The height of injustice is to be deemed just when you are not. Plato
Even an honest man sins in the face of an open treasure. Saying.
The VII song of the Odyessy tells how the goddess Circe warned Ulysses that the sailors of those waters were so enchanted by the song of the sirens that they went mad, and lost control of their ships. To not succumb to that enchantment, Ulysses asked that he be tied to the mast of the ship, and that the oarsmen have wax put in their ears, and ordered that if he, because of the spell of their song, would ask that they free him, instead they should tighten the knots. So it was that Ulysses and his oarsmen were saved, and the sirens, failing in their objective, threw themselves off the cliff.
Facing unfair commercial relations, Fair Trade (FT) emerged as an alternative so that people who organized might improve their lives and be a space of solidarity among different actors beyond their countries´ borders. Nevertheless, in our case study in Nicaragua and Central America, we show that the institutional structure of power relationships under the market control of elites is like the sirens in the myth, capable of seducing the FT network, turning it against its own principles, and turning solidarity into just a bunch of words, numbers and papers. How can FT tie itself up so as to not succumb to the song of the sirens, and in this way, grow, enhancing its FT alternative principles? To respond to this question we take as a given that there are exceptional cooperatives, organizations, and people who confirm the importance of organizing and cultivating global solidarity, and that there are successful cooperatives, in countries in the south as well as in the north, in FT as well as outside of it. Nevertheless, in this article we study certain practices of the FT framework that seem to indicate its involution, and on that basis we suggest its reinvention. To do so we focus on coffee, which constitutes 70% of the volume of what is sold through FT.
Bias. It’s what we as human being use to see the world around us, whether we like to admit it or not. We see the world through the lens of our own experiences. Sometimes that comes from things that have happened to us. Sometimes it comes from things we’ve been told. Often our vision comes from the way we would like to see reality, for our own benefit. But we are born with the predilection toward bias. Is it also true about the way we view the poor?
I received the following article from the organization, “Progress Through Business,” a non-profit located at the University of Wisconsin-Madison. It was founded by an acquaintance of mine, John Hoffmire, whom I came to know through his advocacy in the ESOP world. I found the subject and the data of the article provocative, and decided to include it here:
How The Rich View The Poor
The discussion over rising inequality in the U.S. has captured headlines, been featured in the November election campaign, and incited heated debates analyzing and criticizing the relationships between the rich and the poor. “Out-of-touch” and “unsympathetic” have become buzzwords used to describe the attitude of the haves toward the have-nots.
Despite this narrative unfolding in the media, the question remains whether the headlines reflect reality.
The Associated Press recently cited research saying that 1 in 5 Americans reaches affluence at one point in their lives. This 20 percent block is a far cry from the critique offered by many who want change but still provides evidence of a large disparity between the wealthy and the poor.
Some might ask how this division affects the social aspects of our society. What is the best descriptor of the relationship between those on opposite ends of the economic spectrum? The prevailing story conveyed through the media would suggest that “out-of-touch” and “unsympathetic” do accurately portray the well-off portion of the U.S. society.
However, those who question this viewpoint might pose the following queries: What about the billions of dollars donated every year to poverty-focused charities? What about the wealthy investors who have recently turned their focus to social innovation and impact investing in order to address social ills through business? Doesn’t this demonstrate a stronger interest than we might otherwise think? Or does the philanthropist merely seek notoriety through his or her contributions, and is the socially minded investor motivated by the opportunity to gain new market share or attract new customers?
So the question remains, are the wealthy truly invested in the poor and do they care?
A New York Times blog by Daniel Goleman detailed research on social interactions between two groups of people on significantly different rungs of the social ladder. I’ll call this research “study one.”
Members of one group had a much higher income than the members of the other. Subjects of both social classes were instructed to share and communicate, with another individual, about hardships that they had experienced in their personal lives. Researchers then observed the interaction between the two individuals. The findings of the research show that the rich consistently demonstrate disinterest in the personal difficulties of the poor.
The wealthy showed less sympathy and concern as they listened to the poor recall personal trials, such as divorces and deaths in the family. Conversely, the poor tended to be as attentive to the difficulties of the rich as they were to the difficulties of their socio-economic equals.
The researchers concluded that we tend to be interested in those whom we value. Partly due to a void in material wealth, the poor tend to value social relationships. They develop “keenly attuned interpersonal attention, in all directions”. This is a trait that anyone — and everyone — could develop, regardless of financial wealth.
If the researchers are correct in their conclusions, and members of our society are only interested in those whom they value, then inattention would demonstrate that the rich undervalue the poor. Why is this? It may be that the rich judge the poor. The rich may assume the poor live a “substandard” life brought upon themselves through their own ignorant or incompetent decisions.
Wealthier members of society may assume that everyone has the same opportunities and that those whose cognitive abilities are less efficient should not receive certain advantages in society because they have not earned them. This attitude, if it exists, is undermined by research that says that many cognitive difficulties are environmentally induced. In other words, those who live in economic stress may be impaired cognitively as a result of the stress caused by consistently living in situations where their economic lives provide bitter choices.
The research, which I will label “study two,” includes an experiment performed at a New Jersey mall and is detailed in a 2013 article written by Anandi Mani, Sendhil Mullainathan, Eldar Shafir and Jiaying Zhao, all prominent university researchers. The subjects of the study were confronted with a scenario. They were told that they faced a common financial problem, such as paying for a car repair.
This problem was meant to activate real financial concerns that existed in the participants’ own lives. After thinking about how to come up with the money to make the payment, the subjects were asked to answer common IQ test questions. This research included a component that tested the respondents’ ability to answer questions correctly and quickly while under pressure. After providing a solution to paying for the auto repair, the subjects were asked to disclose their income.
The subjects were assigned either “hard” or “easy” financial situations, with an auto repair cost of $1,500 or $150 respectively.
When contemplating “easy” situations of $150 auto repairs, the poor and the rich answered the IQ test questions correctly at a very similar rate. When the auto repair cost was raised to a “hard” situation of $1,500, the rich performed about the same on the IQ test as they had during the “easy” situation. However, when faced with “hard” situations, the poor experienced a significant drop in the number of questions they answered correctly. This was in line with the researchers’ original hypothesis.
The experiment was then adjusted to include a financial reward of 25 cents for every correct response. Although the poor have a presumably greater need for the money, they still performed worse during “hard” situations than the rich, and earned roughly 18 percent less.
This seems relatively reflective of reality. The researchers go on to explain that the poor earn less not out of incompetency, but because they must allocate mental capacity to problems that are more pressing to them than to the rich.
Remember that the poor performed just as well as the rich when the stakes were low. The difficulty for the poor arose when the payment increased to $1,500, even when they had the ability to make money by answering correctly. Many expenses, which the rich consider minor, become major obstacles for the poor, requiring a significant amount of attention to address. This allocation of attention to pressing concerns may in turn prevent the poor from taking advantage of opportunities (such as earning extra cash in the above study).
Additionally, solving these problems comes at the expense of other basic needs. The researchers cite prior studies showing that the poor “use less preventative health care, fail to adhere to drug regimens, are tardier and less likely to keep appointments, are less productive workers, less attentive parents and worse managers of their finances.” According to the study, these troubling behaviors are caused neither by laziness nor incompetence but by decreased capacity brought on by the situations the poor face. This is due to the overwhelming nature of stressful situations, many of which are not nearly as difficult for the rich.
The study’s results provide key insights into the relationship between the rich and the poor. The occurrence of the types of problems discovered in study two should not elicit negative judgments from the rich but rather understanding. The wealthy could be much more interested in the poor, knowing that the personal difficulties in the lives of the poor may have more serious repercussions than situations in their own lives. The resources of the poor, financial and mental, are often already stretched to their limits.
If studies one and two are reflective of the reality of how the rich view poverty-stricken people, and I believe they are, it is a major misperception on the part of the rich to believe that the poor should always be able to recover from setbacks in the same ways as others. And if both of the above studies are true, then less-advantaged individuals’ traits of “keenly attuned interpersonal attention in all directions” are all the more impressive. Low-income individuals are able to allocate their attention to focus on other people, while the rich do not seem to have this same ability, often depriving the poor of sympathy and understanding.
The studies give us observations and a neurobehaviorialistic view of the relationships between rich and poor. But what else might motivate the lack of demonstrated concern of the wealthy for those less fortunate? Perhaps it is that the rich are so focused on gaining more wealth, status, and contact with other wealthy people that there is little incentive for them to get to know and care for the poor.
So the question arises, how can the rich turn their attention outward and toward those on the opposite end of the social ladder? One way would be for everyone to better understand the role of good fortune and the assistance they have received from others. Many have benefited from those who stand a few rungs up and a few rungs down.
We, of all social classes, could consistently be looking out for those who find upward mobility difficult and we could understand that trials and burdens are taxing, painful and often devastating for those at many points along the socio-economic spectrum, but are especially paralyzing for those at the bottom of the wealth pyramid. While those who are well off enjoy the comfort of ample financial resources, they could also strive to develop and use their own sense of a “keenly attuned interpersonal attention, in all directions.”
I say this not only on account of the poor. It seems that many in other social classes are missing out on a special opportunity. I notice at times in our society that many people lack a sense of purpose. Dedication to the poor and a willingness to act on their behalf can bring great value to the life of someone who is willing to serve.
One who certainly showed attention to those less fortunate was the late Nelson Mandela. Leading a nation out of apartheid also meant fighting a war against poverty. Partly due to his work, South Africa began a process leading toward greater development in Africa. Mandela understood that our social interactions are key tools in combating poverty. He described our duty to do our part to help those around us and across the globe when he said:
“Overcoming poverty is not a task of charity, it is an act of justice. Like slavery and apartheid, poverty is not natural. It is man-made and it can be overcome and eradicated by the actions of human beings. Sometimes it falls on a generation to be great. You can be that great generation. Let your greatness blossom.”
We could all benefit from allocating our own financial and mental resources in an outward way, paying special attention to those around us who are less fortunate than ourselves.
It’s an interesting study and a sobering one. I wonder what misconceptions others have about me….?
Son to his Father: old man, you are not making money on the blocks of sugar; you are just doing it to work.
Father: Yes, I was raised in this and I miss it.
Mom: And where do you think our clothes come from, this roof … and part of the food? From sweating over these blocks of sugar!
(Conversation with peasant family, Yoro, Honduras, 2017).
Sugar cane was domesticated 10,000 years ago on the island of New Guinea. It came to the New World based on slave labor and environmental degradation between 1425 and 1493. Slavery began to be stopped in 1807 when England prohibited the slave trade which happened through the purchase of slaves in Africa with sugar itself; at that time more than 11 million slaves had been brought in, more than half to sugar plantations (R. Cohen, “Passion for Sugar” in: National Geographic). These plantations were established at the cost of dispossessing the indigenous populations of their land. With sugar cane we see that “a lot of water has passed under the bridge” – more than water, human blood.
In Central America part of the elite continues in the sugar industry with enormous human and environmental costs (see case of Guatemala: Labrador, Villagrán, Sánchez y Alvarado, “El cartel del azúcar de Guatemala” in: El Faro 25-4-2017, https://elfaro.net/es/201704/centroamerica/20091/El-cartel-del-az%C3%BAcar-de-Guatemala.htm). In the face of this reality, peasant and indigenous families have included sugar cane in their family strategy for self sufficiency and income generation. Does sugar cane allow them to resist? Is this sugar cane, that has planted so much death, also an instrument for life? We argue that if families organize to add value to their sugar cane, they can resist dispossession, remain in their communities without being driven to migrate, and at the same time contribute to environmental sustainability. Consequently, in this article we describe the peasant perspective on sugar cane, the dispossession that they have suffered, their viability, and the challenges that accompanying these processes of repossession imply.
When peasant families see themselves forced to migrate, they tend to take with them some sugar cane plants, and other families even take the sugar mill. The families get to the mountains or places where they can buy less expensive land. There they start to produce corn and beans, they establish their banana plants and sugar cane, they preserve patches of forest for wood and firewood, and they raise small livestock (poultry and pigs) and 2 or 3 cows. Their strategy is to diversify and reduce risk: the forest for wood (home construction, fence posts) and firewood for the kitchen and the oven of the sugar mill; they plant corn, beans and bananas to ensure their food; they grow sugar cane that they turn into blocks of sugar for their own use (to sweeten coffee and natural juices, make honey, pastry, coconut squash, mangos with honey, fritters, corn bread, and liquor – and as young D. Mejía tells us “the recipes of my grandmother are the best with brown sugars”- and for selling it. The sale of the blocks of sugar during a good part of the year, and the sale of 2 to 3 cows a year, is cash to cover other needs (salt, soap, matches, etc) and to buy “new clothes.”
Due to their distance from the market, the idea of the peasant families is to depend as least as possible on outside products. That is why it is easier to take blocks of sugar out to sell in the towns to generate income, than bunches of bananas or corn. Taking 100 lbs of brown sugar blocks generates a little more than double the income of 100 lbs of corn. In addition, sugar is one of the crops that are least affected by diseases or insects, and once established, requires little work and can resprout year after year for more than 50 years. So it is that wooden mills and then iron mills emerged, along with the sugar cane, powered by a team of oxen, and in some communities by a motor. In some communities the blocks of sugar are the only way to connect to the market and get some cash.
Table 1. Transformation of brown sugar block (20 tons / mz)*
L / block
$ / block
Sale (load of blocks)
Weeding (1 mz)
Guide for oxen (load)
Team of oxen (load)
Cutting cane (mz)
Transporting cane (ton)
* 20 tons of sugar cane in 1 mz (0.6988 has) = 33.33 loads of blocks, 1 load = 48 blocks, 1 block= 3 lbs. ** L750/load of blocks; price varies between 700 and 1000/load. L = lempiras, currency of Honduras
Source: based on family producers of cane and with/without mill (Yoro, Honduras)
Table 1 shows its profitability. A family with sugar cane, a mill and a team of oxen could generate income of 13,533 lempiras (balance of 9,600 + 2000 transportation + 3,333 team of oxen – 1,400 for weeding). A family with sugar cane, but without a mill and oxen, that turns in their cane so that it gets processed and they get half the value in return, gets L10,500 (half of L25,000, minus 2,000 for the transportation of the cane). If that same family with a mill takes on the cost of the weeding, leading the oxen around the mill and the cooking, their income increases. Both families get more income as they produce more than 20 tons per manzana.
Pressure combined with dispossession
Living in these communities for 25 to 30 years, families now feel pressure on their economic strategy (income diversification and generation), social strategy (sharecropping relations and sharing labor – mutual support) and political strategy (decisions and autonomy). The “domino effect” of the so-called agricultural frontier is being felt (see: Maldidier, Ch., 2004, “agricultural pioneer fronts, the crest of a far-reaching wave”). The land is tired and its productivity is declining, it needs to be fed, which in turn creates pressure for financial resources to buy fertilizers. Because of world sugar demand and how lucrative it is for the oligopolies, large sugar cane, african palm, rice, and extensive ranching plantations require more land and more water, and that pressure is being felt in the communities whose families at times of greater economic fragility (e.g. sickness of a relative, indebtedness, lack of water), or when the pressure suffocates them (e.g. plantations that close off the road to a community), are left with no choice but to get rid of their land. The sons and daughters who form their own homes press for their inheritance, with the consequence being that the areas per family are getting ever smaller. And the milling of the sugar cane begins to suffer from a scarcity of labor: the work of the ox guides and the cook is hard, from midnight to 9am, because the workers, with the passage of time, take advantage of other opportunities like working in sawmills, coffee fields or migrate in search of other opportunities.
Slowly the sharecropping relationships get eroded and the capacity to decide gives way to the force of the market that comes in with different consumer products, with different labor relations, with credit that finances mono-cropping, with the “deadly embrace” of expensive farm inputs and low prices for peasant products; this is when the population murmurs, “our money doesn´t go very far”. Also state law imposes taxes and restricts the use of their forest areas, while the laws do protect the sugar industry. So human groups, like an ear of corn that shells itself when it loses one kernel, cede their places and go off to other land or become workers. That is why we do not find mills close to the cities; they get farther away tas the “domino effect” intensifies. That is when the profitability of Table 1 gets complicated, because it begins to operate less frequently.
In the last 15 years this practice of establishing oneself, and being forced to migrate to the mountains, appears to be facing drastic changes. Practically speaking there are no more mountains to go to, which is why that escape valve is now being shut down. So increasingly the population migrates to the cities and leaves the country. But at the same time countries like the United States are closing their doors to migrants. The paradox is that that “domino effect” that starts from the demand for sugar mediated by oligopolies, on the one hand expels the peasant families from their land, and on the other hand, they are rejected by the metropolis. This is the second “deadly embrace.”
Adding value to the product in an associative way
How can you resist for more than 25-30 years and stop the “deadly embraces?” The COMAL Network is trying one way, where the peasant families organize into associative enterprises to add value to the sugar cane, producing granulated brown sugar (See: “Eco comal, una marca campesina que cobra auge” in: Diario Tiempo, 4-8-2015).
Table 2. Transformation of granulated brown sugar (20 tons / mz)
Granulated brown sugar
Purchase sugar cane (ton)
Labor (hrs work)
* 1 ton sugar cane = 240 lbs (60% granulated brown sugar 40% crumbs). Exchange rate $1 = L23.3
Source: Records of the granulated brown sugar processing plant of APROCATY (Yoro, Honduras)
In the municipalities of Taulabé, Jocón and Yoro in the last 5 years 100 peasant families that have sugar cane on their diversified farms have organized into 3 associative enterprises. With the support of international aid, they have established 3 processing plants on their farms. Even though their yields vary between 60 to 72% of granulated brown sugar, the calculations in Table 2 are encouraging, even based on the lowest yield. Let´s take a look, a member family sells 20 tons of of sugar cane at L8,800; and then, depending on the policies of the organization, that member family has the possibility of accessing part of the remainder of L5,753 that their sugar cane generated in the organization. In only 3 years, on average in these experiences, the difference of the “value added” is noticeable.
The outlook that they offer us is even more interesting. According to the table the costs are 81.8% of total sales, and to the extent that they grow in volume and yield (let´s say from 60% to 70% of granulated brown sugar), those costs drop from 81.8% to 70%, then the remainder will go beyond L10,000 and also $0.10/lb. This is the commitment of the three organizations.
Going back to the communities, specifically Laguna de la Capa (Yoro) which was already on the outer limit of the 25-30 years, the impact of the processing plant made itself felt. When the APROCATY organization began, the prices for the blocks of sugar were falling below L500/load (48 blocks), the cane fields were being lost and all the symptoms described in section 2 began to appear. “The ear of corn was beginning to lose its kernels” . The entry of the production of granulated brown sugar helped raise the price of cane and blocks of sugar to L700, 800 and even L1,000/load of blocks, because a good part of the sugar cane was turned into granulated brown sugar, which put sugar blocks into short supply. This slowly began to re-energize the production of sugar cane as part of the diversification systems of the families, promoting the consumption of an alternative product to refined sugar, and a production alternative to the human and environmentally degrading practices of the sugar industry.
In spite of the short time line of these experiences, they teach us that it is not just a matter of adding value to the sugar cane and generating profits, but learning to cooperate under associative and business rules. For example, knowing the principle of accounting identity, where the expenses of a business are accounted for separately, understanding that the more effective the organs are (board of directors, committees, assembly) the more efficient the business is that transforms and sells the products, and regulating the use of the profits so that they contribute to the sense of ownership of the members of their organization, and that at the same time allows the equity of the organization to increase. They also teach us that there are risks in the future: that the aforementioned initiative might end up promoting monocropping of sugar cane and erode the peasant-indigenous resistance strategy; that a group might take over the business; that the administration might run the organization behind the backs of the members…
The challenge of accompanying these processes
To manage the risks and create conditions to make the expressed goal viable, it is important to start from the experience of the peasant-indigenous families themselves. They have learned that they are going to make the changes IF they have long term allies – in the good times and in the bad times. The COMAL Network is an expression of that commitment. That committed role, nevertheless, faces enormous challenges, three of which we will introduce here.
For centuries peasant families have counted on the organization and self sufficiency of their extended families. Getting this commitment to scale up organizationally for an effective resistance that would take them beyond the threshold of the 25-30 years implies overcoming centuries-old, deeply rooted institutions. “Yes, I was raised in this and I miss it”, the phrase from the Father quoted at the beginning of the article, means that the practices that he learned and the institutions (e.g. extended family, exclusion of women from the inheritance and from organizations) in which he was raised are going to persist, and even “will be missed.” In this dialogue, the son as well as the father ignored the fact that making blocks of sugar is profitable, as part of a diversification strategy, for 25-30 years. How to understand those perspectives in their contexts in order to accompany them is a monumental challenge for any external ally, because you have to study those realities and ask about alternatives, something difficult when we are accustomed to provide standardized solutions for any situation.
Peasant distrust toward outside actors, particularly merchants, is another institution deeply rooted because of centuries of plundering. Now that distrust is expressed as: “we will go to the meetings if they call us.” This assumes that the one calling the meeting is the external actor or a local person with the aura of being the representative of the external actor, and that they are not going to take the initiatives to call their own meeting and meet on their own. Getting the rules (statutes) and democratic mechanisms of an organization to be followed and used, as a way of “calling your own meeting”, is another challenge for any organization accustomed to going out to the communities and being “the big man” with resources in hand.
Member families in organizations with important physical investments tend to hunker down and prevent the entrance of new members. They do not allow even their sons to join the organization, much less their daughters. It will be difficult for organizations to respect their democratic mechanisms in their statutes if there are no changes in the heart of their families, changes in equity in terms of inheritances and in decision making where the mother and the offspring participate like the father. Without members that are experiencing changes in their families, it will be difficult for the organization to make progress. This is the third challenge for any ally organization.
In conclusion, sugar cane came into Latin America spurting human blood and subduing nature, a practice continued today under “modern clothing.” In the face of this, as the Mother at the beginning of this article would say, granulated brown sugar is more than the block of sugar, and the block of sugar is more than sugar cane, it is “sweat”: work and life. Behind it are peasant-indigenous families that are organized around blocks and the granulated brown sugar, while at the same time they are going deeper into their logic of “not putting all their eggs in the same basket.” Will it be possible that they might begin to express a path for transforming peasant-indigenous products as they transform their families and their organizations toward greater equity?
 René has a PhD in development studies, is an associate researcher of IOB-Universiity of Antwerp (Belgium), a collaborator with the Winds of Peace Foundation (http://peacewinds.org/research/) and member of the COSERPROSS cooperative; email@example.com. Hector is an agronomist, coordinator of the Technical Unit for Business Consultancy of the COMAL Network, and technician-expert in the transformation of granulated brown sugar; firstname.lastname@example.org
Eve left the Garden of Eden over chocolate! Anonymous.
Life is like a box of chocolates, you never know what you are going to get. Forrest Gump
The exodus of the people of Israel from Egypt to the Promised Land, the Bible says, had a decisive moment when, pursued by Pharaoh and his Army, they arrived desperately to the sea, and then Moises raised his staff and the sea opened up; so they turned a page and wrote their history. The chocolate industry predicted that by 2020 they will need 30% more chocolate; nevertheless, the cacao supply does not seem to be responding to the demand. Said figuratively, the state institutions, the market and society, like Moises, are raising the staff of productivity, quality, inclusive businesses and fair trade so that there might be more cacao and Eve might have a reason to not go back to Eden, but the sea is not opening up! Why? What “staff” is needed for the sea to open? This article deals with that question.
 René (email@example.com) has a PhD in development studies, is a collaborator of the Winds of Peace Foundation (http://peacewinds.org/research/), an associate researcher of IOB-Antwerp University (Belgium) and a member of the COSERPROSS Cooperative RL. We note that the name of the municipality “Sasha”, the Dalila cooperative, the ABC and RDA NGO, Flesh company, and the last names Konrad, Peñaranda and Peña, mentioned in this article, are ficticious. We did this to protect those identities from any inconvenience that this article might cause them.
I have written here often about some of the cooperatives with whom we work and, especially, the remarkable people encountered in these organizations. Along the way, I have shared descriptions of some of the tools that we have shared with Nica partners (like Open Book Management and Lean principles), because many rural producers have become convinced of the need for organizational strengthening. It should be no surprise that Winds of Peace Foundation regards these tools, and others that encourage inclusiveness and participation, as key to sustainable organizational strength. So do many Nica partners. But thinking that something is true does not automatically prove that it’s true. So I decided to share some data about ownership that has recently been published.
The National Center for Employee Ownership (NCEO) has published a new study of employee-ownership in the U.S. Now, the U.S. is not Nicaragua, and employee stock ownership is not cooperativism. But the results cited in the report focus on enterprise ownership, owning the business and social equity of an enterprise, and that definition encompasses an entire spectrum of stakeholder models. And this is a portion of what the study has found:
*Enterprise-owners in this dataset have 33% higher median income from wages overall. This holds true at all wage levels, ranging from a difference of $3,160 in annual wages for the lowest-paid employee-owners to an extra $5,000 for higher-wage workers.
*Median household net wealth among respondents is 92% higher for owners than for non-owners. This disparity holds true for the great majority of subgroups analyzed, including single women, parents raising young children, non-college graduates, and workers of color.
*Enterprise-owners of color in this data have 30% higher income from wages, 79% greater net household wealth, and median tenure in their current job 36% over non-employee-owners of color.
*For families with children ages 0 to 8 in their household, the ownership advantage translates into median household net worth nearly twice that of those without employee ownership, nearly one full year of increased job stability, and $10,000 more in annual wages.
The report is full of additional data which supports the organizational value of ownership; take a look at it for lots of details. But the picture being painted here is one of many colors: organizations that involve their workers as owners are more successful; greater opportunity comes from ownership; greater participation through ownership yields greater strength and organizational growth; there is a central tendency in us as human beings to nurture and protect that which we own.
Concurrent with the publication of this groundbreaking study was the publication of Fortune Magazine’s 2017 100 Best Companies to Work For. Of the 73 corporations recognized for their outstanding workplaces, more than half of them (35) incorporated ownership plans for their members. It’s hardly a coincidence that many of the best companies to work for are companies owned, in whole or part, by the employees or members themselves. (The Fortune list is traditionally weighted heavily toward technology and healthcare providers; the preponderance of ownership would presumably be even higher in a more representative sample of U.S. businesses.)
There is no mistaking the fact that Nicaraguan cooperatives are owned by their members, in at least the structural, legal sense. But like their U.S. employee counterparts, Nicaraguan owners need the understanding of what ownership is, of what their ownership obligations and rights are, and how their success truly rises or falls based upon the members taking responsibility, collectively. Successful ownership is not reliant upon heroes or the efforts of the few or the presence of a beneficent patron. Success follows a basic understanding of how their cooperative works, how A+B=C, and importance of each member to the whole.
So when the third Certificate Program is convened in August, there will be modules about family strategic planning and access to markets and means of improving production and quality. But at its core, the Program will be about ownership, seizing the opportunity for self-improvement by embracing both self and collective responsibility. We’ll be there to help conversations about Open Books and Lean, but the days will really be about our partners’ futures, and their appetite to own it….
You cannot direct the wind, but you can change the direction of the sails. Chinese Proverb
Let the wind blow and carry you where it will. Bible saying.
“Our problem, says A. Argueta, from the COMAL network (Honduras), is that our offspring do not want to know about agriculture; many times in a family of 7 only two are working, Mom and Dad.” R. Villegas, also from the COMAL network, says, “when they are little our children help us in the work, but once grown up, returning from their studies they do the numbers on our crops, and they tell us that planting corn and beans no longer works, and they tell us it is better to sell the land.” What Argueta and Villegas tell us we hear in every country in Latin America.
If this situation intensifies, it will affect world food production. Because it depends in good measure on family agriculture, which, according to ECLAC, FAO and IICA (2014, Prospects for Agriculture and Rural Development in the Americas) represent more than 75% of total production units in nearly every country of Latin America. The organization of that peasant economy, according to A. Chayanov (1925, The Organization of the Peasant Economic Unit) is based on family labor to meet their needs. From that situation, to now where youth are increasingly disenchanted with farm work, means that the peasant economy is growing old and the depopulation the rural sector is increasing.
We are facing a world problem that we deal with in this article from a rural perspective. We break down the dynamics that led to this situation, we look into the specific nature of family agriculture and we provide some ideas for the youth to fall in love again with the countryside. For these points and others, taking up again the Chinese Proverb and the bible passage quoted above, we argue that it is important to change the direction of “our sails” (perspectives) as we understand the direction of the “wind.”
The conditions for the disenchantment
There are structural conditions that are conducive to this disenchantment. The first refers to the current generation of parents and children. In Europe they talk about the “neither-nor” youth; they neither study nor work. Bauman (2014, Does the Wealth of the Few Benefit Everyone?), studying the inequality, observes that the generations after the second world war, supported by redistribution policies, looked forward in order to improve; while today the “neither-nors” are the first generation that are not managing the achievements of their parents as the beginning of their career, that instead are asking what their parents did to improve, and that in this way these youth are not looking forward, but back. Some years ago in rural Latin America, parents would receive their inheritance and would go into the forest to expand their area in order to, later on, leave it to their children, and they to theirs. The inheritance was the starting point for each generation. But now the agricultural frontier has reached its limits, and there is almost no more forest to go into. So, on the one hand, the parents are not expanding their areas to leave behind, nor did they have time to inculcate their farming culture on their children, because they passed their childhood, adolescence and part of their youth studying; and on the other hand, this growing group of youth did not find work in their majors, nor did they like their parents farming, and in the case that they did, it is common to hear their laments; “Dad says that as long as he is alive I cannot raise different crops on his land”, “they do not want to leave me my inheritance because they say that ‘the pig sheds its lard only after it dies’”.
Table. Corn profitability (Honduras, 2016/17)
Fungicide (lt herbicide)
2 fertilizations (wd)
2 fertilizations (sacks fertilizer)
Bend and harvest (wd)
wd =work days
Source: based on cases of several producers in Honduras
The second condition refers to the knowledge perspective acquired by the youth. There is a boom of youth studying; in 2015, according to the UNESCO report, 98% of the youth of Latin America were studying. Going back to where their parents are, many of them do economic calculations and conclude that what their parents are growing it not profitable (see Table for corn; calculations for beans are more generous, $400/mz costs and $1200/mz income). This acquired knowledge, nevertheless, underlies a perspective contrary to the peasant economy: they take crops as a comodity isolated from the production system where it grows, and outside the logic of the family that produces it. These assumptions are in line with the perspective of big enterprise: monocropping, betting on volume based on intensive and mechanized technology, and the maximization of financial earnings.
The third condition refers to the growing gap between parents and their children. The children are caught between the love for their parents and their belief that “I did not study to go back to the fields” – by “fields” they assume backwardness. The parents feel impotent in not being able to explain their “agricultural profitability” showing their production systems and their social and economic life, surprised they recall when they encouraged their children to study, telling them that “a shovel weighs more than a pen”, and get frustrated in not being able to direct their children to the future, even worse not knowing the digital technology in which the youth move. These facts make the gap that separates them even greater, the parents grow old and the youth are at risk of falling into that old expression of “the idle mind is the devil´s workshop” in a Central America that finds it difficult to free itself from violence.
The fourth condition refers to rural organizations. It is common to run into peasant associations, stores, banks and cooperatives whose members´average age is 50. If life expectancy in the Central American countries is around 73 years of age, the paradox is that the organizations are aging while they close themselves to the youth. A mother who returned to dedicate herself to her family, after 8 years in an organization, said, “if I would have continued as a leader, I would have lost my son, because he was already on a bad path.” The logical thing would be that the family life of those who are organized would improve, but that mother says that it did not. Others look for people to blame: “the governments hassle the organizations with taxes and repressive measures, businesses hassle them through their harvest collectors or intermediaries, and aid organizations keep them busy with projects.” It could be. But the chasm between the organizations and the youth is deep.
The Specific Nature of Peasant Production
Why do they take such great pains with corn and beans? What is it that we do not understand about them? Full of millennial patience, the peasant families husk the ear of corn for us. “We plant corn, beans, chicory…because we learned it from our parents to feed our families, not to make a lot of money.” Looking at me skeptically, they continue on: ”by planting corn we eat tamales, atol, corn on the cob, baby corn, new corn tortillas, would we be able to eat all this if we quit planting corn?”, “the protein from a recently harvested corn cob is not comparable to that anemic imported corn”, “with beans we eat green beans, bean soup, cooked beans…” We understand that corn is more than tortillas, and beans are more than bean paste. “When we have corn and beans it makes us feel relieved, so we look for plantains, eggs…we go from serving to serving.” And then, “the beans that we are not going to eat we sell, likewise with the other products, in order to buy other needs and pay for the studies of our children.” And the profitability?
With weatherbeaten skin and a cold stare, they explained to us. “If we don´t plant corn, we would have to buy tortillas; we are 6 in the family and we would need 30 tortillas for each meal, that is L15; if I plant we eat 20 tortillas because the tortillas we make are thick.” Time to do the numbers: 1) 20 tortillas come from 1 lb, 3 lbs per day, 90 lbs per month, in other words 10.8qq per year, the remaining 13.2qq are for seed, chickens and pigs, from which we get between 6-10 eggs each day and 2 piglets every 6 months; 2) not planting corn, a family of six people needs L16,425 ($714) to buy tortillas in the year, another amount for atol, eggs and pork. In other words, the Table does not show that the corn is linked to small livestock, does not count the corncobs, little corn, new corn tortillas…If the peasant families subjected themselves to the “profitability calculations” of the large enterprises, they would have to go into debt, sell their land, and become farm workers to buy corn in times of scarcity at double the price or buy 90 tortillas/day at $1.90. “They say that it does not work, but it does”- the roar of the wind is heard.
The peasant cornfield includes basic grains, root plants, bananas, trees, chicory, poultry, pigs, water… Is it time to change the direction of our “sails”?
Thinking about the youth
Observing, listening and dialoguing can happen in the family, particularly if their organizations help. The Colega of Colombia cooperative shows us the way. Their members are milk ranchers and the cooperative collects and sells the milk. “We are second in world productivity, behind New Zealand,” they state. This cooperative organizes the children of the members into two groups; the little Colleagues are those under 14, and the pre-Colleagues are between 14-18 years of age. Each little Colleague is given one calf to take care of, the cooperative gives milk to the child as a provision for the calf, and the family of the child provides the inputs for raising the calf; in school they include courses on cooperation and the cooperative invites the little Colleagues to their events; so, from an early age they are cultivating the “member-rancher of the future.” The pre-Colleagues, who were able to take care of and multiply their calves, are provided scholarships for their studies, and member benefits, because they already participate in the production processes like their parents.
Youth are joining the Fe y Esperanza Rural Bank of Palmichal in the COMAL network, encouraged by their families. “My stepfather insisted that I attend the meetings, I thought that this was about old guys who do not change, then I realized that here you learn to improve.” “My grandfather is trustworthy, he told me to join the Bank because one day it would work for me, I paid attention to him, and it is true, now it is working for me.” In a few years this organization is growing in savings and loans, has efficient administration and its organs (board of directors, oversight board and assembly) meet each second Saturday of each month to discuss their numbers and opportunities. Another organization, the 15th of July (a community in Corozo, Yoro) also from the COMAL network, recognized the capacity of a young woman (D. López) who has finished her Certificate Program, and named her as President, and that organization got itself up to date with its internal and external paperwork, and finished its factory for processing granulated sugar.
These three experiences express three ways of including youth. They also tell us that, in contrast with the large businesses where you learn to do a task, in small organizations youth learn to follow their dreams with deep passion. So if an organization would dedicate 1% of its profits to provide a calf, a piglet or a contribution of 5 dollars to each son or daughter of each member, and if that organization accompanied that initiative, it would be planting its own future and that of humanity. If that is accompanied by the universities teaching the perspective of the large business sector, and also that of that 75% of producers who make up family agriculture, we would be turning the direction of our “sails”, and the youth would once again fall in love with the countryside. In this way, organizations could continuously reinvent themselves under the following expression, that D. Zuniga from the COMAL network saw in a home for the elderly in Copan: “you will be as young as your faith and as old as your doubts.”
As one who has tended to be drawn to the Fair Trade (FT) label on a wide range of products, I have always been pleased that some of our cooperative partners in Nicaragua are part of that movement. Their participation has simply felt right, and just, as they have sought to connect with a consumer base around the world which has been eager to support the small producer effort. It has seemed a “win-win” circumstance about which both the end user and the producer could feel good. But there is a growing cause for doubt about both the fairness and the trade in FT, and reasons for all of us to take a closer look at the evolution this once- (and future?) empowering concept.
In a very well-researched and analytical article authored by researcher(and consultant to WPF) Dr. Rene Mendoza, he has undertaken a close look at cooperatives in Nicaragua and other Latin American countries , to assess the effectiveness of the FT movement. After studying the symptoms and complaints of the cooperative “patients,” he has also offered a detailed diagnosis of the ailments, including contextual analysis of the pathology which is draining the energies from cooperatives and their members. His conclusions should provide all parties interested in the FT ideals with both understanding of the disease and hope for its cures.
Dr. Mendoza attributes no blame for the spread of the unhealthiness, but does identify the complicity shared by all of the actors within the FT chain, from producer to consumer. He identifies both the malady and its contagion points and has created a clinical treatise on where it leads if the disorder isn’t treated.
The best news is that Dr. Mendoza’s article includes several prescriptions for healing and recovery. He does not offer a magic pill for immediate wellness. And restoration of confidence in a system that initially hoped to marry producers with well-intentioned consumers, in a win-win undertaking, will require serious treatment. Like any well-considered rehabilitation, the restoration to full health is likely to be slow and demanding. It will require patience, discipline, a collaborative mindset and re-focus on values. But full remission is possible.
For anyone who has ever purchased a product under the FT label, or sought to be supportive of small farmers in a small way by purchasing their goods, I encourage the reading of Dr. Mendoza’s work. WPF has provided a link to this groundbreaking research on our website homepage, under the column with Dr. Mendoza’s photograph, and entitled, “Toward the Reinvention of Fair Trade.”
Read it. It may change your thinking about that next cup of coffee, or that recent chocolate bar and the truth about how it may have reached your home….
The height of injustice is to be deemed just when you are not. Plato
With an open treasure, even the most righteous sins. Saying.
The VII song of the Odyessy tells how the goddess Circe warned Ulysses that the sailors of those waters were so enchanted by the song of the sirens that they went mad and lost control of their ships. To not succumb to that enchantment, Ulysses asked that he be tied to the mast of the ship, and that the oarsmen have wax put in their ears, and ordered that if he, because of the spell of their song, would ask that they free him, instead they should tighten the knots. So it was that Ulysses and his oarsmen were saved, and the sirens, failing in their objective, threw themselves off the cliff.
Facing unfair commercial relations, Fair Trade (FT) emerged as an alternative so that people who organized might improve their lives and be a space of solidarity among different actors beyond their countries´ borders. Nevertheless, the institutional structure of the power relationships under the market rule of elites is like the sirens of the myth, capable of seducing the FT network, of turning it against its own principles, and turning solidarity into just a bunch of words, numbers and papers. How can FT tie itself up to not succumb to the song of the sirens, and in this way, grow, enhancing its FT alternative principles? To respond to this question, we take as given that there are exceptional cooperatives, organizations, and people who confirm the importance of organizing and cultivating global solidarity, and that there are still more successful cooperatives, in countries in the south as well as in the north, in FT as well as outside of it. Nevertheless, in this article we study certain practices of the FT framework that seem to indicate its regression, and on that basis we suggest that FT re-invent itself. To do so we focus on coffee, which constitutes 70% of the volume of what is sold through FT.
It should be noted here that this analysis does not presume that all parties in the FT framework will view its conclusions with favor or agreement; indeed, some of the actors within the FT arena are very well-served by the current status of the FT mechanisms. Nor does the author attempt to provide a blueprint for all of the actions necessary to cultivate change. The intention herein is to describe the realities of the FT network as it most often operates, and to draw attention to the ways it could be returned to its original objectives and principles.
 Even though strictly speaking currently FT is the organization known as FLO International (Fairtrade Labelling Organization International) and FT-USA (FT-United States), we call “the FT network” the series of cooperatives, certifiers, social banks and buyers who operate under the FT seal.
 We have followed the topic of fair trade in coffee since 1996 (See: Mendoza 1996, 2003, 2012a and 2012b; Mendoza & Bastiaensen, 2002).