Skip to main content

Co-operative or coyote? Producers’ choice between intermediary purchasers and Fairtrade and organic co-operatives in Chiapas

Abstract

Coffee producers in many parts of the world have the option of either becoming a member of and selling their coffee to a Fairtrade and organic co-operative, or selling it to a “coyote”, the Central American nickname for intermediary purchaser. This study investigates why different producers make different choices, looking at both material and immaterial costs and benefits of the two choices. A qualitative study from Chiapas (Mexico) finds that a main reason for not choosing the co-operatives is the production requirements that follow organic certification. A survey on production costs confirms that members of an organic co-operative have more work hours than non-members in the same area. A probit analysis indicates that both coffee plot size and number of working household members influence the producers’ decision on sales channel. However, the study also finds that aspects not related to the organic production requirements can affect the choice, such as the level of trust in co-operative leadership, and the co-operatives’ payment systems.

This is a preview of subscription content, access via your institution.

Notes

  1. An agreement between coffee producer and consumer countries first signed in 1962, aimed at keeping coffee prices stable by using export quotas that government bodies in each producer country were responsible for maintaining.

  2. In 2013 the minimum price was 1.40 USD/lb for washed Arabica coffee and the premium 0.20 USD/lb. According to ICO statistics this is roughly the same as the average price for “Other Mild Arabica” coffee for 2013 (ICO 2014).

  3. The question is about choosing membership or not, and not about members side-selling to intermediaries, although the two aspects are closely linked.

  4. The Mexican certifier organisation Certimex held a workshop in San Cristobal and Tuxtla Guiterrez in May 2007. Representatives from all the organic co-operatives in Northern Chiapas participated.The representatives, one or two from each organisation, were mostly part of the technical staff, and all of them spoke Spanish and were able to read and write. The organisers from Certimex allowed me to hand out a questionnaire, which most of the participants completed.

  5. Unión Regional de Ejidatarios Agropecuarios, Forestales y de Agroindustria de los pueblos Zoque y Tzotzil del estado de Chiapas.

  6. www.iai.int.

  7. It turned out to be difficult to find producers with more than two hectares, and only one producer was found with more than five hectares. The average coffee plot size for the sample is 1.24.

  8. A pilot for the survey was done in the late spring of 2007. The survey itself was done during the summer and autumn of 2007.

Abbreviations

Certimex:

Certificadora Mexicana de Productos y Procesos Ecológicos

FLO:

Fairtrade International

IAI:

Inter-American Institute for global change research

PRD:

Partido de la Revolución Democrática

UREAFA:

Unión Regional de Ejidatarios Agropecuarios, Forestales y de Agroindustria de los pueblos Zoque y Tzotzil del Estado de Chiapas

References

  • Arruda, C. 1997. Business ethics in Latin America. Journal of Business Ethics 16: 1597–1603.

    Article  Google Scholar 

  • Bacon, C. 2005. Confronting the coffee crisis: Can fair trade, organic, and specialty coffees reduce small-scale farmer vulnerability in northern Nicaragua? World Development 33(3): 497–511.

    Article  Google Scholar 

  • Barham, B., M. Callenes, S. Gitter, J. Lewis, and J. Weber. 2011. Fairtrade/organic coffee, rural livelihoods, and the “Agrarian Question” : Southern Mexican coffee families in transition. World Development 39(1): 134–145.

    Article  Google Scholar 

  • Barrera, J.F., M. Parra Vázquez, O.B. Herrera Hernández, R. Jarquín Gálvez, and J. Pohlan. 2004. Plan Estatal de Manejo Agroecológico del Café en Chiapas. Guía hacia una cafeticultura sustentable. Tapachula, Chiapas, México: Comisión para el Desarrollo y Fomento del Café de Chiapas y El Colegio de la Frontera Sur.

  • Basu, P., and J. Chakraborty. 2008. Land labour and rural development: Analyzing participation in India’s village dairy co-operatives. The Professional Geographer 60(3): 299–313.

    Article  Google Scholar 

  • Bernard, T., and D.J. Spielman. 2009. Reaching the rural poor through rural producer organizations? A study of agricultural marketing co-operatives in Ethiopia. Food Policy 34: 60–69.

    Article  Google Scholar 

  • Beuchelt, T., and M. Zeller. 2011. Profits and poverty: Certification’s troubled link for Nicaragua’s organic and Fairtrade coffee producers. Ecological Economics 70: 1316–1324.

    Article  Google Scholar 

  • Bolwig, S., P. Gibbon, and S. Jones. 2009. The economics of smallholder organic contract farming in tropical Africa. World Development 37(6): 1094–1104.

    Article  Google Scholar 

  • Bray, D.B., J.L.P. Sánchez, and E.C. Murphy. 2002. Social dimensions of organic coffee production in Mexico: Lessons for eco-labeling initiatives. Society and Natural Resources 15: 429–446.

    Article  Google Scholar 

  • Castellanos, E., C. Tucker, H. Eakin, H. Morales, J. Barrera, and R. Diaz. 2012. Assessing the adaptation strategies of farmers facing multiple stressors: Lessons from the Coffee and Global Changes project in Mesoamerica. Environmental and Science Policy 26: 19–28.

    Article  Google Scholar 

  • Certimex (Certificadora Mexicana de Productos y Procesos Ecológicos. S.C.). 2007. Normas para la producción, el procesamiento y la comercialización de productos ecológicos. www.certimexsc.com/docs/Normas%20CERTIMEX%20actualizadas%202007.pdf. Accessed May 2007.

  • Deininger, K. 1995. Collective agricultural production: A solution for transition economies? World Development 23(8): 1317–1334.

    Article  Google Scholar 

  • Fischer, E., and M. Qaim. 2012. Linking smallholders to Markets: Determinants and impacts of farmer collective action in Kenya. World Development 40(6): 1255–1268.

    Article  Google Scholar 

  • FLO (Fairtrade Labelling Organisation). 2012. Fairtrade and coffee. Commodity Briefing. http://www.fairtrade.org.uk/includes/documents/cm_docs/2012/F/FT_Coffee_Report_May2012.pdf. Accessed Feb 2013.

  • FLO (Fairtrade Labelling Organisation). 2013. http://www.fairtrade.net/. Accessed Oct 2013.

  • Fulton, M. 1999. Co-operatives and member commitment. Liiketaloudellinen-Aikakauskirja 4: 418–437.

    Google Scholar 

  • Fulton, J. 2004. Understanding co-operative behaviour. The prisoners dilemma approach. In Co-operatives and local development, ed. C. Merrett, and N. Walzer. Armonk: M.E. Sharpe.

    Google Scholar 

  • Giovannucci, D., and R. Juárez Cruz. 2006. Análisis Prospectivo de Política Cafetalera. Mexico: FAO.

    Google Scholar 

  • Gliessman, S.R. 2008. Agroecological foundations for designing sustainable coffee agroecosystems. In Confronting the coffee crisis: Fair trade, sustainable livelihoods and ecosystems in Mexico and Central America, ed. C.M. Bacon, V.E. Méndez, S.R. Gliessman, D. Goodman, and J.A. Fox. Cambridge: MIT Press.

    Google Scholar 

  • Gobbi, J.A. 2000. Is biodiversity-friendly coffee financially viable? An analysis of five different coffee production systems in western El Salvador. Ecological Economics 33(2): 267–281.

    Article  Google Scholar 

  • Gonzalez, A.A., and R. Nigh. 2005. Smallholder participation and certification of organic farm products in Mexico. Journal of Rural Studies 21(4): 449–460.

    Article  Google Scholar 

  • Hansen, M.H., J.L. Morrow, and J.C. Batista. 2002. The impact of trust on cooperative membership retention, performance, and satisfaction: An exploratory study. International Food and Agribusiness Management Review 5(2002): 41–59.

    Article  Google Scholar 

  • Hansmann, H. 1996. The ownership of enterprise. Cambridge: The Belknap Press of Harvard University.

    Google Scholar 

  • ICO. 2014. www.ico.org/prices/p2.htm. Accessed Jan 2014.

  • INEGI (Instituto Nacional de Estadistica y Geografía). 2007. www.inegi.gob.mx. Accessed April 2007.

  • Jaffee, D. 2007. Brewing justice: Fair trade coffee, sustainability, and survival. Oakland: University of California Press.

    Google Scholar 

  • Jones, E.C. 2004. Wealth-based trust and the development of collective action. World Development 32(4): 691–711.

    Article  Google Scholar 

  • Kilian, B., C. Jones, L. Pratt, and A. Villalobos. 2006. Is sustainable agriculture a viable strategy to improve farm income in Central America? A case study on coffee. Journal of Business Research 59(3): 322–330.

    Article  Google Scholar 

  • LeVay, C. 1983. Agricultural co-operative theory: A review. Journal of Agricultural Economics 34(1): 1–44.

    Article  Google Scholar 

  • Lopez Arévalo, J. 2007. Globalisation neoliberal. El caso Chiapas. Tuxtla Gutierrez: Universidad Autonomo de Chiapas.

    Google Scholar 

  • Lyngbæk, A.E., R.G. Muschler, and F.L. Sinclair. 2001. Productivity and profitability of multistrata organic versus conventional coffee farms in Costa Rica. Agroforestry Systems 53: 205–213.

    Article  Google Scholar 

  • Martinez-Torres, M.E. 2006. Organic coffee: Sustainable development by Mayan farmers. Athens: Ohio University Press.

    Google Scholar 

  • Murray, D., L. Raynolds, and P. Taylor. 2006. The future of fair trade coffee: Dilemmas facing Latin America’s small-scale producers. Development in Practice 16(2): 179–192.

    Article  Google Scholar 

  • Milford, A. 2012. The pro-competitive effect of coffee co-operatives in Chiapas, Mexico. Journal of Agricultural & Food Industrial Organization 10(1), ISSN (Online) 1542-0485. doi:10.1515/1542-0485.1362.

  • Mujawamariya, G., M. D’Haese, and S. Speelman. 2013. Exploring doble side-selling in co-operatives, case study of four coffee co-operatives in Rwanda. Food Policy 39: 72–83.

    Article  Google Scholar 

  • Mutersbaugh, T. 2004. Serve and certify: Paradoxes of service work in organic-coffee certification. Environment and Planning 22: 533–552.

    Article  Google Scholar 

  • Pascucci, S., C. Gardebroek, and L. Dries. 2012. Some like to join, others to deliver: An econometric analysis of farmers’ relationships with agricultural co-operatives. European Review of Agricultural Economics 39(1): 51–74.

    Article  Google Scholar 

  • Pérez Grovas, V. 2000. Evaluación de la sustentabilidad del sistema de manejo de café orgánico en la unión de ejidos Majomut, región de los Altos de Chiapas. In Sustentabilidad y sistemas campesinos, cinco experiencias de evaluación en el México rural, eds. O. Masera, and O. López-Ridaura. Mexico: Mundi-Prensa. Universidad autonomo de Chapingo.

  • Pérez Grovas, V., J. Burstein, E. Cervantes, and L. Carlsen. 2002. El caso de Mexico. In El café en México, Centroamérica y el Caribe: Una salida sustentable a la crisis, eds. V. Pérez Grovas, J. Burstein, E. Cervantes, L. Carlsen, and L.H. Navarro. Mexico: Coordinadora de Pequeños Productores de Café de Chiapas.

  • Raynolds, L. 2002. Consumer/producer links in fair trade coffee networks. Sociologia Ruralis 42(4): 404–424.

    Article  Google Scholar 

  • Raynolds, L., D. Murray, and P. Taylor. 2004. Fair trade coffee: Building producer capacity via global networks. Journal of International Development 16(8): 1109–1121.

    Article  Google Scholar 

  • Raynolds, L. 2009. Mainstreaming fair trade coffee: From partnership to traceability. World Development 37(6): 1083–1093.

    Article  Google Scholar 

  • Renard, M. 1996. Les interstices de la globalisation. Un label (Max Havelaar) pour les petits producteurs de café. Thesis (doctoral)-Université de Toulouse-Le Mirail.

  • Rice, R.A. 2001. Noble goals and challenging terrain: Organic and fair trade coffee movements in the global marketplace. Journal of Agricultural and Environmental Ethics 14(1): 39–66.

    Article  Google Scholar 

  • Ruben, R. 2008. The development impact of fair trade: From discourse to data. In The impact of fair trade, ed. R. Ruben. The Netherlands: Wageningen Academic Publishers.

    Google Scholar 

  • Ruben, R. 2012. The fair trade balance: New challenges after 25 years of Fair Trade Ruerd, FERDI Policy Brief # 52. http://www.ferdi.fr/uploads/sfCmsContent/html/111/Ferdi-Br52-Ruben_WEB.pdf. Accessed Nov 2013.

  • SAGARPA (Secretaria de Agricultura, Ganadería, Desarrollo Rural, Pesca y Alimentación). 2005. Plan Rector del Sistema Producto Café en Mexico. www.cedrssa.gob.mx/?doc=281. Accessed May 2007.

  • Sexton, R.J. 1990. Imperfect competition in agricultural markets and the role of co-operatives. A spatial analysis. American Journal of Agricultural Economics 72(3): 709–720.

    Article  Google Scholar 

  • SNIDRUS. 2007. (Sistema Nacional de Información para el Desarrollo Rural Sustentable). http://www.agrochiapas.gob.mx/. Accessed in April 2007.

  • SPC. 2007. (Sistema Producto Café): www.spcafe.org.mx. Accessed in April 2007.

  • Talbot, J.M. 2004. Grounds for agreement. The political economy of the coffee commodity chain. Lanham, MD: Rowman & Littlefield Publishers Inc.

    Google Scholar 

  • Thorp, R., F. Stewart, and A. Heyer. 2005. When and how far is group formation a route out of chronic poverty? World Development 33(6): 907–920.

    Article  Google Scholar 

  • Turtiainen, T., and J.D. von Pischke. 1986. Investment and finance in agricultural service cooperatives, World Bank Technical Paper Number 50.

  • Wooldridge, J.M. 2002. Econometric analysis of cross section and panel data. Cambridge: The MIT Press.

    Google Scholar 

Download references

Acknowledgments

I wish to thank Stewart Diemont, Angel Alvarez Martínez, Pedro Ramirez Lopez, and Certimex for help with data collection. I would also like to thank Kjetil Bjorvatn, Erik Sørensen, Gudbrand Lien, and Sophie Spencer for helpful comments. The survey reported in this study was financed by the Inter-American Institute for Global Change Research (IAI). I would also like to thank El Colegio de la Frontera Sur for hosting me during 10 months.

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Anna Birgitte Milford.

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Milford, A.B. Co-operative or coyote? Producers’ choice between intermediary purchasers and Fairtrade and organic co-operatives in Chiapas. Agric Hum Values 31, 577–591 (2014). https://doi.org/10.1007/s10460-014-9502-x

Download citation

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10460-014-9502-x

Keywords

  • Fairtrade
  • Organic production
  • Farmer cooperatives
  • Coffee
  • Mexico