Reframing Çrisis' in fair Trade Coffee Production: Fraser,Fisher, Arce

Reframing ‘Crisis’ in Fair Trade CoffeeProduction: Trajectories of Agrarian

Change in Nicaragua

JAMES FRASER, ELEANOR FISHER AND ALBERTO ARCE

A focus on crisis provides a methodological window to understand how agrarian changeshapes producer engagement in fair trade.This orientation challenges a separation betweenthe market and development, situating fair trade within global processes that incorporateagrarian histories of social change and conflict. Reframing crisis as a condition of agrarianlife, rather than emphasizing its cyclical manifestation within the global economy, revealshow market-driven development encompasses the material conditions of peoples’ existencein ambiguous and contradictory ways. Drawing on the case of coffee production in Nicara-gua, experiences of crisis demonstrate that greater attention needs to be paid to thesocioeconomic and political dimensions of development within regional commodity assem-blages to address entrenched power relations and unequal access to land and resources.Thisquestions moral certainties when examining the paradox of working in and against themarket, and suggests that a better understanding of specific trajectories of developmentcould improve fair trade’s objective of enhancing producer livelihoods.

Keywords: agrarian change, development, fair trade, coffee, Nicaragua

INTRODUCTION

In 2002–3, the effect of a global coffee crisis on rural producers in Nicaragua was reported inthe global media. The BBC claimed that growers had to abandon their farms and that theWorld Food Programme had declared that one in eight children were starving as result of lossof income (WFP 2002; Carslaw 2003). These children were the families of landless labourersno longer paid to work on coffee farms owing to a dramatic fall in the international price ofcoffee beans. This situation was characterized as an outcome of a severe fluctuation in theworld market price of coffee driving down supply (Fairtrade Foundation 2002, 2003). Itobscured a more complex reality; namely, that agricultural labourers were vulnerable tointernational commodity prices because they had no access to land to grow food, a criticalissue in rural Nicaragua.

James Fraser, Associate Researcher, Department of Anthropology, University of Sussex, Sussex House, BrightonBN1 9RH, UK. E-mail: [email protected]. Eleanor Fisher (corresponding author), Senior Lecturer inInternational Rural Development, School of Agriculture, Policy and Development, University of Reading,Whiteknights, Reading, RG6 6AR, UK. E-mail: [email protected]. Alberto Arce, Rural DevelopmentSociology, Wageningen University, Hollandseweg 1, 6706 KN Wageningen, The Netherlands. E-mail:[email protected]

We are grateful to Brigitte Cerfontaine, Sean Hawkey, Ena Salinas and Fatima Ismael Espinoza for time givengenerously to enable us to develop insight into experiences of fair trade in Nicaragua; also to five anonymousreviewers for their critical contributions in the development of this paper. All views expressed are those of theauthors, who remain responsible for any shortcomings.

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Journal of Agrarian Change, Vol. 14 No. 1, January 2014, pp. 52–73.

© 2013 John Wiley & Sons Ltd doi: 10.1111/joac.12014

In this paper, we examine the relationship between fair trade and local trajectories ofagrarian change. We proceed from the observation that the production and marketing ofglobal commodities involves a field of interactions that are negotiated and contested. As such,crises affecting agrarian producers are not simply a failure of rational coordination betweensupply and demand in global markets but are a feature of rural existence, underpinned bylocal inequalities in access to land and capital and shaped by how peoples’ material circum-stances frame their capacity to produce and sell commodities.

We use the notion of crisis as a lens to situate the way in which fair trade – as a universalprescription for producer livelihoods – is organized through existing forms of developmentthat, we argue, position producers within an international trading complex that disregards thedynamics of agrarian development. This is significant because these dynamics shape who isable to benefit from international markets and, concomitantly, who is excluded. In effect, theNicaraguan ‘coffee crisis’ of 2000–3 forms a critical event that enables us to rethink thematerialization of market-driven development and reorganization of cooperative forms. Ourrationale for focusing on crisis is that in times of stress, underlying factors such as labour andproperty relations come to the fore within peoples’ livelihood struggles. In this respect,representations of crisis are the outcome of different – often conflicting – characterizations of‘the real’ as portrayed in discursive forms. This raises the question of whether the notion ofcrisis as a problem of price emerging from global commodity markets creates a partialunderstanding that excludes significant social and political factors within rural development,arguably favouring a view of idyllic cooperatives and the unproblematic political and organi-zational inclusion of producer participation in global commodity markets.

The contemporary fair trade movement is party to contradictory tendencies – growingcorporatization accompanied by the prevalence of private agrifood standards, but also diversi-fication through Southern producer-led initiatives to gain greater control over the governanceof fair trade, through innovations to localize supply chains, and through initiatives to connectto producers’ social and place-based identities.This suggests both potential for fair trade to bedominated by business dynamics that devalue an inclusive and developmentally informedapproach, and for emerging opportunities within sections of the movement to take betteraccount of specific development trajectories and producer empowerment. Whether theseopportunities are grasped in a manner that informs wider thinking and practice on fair tradeor whether they are missed in a drive to increase market share is a question that remains tobe answered.

To explore how fair trade performances are incorporated into existing social relationssuggests the need to engage with the political economy of agrarian change, considering thecharacter of everyday life and broader socioeconomic and political configurations. Thisdemands empirical studies that address the materiality of the social. In order to do this, wetake the case of coffee production in Nicaragua, locating fair trade within a history ofagrarian struggle that stretches from the capitalist penetration of the countryside in thenineteenth century, through the Sandinista era between 1979 and 1990, to the so-called ‘crisis’in global coffee prices in the early 2000s, and the ‘post-crisis’ period of coffee cooperativedevelopment.

Three questions drive our analysis. First, how is crisis perceived by producers within aspecific agrarian context, and in what way does this relate to an understanding of crisis interms of price within international markets? Second, how do historical trajectories of agrarianstruggle shape class and status distinctions among rural producers and the manner in whichthey connect to fair trade markets? And, third, what implication does an appreciation ofagrarian change hold for our understanding of the positioning of development processes

Reframing ‘Crisis’ in Fair Trade Coffee Production 53

© 2013 John Wiley & Sons Ltd

within contemporary fair trade? To answer these questions, an ethnographic approach is usedto focus on the political economy of coffee, agrarian crises and fair trade. Data are drawnfrom five months’ fieldwork in the main coffee-producing area of northern Nicaragua,conducted between November 2002 and March 2003, and fieldwork visits and semi-structured interviews with representatives of the Nicaraguan fair trade movement in 2011. Forethical reasons, pseudonyms are used to confer anonymity on informants, cooperative organi-zations and settlements.

We recognize that our Nicaraguan case has exceptional elements, but this is partly thepoint: the intention is not to generalize on the basis of particularities within the data but,rather, to consider how a universal fair trade model engages with the social, political andmaterial specificities of agrarian development. In this respect, coffee constitutes a commodityassemblage1 that enables us to explore fair trade interventions in local spaces. One exceptionalelement relates to corruption in cooperative organization, raising questions over its bearing onthe analysis. We suggest that simply labelling a process ‘corrupt’ compresses complexities, suchas accountability and the use and abuse of power, which need to be teased apart to under-stand the political process of administering resources within the agrarian economy. Unless thisis done, there is a danger of emphasizing differences between us (who consume coffee andmay be non-corrupt) and them (who produce coffee and may be corrupt).

CONCEPTUALIZING FAIR TRADE AND CRISIS

Fair trade promotes the potential for small-producer, hired-labour and contract-productionorganizations in Africa, the Americas, Asia and Oceania to use international markets forcommercial opportunities (FLO 2011). Coffee grown by small-scale producers was instrumen-tal to fair trade’s development, but today a diverse range of food and non-food products arefair trade–certified (FLO 2011). At the heart of fair trade is an emphasis on ‘fair access tomarkets under better trade conditions’ (Fairtrade Foundation 2011, n.d.); this is achievedthrough techniques of intervention that include a guaranteed minimum price to cover averagecosts of production and to protect against price volatility, and a premium for investment indevelopment projects (women, children’s education, community health, environment). Linkedto this is pre-financing, long-term contracts with buyers, labour rights, democratic producerorganization and environmental conditions. In effect, the fair trade movement has developed auniversal prescription for international market access.

The expansion of fair trade through corporate mainstreaming is far removed from itsorigins as a market ‘alternative’ (Brown 1993; Tallontire 2006). Change was stimulated by theintroduction of private standards and certification from the late 1980s. The timing is signifi-cant because it was an era when universal regulatory strategies were being promoted in globalmarkets, shaped by neoliberal thinking on the need to reposition agricultural producerswithin registers of quality for production, trading and consumption. Forms of global policyregulation were introduced that located commodity circulation in world markets according tovalues embodied in the goods (Marsden and Arce 1995). Fair trade’s application of a universalprescription for international market access resonates with this period in neoliberal develop-ment thinking.

1 A commodity assemblage is a number of separate elements – social, cultural, economic, political and historical– gathered into a single context that shapes how exchange value is constructed (see Collier and Ong 2005,3–21).

54 James Fraser et al.


Against a background of the ‘mainstreaming’ of conventional business practices andgrowing involvement by the corporate sector (for a review, see Fisher 2009), the intellectualpolitics of Western scholars has denounced a move away from fair trade’s seminal values andradical politics, asking what is alternative about fair trade today (Renard 2005; Dolan 2008;Moberg and Lyon 2010). Many assumptions about the interdependence of the market anddevelopment within the fair trade movement have been called into question (Fridell 2007).This is evident in critiques of fair trade practices (e.g. Valkila 2009; Wilson 2010) and inresearch questioning the impact of certification schemes upon producer engagement (Shreck2005; Dolan 2008; Raynolds 2009).

Within the fair trade movement itself, there is profound tension over the direction ofcontemporary fair trade. Parts of the movement embrace the potential for producer impactprovided by multinational corporations anxious to acquire social credentials through fair tradesourcing. Contesting this approach, however, are activists, alternative trade organizations andSouthern producer networks who hold this to be a betrayal of fair trade’s radical voice forreform of the international trading system (Moberg and Lyon 2010, 12; cf. Davenport andLow 2012).2

These tensions have led to an interesting recent debate. On the one hand, there is a strongorientation towards recognizing the need to operate commercially within existing powerconfigurations of the retail sector, through integrating modern organizational and businesschain dynamics in order to provide added value to production for fair trade markets andextend the impact of fair trade to greater numbers of producers (Reed 2009; cf. Busch 2010).In this vein, commercial alliances and manufacturing conventions are viewed as essential,imbuing commodities with the ability to circulate through corporate retail channels(Raynolds 2002, 419); this is a process of global commoditization that implies a particularview of trade and development, and has the potential to instigate market innovations andtransform commodity processes in producer countries in ways that may not benefit producerdevelopment in the long term. On the other hand, and at least partly in reaction to bothcorporate control and to imbalances of power in fair trade governance that until recentlyfavoured European and North American dominance, there has been a growth in: producer-ledcertification schemes such as Commercio Justo México and Sistema Nacional do Comércio Justo eSolidário Brazil (Renard and Pérez-Grovas 2007; Smith and VanderHoff Boersma 2012); inconnections to local trading mechanisms, identity politics and place-based concerns (Jaffeeet al. 2004; Ofstehage 2011, 2012); in regional networks (Sutton 2012); in traceability schemes(Jacob 2012; Weil 2012); and in projects to build climate change resilience (Siegle 2012;Twin n.d.(a)). These initiatives are starting to construct new content for regionally situatedcommodity assemblages that have developed around fair trade.

Contemporary debate on greater producer empowerment, coupled with emphasis on net-works and leadership in the global South, generates potential for greater democratizationwithin the movement, for better linkages to regional development, and for improved connec-tions to other initiatives and actors. However, against a background of growing corporateinvolvement in fair trade, giving value to producer-led innovation and changing ideas andpractices raises profound challenges, not least through the threat of undermining currentmarket success. Indeed, much contemporary debate continues to discuss development in

2 An example of the consequences of this rift is Fair Trade USA’s 2011 decision to withdraw from FairtradeInternational/FLO and subsequently including plantations and factories within its operations. This has hadfar-reaching consequences within the fair trade movement, with some Alternative Trade Organizations (ATOs)splitting away from Fair Trade USA and other partners involved in ‘damage-limitation’ on behalf of small-scaleproducers (Moberg and Lyon 2010, 12; TWIN n.d.(b); WFTO n.d.).



conservative terms regarding projects that are lineally integrated to a local site in order tooppose a dominant neoliberal discourse on individual rural entrepreneurs and markets. Suchlineal integration is linked to emphasis on instrumental assessment of the impact of fair tradeon development outcomes (Nelson and Pound 2009). A more radical position would be tolocate fair trade within a development approach that encompasses grassroots action towardsbuilding commercial commons within regionally situated commodity assemblages.

Fair trade advocacy can reinforce a simplistic view of development and generates animplicit ‘moral high ground’ through accounts of the benefits that fair trade brings to poorproducers and portraits of development success (e.g. Lamb 2008; Bowes 2011; Haslam andHoskyns 2011; cf. Dolan 2010). Such accounts are seldom accompanied by scrutiny of thesocial relations and lived experience of development (Fisher 1997; Getz and Shreck 2006;Fridell 2007; Dolan 2010), or by understandings of local complexity, conflict and politicalagendas (Arce and Fisher 1999; Lyon 2007; Arce 2009). In our view, without consideringhistorically situated agrarian struggle or seeking to address local development dynamics andpower relations, there is a danger that fair trade perpetuates deep-rooted inequalities andexacerbates power struggles, making principles of trade justice appear abstract – perhaps evenhollow – despite laudable intentions.

If a nuanced understanding of development and the politics of development is not takeninto account, a more equal market perspective cannot fully open up the potential for localdevelopment through contemporary forms of social innovation (cf. Edward and Tallontire2009). This suggests the need to situate fair trade values in relation to specific organizationalexperiences and material trajectories that consider the political economy of land ownershipand entrenched power relations (Kruger and Du Toit 2007; Luetchford 2008b), the historicaland developmental significance of cooperative organization (Fisher 1997; Luetchford 2008a;Arce 2009; Ofstehage 2012) and the role of local politics in shaping engagement with fairtrade product markets (Arce 2009; Lyon 2006). Here, the significance of reflecting on crisisenters the picture.

Crisis is a complex, multifaceted notion. It emerges in discourses on capitalist incompat-ibilities, highlighting how capitalism is prone to recurrent situations of over-accumulation(Nonini 2007). Focusing on price in international markets, in which there are cycles of highand low product prices and associated ‘commodity crises’, captures notions of market instabil-ity and risk as a global semiotic device, but obscures a view of the social as embodied inmultifaceted and diachronic agrarian change (cf. Joas 1996, 145–95). In this respect, the idiomof crisis can also be a condition of producers’ existence; it is manifest in people’s expressionsof how they are affected by development interventions in experiential terms far broaderthan epistemological definitions of crisis rooted in capitalist economics. As Nicaraguan coffeeproducers interviewed for this research stated, ‘here there has always been crisis’, a perceptionthat references local politics, patron–client relationships and cultural ideas on reciprocity. Inthis respect, while the notion of crisis has an underlying association with universal cyclicalperiods of stress and predicament, it has both material and discursive dimensions, and gener-ates social and political ambiguity concerning local processes of change.

Our perspective treads a path between understanding crisis as an aggregate economic andcyclical phenomenon within global capitalist arrangements and crisis as a social categoryemerging within a given context (cf. Pigg 1992). To take this path, we suggest that there is aneed to encompass the relationally situated dimensions of crisis and connections to a diversityof actors, spaces and knowledge that appropriate a set of notions and legitimize their coursesof action within a particular field of practice. In this sense, notions of crisis can take usbeyond abstract ideas of social justice and equality, to relocate the sphere of small producers’



everyday lives within a conceptualization of how actors access markets and developmentresources. This may be in ways that are represented through different discursive traditions interms of trade and justice or freedom and equality, and not simply a matter of tracing theimpacts of crisis on social groups from macro to micro levels (e.g. Harper and Jones 2011).

Contradictions within specific agrarian trajectories and their discursive representation havethe potential to create a potent politics of conflict and sharp divisions in favour of particularsocial groups, stimulated by social and institutional regularization and situational adjustment tomarkets. Reinterpreting a past debate between Miliband (1968) and Poulantzas (1978), theinternal political crises of a country may not coincide with generic economic crises ofcommodities. However, when these notions align, we can speak of significant discontinuitiesbetween the long-term agrarian trajectories of a locality as a social place and a discourse onfair trade that seeks to provide a range of political, democratic and equity relations, as theglobal socialization of an abstract discourse of fairness politically unfolds through local expe-rience of gaining access to markets and development resources.

These issues are explored in the following case, which turns to consider scholarly work onfair trade and crisis in Latin American coffee production and then focuses on the materialhistory of the coffee bean in Nicaragua to provide a background to evidence on contempo-rary cooperative organization for fair trade markets.

CONTESTED REPRESENTATIONS OF CRISIS IN DEBATES ON COFFEEPRODUCTION IN LATIN AMERICA

Coffee was an important commodity in the development of fair trade; however, attempts tobroaden the impact of fair trade upon impoverished Latin American coffee producers remainprofoundly challenging (Murray et al. 2006).The sale of coffee on world markets is character-ized by extreme price volatility. In the 1960s, governments sought to counter this through theInternational Coffee Agreement (ICA), to constrain oversupply, stabilize price and promoteconsumption (Renkema 2002). The first ICA was introduced in 1962, followed by 5-yearagreements through the 1970s and 1980s.

In 1989, negotiations over the ICA collapsed, causing coffee prices to fall. Five years later,in 1994, a new ICA was agreed, but it was then decided that prices could no longer beregulated and a free market was introduced. This was hastened by the prevailing neoliberaldevelopment model promoted by the World Bank and the International Monetary Fund andtaken up by many coffee-producing countries, with the consequence that state-led producerorganizations, subsidies and credit were disbanded (Talbot 2004; Goodman 2008).

Speculation, market segmentation and harvest conditions all contribute to instability ininternational coffee markets. Rural producers benefit from high prices, but when they are lowthe effects are strongly felt, especially within economies dependent on coffee for exportrevenues. This is made acute by little value-added being captured by producer countries, with94 per cent of coffee processing and packaging taking place in the developed world (Osorio2002, 33).

A critical situation within coffee commodity markets, characterized as a crisis by the fairtrade movement, occurred between 2000 and 2003, when green coffee bean prices droppedto their lowest level in real terms for 100 years due to increasing global production and lowdemand (Varangis et al. 2003; Bacon et al. 2008). Research has focused on the consequencesof this global ‘coffee crisis’ for farmers in Nicaragua, with varying conclusions over whetherfair trade offered protection. Sick (1997), writing before the fall in coffee prices, characterizescrisis as the effect of boom and bust on households involved in the coffee economy, com-



bined with population pressure, land scarcity, increased production costs and an overrelianceon coffee production. Bacon (2004) finds that participation in organic and fair trade networksreduced farmers’ livelihood vulnerability to the coffee crisis. This has led him and colleagues(Bacon et al. 2008, 269) to argue that the coffee crisis produced an opportunity for thedevelopment of a specialty coffee business for more educated, small-scale Nicaraguan farmersbelonging to farmer cooperative unions selling to the fair trade market.

In contrast, Utting-Chamorro (2005),Wilson (2010) and Valkila (2009) question the extentto which fair trade helps coffee farmers break free from cycles of debt. Valkila (2009) findsthat fair trade and organic coffee markets offer little benefit to the most marginalized farmers,who remain in poverty (cf. Bacon et al. 2008; Valkila and Nygren 2009). This view is sup-ported by Beuchelt and Zeller (2011), who demonstrate that over a 10-year period, organicand organic–fair trade farmers in Nicaragua have become poorer relative to conventionalproducers.

These studies are moderately to highly critical of aspects of the production of coffee inNicaragua for fair trade markets. This reflects wider findings from the region: writing oncoffee production in Mexico, Jaffee (2007) concludes that while fair trade makes a differenceto some peasant livelihoods, it is not enough to prevent them being affected by crises. Thisview is supported by Luetchford (2008b), who focuses on coffee producers in Costa Rica toemphasize that fair trade may benefit more affluent individuals but not the poorest, and that itremains caught in conflicts of interest that characterize the coffee industry and social divisionsthat reflect the wider agrarian political economy. Méndez et al. (2010) also align with theseconclusions, arguing that in Central America and Mexico sales to fair trade–certified marketsoffer better prices, but the contribution derived from premiums has limited impact onhousehold livelihoods.

Such debates are important for understanding and representing the complexities of globalcapitalism and its diverse effects on small producers’ livelihoods. However, rather than discuss-ing fair trade’s role as a buffer against the consequences of crisis, we want to focus on howan understanding of a different representation of crisis helps elucidate the local process oftranslation and mediation by different actors through their performance of fair trade.This willlead us to contest a representation of crisis as exclusively a price problem related to globalcommodity markets.

At the time of writing (2011), international commodity prices for coffee are at 30-yearhighs. However, boom and bust are recurrent features of coffee markets, and history wouldsuggest that this may lead to overproduction and another ‘crisis’ in the future.

THE MATERIAL HISTORY OF THE COFFEE BEAN IN NICARAGUA

The foundations of ‘coffee commoditization’ in Nicaragua were laid in the nineteenthcentury, as capitalist relations transformed agrarian reality. Coffee cultivation began around1850, drawing the country into the world economy (Samper 1999). As with other exportcrops, coffee was predominantly produced in the hacienda,3 with production for internationalmarkets creating an exploitative way of life for peasants (Dore 2003) that fed into processes ofnation-building, as was the case throughout Central America (Williams 1994).

3 Coffee production in the hacienda was not dominant everywhere. In the northern border region of NuevaSegovia and in Masaya, south of Managua, the greater proportion of coffee was grown by small producers.Theseare, however, exceptions.



Despite being part of the international coffee market, much of the domestic economyremained outside this larger process; as a consequence, and due to exploitation and loss ofland and livelihood, the standard of living of peasants deteriorated and food security becamean issue (Enriquez 1991). Peasant dependency and powerlessness vis-à-vis the importance ofthe hacienda, coupled with processes such as the large-scale adoption of a variety of exportcrops and cattle-raising, generated highly unequal land distribution, a state of affairs thatcontinued into the twentieth century and was compounded by an expansion in coffeeproduction in the 1950s. This reinforced unequal property relations and contributed to theRevolution of 1979.

The Sandinista Revolution and Agrarian Reform

Following the Revolution of 1979, the Frente Sandinista de Liberación Nacional (FSLN) started aprocess of agrarian reform and land redistribution.4 Rural people who had been haciendaworkers adopted the commodity that had mediated their subjugation, with coffee becomingpart of their livelihood and identity. Historically, ‘coffee labourer’ (cafetalero) was a linguisticterm applied to social relations within a large landholding (latifundio): it referred to theownership of property and denoted an exploitative relationship between the landholder(hacendero) and the coffee labourer (cafetalero).The territory of the hacienda was the pride of anoligarchy, whose domain was the place where coffee was grown (Wheelock 1975; Dore2003). However, coffee was not part of the personhood of the workers, who confronted it asa commodity crop that imposed hacienda relations and labour exploitation as a point ofreference for development through a discourse of domination and profit, rather than beingincorporated into a territorially and socially cohesive unit that gave civic respect to haciendalabourers.

Questions over the identity of coffee labourers (cafetaleros) and their place in capitalistdevelopment emerged in Sandinista debate (Dore and Weeks 1992). One position held thatcapitalism was developed from above, with debt peonage and the state labour draft constitut-ing a way of consuming relations of exploitation and separating coffee from the self and socialrelations, an objectification that generated a ‘Junker path’ to modernity. An alternative positionemphasized that servitude and exploitation in the hacienda was not significant and a self-created capitalism emerged through processes of differentiation and land expropriation thatengendered a peasant path to modern Nicaragua. The first position advocated the creation ofcollective state farms and the second called for land redistribution to small and medium-sizedrural producers. Both, however, missed the ambiguous nature of the commoditization processin rural peoples’ subjectivities, which served to perpetuate exploitation. This subjectivity isincorporated into how agrarian trajectories are appropriated within differential resource andaccess strategies (cf. Arce 1993). For some, this meant the development of livelihood practicesthat retained a degree of autonomy from Junker or peasant representations of modernity.

Such debates raise the need to understand how social categories within a rural populationexist beyond archetypical representations of agrarian trajectories and policies that diminish thecomplex experiences of ‘real’ people. This presents a problem regarding the visibility and

4 The FSLN overthrew the dictator Anastasio Somoza Debayle in 1979, establishing a revolutionary govern-ment that lasted until 1990. In response to the Revolution, the landowning elite, in collaboration with the CIA,formed militias, known as Contras.The FSLN won the 1984 elections, which were described as free and fair byinternational observers. Despite this, the Contras continued their counter-revolutionary struggle until 1989. In1990, the FSLN lost the election to Violeta Barrios de Chamorro; however, in 2006 former FSLN PresidentDaniel Ortega was re-elected.



invisibility of social categories and raises questions about the policy consequences of catego-rizing people according to discourse representations (Fisher 2002). This is important in fairtrade debates because interventions that render certain categories of rural people ‘visible’ (e.g.small-scale producers) may also render other categories ‘invisible’ (e.g. landless labourers), withthe consequence that parts of a rural population may not benefit from resource allocationthrough development and trade (see Luetchford 2008b). This raises the question of whetherthe fact that the 2002–3 global media reports (noted in our Introduction) referred to landlesslabourers as victims of the Nicaraguan coffee crisis is an indication that their social meaning istoday becoming visible within the development process for the fair trade movement.

Land and Property: The Front Stage of Policy Reform

For the first time in Nicaragua’s history, the 1979 Revolution and accompanying agrarianreform led a significant portion of the rural poor to become propertied, with a transforma-tion in the social fabric to achieve more equal property distribution. The main beneficiarieswere small producers, as underused land that formed part of the haciendas was confiscated anddistributed to farmers organized into cooperatives (Enriquez 1991, 88).5 This stimulated thecooperative movement, such that by mid-1980, 2,512 cooperatives were operating in Nicara-gua (Enriquez 1991, 88) and by the end of 1988, around 108,765 peasant families hadbenefited from reform, 71 per cent receiving land through redistribution and 29 per centlegalizing titles for land they had previously occupied (Enriquez 1991, 90).

As the category of ‘small producer’ developed, this stimulated a transformation of ruralpeoples’ imagination – the discourse on land ownership enabled the category of coffeelabourer (cafetalero) to be repositioned: whereas in the past it denoted an exploitative relation-ship within the hacienda, it now meant having land and growing coffee upon it.This was not,however, without conflict – which emerged through the way in which small landholders andex-landless labourers sought to organize themselves for market relations. The existence ofex-landless labourers – those who were chronically poor – remained ‘invisible’ as a socialcategory within repeated agrarian policy interventions including, implicitly, local cooperativeorganization for fair trade.

The newly created category of cafetalero included small landholders and ex-landless labour-ers organized into Cooperativas Agricola de Credito y Servicio (CACS) and Cooperativas AgricolaSandinista (CAS).6 In effect, social and political ambiguities and incompatibilities wereenfolded within the identity of being a cafetalero. Differences of interests and knowledge werecontained in the provisional arrangements of the cafetalero discourse, which emphasized thesharing of the same agrarian history, land and cooperative experience.

In effect, agrarian reform did not lead to the universal emancipation of the rural poor, butto a complex political process in which the social category cafetalero became socially frag-mented and dispersed through the hierarchical legacies of the hacienda’s past into the genesisof the regularization of ‘small landholders’ and ‘ex-landless labourers’ within the cooperativemovement and fair trade. Added to this was the way in which the civil war differentially

5 Around 20 per cent of Nicaragua’s agricultural land had been owned by the Samozas and associates.This wasconfiscated, but a substantial proportion was not redistributed because it comprised modernized agro-exportestates, which were seen as vital in maintaining flows of foreign capital.6 These two types of cooperative were commonly formed after the Revolution. CACS involved peopleworking their land individually to produce staples; whereas CAS reflected revolutionary values, being based oncooperative production and defence of the land. CAS cooperatives embodied the FSLN ideal for a socialistcollective, whereas the FSLN were not keen on the CACS because people worked individually.



affected people and created different historical narratives to explain trajectories of agrarianchange and why some ex-landless people are marginalized by the development process.

The social and political significance of coffee cultivation in Nicaragua, and its material andemotional importance for rural inhabitants, form an important background to contemporarycoffee production for fair trade markets. Against the trajectory of revolution and civil warthrough the 1980s, followed by neoliberal policy strategies and unprecedented deregulation inthe 1990s, anxiety grew over how to be economically competitive. Land ownership also raisedsubstantial issues: while land titles were granted, many remained incomplete or incorrect, withproperty rights being a matter of legal contestation and reflecting a wider crisis of access toproperty, development opportunities and the market economy.This was further entrenched bythe privatization of land after the Sandinistas lost the elections in 1991, as policies of landredistribution and neoliberal market economics proved incompatible.Within this, memories ofthe war and expectations that policy reform could provide access to land and services haveeach played their part in the process of imagining development in a country on the edge ofthe world economy.

Fair Trade and Cooperative Development: The Backstage of Policy Reform

When fair trade was introduced into Nicaragua, it used cooperatives as the basic form ofproducer organization for international markets, helping to support peasant livelihoods duringa difficult and hostile period between the Sandinistas and the propertied classes (Haslam andHoskyns 2011, 57). Many of these cooperatives had their roots in the Sandinista Revolutionand subsequent civil war, with the consequence that fair trade became part of a process ofregularization and stabilization of the political gains of the Revolution, together with thereinterpretation of rules and relationships after the Sandinistas lost the national election in1990.

Cooperatives formed by the FSLN during the 1980s replicated hierarchical forms ofpolitical organization, including military coordination. Since this period, cooperatives based insettlements have been known as first-grade cooperatives, of which there may be more thanone per settlement. Groups of these first-grade cooperatives form a Union of OrganizedCooperatives (UCA) that functions to generate volume and to market the coffee of ruralcooperatives, usually at regional level. After 1990, some of these UCAs were rebranded asprivate limited companies (PLCs) (in Spanish, Sociedad Anónima), in keeping with neoliberallanguage. Federations form a third type of cooperative organization, which act as largerumbrella associations bringing together national alliances of UCAs.

Within the international dynamics of coffee cooperatives supplying the fair trade market,projections of global market opportunities became entwined with past histories of revolution-ary participation and cooperative organization. This is linked to associations with familieswho did or did not participate in the Revolution. In effect, political belonging and relationsto fair trade are marked by collective organization but also by volatility, volition and affect.This background helps contextualize how universal notions of solidarity are given politicalmeaning within historical trajectories of landed property and labour divisions.

‘Here There Has Always Been Crisis’

When informants were asked to share experiences of the ‘coffee crisis’, it became apparentthat they view crisis as a condition of their existence, rather than simply a disruption to thecoffee economy.This is not to downplay the extreme consequences of the fall in international



prices for coffee in 2000–3, whose effect included the inability of coffee growers to accesscredit to sustain themselves and their families, owing to the foreclosure of agrarian banks. Asone farmer put it:

Before [the current crisis] when there was money in the banks the people arrived at thebank with their land titles and the bank advanced money on loan. A part was to assistwith the coffee, another part was to buy food for the family, another part to clothe thechildren and send them to the school. Now the result of the bank not lending money isthe establishment of a subsistence form of life (sobrevivencia). (Interview, November 2002)

Difficulties in accessing credit constrained the ability of small producers to employ labour orbuy agrochemicals and led to a return to more traditional techniques of growing coffee.Owing to lower coffee prices, some producers also became over-indebted to the banks andinformal lenders, with banks seizing properties (see Wilson 2010). At the household level,reduction of income along with rising prices of basic necessities affected families profoundlyand placed property at risk. For the landless dependent on wage labour for their survival,times were incredibly tough due to loss of employment and shortage of money causing urbanmigration.

The Nicaraguan peasantry is characterized by recurrent economic, social and environmen-tal uncertainties. Fundamentally, this is an embodiment of the historical crisis of property, alegacy of the agrarian reform, which left many incipient coffee farmers in ambiguous posi-tions of legality regarding the ownership of land, and prey to appropriation of land titles bythe banks, compounded by the privatization of land in the 1990s. Land, coffee and the globalcommodity crisis therefore reflect changing circumstances and contingencies, which need tobe taken into account within the social and material experience of crisis.

To illustrate these unfolding processes, we turn to the example of a first-grade cooperative,La Montañita, and the changing fortunes of a regional UCA/PLC.7 The sociopolitical dimen-sions of conflict within a settlement and the vicissitudes of the scaling-up of cooperativeorganization are explored in a discussion of how landless people were excluded from fairtrade. These conflicts provide the backdrop for understanding the notion of fairness andcooperative strategies in rural Nicaragua: interviews conducted in 2003 and 2011 suggest thatsimilar conflict has been rife in other localities where cooperatives were established as pro-ducer organizations in the 1980s and have today become incorporated into fair trade.

RESETTLEMENT AND CONTESTED COOPERATISM

Before the Revolution, La Montañita was a run-down hacienda in a prime coffee-growingarea of northern Nicaragua. The Sandinistas allocated it to the Victor Buendía Cooperative,resettling people from a settlement near a town called Venezia and from a remote haciendacalled La Carbona. The cooperative was named after a man killed fighting for land for thepoor and it had two main functions: to work and defend the land.

Families arriving at La Montañita were confronted by secondary forest and mountain,together with some coffee plantation, constituting ten manzanas (16.8 acres) in total. Resettle-ment from different areas created divisions based on origin, and incorporating class and statusdistinctions. The people from near Venezia were smallholders, while those from La Carbonawere landless labourers. Differences coalesced around land ownership and personal animosities

7 Throughout the example, pseudonyms are used for Nicaraguan people, places and cooperatives.



between a relatively rich and powerful family that dominated Venezia – the Marquez – andrepresentatives of the ex-landless group from La Carbona.

The Victor Buendía Cooperative leader, a former Sandinista soldier named Santiago whoworked for the Ministry of the Interior before marrying into the Marquez family, explained:

There were many differences between the two [groups]: those from Venezia had an ideaof the Revolution while the others were [landless] labourers. Those from Veneziabrought many things such as cattle to the commons. The others from La Carbonabrought [only] their labour and commitment. During the war there were always smallproblems . . . The people from Venezia had better economic possibilities and a bettercapacity for management. The ideologues were from Venezia too, so there was alwaysdisequilibrium. (Interview, January 2003)

These comments underline how historical social divisions between smallholders and formerlandless labourers shaped local experiences of the cooperative movement and exposed powerdifferences and struggles that later surrounded collective coffee marketing and fair trade.

Resettlers to La Montañita had been given a collective land title, but when the war endedin 1990 the land was divided up and those who could afford it obtained individual titles. Ineffect, the end of the war contributed to the recurrence of animosities. Political differencesbetween CAS, based on collective socialist values, and Cooperativas Agricola de Credito y Servicio(CACS), based on collaboration for market competition, fed into this process as the VictorBuendía Cooperative, originally a CAS, became an ambiguous space full of local politicalcomplexity, which eventually transformed itself into a CACS (see note 6).

The Fair Trade Experience and the Cooperative Movement

In 1990, the Sandinistas lost the elections to a pro-neoliberal and right-wing coalition. In fact,change in the national political economy encouraged fair trade to enter Nicaragua (seeHaslam and Hoskyns 2011). In our fieldwork region, a Sandinista called Macario visitedsettlements that were cooperatives during the war, saying that fair trade wanted to supportthem. Macario mobilized people to join the UCA, GIPROCOOR, by saying that they couldreceive US$125 per quintal oro (100 pounds weight of processed coffee before roasting) if theyparticipated in fair trade. As Macario was well known in the Sandinista networks, he was ableto use these relationships to build GIPROCOOR across one state of northern Nicaragua.This lasted for 4 years, and was composed of first-grade cooperative members and mediumand large-scale individual coffee producers.

The local Victor Buendía Cooperative became part of GIPROCOOR. However, accordingto the coffee producers, they only received a better price for the first harvest; for the next,they received the conventional market price, and finally even less. Macario and his accom-plices were accused of appropriating US$640,000 in pre-finance credit from European buyersin 1996–7 and Macario was subsequently jailed. After the demise of the UCA GIPRO-COOR in 1997, a private limited company (PLC) with the name of SEPASA was created toclean up GIPROCOOR’s corruption and uphold fair trade values through good manage-ment and business principles. Five of the European buyers agreed to continue trading on thecondition that they held control over decision-making and management personnel. With thepre-financed credit plus subsequent interest, the PLC inherited a debt of US$722,990 fromthe dismantled GIPROCOOR.

Max Havelaar, a Dutch fair trade organization, sought to find an administrator to representthe European coffee buyers’ interests, which the producers agreed to as a starting point for



pre-financing new contracts. In order to retain European buyers and restore confidence,SEPASA agreed to pay back the debt accrued by GIPROCOOR, with a plan to split thedifference between the price of coffee on the New York commodity trading exchange andthe fair trade guaranteed price in Nicaragua. Fifty per cent of the revenue was channelled intodebt repayment and 50 per cent invested in the new enterprise (see Denaux 2008). However,during 1998 SEPASA only managed to accrue one coffee container sold through localmarkets, because producers needed immediate finance. The outcome of this was that torestore market credibility and discipline among coffee farmers in SEPASA, these farmers wereobliged to use the fair trade premium to pay off a debt from corruption that had not involvedthe vast majority. This disciplinary action brought home to local producers the logic ofadministration and management of fair trade, as part of a transnational business enterpriseculture.

The years from 1999 to 2004 were critical for coffee cooperatives: difficulties over redis-tributed property, processes of privatization, and land being viewed as dubious by banks andcompanies (cf. Fiallos 2002) were exacerbated by the coffee crisis, the effects of HurricaneMitch (1998) and a general economic crisis, all of which led people to sell land and accumu-late debt, with seizure by land speculators and banks forcing them to migrate.These processeshad negative impacts on coffee production within cooperatives, certainly until national politicsstimulated resurgence in the cooperative movement as a result of the Sandinistas return togovernment in 2007.

Local Cooperative Fragmentation and (Re)-Formation

At this time, people living in La Montañita who were members of the Victor BuendíaCooperative were desperate for cash, so they sought to reactivate their cooperative. A coffeeexporter was sought and subsequently, in 2000, SEPASA accepted the Victor Buendía Coop-erative as one of its members. However, local conflicts between the ex-landless group from LaCarbona and the former landholders represented by Santiago and the Márquez family contin-ued, because the people who were involved in the corruption case remained part of thecooperative. Santiago eventually became part of the Board of Directors of SEPASA and,according to the accounts of individuals originating from La Carbona he used his power toexclude them from joining SEPASA.

This conflict emerged in fights over land. Apparently, Santiago and the Marquez familywon these fights due to ties with Sandinistas in the regional police force. In effect, thedivision rooted in history between small landholders and ex-landless people served to excludesome from the fair trade market; only those who were willing to enter the political domain ofthe Marquez family were able to access fair trade. Nevertheless, widespread mistrust generatedby the UCA GIPROCOOR and of fair trade as a result of the experience of corruptionmade many people wary of entering SEPASA.

Members of the Marquez family who were within the Victor Buendía Cooperative startedto work with SEPASA (with fair trade access). Others, mainly ex-landless labourers originat-ing from La Carbona, worked with a private coffee-buying enterprise, AGRONICA, whichused the collective land title as insurance against a pre-finance loan. Unfortunately,AGRONICA collapsed and the collective land title was taken as an asset. By 2000, the effectof losing the land title effectively split the settlement into two groups: the small landholdersand others who were now landless again because they had lost their property rights.

In one interview, Santiago – representing the Marquez family – maintained a pejorativediscourse to legitimize the local exclusion of people from SEPASA, saying ‘I brought fair



trade to this settlement’, implying a degree of control and propriety over commercial oppor-tunities. As one informant, originally from La Carbona said:

Because of the political confrontation in 2000–3 between the two sides – peopleaffiliated with those who originated from La Carbona don’t enter SEPASA. He [actingas the head of the Marquez family] likes people to do what he wants. He likes to actlike your father;8 and further people still lack confidence in SEPASA because of the badexperience of the UCA GIPROCOOR.

Development Intervention

After 2003, SEPASA was becoming a success story against the odds, with a membership ofaround 450 small producers from 12 settlements organized into seven cooperatives.9 Part ofthe reason for this was because the effects of Hurricane Mitch in 1998 had led Max Havelaarand Solidarity from The Netherlands and ACRA from Italy to implement a European Com-munity project for affected producers from Nicaragua and Honduras. SEPASA became a hubfor the development relief effort in Nicaragua, with support from Christian Aid, CAFOD andIrish Aid, amongst others.

These development actions started to reposition the cooperative movement and SEPASA,improving its image among local cooperatives and reducing the distrust generated by corrup-tion. Nevertheless, even today (2011) there are settlements and first-grade cooperativesexcluded from the regional cooperative movement due to debt and/or political allegiances.Indeed, SEPASA’s success was despite advice from both the International Coffee Register(ICR) and parts of the fair trade movement that did not want Max Havelaar to bail out‘failed’ producers (that is, those in debt due to corruption by the GIPROCOOR leader).These organizations argued that the function of fair trade should consist of selling andincreasing coffee volumes for international markets, not galvanizing producer interests aroundthe value of cooperative organization (Denaux 2008, 13).

By 2004, the debt incurred through corruption by GIPROCOOR had been almostentirely paid and the cooperative treasurer liaised with Fairtrade Labelling OrganizationsInternational (FLO)10 over the possibility of reverting to being a UCA rather than a PLC,leading to negotiations with European buyers who owned 51 per cent of the share to agreethe transition. Explanations for this decision included the fact that members wanted a form ofcollective organization because despite paying off the debt they were not part of the decision-making process of the commercial association. Also, if the buyers decided to go with their 51per cent of the shares, this could place the PLC and producers in jeopardy. Finally, in contrastto a UCA, taxes for a PLC are very high and this money could not be used to benefit localproducers.11

Underpinning these factors was also the fact that international development agencieswanted to work with a cooperative organization where local producers had decision-makingpower. However, the idea of bringing back a UCA provoked people involved in the corrup-tion case who had been displaced from the original UCA GIPROCOOR; they now wantedto move the assets and infrastructure of SEPASA back to their area to regain power over

8 This remark about patronage has historical reverberations because some hacendados called themselves ‘fathers’of their labourers.9 The number of producers and cooperatives has since risen (see Denaux 2008).10 Now renamed Fairtrade International.11 For further elaboration, see Denaux (2008) and Donovan (2011).



financial decisions. However, they met with resistance and a vote decided that SEPASA wouldstay in its existing location but would revert to being a UCA.

After the debt was successfully repaid and cancelled, only one buyer, EZA Fairer HandelGmbH from Austria, stopped buying coffee (because their demand was just for organic coffeeand SEPASA usually delivered 20 per cent organic and 80 per cent conventional coffee).During this period, 45 per cent of sales started to go to the United States, thanks to two newcoffee buyers.

In 2007, the Sandinistas returned to power in Nicaragua, stimulating a period in which thecooperative movement became relevant again for development and market opportunitieswithin coffee production. In an interview in 2011, the general manager of the UCA SEPASAproudly highlighted the cooperatives’ social development programmes funded by Irish Aid.Gender awareness, educational support, school buildings, uniforms, scholarships, artistic cul-tural activities, libraries in rural areas and health programmes are presented as central activitiesof the revitalized UCA SEPASA:

Today [2011] we have a different situation to the one that existed in the 1990s.We havebetter roads, electrification programmes in the rural areas, houses for the more marginalpeople and education is free.These are national policies that have positively impacted onthe social development of people. Better still is that international coffee prices are goodand the producer can benefit from this. Today we have channels to get credit. As anorganization we have invested in infrastructure to improve the quality of our coffee.However, our dream is that each first-degree cooperative has its own office and ourintention is to decentralize the credit programmes so local people are less dependent onthe regional UCA. It is clear that poverty has receded but not disappeared.We are betterprepared than during the 1990s to face the next coffee crisis. We should not forget thata period of good prices is like oxygen for us to progress, but poverty may return,because if we are a weak organization everything we have done will be a drop of rainand with the next crisis everything we have achieved may just evaporate. (Interview,November 2011)

Such development programmes take place against a dynamic process of property reorganiza-tion, with individual property and land titles being regularized. Today, the UCA SEPASAprovides credit to groups of young cafetaleros and women to buy land, in the expectation thatthis will motivate them to became members of first-grade cooperatives and increase theirnumbers within the cooperative movement.

Fair Trade and Producer Life-Worlds in Rural Nicaragua

In our study, the fair trade market was used to stimulate the cooperative movement in anagrarian trajectory different from that of large-scale coffee production. Like many othercooperatives in rural Nicaragua, the Victor Buendía Cooperative was created during the civilwar and reoriented itself towards the fair trade market in the 1990s post-war period. Withinthis process, people’s socioeconomic circumstances, interests and backgrounds shaped howthey interpreted the value of the cooperative movement and how they deployed fair trade.Woven into these dynamics are peoples’ experience of crisis as an underlying condition ofrural life, one that is punctuated by ‘events’ – within the civil war, the steep downturn ininternational coffee prices, the consequences of Hurricane Mitch and so on – that stimulatechange within lives and agrarian trajectories.



The case highlighted how acts of corruption and associated conflict led to a loss of trust inthe cooperative movement and in fair trade, a situation coinciding with a neoliberal policyshift in Nicaragua. When the ability of producers to sell coffee on fair trade markets wasthreatened by this corruption, Max Havelaar’s representative for Central America intervenedto generate a ‘new’ version of a fair trade organization by creating a PLC.This strategic movehelped to retain the confidence of European buyers through focusing on coffee procurement,better management and repayment of the debt to re-engender buyer confidence. At thispoint, producer participation almost exclusively concentrated on small landholders and theimportance of good management and market requirements. This intervention sought toreclaim solidarity values within the more mainstream market orientation of parts of the fairtrade movement and the International Coffee Register, and in effect contributed to thereorganization of organizational practices within the Central American region.

Despite this move, at local cooperative level the language was of conflict, power andexclusion of ex-landless labourers who entered into deals with private companies, the collapseof which led to land titles being appropriated and people being forced to migrate. Ironically,people’s awareness of this situation played a significant role in the success of the imperative ofdebt repayment within the PLC and new UCA SEPASA (producers with land titles did notwant to get into the same situation). Indeed, in interviews, repayment of the debt emergedas an important action that led to the return of cooperative values, a position promotedby Nicaraguan representatives of European buyers who used issues of accountability asjustification.

In short and surprisingly, repayment of debt and commercial solvency acted as bindingelements to return to fair trade’s ‘values’ and European buyers’ acceptance of the relationshipbetween trade and development. Redefining the commercial language in terms of fair trade’suniversal principles provided legitimization for incorporation of professional management andfinancial stabilization. This did not prevent local conflict, however, as changing patterns ofloyalties and affiliation cut across universal principles of fair trade, particularly in the contestedrelationship between small landholders and ex-landless labourers.This is the basis upon whichspecific processes of exclusion and marginalization take place in Nicaraguan rural cooperativesand highlights their differentiated character, while revealing the flexibility of fair trade valueswhen confronted by the pragmatics of organizing fair trade in action. The intervention wasinitiated to keep commercial linkages open with Europe and America.

These processes bring to the fore questions concerning the relationship between fair tradeand processes of development intervention. The implementation of international developmentprogrammes after Hurricane Mitch in 1998 added a new dynamic, which repositioned thelife-worlds of coffee producers and associated issues of power over land and political control,including seemingly incompatible interests between small landholders and ex-landless labour-ers, reinforcing underlying tensions within the category of coffee producers (cafetalaros). Localconcerns for health, education and self-respect permitted engagement with fair trade andinternational development agencies, favouring the significance of linkages between localcooperatives and the regional UCA/PLC. Indeed, rather than a confrontation between tradeand development, there was an accommodation between different value repertoires and theability to translate notions such as accountability, participation and organizational efficiencyinto practice.

Within the above processes, small landholders opened up room for manoeuvre in thecooperative movement and built a powerful fair trade network. However, processes of exclu-sion cannot simply be overcome by providing producers with international market opportu-nities. In 2011, the General Manager of UCA SEPASA was aware of the need to address



excluded categories of people in the settlements, but considered that the only way to securesocial development programmes was through further embedding the UCA within local coop-erative ‘reality’ and expanding the domestic and regional market. However, she acknowledgedthat two scenarios could undermine this process: a new global coffee commodity crisis andthe need to develop commercial relations with Nicaraguan mainstream retailers. The lattersituation is already taking place, with potential to de-territorialize the UCA/PLC SEPASA’sorientation from local social development to concentrate on the national market, wherealliances with retailers would trigger organizing processes specializing in the trading of non-fair trade-certified coffee.

CONCLUSION

A severe fluctuation in the world market price of coffee in 2000–3 has permitted explorationof the relationship between fair trade and agrarian change within the coffee economy.Locating crisis as an idiom within the material lives of rural producers brings to the fore thedynamics of agrarian production for fair trade markets. Highlighted within this process is howlocal conflict and existing political ideologies both facilitate and restrict organizational reper-toires within a commodity assemblage.This reminds us that the commoditization process doesnot expand in a linear fashion from the global to the local or vice versa, and calls intoquestion the assumption that crisis is the same everywhere.

Our argument over crisis has taken the paradox of fair trade working in and against themarket and engaged with local narratives of crisis to demonstrate that there are pluralisticways of socially organizing market production. Historical trajectories of agrarian change arenot overturned by fair trade but influence producer organization, with agrarian strugglegenerating unintended outcomes. In this respect, focusing on crisis offers a window throughwhich to understand how agrarian change transforms social and spatial processes of boundaryformation within cooperative organizational forms supplying products to fair trade markets.

When considering how historical trajectories of agrarian struggle shape class and statusdistinctions among rural producers and the manner in which they connect to fair trademarkets, the case of coffee production through cooperative organization in rural Nicaraguahas demonstrated that fair trade becomes part of a commodity assemblage that incorporatesparticular sets of social relations, political connections and economic practices with historicalroots and complex inter-linkages to contemporary development interventions and productmarkets. Against this background, some social groups are excluded from fair trade due to lackof political acumen and property ownership, while others readily grasp market opportunities:ex-landless labourers are considered different and often deviant from the small landholderswho are drawn into fair trade through global flows of coffee. In effect, local experiences ofthe coffee crisis expose the manipulation of networks, of political relations and of resources,with exclusionary, conflict-ridden and even criminal outcomes.

The evidence suggests that fair trade does not produce local difference in terms of theapplication of abstract principles such as equity, democracy or social justice. Instead, it is partof the boiling pot of local politics and power relations, with ideas and practices becomingappropriated and embedded in locally situated interrelationships that reflect divisions based onclass, status and territory. These dynamics challenge universal representations of ‘fairness’ andsuggest that fair trade is not an apolitical initiative for adding value to commodities but is,instead, a strategic resource bound to power relations and politics that are negotiated andcontested in a variety of arenas from international to local. In this respect, the danger oftreating market and development projects as totalizing and at times ahistorical objects ignores



the nuanced forms of social differentiation, power relations and socioeconomic inequalitiesthat underpin producer experiences and organization.

We have asked what implications an appreciation of agrarian change holds for our under-standing of the positioning of development processes within contemporary fair trade. As wehave argued, prescriptions for fair trade simplify complex development realities. This has infact permitted the successful growth of a niche market, but in view of the growing domi-nance of a model for fair trade based on corporate business norms and private agrifoodstandards and certification, the scope for social development is narrowing.

Can an understanding of the history and political economy of agrarian change contributeto more effective producer organization for fair trade markets, or make the governance of fairtrade more effective and responsive to producers’ life circumstances and priorities, takingsocial inclusion into account? Three aspects emerge from our evidence.

First, prescriptions for fair trade need to be more flexible with regard to issues that localactors’ identify as significant: international product markets may be one in a range of priori-ties that include land rights and differential access to resources. How this is translated intopractical action must emerge from giving scope to the driving dynamic of producer groupsand supporting actors within localities and regions. In Nicaragua, when the corruption casebecame apparent, a constellation of measures were introduced to save the reputation of fairtrade and the viability of the model connecting local small producers and internationalmarkets.The intervention included convincing the international coffee buyers that corruptionwas exceptional and a result of lack of managerial skills. To regain control over the situation,the cooperative became a private company, a business orientation that facilitated debt repay-ment to international buyers, and the UCA and first-grade cooperatives were reorganized.However, debt repayment legitimized local exclusion processes and reignited conflict betweensmall producers and ex-landless labourers. The UCA’s transformation to a PLC and subse-quent return to a UCA demonstrates how the flexible use of contextual elements within thecommodity assemblage can facilitate the establishment of rural cooperatives through dialoguebetween the institutional orientation of public policy and the existing scope of humanagency.

During this process, the market pushed social development orientations to the marginsof fair trade values, thus making fair trade legible and open for commercial scrutiny.When the international debt was repaid and Hurricane Mitch generated developmentactions to support people in the affected rural space, it triggered a revival of cooperativevalues under the lessons learned from the business experience – development and tradebecame entwined. The study reveals a flexible mode of operation drawing on variants ofprivate and cooperative values to actualize a commercial commons. Recent Southern-drivenchange within the fair trade movement may provide scope for more systematic analysisof how history and political economy frame contemporary development concerns arounda commercial commons, and the construction of a framework to incorporate localand regional elements within local commodity assemblages; however, new innovationsremain far from becoming the fair trade alternative for an equal and just form of socialdevelopment.

Second, issues of exclusion and social differentiation raise the question of how to deal withthe conflicting interests, ambiguities and incompatibilities enfolded in notions of a commonidentity and livelihood as associated with seeking social justice through markets. It is todaycommon to address certain socioeconomic categories – notably women and children – withinconsiderations of the distribution of benefits from fair trade. This has been an important step;nevertheless, a nuanced analysis of other socioeconomic inequalities and power relations in



sites of fair trade production needs to arise through adequate analysis of social and place-basedidentities.

Third, it is apparent that there is local accommodation between different value repertoiresand a flexibility of fair trade values within the pragmatics of organizing fair trade as acommercial venture in action. This complexity ‘on the ground’ is typically not reproduced infair trade advocacy; we would contend that if fair trade is to continue to have a radical edgeto challenge the ‘unfair’ status quo for producers in a way that reflects Southern voices andempowerment within twenty-first century concerns, then advocacy needs to capture morecomplex development dynamics within fair trade. These changes emerge in a global configu-ration of relationships and linkages that provide situated answers to a challenge posed byreflexive consumers: how within the framework of fair trade is it possible to increase people’sliving standards through market participation while at the same time raising political involve-ment in ways that contribute to social justice? To answer this question, theories favouring theliberalized market or state regulation do not provide room for citizen engagement when newsocial forms of market participation and cooperatism emerge.

The actualization of the cooperative movement in Nicaragua through the last coffeecommodity crisis constituted a process of making tangible fair trade practices and the poten-tial of local producer organization to tackle rural poverty. To dismiss the trajectories ofagrarian change may result in making invisible some categories of rural inhabitants andigniting contradictions and conflicts. But this is always the risk of external intervention whenframing the boundaries of modern agricultural production and organization against customarypolicy practices that discursively blur conflictive and contradictory aspects within the socialrelations of agrarian change. Understanding these processes contributes to the debate on fairtrade markets and development.

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