distributing the premiums; it is redistributing the gross profits of your organization.* The remaining 50 or 40%, or other percentage, goes to internal funds, social fund, legal reserves, investment fund in the organization…
Third, all the actors, cooperative, associative enterprises, aid agencies, Universities and State Institutions, we all should commit in an ongoing and systematic way to cooperative formation, based on the lessons and challenges of the organizations themselves. On emphasizing profits we are not reducing ourselves to the economic, we understand with Aristotle that quantity is an element of quality; consequently, the members will move from a mentality of “I am a seller of sugar cane” to “I am a seller of granulated sugar”, from “I am a seller of coffee” to “I am a cooperative member exporter of export quality coffee”. This will mean that each member pushes that their organization generates more profits and redistributes them, they will make an effort to be informed, to be trained, to diversify more. With these elements, the formation will help their cooperative and territory, the board and their members, the cooperatives in the north and the south, to maintain strong ties of collaboration and mutual learning.
3. “Muddy” accompaniment from the underworld of the member families
Most cooperatives have been accompanied, be it by the State, Churches, aid agencies or Universities. Standardized accompaniment has meant providing them trainings, legalizing them, buying products from them and /or providing them with donations; it is an accompaniment that does not cross over toward the communities and the underworld of the cooperatives, which is why it ends up legitimizing corruption, or that cooperatives get turned into a means for dispossession. A new type of accompaniment is required so that these four mechanisms emerge, are adapted and make a difference.
Owen and other associative people inspired the emergence of cooperativism in England, Friedrich Wilhelm Raiffeisen accompanied the first cooperative in Germany. A distinctive accompaniment in Central America has been that of the Catholic Church in the years 1960-1970; that accompaniment helped them to reflect on a God living among them, and a Reign of God that began in those very communities – the “treasure” (God) was in the communities themselves. This accompaniment gave rise to dozens of cooperatives and peasant stores based on their own resources; a good part of them still persist after 40 and 50 years. Consistent with this type of accompaniment, even though not from a religious perspective, we describe here an accompaniment that enters into the cooperative underworld in interaction with the 4 described mechanisms.
What are the distinctive characteristics of this accompaniment? The first is that the accompanying people understand that only by entering the underworld of the cooperatives and their territory will they be able to understand the process in which the cooperative finds itself, awaken reflection and help create mechanisms like those worked on here. The fact that we intellectuals might have the “best” assessment is useless if the members are not reflecting on and walking their own cooperative path. For that reason the accompaniers need to pass beyond the control of the “patroncito”, be that the administrator, manager or president, and through the conversation be exposing the struggle between the path of the patrón and that of the cooperative, as well as the complexity of walking their own path.
Second, accompanying is discerning mindsets from the inside. Along with studying the cooperative underworld, where the old path is imposed based on betrayal and subordination, and where people wander between doubt and intuition, the accompaniers discern the mindsets in the cooperatives, and their own mindset as accompaniers. When the cooperative is trapped in acts of corruption, it is moving under the rules of “the clever one takes advantage of what he administers”, and “we always need a patrón”; these rules conceal actions against their own organization; then the members see the accompaniers as “intruders”, unfurl the banner of “autonomy” to keep the accompaniers from “crossing over the threshold” of the territory, and make up lies in the territory that these accompaniers “are taking advantage of the cooperative.” Discerning their mindsets implies “muddying ourselves” in their beliefs and lies, at the risk that this might erode the legitimacy of the accompanier and drive him/her out of the territory. What distinguishes good accompaniment is the persistent act of overcoming our own mentality that it is “enough to train, legalize and help them to export in order to live better”, “taking their pulse” and innovating with member families to the extent that destructive mentalities that prevent learning are dispelled.
Third, accompanying well is allowing member families to take their own steps, provided that we understand that our actions also have repercussions in the lives of the member families. The accompanier risks the fact that the members might perceive him or her also as a “little patrón”, impairing them from walking their own cooperative path. Let us illustrate this with one experience; in a cooperative, after the second mechanism took place, of rootedness, the results in terms of informational transparency, reduction of corruption and a motivating environment because of its economic and social impact in the territory were admirable. So the board members complained to the accompaniers: see attached box.
In the box the leader sees the accompanier as a “little patrón” with the capacity to stop the corruption and impose decentralized administration on the territory of the cooperative. The response of the accompanier to the first complaint is that having intervened as a “firefighter” to “put out the fire” of corruption, even though this act would have saved them financially, it would have constrained them from building their own cooperative path, which is structural and long term. The response to the second complaint reveals an accompaniment that helps to innovate mechanisms to the extent that it studies and learns from the cooperative itself and its underworld. Even now that we have innovated these four mechanisms they would not be recipes for any organization, they are mechanisms that need to be adapted to each situation, and that each cooperative should experience their processes. These two responses illustrate that accompanying is letting member families walk their path, provided that it studies them and provokes reflection.
Finally, in this process we are getting to know ourselves, re-knowing ourselves in our actions, and we are developing a sense of reasoned compassion. Not the “rational being” of homo economicus. On understanding the mentality of a group of members who “always need a patrón that steals from us”, we understand that for more than 100 years this institution has been deeply etched in their grandparents and parents, reproduced now by this group. At the same time we understand that this institution is not characterized by “being peasants”, but that it is the centuries old path of the patrón-fieldhand. This reflective reasoning envisions this reality for us, and awakens “being peasants” in the lives of cooperative member families and our lives, through respecting the collective good, the rules of the collective and mother earth, the horizon for which we produced the four mechanisms.
Accompaniment makes us remember that the change is in alliance between the peasant families and those of us who accompany them, while we walk together. It is not a stationary accompaniment, but along the road. It is a tense alliance, with stumbles and doubts, but embracing each other for the purpose of creating a vehicle for repossession to the benefit of peasant families.
By way of conclusion
We began this text with the following question: How can people who are organizing follow their own path? First we identified how the colonial patrón-fieldhand path intensified by capitalism that only values merchandise (commodities) erodes the cooperative path, and leads people to betray their own path. This teaches us that individual actions respond to certain perspectives (individual or collective), and they in turn come from structures in conflict, communitarian structures and structures of dispossession; and that this cooperative path is connected with community life, also in resistance for centuries. These two paths clash, for example, in “the good of others”: the colonial and capitalist path is nourished by dispossessing “the good of others” (land, financial resources, labor) from the peasantry, while the cooperative path is connected to community structures which precisely originate in repossessing “the good of others”, which in this case is the “collective good”, material assets (financial resources), as well as alliances and collectively decided arrangements. This “good of others” in the cooperative path is then a “social relationship”, as Federici would say.
Lining ourselves up with this cooperative path, we list four innovative mechanisms that, contrary to the saying that “in an open treasure even the most just sins”, make the cooperative into “a treasure with rules and associative governance where even the biggest sinner becomes just.” These four mechanisms are: voluntarily organizing, rooted in specific micro-territories, making the cooperative organs and administration function, and within a glocal alliance framework help the member families to cultivate an awareness of “being a cooperative member”, that their actions generate changes in their lives and the life of their territory, and making the cooperatives expand their profits and redistribute them with informational transparency and as an expression of respecting “the good of others” (common good, collective good, their own good), in contrast to capitalism that is nourished from dispossessing material assets from peasant families. Then we argued that cooperatives need an accompaniment that makes a difference, that crosses over formal and despotic structures and gets into the underworld of the territories, from which they innovate with the member families, like the mechanisms listed here, and accompany them through thick and thin.
Is this text important only for cooperatives and their allies in their social territories? What happens in the cooperatives and their social territories at the micro level is happening in countries at the macro level. Following the cooperative vision is overcoming the “commodity” vision, the colonial patrón-fieldhand path and the belief that “with money you can even make monkeys dance”, and it is creating a society that cooperates, makes rules and follows them, expands their profits and redistributes them, learns and democratizes. Will it happen?
 A case to illustrate this type of accompaniment is that of the Cooperativa La Esperanza de los Campesinas in Panama. See: R. Mendoza, 2017, “A priest, a cooperative and a peasantry that regulates the elites”, in: ENVIO 425. Managua: IHCA-UCA. http://www.envio.org.ni/articulo/5304
 Lucia Linsalata, 2015, “Three general ideas for thinking about the commons. Notes around the visit of Silvia Federici” in Bajo el Volcán, year 15, number 22. Federici talks about the commons in the community, she says “there is no commons if there is no community”. In this article we present the cooperative as an expression of people from a community who decide to organize, and for them “the commons” is within the cooperative, even though in relation to their communities or social territories.
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.
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 firstname.lastname@example.org. We would also appreciate support from any readers in helping us make contacts with coffee buyers and roasters.