Fair Trade Coffee in Peru: An Economist's Notebook

Amherst Fair Trade News and an Op-Ed

2008-03-19T07:57:00.000-07:00

Before I include this Op-Ed I wrote for the Amherst Bulletin last fall, I should mention a few important news items:

- Amherst, MA is now the third Fair Trade Town in the United States, after Media, PA and Milwaukee, WI. The vote took place at last fall's Town Meeting. This achievement could not have taken place without the tireless efforts of Yuri Friman, coordinator of the Amherst Fair Trade Partnership Committee.

- The Amherst Fair Trade Partnership Committee has established a sister organization relationship with Oro Verde, where I did my research. Yuri and his family recently spent a week in Lamas, exploring the coffee fields and meeting the farmers and co-op staff. They had a wonderful time. We are looking forward to future visits between the Pioneer Valley and Oro Verde!

- UMass Students for Fair Trade has been re-established, thanks to the efforts of Rebecca Hamilton. We've got a few different events in the works, among them a Fair Trade Coffee House this spring.

- The second year of Living Routes' "Fair Trade and Bio-Cultural Regeneration in the High Amazon," the brainchild of Prof. Frederique Apffel-Marglin, took place this past January. It marked the inauguration of Oro Verde's new Ecological Center for training and education. Though the program had a few difficulties, most notably student health and center logistics, it was an overall success. I think everyone learned a great deal.

- The Amherst Fair Trade Partnership will be bringing Oro Verde farmer, Alto Shambuyacu community member and president of Oro Verde's Audit Committee (Consejo de Vigilancia), Manuel Tuanama Fasabi, to the Pioneer Valley area this May. We are very excited for his visit!

Here's a link to an Op-Ed I wrote in the Amherst Bulletin last fall promoting the Fair Trade Towns move. While I haven't had the time to promote the article to a wider media audience, I thought at the very least that you, dear readers, would appreciate it.

http://www.amherstbulletin.com/story/id/64246

just back from Alto Shambuyacu!

2007-01-23T08:00:00.000-08:00

Allima punchaw waukikuna panikuna! (Good morning brothers and sisters! in Quechua) Just returned from 4 days visit to native community Alto Shambuyacu! Wonderful time it was. Just some highlights - harvesting coffee in the morning, lunching in the tambo (cottage) of one of the socios (members) of the co-op, with some mishkichado (honey and cane liquor) ... harvesting organic rain-fed rice from the field and then finding our way back through the creek where we picked snails and crabs for dinner (mmmm! sauteed snail! delicious!) ... building the wall of a house of mud and straw, stomping around in it barefoot to get a plasterlike paste ... parties and talent show every night with singing and dancing, Gabe and I played some jazz and the local band played their traditional tunes while we danced - Gabe, Zoe, Julia, and Becky performed a spontaneous dance - the Vice President of the co-op, who lives in the community, sang - they staged a mock Carnival with mask dance - we all acted out our trip in improv theater - I sat in with the band the last day for the going-away party... baking traditional breads, rosquitas (from yuca flour), puchku (yuca and corn with sugar, fermented 1 hour with corn beer called chicha and baked in the earthen oven), and biscochuelo (a kind of pound cake made with 60 eggs!) ... planting trees on the last day - I planted two mahogany trees - we all became godparents... I am the godfather of the two children of our host family. Amazing host family, Ronald and Betty and their kids Jonathan (9 years) and Cindi Pilar (19 days!) ... Ronald is ex president of the sectoral committee for the co-op from the town ... Betty is the ex president of the co-op´s women´s committee ... the new sector president is Manuel, a great person, so relaxed and welcoming to all of us. More about this experience later - it is a great beginning of something I think will last a long time. Love to everyone!

Enjoying Lamas!

2007-01-11T09:35:00.001-08:00

Hey everyone! I´ve been spending the last 2 weeks TAing for a Living Routes course on Fair Trade, native culture, and ecology here in Lamas, in the northern part of Peru. For details please check out our website: http://www.livingroutes.org and search for the Peru course. It´s a great group of students and it´s been a lot of fun. We´ve spent the last 3 days with Dean Cycon, pioneering Fair Trader and founder of coffee roaster Dean´s Beans: http://www.deansbeans.com. Dean has generously shared with us fifteen years of knowledge and experience in the Fair Trade coffee business, in three four-hour lectures jam-packed with information, passion, personal narrative, and social critique.

Dean and Oro Verde, the coffee co-op we´re working with here in Lamas, have just reached a historic agreement - the first written long-term (i.e., multiyear) Fair Trade contract between a roaster and a co-op. Way beyond a higher price, this agreement spells out a series of mutual projects - in the areas of product diversification, marketing, environmental protection, and community development - that Dean and Oro Verde are going to do together. With the help of Dean and Oro Verde, our study group will write a draft of this agreement, and research and explain every element of it - the economic, social, environmental, and cultural issues and personal stories that lie behind the projects. In this way, we will help make visible to our colleagues and friends in the North the previously invisible lives of the growers. We´re psyched!

Well, there´s a lot more to tell, but no time to tell it just now. I ended up spending over a month there in Pangoa, from November 21 to December 23, and learned a ton about cooperatives, coffee, organic agriculture, local ecology, and Fair Trade - among other things! You´ll hear it all in good time.

Huaycos, waterfalls and bus rides

2006-11-21T16:15:00.000-08:00

I am writing from the offices of the Pangoa coffee co-operative, in the little town of San Martin de Pangoa in the central jungle. It is located in a pretty little valley surrounded by mountains. Tomorrow I´m going to go out and spend some time in the chacras (fields) where the coffee, cacao, honey, fruit, and other products are cultivated. But today I sat inside and listened to the co-op´s budget. It was an endurance test, but also an educational experience: I´d never really thought about an agricultural organization in this much detail before. Not surprisingly, there are a lot of elements that go into cultivating, processing and marketing a co-op. A big one is transport: the members mostly don´t have cars, and so the co-op is entrusted with the task of driving the many miles on rocky dirt roads required to collect the members´ coffee. The resulting wear and tear on the trucks makes the maintenance budget for transport enormous, not to mention the gas bill.

Infrastructure. You don´t think about it much until it stops working for you. Another example with the roads: I just went to a conference in Tingo Maria, a town about three hundred miles north in the jungle. The road that goes from Tingo Maria towards Lima climbs up into the Andes to a town called Huanuco. The road between Huanuco and Tingo Maria is extremely prone to washouts, or "huaycos." On my way to the conference, we were delayed two hours because of a huayco. The day I planned to leave, the road was washed out entirely and wouldn´t be available until at least the next day. Along with a fellow gringo named Steve, who had a plane to catch, I caught a taxi to the beginning of the huayco and walked across it with my backpack and computer. There were six mudslides encompassing about a kilometer of road, bracketed on either side by about a hundred trucks lined up going to and from Tingo Maria. Some of those trucks carried perishable items, like pineapples.

Tingo Maria has a bad reputation as a coca town, but it´s actually safe and friendly, and is located in a beautiful setting, with a national park, caves and waterfalls. I´ll post some pictures.

Tonight (at least in theory - the co-op managers are still meeting), Esperanza, Pangoa´s general manager, and I will go over the first draft of my survey. Fingers crossed!

Lightning jungle adventure

2006-11-11T16:34:00.000-08:00

Whew! Just returned from a whirlwind trip to the jungle, planned and executed at a moment's notice. I had been invited by my colleague Amilcar Buleje at the Junta Nacional del Café to attend an event somewhere in the jungle a couple weeks beforehand, and the day before we were supposed to leave, I canceled on him, given two facts: first, that I was in the midst of writing a proposal, and second, that I had been staying in a hostel so uncomfortable that I was feeling like roadkill. I've since moved to a MUCH more comfortable spot, with Internet in my room, above a restaurant with a killer espresso machine and a waitress who delivers the sacred beverage to my room on demand. I should also mention the Brazilian musicians who arrive every Saturday afternoon and play through the evening. Yes, they're playing right now - I just finished enjoying them up close over a Cusqueña, Peru's best beer, and am now enjoying them at a distance.

Well, cancelling on him was a mistake: on Tuesday evening, when we had been scheduled to leave, a feeling came over me that I'm sure some of you are familiar with. It was the feeling of missing something. What was it that I was missing? Well, at first I thought it was the fact that I didn't have dinner plans, which I remedied fairly quickly. Then on Wednesday afternoon, as I was laboring for twenty minutes over a couple sentences of the sample chapter I am scheduled to send away for another scholarship, I realized what it was: I was supposed to be in the jungle.

What happened was this: I presented the idea of going to the event to Lorenzo Castillo, the Junta del Café's director (title: Executive Secretary). I have probably stressed this point before, but I will stress it again: Lorenzo Castillo is an amazing person, among the wisest people I have encountered on Earth up to this point. This man has been largely responsible for the revival of Peru's coffee co-operative movement. And at this moment, he decided not to go to the event, and offered me his seat on the plane. Of course I resisted, until it became clear that this was what he wanted. So I went.

How it happened: woke up at 3:30 AM Thursday morning for my 5:30 AM flight to Ayacucho. Okay, my 5:30 AM flight to Huamanga. Everyone outside this region calls the city Ayacucho, but it is not called Ayacucho, it is called Huamanga, and it is the capital of the department of Ayacucho. The University of Ayacucho (at Huamanga) has a strong philosophy department, and one of its professors was a radical named Abimael Guzmán. Guzmán went a little (OK, a LOT) off the rails with his Maoism, and the result was the Sendero Luminoso, which terrorized Perú during the 1980s and 1990s. They are largely nonexistent today, and Huamanga is a beautiful, bustling colonial mountain town replete with churches and the famous "retablas," or dioramas featuring religious themes and scenes of peasant life. These dioramas, to me at least, look quaint and folksy, even kitschy, outside their context; in the context of the reddish-brown mountains, intoxicating elevation, and stately Spanish colonial architecture of Huamanga, they are beautiful and not to be missed.

From Huamanga I caught a combi (microbus) to Sivia, where the cooperative El Quinacho is located. Sivia is in the jungle at, my guess, 2000-3000 feet elevation. Huamanga is at 9000 feet or so. From Huamanga, you scale two passes, each of which is around 12,000 feet elevation. Yes, that's a lot of elevation change, isn't it? This kind of journey is what Peru is all about, and what makes it both beautiful and a uniquely difficult place to travel, live and work. I don't know of a lot of countries with that type of geography, and not to be a geographical determinist here, but, to me, this is a big obstacle to an integral Peruvian development strategy. The country is three regions: "costa, sierra, y selva," or coast, mountains, and jungle. It is a source of national pride, but also a source of difficulty: traveling between one and the next is time-consuming, and the three regions possess distinct cultures.

We got to Sivia around 6 PM, or rather, I should say, Pichanari, at which point I hopped a canoe across the Rio Apurimac. This was the second crossing, the first of which occurred in the microbus, balanced atop a platform steered by a guy with an outboard motor. Sivia is a sleepy little jungle town where the co-op El Quinacho plays an important role. They occupy a block of the town, with a large warehouse at one end and an office at the other. I had initially told the manager I couldn't make it to his event; Wednesday, the day before I left, I told him I had changed my plans and would be arriving the following day. However, he had been so involved in the event that he hadn't checked his e-mail, and so was startled when I showed up. From his reaction, I guessed that he was thinking of me in a similar category to the inspectors and financiers who periodically show up around the co-op and instigate various forms of rigorous group processes, requiring serious preparation. He relaxed a bit when he realized I was just there to hang out and chat, which I think took a while. Really, that was all I was there to do - and, of course, schedule a time for a rigorous and participative process somewhere down the line. Can you see the tightrope I am walking here? Don't get me wrong, it is fun.

I spent the evening chatting with the co-op's elected officials about their organization, its history and its current state of affairs. El Quinacho was founded in 1970 as part of the national cooperative program started by the populist leader Juan Velasco. In the 1980s, however, terrorism and drug trafficking rocked the Valle del Rio Apurimac (VRAE) where the co-op is based. It had to shut down in the late 1980s, as military took over the building and used it as a base of operations against the terrorists and traffickers. In the 1990s, when the violence subsided, the co-op started up again and is currently in a period of expansion. The leaders were proud of the number of new members that were signing up to join its ranks, and were equally proud of its 100% organic orientation. They took me to dinner, and for a walk around the town, which ended at the Quinacho tree, the co-op's namesake, planted when the organization was founded. That was a nice moment. The paradox of co-ops is that they are at once business enterprises and social institutions: meant to generate profits and create meaning at the same time. This is a reason why neoclassical economists hate them. You're supposed to do your business 9 to 5 and create meaning somewhere else. That is what economic efficiency means. Organizations are supposed to exist for single purposes: schools, for the production of knowledge; firms, for the pursuit of profits; families, for the reproduction of the species. Et cetera.

The critique of this point of view could be of book length. Steve Marglin of Harvard is in fact writing a book of this nature entitled _Economic Myths_. I'll leave it with one question: suppose the notion of efficiency were re-construed such that an organization which served more than one purpose was considered to be efficient, since it fulfilled more than one human need at the same time?

The next morning I attended the second day of the event, dedicated to fostering sustainability and competitiveness among the coffee growers in the VRAE region. Unfortunately, attendance was poor. Perhaps the meaning invested in the co-op by its leaders had apparently not penetrated down to its base. Or perhaps it was simply a question of logistics. From one man in the audience I heard a scathing critique: the socios (members) would only show up if there was alcohol. From Lorenzo I heard a kinder response: the members live far away from the town, and to attend the meeting is a huge sacrifice of time and effort. To foster member participation, the co-op must bring its message out to the members' homes. I will not take a position at this time on which factor is more important for participation, culture or logistics. My hypothesis is that each feeds on the other in a vicious circle.

It was unfortunate that most (though not all) of the members missed out, because the presentations were very good: Lucila Quintana, a fiscal manager at the second-level cooperative CECANOR and the director of CONAMUC, the national organization of female coffee growers, spoke on gender equity in the coffee cooperative movement, and Israel Pisetsky, general manager of CACVRA, the neighboring (and larger) coffee co-op, gave an excellent talk on trends in the global coffee market and the importance of Fair Trade and other certifications. (Note to all MOT: it did not escape me that the chances of this man being of Jewish origin, judging by both name and face, are about 98%, however, I didn't have a private moment to ask him.)

At that point, it was time to go. Quick trip! The route back had the advantage that I was accompanied by Sra. Quintana, Carlos Huaroc of the Naranjillo co-op, and organic inspector Enrique Hacker. Carlos and Enrique were both excellent guys, who had presented the first day and whose work I had missed. The disadvantages: remember that enormous descent? Think about it in reverse. Also, imagine the second 12,000-foot pass in the rain, on a dirt road at night. We arrived in Huamanga at 9 PM or so, in time to eat a delicious pizza and pack Carlos and Enrique off to Lima on the night bus. Lucila and I rested our weary bones in a nice hotel just off the plaza, and caught the 6:45 and 7 AM planes back to Lima. And so it was.

The issues raised during this trip were much more than I have addressed here: it is Saturday evening and I am in the mood to write about personal experiences. I will save the political economy for the next post.

Latin American Fair Trade news and more

2006-11-08T19:41:00.000-08:00

Well ... I know it's been a while since my last post. It's been a busy couple weeks as I prepare for my first site visit and apply for funding for this project for next year. Meanwhile, tomorrow I'm heading out to an encuentro in Ayacucho at a co-operative called El Quinacho. It will be my first time outside Lima and away from the coast! And it is about time - for fresh air, new experiences, and the all-important reality check.

But first, some catch-up:

Two weeks ago I attended the CLAC - Coordinadora Latinoamericana y Caribeña de Pequeños Productores de Comercio Justo - or, Latin American and Caribbean Small Fair Trade Producers Association - in the Dominican Republic. It was a very interesting conference, full of co-op representatives, traders, and members of labelling initiatives. I ran into Paul Rice, CEO of TransFair USA, whom I worked with as an intern last summer (2005); he introduced me to Miguel Zamora, project manager for Global Producer Services, which brings technical assistance to producers at origin (i.e., in their home countries.) Learn more about them at http://www.fairtradeimpact.org. It's my opinion that the linking of Fair Trade with agricultural development and commercialization projects in developing countries is essential to the future of the movement. So... more about that later.

The conference opened on Thursday morning with opening remarks by the current (and outgoing) CLAC president, Victor Perezgrovas of Mexico, followed by a fiery speech from the Dominican Secretary of Agriculture, who talked about the struggle of small producers in Latin America to get fair prices for their products in a world dominated by transnational companies from the North. This is something most politically aware and educated people in the U.S. are aware of, I _think_ - it's amazing sometimes what people don't know.

Then there were reports from the CLAC Board, and reports from each producer network. Bananas were the most interesting. The issue of Fair Trade bananas is the most interesting, because in that industry, small firms compete directly with transnational companies that own plantations. This means that allowing transnationals into Fair Trade is a lot more complicated than in coffee, where you can allow the big trading firms to buy small producers' coffee without admitting large plantations. In bananas, if you let Dole in, you let them in all the way: Dole-produced bananas get certified Fair Trade. At least that's my current understanding of it.

Small banana producers were afraid that letting the transnationals into Fair Trade would force them out of the market. I don't have data to back this up, but it seems like a natural thing to be afraid of. The problem, as Paul Rice explained it to me, was that the shipping channels for small producers from Latin America to the U.S. are inadequate to handle bananas. They are too slow. So shipments of bananas from small producers were arriving on U.S. shores rotten and being thrown out. The transnationals have their own transport lines, meanwhile. The idea behind allowing bananas produced by transnationals to be certified Fair Trade was that the small producers would be allowed to use the transnationals' shipping. However, for the small producers, allowing transnationals on board was unthinkable. For that and other reasons, the expansion of Fair Trade bananas is currently stalled.

I'll skip forward to Friday, where there was a very interesting presentation by Chris Bacon on the competitiveness of the FLO (Fair Trade) certification model with respect to other sustainable coffee labels. Most of the other labels, from Utz Kapeh to Starbucks' Cafe Practices, use a pure premium model. So in a low market, they still may end up below production cost. However, in a high market they out-compete Fair Trade. This touched off a lengthy discussion about raising the premium. Later in the day, a proposal was generated to raise both the premium and the minimum price. The more business-savvy producer representatives were against it, but this proposal passed with about 95% approval.

Now to Saturday - I'm giving you the whirlwind tour here, a ton of other stuff happened that I'm not going to go into - the CLAC elections took place. Raul del Aguila from Peru's COCLA was voted in. COCLA is the leading coffee co-op in Peru, and the country's fourth-largest coffee exporter. 8,000 families are members, divided into about twenty-five first-tier organizations who send delegates to the General Assembly. The co-op is a smartly run business, which sells a suite of highly differentiated coffees to a variety of niche markets the world over. They use local, national, and international capital markets to raise funds for investment, and are very active in the Junta del Café.

So now the CLAC is moving to Peru, and opening an office in Lima.

It's an exciting time to be here, and to be doing this work.

I could write another twenty pages about the CLAC, but to keep things accurate, I'm going to wait to do so until I've gone over the recordings of the sessions I made with my hand-held digital recorder. I think it's worth the trouble.

More to come!

News and new experiences

2006-10-24T16:45:00.000-07:00

Some news that I didn't have time to report last post: the JNC's accountant, Segundo Gonzales, passed away suddenly in his sleep last Saturday of a massive heart attack. He was only forty-five years old and appeared to be in perfect health. He was buried in a short ceremony on Monday morning. We (meaning I and my friends at the JNC) got the news late and went to visit his grave that afternoon. It was weird and sad - this guy who was bouncing around the office cracking jokes one day, was suddenly dead the next.

He used to practice his (very rudimentary) English on me - often times when I was right in the middle of something. Most of you know how much I enjoy being interrupted ... needless to say, I wish I had appreciated him a little more. I think everybody felt the same way. He was the office buffoon, a roly-poly guy with a simple soul and a tendency to make inappropriate comments. People made fun of him and talked about him behind his back. I felt sorry for the guy and tried to hide my irritation when he would interrupt me in the middle of some important e-mail to any one of the High Muckety-Mucks and Grand Poo-Bahs that I seem to have become very fond of interviewing. (Met a great one today, by the way, but that's another story.)

So that was Segundo. Here today, gone tomorrow, but not forgotten. Rest in Peace.

Some other news on a lighter note. I mentioned that I went and talked with José Rivera from COCLA. What I didn't mention is that his office is on the same property as their processing plant in Callao (the port of Lima). And that I got a tour of the plant from one of his managers, Juan Jordán (who told me he was Michael's uncle, of course.) The plant was amazing - a labyrinth of blue pipes and tanks stretching about twenty-five feet in the air and covering probably a thousand square feet of space. Next time I go I'll take pictures.

The coffee comes into the processing plant in "parchment" form, which means that everything has been removed from the bean except for a little shell the color of parchment. (Bean is actually a misnomer - coffee is a seed. When I found that out it made me think differently about what I was drinking. I don't know why.) The coffee sits in a big tank until it's ready to be husked. Then it gets picked up by an endless conveyor belt of little tubs and sent into a big husking machine. Once it emerges from the machine fully husked, it gets whisked up a vertical blue tube into another tank, where it awaits being processed. At this point it's green or raw coffee, but the good beans are mixed together with a bunch of bad beans and even rocks and twigs. The rocks and twigs get sorted out via one machine, and then the beans get sorted by size via another. This machine is electronically controlled to adjust for size. You walk up a staircase into a control room where you can see the processing speed. You can also see five pipes reaching down from the ceiling to below the floor. If you open a little trapdoor you can look down below these pipes and see five jetstreams of green coffee beans flying into five little tubs based on the size.

This whole contraption, I should mention, is really, really cool to look at. I felt sort of like Charlie Bucket being taken on the grand tour by Willy Wonka. It touched on that primordial part of me that still likes playing with Legos and blocks, and toy trucks of course (although the first two were a much bigger part of my life.)

Then Juan Jordán showed me the inventory. I am a coffee lover, as some of you probably are too. Imagine being surrounded by something like two thousand sacks of raw coffee beans, each of which weighs at least two hundred pounds. They were sorted into stacks, with labels like "Organic IMO Naturland." Juan Jordán pointed out their classifications and their destinations. COCLA ships all over the world - Belgium, the UK, the Netherlands, Germany, New Orleans, Oakland. In 2005 it shipped 213,969 kilos of coffee for $23,958,567 worth of revenue. (I am reading those figures off a sheet.) In 2005 it returned $4 million in profits to its 8,500 families, adding to their income by an average of 20% above what they would have made selling on the private market (not counting COCLA's price premiums from selling to Fair Trade, organic, and gourmet markets.) It is the biggest co-operative enterprise I have ever seen or even heard of. Heard of a bigger one?

Today I went back to COCLA for another visit and was treated to a cupping. Cupping is the coffee world's word for professional tasting. At COCLA, it is what happens every time they get a new shipment of beans, to test their viability on the extremely varied markets to which they sell. For instance, a coffee with no major defects but with no particular flavor profile will get sent to the conventional market. Most likely you'll find some COCLA coffee at Trader Joe's - that'll be the organic stuff with nothing special about it, mixed in with a bunch of other stuff from different origins. But some of these cups were delicious, full of flavor, and those will be sold to specialty coffee companies like Colorado's Allegro Coffee, which has a brand that comes entirely from COCLA. The efficiency of COCLA's operation is enhanced by this process: no sense in selling a top-quality organic coffee with a unique flavor profile to a transnational that'll mix it together with any number of average to poor-quality beans.

This was my first cupping. Shades of Roald Dahl again. I get to combine this kind of stuff with social justice work? ... Did I mention I love this project?

More to come, of course ...

Progress - Slow but Certain

2006-10-23T17:02:00.000-07:00

Almost a month into this trip - my feeling is that the project is undeniably progressing, though slowly. From a casual list of four or five variables, my approach is expanding into a more comprehensive survey and interview format. These new developments are being heavily encouraged by my colleagues at the JNC and those I've met outside it. It appears that at least a significant number of the co-operatives I'll be working with are at significantly higher levels of organizational and management capacity than I had thought. They employ accountants and keep detailed records, to comply with the demands of their certifiers and NGO funders, as well as to analyze their costs and improve their productivity.

Yes, these are businesses, albeit ones unlike any most of us in the United States have ever encountered, in that they are made up of individual farmers instead of wage-workers, and these farmers are the struggling poor of the Peruvian high jungle, scratching out a living on tiny plots. Of course, anyone who lives in an agricultural zone of the U.S. will know that co-ops are not uncommon. Did you know that Sunkist, the orange producer, is a co-op, for example?

Growing up in Berkeley, I thought of a co-op as something progressive that came out of the 1960s and '70s and went out of fashion in the 1980s as the economy got leaner and meaner (okay, just meaner. Fatter and meaner, in fact.) That's not actually true. The co-op has been a viable form of agricultural organization for a long, long time. If anyone's got (lay readable) references for this, I'd love one.

What news? I've moved twice since the last post: first to a private home in Miraflores, Lima's international district, then last night to a hostel across the street from my office. Convenient and clean, with a private bathroom! Too bad the bed is uncomfortable. The housing saga continues.

New contacts:

- Alfonso Cotera Fretel, the director of Peru's Solidarity Economy Network (GRESP.) I met with him last Monday the 16th at his office. Cotera is interested in creating a Peruvian certification system for Fair Trade. It's currently in its early stages and it is not yet certain how it would interact with FLO. However, the idea is a good one: to create a system which is more directly accountable to its constituents, yet which is internationally accredited. Fulfilling both objectives is, of course, the big challenge. Last Friday was GRESP's first meeting, which I attended. The discussion was long and much of it went over my head, but I did record it and will be returning to it later.

- Gycs Gordon of gtz, the German development agency (their version of USAID). He was extremely excited about my project and wanted to connect me with a Peruvian college student doing her undergraduate thesis on Fair Trade. Thanks to Oscar Malca for making the connection.

- José Rivera of COCLA, Peru's biggest coffee co-op. Originally from a coffee growing family, Rivera studied business management and has gone on to manage COCLA's marketing division. COCLA is an extremely sophisticated business organization made up of, at last count, 8,500 families. They market to many, many channels, including Fair Trade, organic, and conventional, and produce at many levels of quality to meet specific importer demands. Rivera's opinion was that Fair Trade was an extremely useful development tool, but its best use was to teach producers how to compete in the specialty coffee market by producing high-quality products with specific attributes.

- Augusto Cavassa of Innovacciones, a network of agricultural development consultants. Cavassa is an amazing guy. I met him at the IEP (Institute of Peruvian Studies), who recently released the latest version of SEPIA, the yearly Peruvian agricultural economics journal. The latest version of SEPIA is full of relevant topics ranging from organic coffee production to globalization and social capital. (Note to UMass-ers and other alt-econ folk: the first person I met at this event was a man named Javier Escobal, a New School Econ Ph.D who had studied Bowles and Gintis's work!) At the SEPIA event, Cavassa told me the story of CECOVASA, a "central" or second-level co-operative made up of a consortium of peasants' associations based in the province (or "department") of Puno, near the shores of Lake Titicaca. Eighteen hours' drive from any major town, these growers worked out a complex system of quality control based on internal incentives provided to those groups that were most productive and delivered the highest-quality coffee. They live in one of the most remote regions of Peru - and in all of South America - yet have managed to become Peru's second-largest coffee co-operative. A couple days later, their general manager walked into the JNC's office. We met and exchanged a few words, including the question, "When are you coming to visit?" ... Good question, but the answer is a definite "Yes!"

I've met with Cavassa twice now, for two hours each, where he's provided me with enormous context and background for the development of my survey. Surveys are his specialty: he showed me one he was working on, a ten-page document aiming to provide a comprehensive profile of a rural organization (that's all I currently remember). He's encouraging me to take a closer look at the first-level producers' organizations. I am not currently sure how much time I will have to do this, especially since they are at different levels of formalization and overall economic development. We will see ...

More to come ... if you're reading this, please provide feedback on format and content - do you want more personal stories or are you more into the gory details of my topic? I'm aiming to provide a balance of both.

First Week's Fruits: Music, Food, New Contacts, and Encounter with Uncle Sam

2006-10-04T17:58:00.000-07:00

Officially one week since I arrived here - so much new to see and experience, and recount.

Saturday was nothing but pure fun - two BIG thank yous: first, thank you Frederique for encouraging me to bring my saxophone! Second, thank you Fernando for introducing me to your awesome friends! Marco picked me up around 3 PM and we went for a tour of the city, ending up at his place jamming with his band, drinking pisco and Peruvian wine, and talking history and politics late into the night.

Sunday night I discovered a wonderful restaurant around the corner from my hostel - absolutely delicious food, amazing ambience, and run entirely by people in their 20´s. Great people, extremely smart, hip Limeños and Limeñas. It´s not every day that I sit down to a delicious dinner of steak and mushroom risotto and chicha morada (that´s the local beverage made from a deep purple maize, boiled with sugar - it´s delicious) - only to have the chef walk out of the kitchen and start chatting with me! Angel was his name, a guy maybe my age, just out of cooking school; his sister Katy, an interior designer who did the décor, and his girl friend Cynthia behind the cash register. Very, very cool people, all. The restaurant is called "Porque Sí" which translates to "Just Because." Don´t let me forget to write Lonely Planet and tell them about this.

Yesterday was university day - met with UMass alum and Econ department chair José "Pepe" Távara at the Universidad Católica. Pepe (as he is known at UMass at least) has done some great work on competition and public service regulation. It´s also not an everyday occurrence for me to sit down to lunch with the former president of Peru´s Central Bank! Oscar Dancourt, a very smart man, a fan of Bernanke´s and an inflation targeter (no comment). The Peruvian economy is growing fairly quickly, exports are up and credit´s doing well. We agreed about Barry Eichengreen and Paul Davidson (thumbs up on the first, thumbs down on the second, sorry Jimsky). He said some other things but that´s all I remember.

Anyway, thanks Pepe for offering me Católica library access... the JNC will thank you too.

Spent the afternoon in the office of agribusiness economist Oscar Malca from Universidad del Pacífico, a school for business administration and economics - very, very smart and helpful! We had a great discussion and he set me up with contacts and data. A big thank you to Oscar and to Luz Díaz from Head-Royce for making the connection.

Today was my U.S. Embassy security briefing, which was mandatory for Fulbrighters. This is one experience I have to describe to you in detail. The Embassy is about ten miles outside the center of town (but still in town - Lima is huge), an enormous building surrounded by a security wall with one ingress, where Peruvians line up by the hundreds to get their visas, and gringos like me walk right in the other door. The building is an enormous block about ten stories tall with tiny little windows, and now there is a USAID annex part of the same compound, a darker color but similar design. (That´s right, it takes big guns to help poor people, right?) I walked up to Security Checkpoint 1, where they checked my cell phone, flash drive, and pocket translator, and put my bag through a metal detector. Then across an empty stone patio the size of a football field, and on through 14-foot-tall steel doors guarded by a sentry with a machine gun, to Security Checkpoint 2, with another metal detector. After that, I spoke to reception, and an escort came down to escort me past the Marine sentry guard (checkpoint 3?) upstairs and into a windowless office block. There I was met by a guy named Murphy (unfortunately, that was his actual name) who described crime and terrorist scenes in detail for an hour and a half to a group of about 15 of us. He told us not to go anywhere in the center of the country. (Note: the regions I plan on visiting lie to the east of the regions he showed, if anyone is concerned.) A bit troubling is the fact that some Senderistas are getting out of prison pretty soon, but who knows whether these are the main instigators or just peons who got seduced by the Maoism. At any rate, the information would have been a lot better received (by me, at least) if it hadn´t been delivered in an overall atmosphere of borderline-clinical paranoia. If I learned anything in Chiapas, it is that the best way to stay safe in an unstable zone is to stay close within a social network, of which I have quite a good one here in the JNC.

So that was my experience with Uncle Sam in Peru ... it didn´t seem like much of an embassy to me, more like a fort. I want to believe that this is a holdover from the days of the late ´80s and early ´90s when the Shining Path really did threaten a lot of people, or perhaps the Cold War, but I don´t, actually. I think the war on drugs keeps this mentality alive and kicking. I sensed a real reticence to engage with Peruvians by the U.S. government and their representatives. Murphy said some contemptuous things about Peruvians during the talk, and the overall atmosphere was one of distrust for the local people and a desire to wall oneself off from the society at large. He did say one nice thing about the Peruvian police at the end of the talk, but I felt it was too little, too late.

I am writing to you from an Internet station on a busy street in an ordinary part of Lima. The station is full of students of all ages, middle-aged and elderly women and men. It opens onto the street. I go to work every day in an ordinary Lima neighborhood - not the poorest, but not the richest, either. It feels comfortable, not such that I don´t have to be alert, but not menacing, either. Lima is a big city, and certainly full of social ills, poverty and petty crime. But as most seasoned travelers know, the most important things are to keep your wits about you, take basic precautions, and listen to the travel advisories and local people you trust.

The effort to build durable and mutually beneficial transnational networks of trust and co-operation is one of the main things that draws me to Fair Trade. The embassy experience just made me realize how important that aspect of the work really is.

saludos de Lima!

2006-09-29T17:21:00.000-07:00

Greetings from Lima!

It has been quite a three days - I have landed in the midst of a hard-working, committed group of people, in a vast, sprawling city. It's 7:20 in the evening and I'm at the offices of the Junta Nacional de Café - yep, still at work. Why am I still at work? Well, three reasons - there's a lot to do, the Internet's fast, and I've got to buttonhole the Executive Secretary and my advisor, Lorenzo Castillo, before the weekend comes and he goes to Switzerland for the week to battle with the corporate giants who are trying to establish a fake Fair Trade called 4C, or "Common Code for the Coffee Community." He's in a meeting now.

Those of you who are interested in coffee and social justice may have heard something about this 4C business. Don't believe the hype. From reading their documents between the lines, the 4C looks to me for all the world like a supreme example of Orwellian double-talk - an endless rigmarole of meetings, evaluation forms, declarations, panels, and "forums," the point of which is to generate additional piles of paperwork featuring a lot of vague, toothless jawboning about "sustainability," "participation," "communications strategies," "tripartite multi-stakeholder approaches," and the like, all of which is supposed to support a so-called "Code Matrix" the content of which is given exactly zero mention. Does this sound familiar to anyone? Participants involve - yes, you guessed it: Kraft, Nestlé, Sara Lee, and Tchibo (a huge importer). Also Oxfam, for some reason. I guess they think they can mitigate an otherwise unmitigated disaster? Who knows.

Last night a congresswoman came to meet with the Junta, and I sat in on the meeting. Interesting stuff. Lorenzo gave a fantastic presentation, in fact one of the best that I have ever seen. This is a man who works about twelve hours a day representing one of the most progressive national agricultural associations in the world. He is completely plugged into organic and Fair Trade channels, and has a deep understanding of the extreme poverty most coffee growers face. He is an extremely articulate, as well as warm and friendly man, besides. You can tell I'm excited to have him as my in-country advisor.

Details, details. Here are some good ones.

-At one point there was a law that set aside a portion of the proceeds from agricultural exports, including coffee, and invested that portion in local agricultural extension services. It was abolished under Fujimori, himself an agricultural economist, in the 1990s. Since then the problem of under-investment in agricultural regions has gotten worse. Hooray for neo-liberalism!

-Here in Peru, chemical-intensive agriculture gets favorable tax treatment over non-chemical, including organic, agriculture. In other words, Peruvian agricultural policy is exactly backwards. Lorenzo believes that this policy is designed to punish the growing methods of the indigenous people, and I am well inclined to believe him. An unholy alliance of modernism and racism.

-70% of Peruvian coffee trees are over 20 years old. This means their productivity is on the decline. There is a clear relationship in high Amazonian agriculture: less coffee means more coca. More coffee means less coca. Without investment, the sector will find itself back in the 1990s, when the high jungle was under constant threat of violence from both the government and the drug kingpins.

Well, the weekend's upon us. Time to go out and enjoy the Lima nightlife, full of peñas and pisco sours! More to come.

My first "field visit" and more

2006-08-17T09:33:00.000-07:00

So I was sitting in the Haymarket Café in Northampton on Tuesday afternoon, reading over some research materials (http://www.colostate.edu/Depts/Sociology/FairTradeResearchGroup/), and writing some e-mails, when who should I hear from but Dean Cycon, founder of Dean's Beans (http://www.deansbeans.com) and pioneering local Fair Trader. I've been wanting to visit Dean's roastery for a while now. "C'mon up!" he says. So with no delay, I get in the car and drive up to his place in Orange, an hour away. (I love having a schedule that allows me to do this!) That was my first visit to a coffee roasting plant. The greatest things about it were the people and the smell. It's great to meet people who enjoy what they do, while knowing that it contributes to a larger process of empowerment and development around the world. There is something special about coffee - last I read, 100 million people's livelihoods depend on it - and not the least amazing thing about it is its global nature. Coffee is perhaps the most global of global commodities. I saw the enormous sacks of coffee, 150 pounds each, stacked up in the warehouse, all coming from a different location across the globe. The confluence of Fair Trade with coffee is no coincidence - not only because of the crisis, which is still very real, but also because of the global nature of its production and distribution. Coffee, if produced and sold right (i.e., fairly) has the potential to bring together people from opposite ends of the globe into what FINE (the Fair Trade umbrella group) calls "a partnership based on dialogue, transparency, and respect." There are other products that can play this function - anything handmade, for example; visit World of Good (http://www.worldofgood.com), an extremely vibrant and rapidly expanding Fair Trade crafts importer co-founded by my good friend David Guendelman. It's also my opinion that music can play this function. More about this later. In the meantime, thanks, Dean, for the tour!

I've also been having some fantastic e-mail and phone conversations with great Fair Trade, organic, and gourmet importers. Thanks to Mark Inman from Taylor Maid Farms (http://www.taylormaidfarms.com) and Gay Smith from OPTCO or Organic Products Trading Company (http://www.optco.com). More to come!

The project evolves - Sunday morning dispatch

2006-07-23T07:56:00.000-07:00

Even before leaving town the project has evolved in a number of different directions - it was my original intention* to research the dynamics of the trade relationships between producer and importer. However, it's now occurring to me that I may be able to generate more comprehensive and reliable data if I choose to focus on the impact of Fair Trade on the strength of the co-operative organization itself. As my advisor Jim Boyce expresses, finding or generating a measure of overall co-operative strength will be a challenge here. The challenge is to come up with a way of integrating the financial, productive, social, and cultural health of an organization.

This is not a small question. Economists have been privileging financial health - measured in total wealth, profits, and growth of these variables - for as long back as there have been distinct people called "economists." I'm interested in something which is a little harder to define: the strength of an organization and the well-being of its members. Sure, this has to do with assets and profits, but also with health, education, nutrition, and that much-debated notion of "social capital" - or, if you will, solidarity. And in the case of Peru, the situation has been profoundly influenced by five hundred years of oppression of indigenous people, culminating in a partially successful but extremely authoritarian military-led land reform in 1972, and a continuous guerrilla war by Shining Path and MRTA (Movimiento Revolucionario Tupac Amaru) throughout the 1980s and 1990s. Part of co-operative strength, then, may be linked to the reclaiming of indigenous political and cultural autonomy. Question: how do the co-ops interact with local governmental structures? Does Fair Trade, through enhancing both profits and group solidarity, help coffee co-ops achieve a higher degree of political clout?

Stay tuned ...

*Original intention not meant in the spirit of conservative constitutional legal scholarship, but rather in the spirit of my good friend Micha Patri's stellar music group, the Original Intentions. ;-)

How I Got Involved in Fair Trade

2006-05-23T13:20:00.000-07:00

A couple years back, in 2001 while taking a course on Economic Development at UC Berkeley taught by Prof. Alain de Janvry, I heard tell of a crisis in the world of coffee. The price had crashed in 1989, leaving most of the 25 million coffee producers worldwide in dire poverty. In response to this crisis was born the movement for Fair Trade in coffee, whereby a third-party, non-governmental agency ensures farmers a price above the cost of production, and labels the products that meet their standards for the benefit of consumers. This way, we know that the people who we're buying from lived and worked under decent conditions.

This was the best system for poverty alleviation I'd come across yet. Instead of providing a pure cash transfer or handout, it rewards people justly for what they are already doing, and provides them with the income to do it better. It also deals with the problems of access to information and infrastructure that lie behind a lot of poverty issues. Coffee growers are selling into a market they don't know, either because they don't have access to the statistics through any of the usual channels - try getting the New York Times in a remote village in Peru - or they may not be able to read at all. The buyers, of course, have no incentive to provide this information and have every incentive to remain in control over the price the farmer gets.

So three years later, in 2004, after applying to graduate schools, enrolling at UMass, and spending a couple years primarily focused on macro issues, the Fair Trade issue came back to the forefront. I think what drew me back to it was a desire to return to the grassroots. Macroeconomics is a great discipline and perhaps one I will return to someday - but for those of us who like to see action on the ground, the macro perspective is a bit distant, like watching the Earth from a spaceship. It's good to go up in the spaceship and try to construct some valid model of the big picture, but it won't help you address local issues and it won't bring you into contact with people whose lives are shaped by these issues. Nevertheless, it was the macro perspective, being aware of global inequality, which got me into the search for grassroots initiatives and brought me back to Fair Trade. I applied to be an intern at TransFair USA and spent the summer of 2005 at their office.

The rest, they say, is history… and I'll save it for later.

Welcome readers!

2006-05-23T12:59:00.000-07:00

Welcome to my virtual logbook and journal for my upcoming yearlong research trip to Peru! I'd like to use this post to introduce myself to those of you who don't know me, and give a quick introduction to my project.

I'm a Ph.D student in Economics at the University of Massachusetts, Amherst. At this point, it would be best for you to do away with any stereotypes you may have acquired about economists or economics students. I can not guarantee that I will break them all, but I will almost certainly break some of them. Some of the other hats I have worn in my life have been literature student, online music reviewer, and saxophonist. I have long been interested in the Latin American region, and have traveled in Central America and the Caribbean. This is my first trip to Peru, and to South America generally. I am excited.

The focus of my trip is to gather information - both quantitative and qualitative - about the Fair Trade system of third-party certification for agricultural commodities and handmade crafts. I will be focusing on coffee, since it is currently the most prevalent Fair Trade commodity and a good baseline case for at least the agricultural portion of the system. I have also been drinking coffee for over twelve years, and grew up a mile away from the original Peet's Coffee in Berkeley, California. This places the subject of coffee fairly close to my heart.

Specifically, I aim to understand the impact of Fair Trade on the relationships between Peruvian coffee export co-operatives and international traders. The co-ops are made up of large numbers of farmers that we would classify as poor. The international traders tend to be, though are by no means always, large corporations with a great deal of power. Fair Trade aims to even out this relationship. I want to see how successful it is in doing so and whether it can do a better job.

Stay tuned.