Why co-ops matter

Small-lot coffee farmers, managing parcels of land around 1–5 hectares in size, have been around for hundreds of years, ever since colonial traders discovered that peasant farmers on a few hectares of land could efficiently produce coffee without expensive inputs and machinery. This became the standard method of extracting cash crops from these farmers who, while not technically slaves, were required to grow quotas of coffee rather than food for themselves. Small-lot coffee farmers are still the main source of high-quality Arabica coffee in the world.

After decolonisation, small-lot farmers became members of large, predominantly state-run cooperatives. Coffee prices were relatively stable as governments carefully managed coffee stocks.

Market-liberalisation in the 1970s saw an end to this. Since then, the control of coffee stocks (and therefore prices) has been in the hands of the large international traders that flooded the market, leading to the lowest coffee prices ever seen between 1989 and 2001.

On their own, these farmers have no option but to sell to local traders (called ‘coyotes’ in many parts of Latin America for their unscrupulous dealings with farmers). The trader will offer the street price, which is variable and inconsistent, with no minimums, but the farmer has no option than to sell, meaning no guarantee of a consistent income.

To combat this, farmers have set up their own cooperatives, giving themselves the volume and therefore selling power that they could not achieve individually. Farmers are paid a regular and fair price for their coffee during harvest with a second payment later in the year if the cooperative has made a profit.

Successful cooperatives attract coffee buyers and roasters who will pay good prices and become long-term customers. Individual farmers can then bypass street traders and provide themselves with more dependable prices, while also raising the standard of infrastructure in the local area.

The healthy cooperatives we visit and are proud to work with are an example of ‘by the people, for the people’; local coffee farmers looking after their people, through their own design.