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206. Where there is no co-op

Fair Trade USA set off a swirl of controversy with its recent decision to open the U.S. market for Fair Trade Certified coffee to estates.  Lost in the furor was the fact that Fair Trade for All won’t just open the door to estates.  It will also create new opportunities for unorganized farmers — a measure that has the potential to expand the benefits of Fair Trade to smallholders in places where cooperatives have not thrived.


In the late 1960s and early 1970s, a group of health activists in a small village in Mexico gradually compiled a notebook of local treatments for the ills that ailed its inhabitants.  In 1977, a California foundation published the collected notebooks under the title “Where There is No Doctor.”  In the intervening 30 years, the book has become an indispensable (and often dog-eared) companion to Peace Corps volunteers and other folks like me who have spent extended periods of time in remote areas in developing countries where, as the title suggests, there is no doctor.

With the growing demand for specialty coffee, increased competition at origin and fears of a looming supply crunch, coffee buyers are beginning to expand their search for sustainable smallholder coffee — a search that has taken them “off the cooperative grid” to new origins where there are no cooperatives.  Over the past year, several buyers of sustainable smallholder coffee have asked me separately to help them think through the question of how they might source smallholder coffee in these origins that meets their standards for quality, traceability and sustainability.  Their search for alternative mechanisms to link smallholder farmers to markets is not a betrayal of the cooperative system, since there are no robust local cooperative structures in these origins.  Instead, it is a potential complement to the cooperative model.  What coffee buyers are looking for is a coffee sourcing version of the village health guide: “Where There is No Cooperative.”


Thriving cooperatives can be found in coffee-growing communities throughout Africa, Asia and Latin America.  But the success of the cooperative model is not universal.  There are plenty of coffee-producing countries in which cooperatives fail to thrive.  Participation in the Fair Trade system seems to suggest as much, in terms of both the total number and distribution of cooperatives in the Fair Trade system.  There are only 322 FTC coops worldwide — a modest number considering that more than 20 million families owe their livelihoods to coffee farming.

Colombia alone has more Fair Trade Certified coffee cooperatives than all of Africa.  So does Mexico.  And Peru.  For Latin America as a whole, the number of FTC coffee coops is almost 5 times the number for all of Africa and Asia combined.  

If participation in the FTC coffee market is any indication of the global health of the cooperative model, it seems safe to say that while coffee cooperatives may be thriving in parts of Latin America, they are ailing elsewhere.


  • Value.  Organizing cooperatives is hard work.  Managing them democratically can get messy.  And overcoming the structural disadvantages of smallholder farmers is challenging for even the best-run cooperatives.  Cooperative organizations must deliver clear value to their members to justify all the effort involved in forming and managing cooperative enterprises.  Coops don’t always meet this threshold, especially in environments that are competitive (lots of channels to market) and hyperconnected (less reliance on farmer organizations for access to information).
  • Coffee sector governance.  In some cases, coffee boards or national-level coffee marketing organizations link farmers to markets by law, tradition or both.  Even when they are free to organize themselves into cooperatives, poor smallholder farmers may prefer the security and services offered by national-level coffee organizations to the risks associated with independent organization.
  • Conflict and revolutionary politics.  In some parts of the coffeelands, organization can be perceived as a threat to the interests of armed actors.  I vividly recall traveling with a Peruvian coffee coop leader years ago during a speaking tour of Catholic parishes and universities in the Philadelphia area.  I was translating for him during his presentations, in which he would characterize as “very difficult” the period during which he assumed the leadership of his cooperative.  I would take “translator’s license” at this point in his presentation to provide context for audiences who didn’t understand what it meant to do grassroots organizing in the mountains of Peru during the 1980s: “very difficult” meant that hundreds of cooperative members resigned after the Shining Path systematically assassinated the cooperative’s leadership, and that as a young man he took the reins of the cooperative and worked patiently, courageously to bring fearful farmers back into the fold and rebuild the organization.
  • Culture.  Academics and researchers hate the attribution of observed behaviors to culture, which they consider to be less-than-rigorous — the default for explaining all behaviors that can’t be measurably linked to other, more concrete motivations.  But the notably disparity in the prevalence of cooperative organization among smallholder coffee farmers across countries — and even across regions within the same country — suggests that there are cultural factors at play.  One example is the stigma that has attached itself to community organization after revolutionary processes swept through so many coffee-producing countries during the second half of the 20th century.  In these countries, cooperative organization can still be perceived as a radical act or a sign of a specific political affiliation.


The absence of formal cooperatives in a particular coffee origin does not necessarily mean that farmers are not willing to work hard to foster the development of their communities or get a fair shake in the marketplace.  The decision not to organize may be as logical in one context as the decision to organize is in another.

Fair Trade USA’s decision to open the U.S. market for Fair Trade Certified coffee to unorganized farmers reflects the conviction expressed by CEO Paul Rice during our recent meeting:  “Fair Trade of the past was amazing.  And absolutely not scalable.”  The decision comes as coffee buyers are searching for alternative mechanisms to link smallholder farmers to market in ways that are consistent with prevailing industry standards for quality, traceability and sustainability.  Fair Trade USA’s detractors may see this coincidence as more evidence of its market orientation.

As a development organization we remain focused in the field on understanding how alternative paths to market may create opportunities for the millions of hard-working smallholder farmers not currently well-served by cooperatives.  These farmers have a socio-economic profile similar to those currently organized in cooperatives in the FTC marketplace.  They need and deserve the benefits that FTC delivers just as much as members of smallholder cooperatives.  In fact, the circumstances that have hindered their organization may make them even more vulnerable.




  • Nema Etheridge says:

    Why do cooperatives need to be universally accepted? I thought one of the problems with development now-a-days was that there was too much of an emphasis on the “one-size-fits-all” approach. What doesn’t work in some countries, might work in others.

    It seems like there should be more of a focus on making the FT system work well where cooperatives and small farmers are already engaged rather than creating a whole new system because this one hasn’t turned into a easily replicable product.

    I thought Bill Fishbein’s comment on your last blog post was very telling. FT wasn’t supposed to be “easy.”

    • Michael Sheridan says:


      Thank you for weighing in here. I think we may be trying to make the same point about one-size-fits-all approaches, only in different ways.

      As it stands, Fair Trade Certification for coffee has a one-size-fits-all approach — coops are the only model of organization eligible. I am suggesting that that since the cooperative model doesn’t work well everywhere for smallholder farmers, there may be some merit in moving away from the coop-only model to accommodate other smallholder farmers — a retreat from a one-size-fits all approach of the Fair Trade Certification system for coffee.

      Sounds like you are suggesting that we shouldn’t try to broaden the Fair Trade Certified coffee market to make room for unorganized smallholder farmers, but rather focus on deepening the benefits to smallholder cooperatives and find another approach that may work for unorganized smallholders.

      Both approaches are coherent. The former may undermine the incentive for cooperative organization, while the latter may exclude worthy farmers from participation. Not an easy choice.


  • Jonathan says:

    Nice piece. And, I feel an important part of the context has been left out. Fair trade labeling was promised, over and over, to be in the hands of small scale farmers and for their benefit. The decision by FTUSA to radically change the terms of the labeling game was done unilaterally without consulting any of the organized groups that democratically represent small farmer organizations. If you think about fair trade as part of their intellectual property, FTUSA has taken it, changed the terms of use without consulting the farmers. This has been experienced as disrespectful and the return of colonial reality by many of the farmers I have spoken with.

    Whether you agree with this new model of change or not, I believe it is important to distinguish between the different layers of conflict. Coops don’t always work in every cultural context. Unilateral decision making on behalf of a movement is being met with concern, anger and disappointment.

    • Michael Sheridan says:


      Thank you for the comment and the reminder that the lack of transparency and consultation in this process is not “merely” a matter of courtesy or respect, but raises again the fundamental question that has dogged the movement for so many years about the governance of the Fair Trade system in general, and the Fair Trade coffee model in particular. You and other visionaries created the Fair Trade coffee model, with and for smallholder farmers, through a process that was open and participatory, involving farmers at origin, consumers in the marketplace and lots of folks in between. It is not appropriate in my mind to talk about ownership, but rather stakeholder voice and participation in decisions affecting everyone in the FT ecosystem. Decisions on Fair Trade Certification with far-reaching impacts have been made in the past without significant participation from other stakeholders, but never perhaps one of this magnitude. The reaction from producer organizations and their advocates to the process that led to this decision seem natural and just.


  • Matt Warning says:

    Like so many of your posts, this is a clear and informative exposition of the issues, Michael. Thanks,

  • Jason says:

    I see this as spin.

    Fair Trade USA set off a swirl of controversy with its recent decision to open the U.S. market for Fair Trade Certified coffee to estates. Lost in the furor was the fact that Fair Trade for All won’t just open the door to estates. It will also create new opportunities for unorganized farmers — a measure that has the potential to expand the benefits of Fair Trade to smallholders in places where cooperatives have not thrived.

    In one fell paragraph the author glosses over FTUSA opening up their market to estates/plantations and succeeds in pitting small producers who belong to co-ops against small producers that don’t belong to co-ops. This is not the issue and is FTUSA really creating opportunities for unorganized farmers or are they simply creating a corporate friendly (meaning cheaper) source of ‘FT’ coffee off the backs of these unorganized farmers? There is no reason why FTUSA could not have gone to their traditional producer partners and expressed FTUSA’s desire to expand the US FT market to unorganized farmers.

    FTUSA, like other companies in food, are using farmers, in this case the unorganized farmers to legitimize their undemocratic actions and the opening up of coffee to estates. Essentially, FTUSA is saying, ‘Its okay that we’re acting dictatorially, its going to benefit the unorganized farmers.’

    The reason we are in such a mess, Wall Street bailout, black site prisons, torture condoned by presidents etc…is that the rule of law is not being followed. When the rule of law is not followed the rule of men takes over and the negative consequences that follow.

    Bottom line is that FTUSA did not consult and is making up their own rules. This is inexcusable.

    • Michael Sheridan says:


      Thank you for your post. I am sorry you see this as spin.

      I understand your frustration with the process by which FTUSA made decisions that have the potential to roll back the gains made by smallholder farmer cooperatives during the first generation of Fair Trade Certification. I share your concerns about process, and addressed the issue at length in my post on the governance of the Fair Trade system.

      To be clear, I have not seen or heard FTUSA try to shield itself from criticism on the estate issue by citing the potential benefits of the FT4All vision for unorganized smallholder farmers, as you suggest near the end of your post. I did not mean to suggest FTUSA had done so.

      I chose to highlight this element of the FT4All strategy. I did so for two reasons: because it seemed to be getting less attention than the imminent entry of estates in the U.S. market for FTC coffee, and because the issue of alternative approaches to linking smallholder farmers to markets is salient to industry actors and CRS as a development agency.

      Ever since I started working on Fair Trade and smallholder coffee in 2004 – and probably even before that – the prospect of Fair Trade Certification for estates has been a lightning-rod issue. When I heard the FT4All announcement, I thought immediately (and exclusively) of how the decision to admit estates would affect smallholder cooperatives. In reading the reactions to FT4All online, I got the impression that others had the same reaction. I later realized the potential opportunity that FT4All represents for unorganized smallholder farmers. I wanted to post some reflections from the perspective of a development agency that has worked hard for many years in Africa, Asia and parts of Latin America to find mechanisms to link these farmers reliable to competitive export markets, with limited success. Turns out we are not alone.

      We are starting new coffee programs right now in Haiti and Narino, Colombia. Both represent origins of keen interest to the specialty coffee market where coops have not thrived. In both cases, we have had discussions with sustainable coffee importers and roasters about their interest in sourcing from these origins and their uncertainty about how to proceed in the absence of the kinds of cooperatives that are so common in Central America and Mexico. In these origins, unorganized farmers will not be competing against coops, because there aren’t the kinds of coops in these origins that have made Fair Trade a viable option for smallholder farmers elsewhere. Against that backdrop, I wanted with this post to suggest that the dimension of FT4All related to unorganized farmers may create some new opportunities for folks who are seeking them, both at origin and in the marketplace. The big question in terms of impact is whether it can do so without significant negative impacts on smallholder coffee coops currently in the FT marketplace.


  • Dear Michael,

    Thanks for this interesting and well-thought out piece about co-ops and coffee sourcing. I would have to agree with Jonathan and others that we are starting from two different places in this particular debate. TransFair USA is looking at the needs of the coffee industry to find quick, easy supplies of coffee to get into the market. Since they believe that there is not enough coffee (tea, bananas, etc.) coming from small farmer organizations, they must look elsewhere to meet the market demand.

    The question goes back to what the purpose of Fair Trade is. If the purpose was – and I maintain, should be – to support democratically-run, transparent organizations of small farmers to get market access and to build alternative supply chains from small farmer organizations to democratic structures in the United States with an informed and engaged citizenry (aka consumers), than TransFair’s model – and the way they are choosing to implement it – is not only counterproductive, but threatens to destroy 25 years of hard-earned progress.

    If the central point is how to get more coffee into the system in the quickest way possible, than yes, I would agree that by lowering standards, certifying all producers, and accomodating the needs of large corporations, Fair Trade For All makes sense.

    Michael, I understand that you are concerned about the welfare of unorganized farmers and that when companies come to you looking for ways to buy more products, you would naturally want to help them find supply through other means. Many of us, including the representatives of small farmer co-ops, are also concerned with the welfare of those farmers who work on plantations. But, no one has yet to document that by flooding the system with all these new “Fair Trade products” coming from estates and plantations, that the situation of these workers is dramatically improved. Nor am I claiming that there are not plenty of decent landowners, well-run plantations and estates where workers are treated well.

    I simply believe that large plantations and estates have a much easier time reaching the market and that there are many more government programs, bank credits, technical assistance, etc. out there to support their work. To protect and empower farm workers labor unions, human and worker rights organizations, government regulations, and if needed, consumer boycotts exist for these purposes. All of these tools should be strengthened. Just please don’t call it Fair Trade.

    For more information about the origins of Fair Trade and why these two paths run so contrary to each other, please read Rink Dickinson’s keynote address before the InterReligious Task Force on Central America:


    Phyllis Robinson
    Education and Campaign Manager
    Equal Exchange

    • Michael Sheridan says:


      Thanks for your good comments and the link to Rink’s talk.

      Thanks, too, for the opportunity to clarify that independent smallholder farmers are both the subject and source of our interest in better understanding the potential opportunities created by FT4All.

      Your comment focuses on unorganized workers on estates and plantations. While my limited personal contact with permanent workers and seasonal laborers on coffee estates suggests to me that these groups are highly marginalized actors in the global coffee economy, we do not commonly engage with them in our work on agriculture and agroenterprise in general, or coffee in particular. They are not the subject of our interest in FT4All. Our work is almost exclusively with smallholder farmers, many of whom are not organized in cooperatives. They represent the primary subject of our interest in learning more about FT4All.

      Your comment also seems to suggest that our recent discussions with coffee companies seeking new smallholder sources for their coffee is the source of our interest in FT4All. These conversations have been important, but helping coffee companies innovate their sourcing models is not the source of our interested in FT4All.

      Our interest is borne of a longer-standing commitment to some of the people we serve overseas – “the smallholder client group we work for,” as one of my colleagues recently put it in an internal discussion of FT4All and the potential threats and opportunities it presents.

      The smallholder farmers we support in Africa and elsewhere who are not linked to cooperatives are actively seeking other ways of linking to competitive markets. We try to help them develop new paths to market, but folks in the private sector generally are not very interested in exploring ways to source from unorganized smallholder farmers. The interest that coffee companies have expressed to us in learning more about what might be possible outside of cooperative channels is, in our experience, uncommon. We want to understand whether there is a model under development that can succeed where cooperative mechanisms have not in helping the millions of currently unorganized smallholder take advantage of opportunities in competitive markets.

      It is not clear to us whether FT4All will deliver that model.

      What is clear to us is that moving new unorganized smallholder farmers into the FTC coffee market won’t represent any kind of progress if they merely displace the organized smallholder farmers already participating in that market.


  • Pieter Koerts says:

    Dear Michael,
    Thanks for your thoughts about the “split” in Fair Trade land. I take this opportunity to ask for information. I am trying to find quantative data on the following about coffee growers also to get some perspective about the importance of coffee growers coops:

    Of the world coffee production what are the estimated shares of the following categories:

    1. share of the producer coops (I heard a share of 8% but could not that confirmed)
    2. share of the large estates ( what are in FT sense large estates >xxha.)
    3. share of unorganized smallholders (less than 10ha?)

    Once we have an estimation of the above market shares we can assess the importance of the USFT decision and the impact of the FairTrade movement in coffee up till now.
    Looking forward to your reaction.
    Pieter Koerts, Amsterdam

    • Maayke R says:

      Hi Pieter,
      What is your research exactly about?
      I am currently conducting a qualitative analysis on the Fair Trade split, after doing research in Brazil visiting FT coops. Maybe we can help eachother out.
      Hopefully we can get in touch,

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