“I’d be happy to sell 50% of our coffee as Fair Trade”, says Enrique. “I’m trying really hard to increase our sales, but it’s really frustrating. I’m knocking on doors, but nobody is answering”. Enrique is a big fan of Fair Trade, but he can’t understand why CoopeAgri sells so little of its coffee at Fair Trade prices. Currently it is around 35% of their total production.
CoopeAgri is located about three hours’ south of San Jose, the capital. The co-operative is 100% certified as Fair Trade, but the problem is having a sufficient number of buyers willing to pay Fair Trade prices. It’s a huge challenge and Enrique, young, enthusiastic and passionate, was practically screaming at me to show his frustration. He recently transferred from another department, and he has that newcomer’s awareness of “why are things the way they are?”.
We spoke at length in English, and there was much to be positive about. CoopeAgri is a very successful co-op. The town of Perez Zeledon (also known as San Isidro de El General) is dominated by the presence of CoopeAgri. Over its near 50-year existence it has ingrained itself into the town in many ways I had never seen in other places. This included supermarkets, a financial co-op, hardware store and recently they opened a cafe in the town. They even run a petrol station.
Having such an influence within the local community requires a large number of employees and producers. The co-op has more than 500 employees (e.g. in supermarkets, offices etc) and 12,000 producers. Approximately 2,500 are sugar cane producers. All the producers are small-scale, with around 1-1.5 hectares under cultivation.
CoopeAgri got involved in Fair Trade in 2004, starting with a small amount of coffee under harvest (~100,000 lbs). Now they sell ~3.5m lbs as Fair Trade. However, they have a capacity for ~25m lbs of coffee each year.
The co-op has survived many problems over the years, including the time of the coffee ‘crisis’ (around 10-11 years ago, when prices hit an all-time record low and farmers were unable to cover production costs). As a direct result of the ‘crisis’, many farmers removed their coffee plants, so over the last few years production levels have fallen. Now, because prices have risen significantly, farmers are replanting coffee. But it will take at least 2-3 years for those plants to bear coffee fruit. And by that time who knows what the prices will be like? This boom-bust cycle is typical in the coffee world, and a real reason why Fair Trade, in the long-term, has the ability to give farmers a minimum standard of living.
With prices relatively high at the moment, Enrique told me that many of the farmers are being approached directly by international buyers. They promise to pay farmers on the spot. Fair Trade typically pays farmers at set times of the year, often several months after the harvest. This is a big problem for the co-op, as it is very difficult to dissuade farmers from selling to these buyers. Despite the size of CoopeAgri, they are unable to pay farmers ‘on the spot’ to try to stave off the direct buyers. If they did, the co-op would run into credit problems, because it gets paid several months after the harvest. Also, prices fluctuate in those intervening months, which can cause additional credit problems. “Fair Trade” requires that buyers offer advance payments to the co-op (up to 60% of the contract), but even this does not alleviate the problem.
Another source of frustration for Enrique (really, he does support Fair Trade!) was the lack of opportunity to sell the co-op’s own roasted coffee in international markets. If you buy a bag of Fair Trade coffee at your local shop, almost always it will be from a company that roasts the coffee in the country you buy it from. CoopeAgri roasts its own coffee and sells it within Costa Rica. However, Enrique would love to sell this in other countries. In contrast to other co-ops that do this, CoopeAgri roasted coffee is the same quality as the beans it exports. Typically the import taxes are higher for a ‘product’ than a ‘raw material’, so it is very difficult to access North American and European markets.
The amazing thing, for me, was that Perez Zeledon is a Fair Trade Town. There are hundreds of these in Europe, and North America is catching up. But it was a huge undertaking for the town to get this status, because the criteria was the same as for any other town or city (e.g. a certain number of shops/cafes have to sell Fair Trade products; local council commits to buying Fair Trade products for internal use, wherever possible). The difficulties were many: lack of awareness of Fair Trade within the town, few products available, Fair Trade products are more expensive. They succeeded and it was refreshing for me to see that. It also challenged my assumption that Fair Trade Towns were a ‘northern’ thing, solely for us in the northen, developed world. With each visit, I learn a little more.
CoopeAgri is a great example of a successful co-op. Although Fair Trade can do a lot more for CoopeAgri, it has already done a lot or the community and is continuing to do so. There are many social programs, a Family Commitee (the only one in Costa Rica), which helps women in various projects, they co-ordinated with a Spanish NGO (non-governmental organisation) to bring $30,000 worth of computers for local children, and they have a sizeable number of female producers (around 35%). Over the last few years, the co-op has developed good relationships with their buyers. It is important that these relationships continue to develop, emphasising the ‘personal’ nature of Fair Trade. In a world of impersonal commerce, Fair Trade acts as an antidote to ‘the way things are’. And everyone can play a part.