Category Archives: Rural Social Enterprises

Booklet 4 Scaling up and circular movement in Rural Social Enterprises

Booklet 4

Scaling up and circular movement in Rural Social Enterprises

René Mendoza with Fabiola Zeledón and Esmelda Suazo

Jesús told his disciples a parable (Mt 25: 14-30). A farmer, before traveling, entrusted his farm to them: to one he gave 5 talents, to another 2 and another 1, according to their capacities. On his return he asked for an accounting. The ones who received 5 and 2 had doubled them, the farmer was happy and rewarded them. The third had saved the talent and gave it back to him, the farmer was upset, told him that at least he could have placed it with bankers so it would earn interest, so he took the talent away from him and gave it to the one who had 10. “Because to everyone who has, more will be given and he will have abundance; but the one who does not have, even what he has will be taken away.”

This parable is not about avarice or despotism. It is about the fruit that comes from talents received. It is responding to the confidence received, deploying all capacities in order to bear fruit. The parable shows us that discouragement, fear or resentment should not keep us from feeling that confidence received, making us hide the talent. The fruit gives joy to the entire community.

So it is as well in Rural Social Enterprises (RSE)[1]. Two dozen people have placed their resources and entrusted a family to administer a community store or a coffee roaster, and another family to administer another store, and so on. The families received resources and trust in accordance with their abilities, they are left the challenge of responding with all their energy and multiplying their fruit. As an effect of those actions, the entire community will be happy.

On multiplying it, like the one who received 5 talents and doubled it to 10, they can receive more resources and trust. How? For the stores, Figure 1 shows us the path in the form of a staircase. But first let us recall that in the previous booklet Claudio Hernández warned us that we are “at different rungs of the ladder”. We address this challenge here: if we scale up collectively with clear rules, we move beyond the individual “ranking”. Even more, our vision is that they scaling up should not be indefinite, ever higher and higher, but it should be circular, that this is what figure 2 will show.

In figure 1, illustrated for a community store, we make a distinction between a conventional (or traditional) storefront, and the community stores that we are organizing. They scale up to the extent that they respond to the trust deposited in them, and in accordance with the energy and mindset that they apply to the talents received. How?

A community store starts on step 1 with a set amount of working capital. If it is managed well, keeping the amount on credit under 5% of total working capital, orders the inventory and orders, attracts customers and the administrator is able to get their earnings (30% of gross profits of the store) above 1500 córdobas, then that store can go up to the next step. As a consequence, SREs take 20% of the net earnings of the store to increase the initial working capital of the store. This step means moving from a conventional storefront to a community store, which means freeing itself from falling into the family rules of “give it to me on credit because we are family”, understanding that working capital is a collective asset, and cultivating an awareness that what benefits the family and the community is the fact that the stores continues to exist.

On step 2, in addition to meeting the challenges of step 1, they do a good job of recording the data, increase the clientele by 10%; process 1-2 products (e.g. popsicles, nacatamales) and form 1 to 2 local alliances (e.g. with bakers, seamstresses, people that make piñatas, raise chickens and have eggs, people who raise chickens, slaughter pigs or sell basic grains). It is a step where the administrator is able to get their gross profits of the store above 2,000 córdobas. If they are able to do all that, then they move to step 3 and they are assigned 20% of the social fund to work with.

On step 3, in addition to meeting the challenges of steps 1 & 2, and increasing clients by 10%, it processes more than 2 products and cultivates more than 2 alliances; lists products and necessary technology to be introduced into the community, such as rice cookers and thermoses, that have the potential of freeing up time for women depending on the conditions in the communities (e.g. if they have electric, water…). It is a step where the administrator can get their 30% of gross profits to be more than 3,000 córdobas. If the administrator is able to do all that, then the store moves to step 4, and their working capital is increased from between 5 to 20% from additional funds coming from new shareholders.

On step 4, in addition to meeting the challenges of steps 1, 2 and 3, and increasing customers by 10%, the store processes more than 3 products and weaves more than 3 alliances; the administrator gets their 30% of gross profits from sales to be more than 4,000 córdobas. As a consequence, this store is a candidate for the annual prize that the Assembly of shareholders grants to the best initiative. In a parallel fashion, the administrator can become initiative supervisor, after accompanying (organizing and advising) other stores, creating new initiatives.

In this way, the staircase (Figure 1) does not add more steps, it becomes a circle of synergy among several stores, roasters, bakers and other initiatives (Figure 2), while people continue being trained and taking on new responsibilities. It is trust which like pickled nancite becomes more dense and increases its flavor and energy.

So the wheel of community improvement turns, turns and turns. It does not go up. It does not go down. It revolves.

 

[1] This article is also for cooperatives and any other associative expression. The members contribute resources and ideas. They deposit them in the administration and organs of the cooperative. In doing so, they really are depositing their trust. In return, the administration and organs of the cooperative have the obligation that those resources and trust deposited in them bear fruit in accordance with the rules of their assemblies.

 

Booklet 3 May: The Power of Communities

Booklet 3

May: The Power of Communities

René Mendoza Vidaurre

 

We were waiting for you like the “rains of May”,

said the girls as they hugged their grandparents.

 

The fifth month of the year is called “May” in honor of Maya, one of the seven daughters of Atlas and Pleione from Greek mythology; “Maia”, goddess of abundance. People who dig into history also tell us that it was a month for the elderly, the word “elderly” in Latin is “maiorum”. In Central America May means the first rains of the year, with which agriculture begins, and all the pallid landscape of April turns green and pulses with life; the popular expression is “the rain showers of May”, the month most anticipated. This article is about the force of community, that when we discover it, is like the month of May: abundant, alive, ever changing and very much anticipated. RSEs respond to their community, and have building that community as their reference point or horizon, it is their umbilical cord, their brand and love.

1.    What people in the communities see and think

Those who live in a village or hamlet watch the movement of people. They see buyers come in to buy coffee, beans, or agoutis; for the buyers the community is a place to buy things. They see people who have diplomas arrive, and board members of organizations, who greet them from the road, estimate the harvest, fill out paperwork, and leave promises behind; for them the community is a stone paved road. They see people arrive in cassocks, lab coats, or wearing glasses, who enter the church, school or health center; for them, the community is a bunch of cement blocks with tin roof sheeting, and “poor people.”

Among those people who are watching, Elder Lagos, from the community of San Antonio, observes, “The cooperatives collect the coffee harvest in the towns, while the buyers collect it here in the community”. The “town” is the municipal capital, and “the community” is a rural locality. The logical thing would be the reverse: that the cooperatives would collect the harvest in the community itself, but no, no. The upside down world.

From another community, Ocote Tuma, in the municipality of Waslala, Rodrigo López observes: “There are two cooperatives from town with members here, those cooperatives are in the town; they never meet here.” What? And what does it mean to be a cooperative member? “The two cooperatives only want cacao, no matter where it comes from, people are not of value to them.” As we said before, it seems like the world is upside down.

People also look at their own community. There were good times when by growing just coffee, cacao or cattle people bought their vehicles, took on positions of responsibility and went to live in town. Those who have stayed, see and feel that for having clung to just one crop their water sources have dried up, and the soil has become weary, while the prices of those products have dropped, and the prices of agro-chemicals have risen. But even though betting on only one crop is affecting them more and more, people are hanging onto that crop, like the Koala bear hugs the eucalyptus tree! But there are people who open their eyes: Daniel Meneces remembers the words of his uncle Toño, “A lot of people are like the dog who barks at the squirrel believing that it is in the tree, when the squirrel has already left.” Betting on only one crop is like barking at the tree, when “the squirrel has already left.”

Other people open their eyes to see more: they discover the inequality in the community itself, reproduced by the cooperative itself. “We are at different places on the staircase,” said Claudio Hernández from the community of Samarkanda. That expression assumes that everyone rises using that staircase, there is no other, some are higher up and others are lower, there is no way of changing where you are. But the mere fact of recognizing it makes you think differently.

2.    What people do when they discover their strengths

These observations awaken three, five, ten and thirty people. So, in this way, awakening, a group of people in the community of San Antonio formed a cooperative. They met to look for ways different from how traditional cooperatives operate; they decided to collect coffee and paid for it in the community itself. They did it. The result: families saved the cost of transporting the coffee to town. It is like they made a different “half staircase”.

Another cooperative was formed in Ocote Tuma, composed mostly of youth. In that cooperative, with their fingernails and the friendship of their neighbors, they bought cacao to dry it in the community itself, and pooled their earnings to invest in a chicken farm. They are beginning to crawl.

There are other people who turn their focus to the land, water, the farm and to processing foodstuffs. They got into making bread, honey…”The cents that it costs us make them more delicious”, concludes Doña Justina Meneces.

When the cooperatives are from the community itself, they help to repair the country road, they are members of the water committee, and look to protect water sources, and organize other committees so that each family might have access to water in their homes. Land and water are valuable and are worth more than money!

And they take more steps. In the face of the custom that has become law of “exporting the best and leaving the worst”, they roast coffee in the communities. In the face of the rule that “organization and projects come from outside”, they talk with one another so that there is water in the community. In the face of the wealthy who say that “only money moves people”, they visit one another, and the affection that they cultivate moves them even more. In the face of the storefronts which make people go into debt and then end up going broke themselves, new community stores emerge that when they let people make purchases on credit, they only allow it for “products that you share with your family” – products like beans or oil, but not cigarettes. This community spirit is like your first love, it has unimaginable flavors.

3.    Good changes are done in alliances

Marx, a century and a half ago, said that peasants were like “a sack of potatoes”, meaning that they were similar, and that they lived closed off from society. Some 20 years ago in the Nitlapan Institute, on finding communities that resisted mono-cropping, that generally expelled people and disappeared communities, we used to call them “peasant pockets”. Now we realize that they are neither a “sack of potatoes” nor “peasant pockets” they are people so united and face to face with one another, and with so many connections that their friendships and relatives cross over communities and countries.

So it is difficult for one community to organize itself on its own. It is difficult for outside aid agencies to be able to organize a community, whether they arrive with a sword, the Bible or dollars – they can build their church, company or military post as enclaves. With the RSEs we have learned a different path: a community can organize if people from inside and out connect with one another, not just link, but connect! When people connect, they do magical things. This is how community stores and roasters are emerging.

When this happens, when they connect, the force of communities is like “the rains of May”, which makes good changes sprout. This is the process in which we find ourselves.