What on earth is this Big Change that Equal Exchange keeps alluding to when we talk about small farmers? Why does Equal Exchange buy our products only from small farmer co-operatives? Why do we feel so strongly about supporting the farmers’ efforts to promote change in their lives, co-operatives and communities?
The following is a story about how a group of farmers from Jaltenango, Chiapas took an interest in growing organic coffee, overcame many obstacles, formed a co-operative, and then overcame many more obstacles. They found an important buyer to purchase their coffee and took a huge risk by terminating their contract when the buyer began to overstep its bounds and impose practices the co-operative felt undermined their development efforts in the zone.I was first introduced to CESMACH, the Ecological Farmers of the Sierra Madres of Chiapas, in the fall of 2004, when I discovered their letter sitting in our fax machine. It was an “urgent action” addressed to coffee buyers, denouncing a large U.S. coffee company with whom they had an exclusive agreement to sell all their coffee. They actually referred to them as an “imperialist company” for trying to impose their business practices on the small-scale coffee farming co-operative. According to their letter, CESMACH was publicly denouncing the company, breaking its contract with them, and inviting Fair Trade buyers to purchase the co-operative’s organic coffee.
It just so happened that we were looking for an additional source for high-quality, organic Fair Trade coffee from Chiapas. And so, in January 2005, Todd Caspersen, director of purchasing, and I took a trip to Ángel Albino Corzo, in the Sierra Madre mountains of southwestern Chiapas where CESMACH has its office, to meet the farmers and learn more about their organization and their coffee. We weren’t disappointed.
The CESMACH farmers are located in the buffer zone of El Triunfo, a U.N.- designated biosphere, rich in flora and fauna, containing many endangered and protected species. Within the nucleus of the biosphere, agricultural activities are not permitted. Organic farming is allowed in the buffer zone, which separates the biosphere from the surrounding region, as long as it is done in accordance with a strict set of standards designed to protect the fragile environment of the rain and cloud forest. For thousands of farmers living in this area, coffee is the principal agricultural activity and their only source of income.
Sixto Bonilla, export manager for CESMACH, told us that the co-operative had signed an exclusive agreement with the company. “At first, it was a dream come true,” Bonilla said. “For a small-scale farmer organization to have a large company interested in buying their entire production of coffee – well you can’t imagine a better situation. We agreed to sell them our coffee, to deliver only the highest quality, and to protect the biosphere, but soon they began telling us how to run our business, where to store our coffee, and where to process it. That’s when the trouble began. We didn’t think that was right, we tried to say to them, ‘you run your company and let us run ours,’ but they were insistent on having us follow their rules. It was a very hard decision, but in the end we decided we had no choice but to stop working with them.”
We returned from this trip impressed with the level of organization and professionalism in CESMACH and the deep commitment of the farmers and staff to serve as environmental stewards protecting an extremely important national treasure. The area is beautiful – the land is lush and green, the surrounding mountains thick in forested cover, and often the farms disappear entirely under the mist and low-hanging clouds. Of course, it doesn’t hurt that their coffee also happens to be delicious. Beth Ann Caspersen, manager of quality control, said the coffee sparkles. “It’s sweet and contains both chocolate and floral notes, a very rare combination of flavors,” she said.
We offered to buy 10 containers of coffee – 60% of their total production – and from that day forward our relationship with CESMACH has been steadily growing; we have visited once or twice each year to meet with the farmers and learn more about their organization. Beth Ann Caspersen has visited their Quality Control Department each year to exchange ideas, identify the flavor profiles we’re interested in buying, and to select the actual coffee. In 2005, when Hurricane Stan devastated southern Mexico and CESMACH lost 25% of its harvest, together with our food co-operative allies and Interfaith partners, we raised tens of thousands of dollars to help the farmers renovate their farms and deliver emergency food aid and supplies to their communities.
In March 2008, we brought a delegation of food co-operative representatives to visit CESMACH. It was the first time a buyer had ever brought a group to meet and spend time with the farmers. We learned a lot, but for now I want to share with you one story we were told about the history of the co-operative, their struggles to organize and make a decent living, the victory of landing a contract with – in the words of one farmer – “the giant” of the coffee industry,” and then their courageous decision to stop selling to them.
Quite honestly, it’s one of the most impressive stories I’ve heard and more than anything, it illustrates to me the power of organization, determination and perseverance of a group of farmers. The importance of this story is not to criticize the coffee company they sold to, but rather to highlight the courage and entrepreneurship of these people who believe so strongly in their co-operative that they took an unimaginably huge risk.
We were in a small elementary school classroom in the community of Rio Negro, municipality of Toluca, with 10 members of CESMACH, including three of the original founders. This is their story, as told by Victorico Velasquez Morales, a founding member and former CESMACH president:
“It’s been a very long road to get here, and when we started it was just a dream. We were growing coffee and selling it to the local buyers, the coyotes. Coffee was only 80 cents/pound at the time. Then, two employees from the El Triunfo Reserve came to Rio Negro and asked if anyone wanted to learn how to grow organic coffee. Only five of us were interested. We kept going to other communities to round up more folks but only the five of us ever showed up for a training. Still, we kept at it. We learned how to terrace, how to make organic fertilizer, and how to control for soil erosion. We learned what we could but eventually the Reserve employees stopped coming.
So we went to other coffee co-operatives and asked them for help. We still had a lot to learn. They didn’t seem interested in helping us – maybe they didn’t want the competition. So that’s when we decided to form our own co-operative. Our first project was to organize ourselves and build drying terraces and systems for making organic fertilizer. When the other farmers saw that we were serious, they began to get interested. Shortly after, some other farmers from Colombia, a neighboring community asked to join, and then more from Toluca and Laguna came.
Our membership was growing; we had somewhere between 200 and 244 members. We had lots of coffee in production, but we couldn’t certify it as organic yet and we still didn’t have an export license, so we had to sell it to another co-operative to export for us. Because of that, we continued to get a very low price those first two years. By the second year, since the farmers weren’t getting a better price, members began to leave or sell their coffee to the coyotes again.
Finally, in 1996, we got our organic certification, and we exported our first container of coffee. But the members still didn’t have a lot of confidence. So, they only turned in a few bags to the co-operative and sold the rest of their coffee to the local market [to assure themselves immediate cash]. We got a great price for the first container, and all the members were really happy. The next year they turned in more coffee and we were able to export two containers.
In 1997, we signed a contract for 3,000 quintales [100 pound sacks] of coffee. But because of climatic factors, and members still not selling all their coffee through the co-operative, we were only able to deliver 2,700 quintales. So the buyer refused to pay us the agreed-upon price. We were supposed to get an extra premium above the market price, but they refused to pay us any of that premium. It was a huge failure. Of the 244 members, only 71 stayed with the co-operative.
The next year, we were much more careful. Our biggest problem was that we couldn’t pay any of the farmers in advance, but the coyotes could, so they would get most of the coffee. Bit by bit, we got some loans for technical assistance and we were able to hire some staff. That’s when Sixto came to work for the co-operative to help us with the business side.
In 1998, we got 325 pesos from every member and with a small bank loan, we were able to buy a little house in Jaltenango. It was pretty beat up and far from the center of town, but we used it as our office. All the members pitched in to fix it up and we started saving money to build a warehouse as well. Forty percent of the money for the warehouse came right from the members.”
Another member, Benjamin Lopez, continued: “It was really hard in the beginning. We didn’t have any trucks to transport our coffee from the farms to Jaltenango. We asked for help from the coyotes but they said no, that if we tried to organize they wouldn’t help us and would stop buying our coffee. We finally got some money from a community organization to rent a truck, but the first year it had an accident and flipped over with all the coffee in it.
If we could get the coffee to Jaltenango we could make 20-25 pesos more/quintal than if we sold it to the coyotes, but without a truck, we couldn’t get it there. Even when we paid the members, they still had to sell some coffee to the coyotes in order to survive. Coffee is such hard work and the harvest is just once a year. Today we have bought our own truck and our members now offer all of their coffee to the co-op. In the beginning we just couldn’t pay the members in advance; Today, we offer all the members advance credit when they turn in their coffee.”
Maria Leticia Velazco Lopez, Rio Negro’s community delegate to CESMACH, went on: “In 2000, we only had one client. It was a very important coffee company in the U.S. We had never met them, but we knew they were important and we knew how lucky we were that they were buying all of our coffee. They were a very good client, but in 2003, they made an agreement with the largest coffee exporter in Mexico, AMSA, to export all of the coffee they bought from this country. Basically, we would have had to sell our coffee to AMSA, and then they would sell it to the U.S. company. We didn’t want to work through AMSA because they would be making money off our coffee.”
During this time, the U.S. coffee company was working in alliance with a U.S. environmental non-profit organization interested in protecting the biosphere. They were paying all the Fair Trade premiums to this organization instead of giving the premiums directly to the co-operative. It was the last straw. We asked them to work directly with us, to pay us the premium, but the company just said, ‘this is the price we pay.’ We didn’t have any bargaining power.”
Silvia Roblero Torrez, production coordinator, picked up the story from here: “The co-op held a General Assembly and the members decided we should call the company and try one more time to ask them not to require us to sell through AMSA. There were four of us (one from each co-operative that had a contract with the buyer) who had to make that phone call. We felt that direct relationships and communication with our clients was really important and would be for the success of our co-operatives. But none of us had ever spoken directly to anyone at this company before. We had never made a conference call before. We were very nervous, but we all sat down around this table with just the telephone in the middle … and we called them. We were really scared. We didn’t want to lose them as clients, we knew that they were the ‘giants of the coffee industry’ and we were really fortunate to have this contract with them.
So, we told them that they had been good clients and we wanted to continue to work with them, but we couldn’t accept working through AMSA. We had worked hard to achieve a level of organization that went beyond coffee and we wanted to work in the way we felt was best for us. But they said no. We couldn’t believe it and all of a sudden we didn’t have any clients. We were totally dejected and dispirited.
We talked it over and decided that we would find new clients. Together with the three other co-operatives, we formed COMPRAS. We are all members of this organization and it handles sales and marketing for us. COMPRAS works with potential buyers and adds a second layer of quality control to our production. It’s very important to us to sell the highest quality possible in the most professional way.
Today we know all of our clients personally, and we talk to them directly. In the end, we were proven right. Of all the co-ops who used to work with this company, only the four of us who rejected the AMSA proposal are still in existence. Every other one has gone out of business.”
Carlos Romero Velazco, founding member and CESMACH president, finished the story: “In 2005, after we ended our relationship with that coffee company, we sent out a press release about how they are an imperialist company and we had no interest in continuing to work with them. We announced that we were looking for new buyers. It was such a huge risk – we didn’t know anything about coffee buyers because they had been buying our entire production. Around that time, a journalist from La Jornada [a Mexican newspaper] came to write about the story, and publicized our situation in the United States. Different buyers came to visit us. Equal Exchange came and we agreed to sell them 10 containers each year – at the time it was about 60 – 70% of our coffee. We continued to grow, and soon found other buyers as well. This year we are planning to sell 20 containers – all into the Fair Trade market.”
Over the next few days, we learned a lot more about the co-operative and the many exciting projects they’re working on. Because coffee is their only source of income, they are now experimenting with the possibility of selling Fair Trade palm fronds. Palm fronds grow year round and the farmers are planting them as live barriers to prevent soil erosion. During the rainy season, when coffee-related activities are less intense, the farmers hope to harvest and sell the palm fronds to churches and florists in the U.S.
CESMACH is also involved in many environmental protection and social development projects in the area. As part of their Sustainable Coffee Project, they are planting new coffee trees, as well as citrus and other fruit- bearing trees. They have a Women’s Project which is teaching leadership development and co-operative management to the women members and wives of members. The women are working with organic gardens and domestic animals to diversify incomes and their families’ nutrition.
As far as their co-operative business, each year they are exporting more coffee into the Fair Trade, organic market, and more farmers are asking to join the organization. Together with three other co-operatives, they used their Fair Trade premiums to buy land and just this year, they finished construction of a new dry processing plant. Milling their own coffee will enable CESMACH to further control for quality and reduce costs. It has been a long road indeed, but it appears that Victorico Velasquez Morale ‘s dream has finally become a reality.
Read about the women of CESMACH’s efforts to organize themselves to protect native species in the Biosphere, and grow organic gardens and orchards to provide food security and extra income for their families.