WCCN's Newsletter, Spring 2011, Volume 27, No. 1

Isabel Zamora, a member of La Fem in Nicaragua, picking coffee. photo by Michael Kienitz

For more than two decades, WCCN has supported fair trade. Actually, the fair trade coffee movement in the United States had its roots in the 1980s in Nicaragua, where WCCN was strongly involved. During that time, young activists from the United States created the worked-owned cooperative Equal Exchange to oppose this government's blockade against the Sandinista revolution by importing coffee beans from coffee cooperatives in Nicaragua for sale in the U.S. market.

During the last couple of years, microfinance has been hit hard from different angles. Politicians from the whole political spectrum have organized groups of dissatisfied borrowers to actively protest against microfinance organizations in countries such as Nicaragua, Pakistan and, most recently, India. Media has been receptive to more critical claims and stories of abuses committed by a few microfinance providers in some countries. From 2005 to 2008, some people portrayed microfinance as the silver bullet to resolve poverty. Today, skepticism about its virtues grows.

Julia Baumgartner of Just Coffe and Irma Soccoro Olivas of La Fem picking coffee. photo by Michael Kienitz

By Matt Earley, Just Coffee

Our discussions about the recent high world coffee prices have raised questions about the “fair trade” model. With coffee prices well above $2 per pound and climbing, fair trade is in an awkward position. Fair trade marketing has focused on “paying a fair price,” which ironically was not really the case before prices rose and fair trade prices had to follow them. In this brave new fair trade world, certifiers, importers and roasters struggle to make a case that fair trade has any teeth to it.

As supplies shrink, prices rise and competition for good coffee increases, this discussion is not theoretical. Cooperatives face challenges collecting coffee from their members. In the past, enthusiastic farmers turned coffee into the co-op knowing that fair trade buyers would pay more than local buyers “coyotes.” As a result, farmers would tolerate the co-op’s partial (or zero) payment on delivery of the coffee and wait for full payment after buyers received the coffee in the United States or Europe. However, in these years of high prices, local buyers pay a price competitive with “fair trade” importers and roasters, and they pay cash on the barrelhead instead of the co-op's two or three payments.

 

Cesar Gonzalez, photo by Michael Kienitz

CECOCAFEN is the Central Coffee Cooperative of the North. The cooperative’s commitment to improving the lives of small coffee farmers and selling coffee of the highest quality on the international fair trade market is evident in all they do.

This association of 12 cooperatives markets and sells quality coffee grown by more than 2,500 families from remote, rural communities in northern Nicaragua. CECOCAFEN sells 97% of its coffee through fair trade markets, providing higher incomes for members.

Income from fair trade coffee sales allows CECOCAFEN to implement numerous programs that improve the co-op members’ quality of life, such as a microfinance program for women that provides business training, loan opportunities to start or grow a business, opportunities to save money and scholarships for members and members’ children from the elementary to the university level.

With WCCN’s $500,000 loan, CECOCAFEN purchased coffee from its members and will process, dry and sell the coffee to international fair trade organizations such as Equal Exchange and Cooperatives Coffee.

Maria depulping coffee beans on her farm. photo by Michael Kienitz

Maria Mendoza raises coffee, corn, beans and a variety of livestock on her 25.5-acre rural Nicaragua farm.

Maria’s first husband was a member of a co-op. When he died 17 years ago, Maria took over the farm and joined Cooperative La Esperanza, one of the 12 cooperatives that make up the WCCN partner agency of CECOCAFEN, the Central Coffee Cooperative of the North.

Before joining the co-op, Maria and her family only raised corn and beans. Now due to training and access to credit and international markets from CECOCAFEN, Maria grows coffee on 5.1 acres.