FEDECOCAGUA, Coffee Co-operative, Guatemala

FEDECOCAGUA General Information

Hand Holding Coffee Beans
FEDECOCAGUA is a second-level co-operative founded in 1969 to improve the position of small-scale coffee growers. It is the umbrella organisation for 19,354 coffee farmers belonging to 37 affiliated farmers’ organisations. FEDECOCAGUA provides a range of services including access to a credit scheme, technical support, transport, warehousing, and the purchase, processing and export of members’ coffee beans. This commercialisation of coffee production means the farmers receive higher prices than when they had to sell to middlemen. An organic conversion programme has also been established.

FEDECOCAGUA members, 70% of whom are indigenous people, are spread over different regions of Guatemala including Huehuetenango, Cobán, Verapaces, Retalhuleu, San Marcos, and Zacapa.. These rural areas are characterised by difficult economic conditions and poor infrastructure, particularly roads, electricity, communication, health, and education.

Coffee Production

Coffee is the main cash crop and provides 90% of farmers’ incomes. The average farm is around 10ha in size. Around 3.2ha is given over to coffee production which is 100 per cent shade-grown.

2002/03 season (harvest November-May):
Total exports: 10,764 tonnes, average price $1.04/lb
Total Fairtrade sales (14% of total): 1,518 tonnes, average price $1.26/lb
Total Fairtrade organic sales (2%): 17.25 tonnes, average price $1.41/lb
Total sales to conventional market (84%): 9,021.75 tonnes, average price $0.60/lb

Other crops

The farmers grow cocoa, banana, mango, and plantain which are also used as shade trees for their coffee. They also grow vegetables and some families keep animals and make handicrafts. A number of farmers are putting more resources into diversifying into citrus fruits and cardamom due to the extremely low coffee prices in recent years. Others have to find temporary work in other parts of the country, and some even migrate to the US for part of the year.

Fedecocagua and Fairtrade

FEDECOCAGUA was registered with Fairtrade in 2000, though some member co-ops have been selling to the Fairtrade market for more than 10 years. Fairtrade is currently working with 1,524 farmers from 13 first-level co-operatives and peasant organisations.

FEDECOCAGUA receives the Fairtrade minimum price of 126 cents/lb for their arabica coffee; this includes 5 cents/lb premium that is used for business and social development programmes. As shown above, FEDECOCAGUA currently receives more than twice the conventional market price when selling to the Fairtrade market.

The price of arabica coffee on the New York Exchange (international export price) has been in general decline since 1998 and fell to an all-time low in real terms of 45 cents/lb in October 2001. Prices currently stand at around 63 cents/lb (November 2003)

“Prior to Fairtrade we did not have any chance to survive, now we see the light at the end of the tunnel.”
Marcos M. Pérez, member, FEDECOCAGUA

Fairtrade Premium

With proceeds from the Fairtrade Premium, the co-op was able to buy new trucks which helped to reduce transport costs involved in coffee production. Some of FEDECOCAGUA’s communities have been able to establish healthcare centres and pharmacies to meet the health care needs of local families.

Other Activities

Following Hurricane Mitch In 1999, FEDECOCAGUA channelled donations from different international organisations to benefit the whole co-op. These funds made possible the reconstruction of FEDECOCAGUA’s co-operative school, several processing plants and coffee farms, as well as local roads and bridges that were seriously damaged by the hurricane.

FEDECOCAGUA supports the “María Auxiliadora Weavers Club”, a group of 25 women weavers who exporte their colourful handmade products to Germany (bags, place mats and napkins), benefiting more than 125 children.

Coffee in Guatemala

Coffee is the main agricultural export followed by sugar and bananas. Almost 40 percent of the workforce and 60 percent of the poor are engaged in some form of agriculture but tourism, apparel assembly, and other non-traditional industries all contribute more than coffee.

Over the last 10 years Guatemala exported between 200,000 and 292,000 tonnes of coffee a year. Annual export revenues rose to around $550m between 1995-2000. But low international prices saw the value of exports fall to just $306m for 247,000 tonnes of coffee in 2001, a significant decline that has had an adverse effect on the national economy.

Indigenous People1

The indigenous people of Guatemala largely comprise 22 separate Mayan ethnic groups and constitute more than half the population of approximately 13 million people. However, they remain largely outside the country's political, economic, social, and cultural mainstream. A 2000 UN report stated that 73 percent of indigenous people, and 72 percent of those living in rural areas, faced an institutional lack of economic opportunities and limited access to basic services. Approximately 83% of the population lives in poverty, rising to 90% among indigenous people. According to the UN Development Program (UNDP), 59% of the population lives in extreme poverty. Combined unemployment and underemployment were estimated at 46%. Violence and discrimination against women persist, as does societal abuse of children and discrimination against the disabled and indigenous people.

25% of all children do not attend school and 63% of those are indigenous girls. The average child receives 2.2 years of education. However, among indigenous children, the average drops to 1.3 years.

[ 1 ] US Department of State, Country Reports on Human Rights Practices - 2002 

Fairtrade Foundation 2004

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