Civil Society and Governance in Mexico.
Dr. Alberto J. Olvera,
National Coordinator.
Case Study
NEW FORMS OF ASSOCIATION IN MEXICAN COFFEE CULTIVATION: THE CASE OF THE CNOC
FERNANDO CELIS CALLEJAS
XALAPA, VER.
MARCH 2000
I N D E X
I. / INTRODUCTION / Pg.II. / SOME CONDITIONING FACTORS IN THE ASSOCIATIVE PROCESSES OF THE CNOC
1. 1. COFFEE PRODUCERS AND THEIR PRODUCTIVE PATTERNS
2. 2. THE BANNER OF MARKET FORCES
3. 3.THE ORGANIZATIONAL MODELS.
III. / A NEW SOCIAL ACTOR IN MEXICAN COFFEE CULTIVATION: THE CNOC
1. THE FORMATION OF REGIONAL ORGANIZATIONS
2. THE FORMATION OF THE NATIONAL ORGANIZATION
3. THE FIRST NATIONAL CONGRESS
4. DIFFERENT STAGES IN THE COLLECTIVE ACTION OF THE CNOC
5. FUNDING AND EXPENSES OF THE NACIONAL CNOC
6. ITS FUNCTION AS A NATIONAL ORGANISM
7. RUPTURES AND CONFLICT EN LA CNOC
8. LEADERSHIP AND INEQUALITY IN PARTICIPATION AND KNOWLEDGE
9. THE POTENTIAL FOR FORMING PUBLIC ARENA IN THE CNOC
10. REGIONAL EXPERIENCES
A. The CEPCO and the Oaxaca State Council
B. Atzalan-Tlapacoyan in the State of Veracruz
IV. / POLITICAL AND SOCIAL ACTORS AND OPPORTUNITIES FOR INTERACTION: 1990-1999
1. POLITICAL AND STATE INTERVENTION ON VARIOUS FRONTS
2. MORE CENTRALIZED POLITICAL AND STATE INTERVENTION
3. THE ZEDILLO GOVERNMENT AND THE DESCENTRALIZATION OF COFFEE PRODUCTION POLICIES
3.1. An opportunity for transition and rupture: the National Funding Group
3.2. The political actors, the SAGAR and the state governments
3.3. Opportunities for interaction at a national level
The Mexican Coffee CouncilThe Forum of national organizations
3.4. Regression in governability and governance
V. / DEVELOPMENT PERSPECTIVES FOR COFFEE PRODUCER ASSOCIATIONS
1. MARKET RESTRICTIONS
2. RESTRICTIONS IN THE POLITICAL SYSTEM
3. RESTRICTIONS IN THE PRODUCERS’ ORGANIZATIONAL CULTURE
4. DEVELOPMENT PERSPECTIVAS FOR THE CNOC
VI.
VII. / ANNEXES
BIBLIOGRAPHY
I. INTRODUCTION
The development of associations in the Mexican countryside, in particular those of peasant farmers, is marked by the long period in which there was a lack of associative freedom and political pluralism in the communities. This process has to do with the way in which the State intervenes in order to organize the process of land distribution, a dominant feature during the four decades between the thirties and sixties, and later during the seventies and part of the eighties, with government economic intervention in agricultural processes. This intervention moulds and subordinates peasant farmer groups, inhibits and blocks the emergence of more autonomous and plural organizational processes, and determines the terms of the relationship with the State, which in turn restricts the development of a democratic process of association forming.
The initial break with the state interventionist model and corporatist control of peasant farmers in recent years has been experienced as a fragmentation of existing organizational spaces. Survival strategies prevail at a family level and a large number of groups have appeared at the local, regional and national level with very little coordination, in such a way that rural civil society has not come up with a broad, organized response in relation to a change in political regime, institutional reformation and new public policies.
Coffee production is one of the most important agricultural branches in Mexico, together with corn, beans and sugar cane. Although there has also been a strong fragmentation of associative processes in this case, it differs from other branches of agricultural production due to the greater presence of organizations, their relative autonomy and pluralism, and their constant interaction with the State in the definition of public policies for the sector.
The National Coordinator of Coffee Organizations (CNOC) has played a fundamental role in this whole process. The presence and importance of this organization deserves attention since it is largely comprised of indigenous producers who have traditionally been excluded from public policy decisions.
In order to understand this history, we are presenting some factors in this study that we consider to be causal in the dynamic of associative processes; what we call organizational models, as well as productive patterns and their specific role in the coffee market.
Secondly, we will refer to the formation and development process of the CNOC as a national organization; although local aspects are not included, we will explore a regional case and one other at the state level.
Thirdly, we will present the different kinds of interaction with the State that took place in the 1990s, concluding with some conclusions about their impact on governability and governance in the sector.
Fourthly, we will examine some factors that have been restrictive on the democratic associative development of coffee producers.
II. SOME CONDITIONING FACTORS IN THE ASSOCIATIVE PROCESSES OF COFFEE PRODUCERS
In this section we will analyze some factors that in our opinion condition the development of Mexican coffee producer associations; these factors have remained central in recent decades.
1. COFFEE PRODUCERS AND THEIR PATTERNS OF PRODUCTION
Although Mexican coffee production has existed since the nineteenth century, it is only in recent decades that it has gained particular importance for its growing production. There are two clear reasons for this expansion: growing demand in the world market and the existence of a large rural population that has gained access to land as a result of agrarian reforms and the breaking up of many large properties (Early, 1998).
The moments in which new coffee producers were incorporated are clearly connected to the periods of rising coffee prices. In July 1953, a big frost in Brazil, the world’s main coffee producer, raised both international and internal prices, leading to what Early referred to as the “Coffee Fever.” In a single decade, coffee production increased from 165,284 hectares in 1950 to 304,297 hectares in 1960. The number of producers rose from 50,000 to 120,000 by the beginning of the seventies, with 418,628 hectares under cultivation. Coffee became more important to the national economy.
In 1975, another frost in Brazil pushed prices up very high in the 1976-1977 cycle. Thanks to growing state intervention through the Mexican Coffee Institute (Inmecafé), and their price guarantee plan, the prices received by small producers almost tripled during these years. This encouraged the incorporation of new producers. By 1982, according to the Inmecafé census, there were 168,521 producers. At the beginning of the nineties there were already 282,629 producers cultivating on 760,000 hectares. The majority of the new producers are indigenous: 185,000, or 65% of the total. In Oaxaca, the most indigenous state in the country, the influx has been massive with the numbers rising from 14,000 producers in 1978 to 55,291 in 1992.
The Inmecafé census in 1992 gives us a picture of Mexican coffee production. It is located in the central south of the country in 12 states, 56 regions and around 4,000 communities. In terms of numbers of producers, the states of Chiapas, Veracruz, Oaxaca, Puebla and Hidalgo stand out, with 73,742, 67,227, 55,291, 30,933, and 25,630 respectively, San Luis Potosí with 12,920 and Guerrero with 10,497. As for form of land tenure, 110,858 producers are ejido members, 99,288 small landowners, 59,462 shareholders, and 13,021 lease holders or others. It is worth pointing out that in the case of the private proprietors, the great majority are also small producers that on average have even less land than ejido members and shareholders. Of the total number of producers, 69% have no more than two hectares and on average have 1.3 hectares; another 23%, with upper limit of five hectares, have an average of 3.6 hectares. A distinctive characteristic of Mexican coffee production is that the majority of the producers are indigenous people. Of the 52 indigenous groups in the country, about 25 are producing coffee.
A classification of productive patterns must be carried out in order to understand the productive dynamics and associative models in coffee production. There are basically two. The first is located in indigenous regions and some have called it the indigenous production system. Production is low at about five hundredweight per hectare. Indigenous producers do very little cultural work. There is some artisan cherry parchment production that requires minimal infrastructure. The indigenous communities are generally very isolated. Within the communities there are low economic differentials, with mutual support mechanisms and acts of collective solidarity. Family incomes are low with high levels of poverty are in small communities and a precarious provision of health, education, drinking water services. If we consider small coffee producers to be those that have less than five hectares, the 175,000 indigenous coffee producers represent 67% of this total.
The great majority of the remaining 33% of small producers, of which there are about 85,000, are located in the central area of the state of Veracruz (around 60,000), in the regions of Tlapacoyan, Misantla, Coatepec, Huatusco and Córdoba, and in other coffee regions, such as Soconusco in Chiapas, Teziutlán and Xicotepec in Puebla and Atoyac in Guerrero. These producers have a different production pattern.
The small mestizo producers have higher per hectare productivity. On average, almost 2.5 times more than indigenous producers. They do more work in their coffee fields and require more pick up work for the coffee harvests (in relation to volume of production) be they neighbors from the same village or people from other regions.
These producers have higher earnings and live in bigger settlements close to the cities. They are therefore better connected and enjoy access to basic services such as education, health, and drinking water. There are bigger economic differentials and a more individualistic culture, with basic forms of solidarity at the level of extended family.
2. THE BANNER OF MARKET FORCES
From the very beginning, the expansion of coffee cultivation has been in response to foreign demand, particularly the USA, where international prices are defined in its New York coffee market. Before the participation of the State through the Inmecafé, the producers did not receive more than 50% of the gross stock market prices; with the intervention of the Inmecafé and its guaranteed prices this rose to 70%, and in the nineties, with the domination of the transnational companies, the percentage rose as high as 90%, such as in the 97-98 cycle. Until half-way through the seventies, the main market contact for coffee producers was the local buyer who was part of a network of middlemen that facilitated the transportation of coffee to the main regional centers, where the big buyers had a monopoly relationship with U.S. importers. The producer had no information whatsoever about the operation of the international market. The personal buyer-seller deals were not very suitable for the formation of producer associations that could control the industrialization and commercialization processes.
Since the 73-74 cycle there has been a significant participation in the coffee market by the State, which ended up handling up to 42% of national production. The expansion was sustained by growing external debt and later by oil revenues, a strategy that went into crisis in 1982 after the big fall in petrol prices and the rise in international interest rates.
During these years the international coffee trade was regulated by a convention of the International Coffee Organization (ICO) that established price bands and a system of export quotas. The main world buyer had accepted this framework, which came into effect in 1962, for fear of the effects of the Cuban revolution on coffee producing countries. International regulation facilitated internal strategies of state regulation.
As of 1982 this strategy went into crisis; there were fewer financial resources and the institute was unable to transform itself into a more efficient company. The expectations that had been created since 1975 began to go into reverse as it was unable to meet the growing demands of a majority of new producers that with great effort had made their coffee plantations and were hoping to reap the benefits. The struggles of coffee producers between 1982 and 1989 were centered in achieving better prices and services, but were only able to achieve limited responses. In 1987 the rupture happened, appearing more as a protest against the government than against a commercial company. In 1989 the new government decided to liquidate the Inmecafé and to transfer the functions of the State to the producers.
Between 1976 and 1989 the regional producer organizations emerge and also get involved in the direct handling of storing and selling coffee. Those linked to the Confederation of National Peasant (CNC), a corporatist organism of the PRI, experienced a boom from the discretionary handling of large quantities of Banrural resources —the official rural bank—and the export quotas that Inmecafé assigned to them without being part of the established accounting system that granted them. The great inefficiency and corruption of these organisms, that were used to finance the campaigns of the PRI, caused them to disappear in the price crises of 1987 and 1989.
Another kind of actor was the autonomous organizations that also intruded in the coffee trade. The idea here was that they could be more competitive if they were managed with transparency, honesty, even greater efficiency. Most of these also went bankrupt. Their organizational structures, however, were more solid and several groups managed to renewed themselves. In conclusion, this stage of strong state participation concluded, within the framework of a price crisis in 1987 and 1989 and high interest rates, with the bankruptcy of the main actors in coffee marketing: the Inmecafé, the companies of the producer organizations and the big private businesses. The nineties appeared to be a phase in which new economic actors emerged, with new state policies orientated at a very selective application of subsidies. The simultaneous disappearance of national and international regulations led to a disorderly supply from producing countries, collapsing the price of coffee for five years, from the 89-90 cycle to the 93-94 cycle. Prices fell to only 30% of the average during the previous decade.
Coffee marketing mainly passed into the hands of new companies affiliated to transnational companies such as AMSA, BECAFISA, Cafés Tulipán, Cafés California and NESTLÉ, whose strength is based in the handling of financial resources, a scarce commodity for national companies and producer organizations. In 1994, facing low coffee prices, the producers started to demand compensation from the federal government, which began to grant small amounts in different ways, including verbal credit, direct support, and even dollar credit in 1995. At this time a credit culture took root in which loans were negotiated with the government if prices fell. Prices recovered in 1995, but in the following years the credit system did not. The producer companies continued depending on financial support and the transnationals strengthen their almost oligopolistic control of the coffee trade.