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Coffee's David and Goliath Story

When the Ecological Farmers of the Sierra Madres of Chiapas (CESMACH) found an important buyer to purchase their coffee, they were elated. “It was a dream come true,” Sixto Bonilla, export manager, says. “For a small-scale farmer organization to have a large company interested in buying their entire production … you can’t imagine a better situation.” Yet, soon after, the buyer began to overstep its bounds and impose practices the co-operative felt undermined their development efforts. “They began telling us how to run our business, where to store our coffee, and where to process it;” Bonilla continues. So, CESMACH got organized. They faxed a letter to Fair Trade coffee buyers across the United States denouncing this company, breaking its contract with them, and inviting Fair Trade buyers to purchase the co-operative’s organic coffee. One FTF member, Equal Exchange, among others, stepped in and now the cooperative and their community are thriving.

Located in the buffer zone of El Triunfo, a UN- designated biosphere, CESMACH members practice organic farming, the only type of agricultural activity permitted. For thousands of farmers living in this area, coffee is the principal agricultural activity and their only source of income.

When CESMACH began in the early 1990s, coffee sold for only 80 cents per pound and the only outlet for small farmers were the local coyotes (middlemen).  While only a few farmers were interested at first, these farmers organized into a cooperative and studied organic techniques. They connected with others nearby and the organization began to grow. As Victorio Velasquez Morales, a founding member and former CESMACH president, remembers “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.”

Sales were slow at first, particularly because the cooperative did not have enough money for organic certification or farmer support. They could not pay up front in order to guarantee a steady supply. Upon receiving organic certification in 1996, the cooperative was finally able to offer its members a viable alternative to the local coyotes. Loans and other forms of technical assistance enabled them to hire staff, establish an office in the city of Jaltenango, and address basic logistical challenges like transportation.

Gradually, the cooperative gained momentum, but, as another member, Benjamin Lopez, recalls “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 … 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.”

In 2000, CESMACH had only one client for which they were grateful until the situation began to change. Maria Leticia Velazco Lopez, Rio Negro’s community delegate to CESMACH, describes their relationship: “It was a very important coffee company in the U.S. We had never met them, but we knew they were important and … how lucky we were that they were buying all of our coffee. They were a very good client; but, in 2003, they made agreements with [the largest coffee exporter in Mexico and a U.S. environmental  organization]…. We would have had to sell our coffee to AMSA, and then they would sell it to the U.S. company. …They were paying all the Fair Trade premiums to this [environmental] organization instead of giving the premiums directly to the cooperative.” The cooperative asked the US company to work directly with them and to pay the the premium directly, but the company refused.

In response, the cooperative realized they had no choice, but to pursue other clients. Working with three other cooperatives, they created a sales arm, COMPRAS, to identify new buyers and to market their work. By late 2004, the fax went out announcing that CESMACH was looking for buyers and publicly describing their experiences with the mainstream US company.

At the same time, Equal Exchange, the oldest for-profit Fair Trade company in the United States, was investigating new sources of high-quality, organic Fair Trade coffee from Mexico. In January 2005, Todd Caspersen, director of purchasing, and Phyllis Robinson, education and campaigns manager, visited the CESMACH office in the Sierra Madre Mountains to meet the farmers and learn more about their organization and their coffee.

Equal Exchange staff came away from the trip impressed with the level of organization and professionalism in CESMACH, as well as their deep commitment to serve as environmental stewards of the El Triunfo biosphere. Phyllis Robinson adds, “Of course, it doesn’t hurt that their coffee also happens to be delicious.” Equal Exchange offered to buy 10 containers of coffee - 60% of CESMACH’s total production – and, from that day forward, the partnership has been steadily growing.

The relationship between Equal Exchange and CESMACH extends far beyond the simple act of purchasing coffee. When Hurricane Stan devastated southern Mexico and CESMACH lost 25% of its harvest, Equal Exchange rallied allies and partners to raise tens of thousands of dollars to help farmers renovate their farms and deliver emergency supplies to their communities. In March 2008, Equal Exchange brought a delegation of food co-operative representatives to visit CESMACH - the first time a buyer had ever brought a group to meet and spend time with the farmers.

CESMACH itself is also involved in many environmental protection and social development projects. As part of their Sustainable Coffee Project, they plant new coffee and fruit-bearing trees. Because coffee is their only source of income, they are experimenting with selling other products, such as palm fronds which grow year round as live barriers to soil erosion and may be of interest to churches and florists in the US. 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 work with organic gardens and domestic animals to diversify incomes and their families’ nutrition. Together with three other cooperatives, CESMACH used their Fair Trade premiums to buy land and recently finished construction of a new dry processing plant. Milling their own coffee will enable CESMACH to further control for quality and reduce costs.

When a small coffee cooperative took on a giant in the industry to protect itself, no one knew what the future would hold. Thanks to the support Equal Exchange and others in Fair Trade, the cooperative and their community thrive. As Silvia Roblero Torrez, production coordinator, notes, “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.”

Now, each year, CESMACH exports more coffee into the Fair Trade, organic market, and more farmers ask to join the organization. A Carlos Romero Velazco, founding member and CESMACH president, says: “We [continue] to grow, and [find] other buyers as well. This year, we are planning to sell 20 containers – all into the Fair Trade market.”

Based on the work of Phyllis Robinson, Equal Exchange, 2008, in the Small Farmers, Big Change weblog.