By Tom Hanlon-Wilde, Equal Exchange Sales Manager
It should have been as rough as a rodeo. The annual meeting of the farmer owners of Co-operative Nor Andino in northern Peru followed a year of dramatic changes and daunting challenges. The organizational structure changed one year ago from a non-profit village co-op-controlled structure to an individual farmer-controlled for-profit co-operative. The $5 million coffee processing plant faced a $300,000 tax bill. The coffee rust fungus has been spreading from farm to farm, causing production declines of as much as 80%. The sugar processing plant is bursting at the seams; with volume so great that raw sugar is being stored in offices and conference rooms at night and on the street during the day. Architectural designs were finished and financing was being lined up for the completion of a cocoa liquor processing plant; the first one to be built in Peru ever and an expensive and technically difficult project.
With so many high-level challenges and strategic decisions to be taken on by the co-op members, I was expecting a meeting of fireworks. And I was ready to throw gas on the fire with provocative questions: Aren’t the coffee farmer members jealous of all the new investments that benefit cocoa farmer members? Why should the cocoa farmer members deliver their high quality cocoa to a co-op that is so focused on coffee? Are not coffee farmers who invest lots of time and money to prevent coffee rust on their farms enraged when their neighbors let the rust flourish and infect their farms?
The General Assembly meeting held on March 28 and 29 at the Co-op Nor Andino processing plant in Piura testified to a membership and management team more than ready and able for all these challenges. The 82 delegates who represent the 3,166 member owners of Nor Andino participated vigorously in discussing the issues, and then smoothly voted on the topics to make lasting decisions. “We have to take good information back to our members” and “things need to benefit members individually while building our co-op” were frequent openings to statements by members on the issues discussed.
The change in the organization’s structure was analyzed carefully by member owners and staff. Between 1995 and 2012, the organization was a non-profit owned by village level associations and co-operatives of farmers. But to progress in line with members’ needs, the group changed to a direct one farmer, one ownership share co-operative. The new structure allows Coop Nor Andino to use earnings to invest in growth and gives more direct control to the farmers.
In addition to electing the Board of Directors and voting on other financial issues, the membership voted to proportion the use of fair trade premiums among six program areas – agricultural extension services and organic fertilizer supplies being two that will account for half of $220,000 in funds. A separate rich debate and vote centered around the use of profits from the 2013 coffee crop. At an amount of ten cents per pound for the two million pounds, the farmers could choose to keep the funds in internal farmer accounts to capitalize the co-operative or disburse the funds to members to raise household incomes. After a fine example of real participatory democracy, the members chose to keep the premium on the first 700 pounds inside as working capital. Farmers who delivered more than 700 pounds during the 2013 campaign could withdraw their remaining balance in cash. Members brushed off my provocative questions. “Diversification is good,” explained Oreste Marcham, “we diversify our own farms, cacao, banana, and citrus. So for the Co-op, we have coffee, we have sugar, we have cacao; in case one goes down the others keep things good.” Many of the delegates are both community leaders and the region’s best farmers and explained that with plenty of nutrition and moderate pruning, the coffee varieties can fight off the coffee rust and provide good yields. Juan Castillo of Sapse explained it this way, “The rust exists naturally everywhere, so it’s not so much about what your neighbor is doing, but rather if your coffee trees are well nourished and taken care of, then the rust is no problem. Just like a person – eat right and take care of yourself.”
The two day General Assembly ended with the laying of the cornerstone of the new cocoa paste (alternatively called cocoa liqueur) processing facility. Equal Exchange consumers can take great pride in their role in building the fair trade market for the farmer owners of Co-op Nor Andino. Equal Exchange purchased 34% of the coffee shipped by Nor Andino in 2013, but because of the high price paid, Equal Exchange accounted for 46% of the value of all coffee sold. On top of the prices, Equal Exchange paid over $100,000 in fair trade premiums as defined by the Small Producer Symbol (SPP) certification program. In addition to that support, a grant program administered by Equal Exchange also fully funds two of the nine full-time agricultural extension workers on staff. In total, the event was no rough rodeo, but more a round-up of thoughtful and hard-working farmers ready to lead their communities into a better tomorrow.