In Transition, Part I
Coffee Co-Ops Adjust to a Brave New Market
by Julie Beals

ZIPOLITE, Oaxaca, Mexico—Almost 10 years ago, a small coffee farming community set out on its own. It separated itself from a large co-op, which had been mixing its higher-quality beans with lower grades. The new, leaner group, called La Trinidad, found itself on a bumpy ride of local political pitfalls and financial roadblocks. Crazy as it seemed, this move toward independence was likely the co-op’s only chance for long-term survival as coffee growers.

Large coffee co-ops, like the one to which the farmers of La Trinidad belonged, were made up of thousands of growers—the norm across much of Mexico and Central America in decades past. They made sense as a vehicle for farmers to gain political voice and to attract government funding with their combined voting power. They also increased tax revenue by ensuring a market for all coffees grown in a region; nothing was left on the table when a big group mixed all member coffees into one giant lot.

But with more specialty coffee buyers willing to seek out and pay well above the fair-trade price for single-farm or single-village lots of unique quality, large co-ops have begun losing their leading role on the geopolitical stage. Mixing harvests from hundreds or thousands of farms is more recognized than ever for decimating unique flavor profiles—and prices. If producers can respond to what the market wants—and will pay for—there is a chance for their survival. Christy Thorns, green coffee buyer and roastmaster at Allegro Coffee, describes La Trinidad’s stand-alone cup quality as “roasted nut in character, not extremely high acidity, but they do such a good job with processing and quality control that a uniqueness shines through.” The farms sit at 1,350 meters, very high for Mexico Arabica coffee, and in terms of cup quality, buyers say La Trinidad represents the quintessential Pluma coffee profile.

Making it taste better, however, takes even more work. Separating smaller lots and finding unique markets for them requires considerable additional labor, but it is the one way to guarantee survival of these farms. Compounding the large-lot, basement-price issue, Mexico and Central America are ill equipped to compete with Brazil, Vietnam and now China in commercial coffee, given the former’s lower yields and more challenging mountainous growing regions.

Due to these trends, individual earnings in large collectives often don't provide viable livelihoods, even with fair-trade premiums. Some observers also point to bloated co-op administrative costs. Creating smaller grower groups, as La Trinidad has done, seems a simple solution. But it’s not an easy road. The large co-ops have kept monopolies of sorts for decades by wielding political and fiscal clout, keeping competition from rising out of their ranks. What is remarkable is that change is now occurring at the grassroots level, without the help of government but instead that of importers and roasters.

When La Trinidad's village communities and 395 farmers seceded, leaders at the larger cooperative told the group they would never export a bean, threatening to use economic and political clout to cut them out of the market, and keeping them from establishing relationships with buyers. “Everyone knew these growers were fighting Goliath,” says David Griswold, owner of Sustainable Harvest, the importing company that found the market for La Trinidad’s coffee and continues to work with the group. After establishing buyers for La Trinidad’s coffees at Green Mountain, Allegro, Batdorf & Bronson, Counter Culture, Tully’s and Café Mystique, Sustainable Harvest’s Mexico-based office went to work on improving quality. Additional funds were provided by Green Mountain and Allegro to build cement patios and to create coffee bar-code traceability programs and organic farmer training programs. A copy machine donated by Allegro has since generated more than $7,000 in income for the co-op. La Trinidad’s farms have received organic and fair-trade certifications, and they have used their premiums to strengthen coffee yields with improved agricultural practices and to diversify crops. They have opened a general store and even rebuilt the town’s church, investing in the community’s overall economy. A credit bank for women’s projects started by Allegro and Coffee Kids began with a credit line of $25,000 that has since grown to $50,000.

Farmers at La Trinidad say they have received little state funding to date but have had some success getting federal funds. With a secure market, a premium quality product and buyers who are willing to invest in their future, the group has become a model for what can happen when smallholder farmers have a voice in allocation of resources, production and cup quality. “They have now seen five years of premium prices across the board, all fair-trade organic pricing, because the market is there for it, and we were able to get producers together with buyers to ensure quality year after year,” says Griswold.

It's going well, paying off. It will never disappear now, says one farmer. There was a time, years ago, when that was uncertain. It was hard because the people we broke away from had all the political power. It is brave ventures like La Trinidad’s that could be key to the coffee industry’s survival in Mexico. And the La Trinidad success story is one that other coffee farmers in the region can look forward to, especially those that are struggling today as Zipolite once did. “We had a big event for producers here in October,” says one La Trinidad member. “Someone came from another group that is struggling to get where we are said they need our support. We said, ‘Absolutely, we’re here for you.’”

In the May issue of Fresh Cup, we'll take you to another small coffee-growing community in the highest producing area of Oaxaca, where farmers are going up against another large co-op in order to survive in the increasingly competitive market. As La Trinidad has done, these farmers are seeking advanced agricultural practices, direct relationships with buyers, and ultimately greater sustainability, increased quality, marketability and prices.

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