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

Reframing ‘Crisis’ in Fair Trade Coffee Production: 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 change shapes producer engagement in fair trade. This orientation challenges a separation between the market and development, situating fair trade within global processes that incorporate agrarian histories of social change and conflict. Reframing crisis as a condition of agrarian life, rather than emphasizing its cyclical manifestation within the global economy, reveals how market-driven development encompasses the material conditions of peoples’ existence in ambiguous and contradictory ways. Drawing on the case of coffee production in Nicaragua, experiences of crisis demonstrate that greater attention needs to be paid to the socioeconomic and political dimensions of development within regional commodity assemblages to address entrenched power relations and unequal access to land and resources. This questions moral certainties when examining the paradox of working in and against the market, and suggests that a better understanding of specific trajectories of development could 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 in the global media. The BBC claimed that growers had to abandon their farms and that the World Food Programme had declared that one in eight children were starving as result of loss of income (WFP 2002; Carslaw 2003). These children were the families of landless labourers no longer paid to work on coffee farms owing to a dramatic fall in the international price of coffee beans. This situation was characterized as an outcome of a severe fluctuation in the world market price of coffee driving down supply (Fairtrade Foundation 2002, 2003). It obscured a more complex reality; namely, that agricultural labourers were vulnerable to international commodity prices because they had no access to land to grow food, a critical issue in rural Nicaragua. James Fraser, Associate Researcher, Department of Anthropology, University of Sussex, Sussex House, Brighton BN1 9RH, UK. E-mail: [email protected]. Eleanor Fisher (corresponding author), Senior Lecturer in International Rural Development, School of Agriculture, Policy and Development, University of Reading, Whiteknights, Reading, RG6 6AR, UK. E-mail: [email protected]. Alberto Arce, Rural Development Sociology, 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 given generously to enable us to develop insight into experiences of fair trade in Nicaragua; also to five anonymous reviewers for their critical contributions in the development of this paper. All views expressed are those of the authors, who remain responsible for any shortcomings. © 2013 John Wiley & Sons Ltd

doi: 10.1111/joac.12014

Reframing ‘Crisis’ in Fair Trade Coffee Production 53 In this paper, we examine the relationship between fair trade and local trajectories of agrarian change. We proceed from the observation that the production and marketing of global 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 between supply and demand in global markets but are a feature of rural existence, underpinned by local inequalities in access to land and capital and shaped by how peoples’ material circumstances 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 universal prescription for producer livelihoods – is organized through existing forms of development that, we argue, position producers within an international trading complex that disregards the dynamics of agrarian development. This is significant because these dynamics shape who is able to benefit from international markets and, concomitantly, who is excluded. In effect, the Nicaraguan ‘coffee crisis’ of 2000–3 forms a critical event that enables us to rethink the materialization of market-driven development and reorganization of cooperative forms. Our rationale for focusing on crisis is that in times of stress, underlying factors such as labour and property 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 of crisis as a problem of price emerging from global commodity markets creates a partial understanding that excludes significant social and political factors within rural development, arguably favouring a view of idyllic cooperatives and the unproblematic political and organizational inclusion of producer participation in global commodity markets. The contemporary fair trade movement is party to contradictory tendencies – growing corporatization accompanied by the prevalence of private agrifood standards, but also diversification through Southern producer-led initiatives to gain greater control over the governance of fair trade, through innovations to localize supply chains, and through initiatives to connect to producers’ social and place-based identities. This suggests both potential for fair trade to be dominated by business dynamics that devalue an inclusive and developmentally informed approach, and for emerging opportunities within sections of the movement to take better account of specific development trajectories and producer empowerment. Whether these opportunities are grasped in a manner that informs wider thinking and practice on fair trade or whether they are missed in a drive to increase market share is a question that remains to be answered. To explore how fair trade performances are incorporated into existing social relations suggests the need to engage with the political economy of agrarian change, considering the character of everyday life and broader socioeconomic and political configurations. This demands empirical studies that address the materiality of the social. In order to do this, we take the case of coffee production in Nicaragua, locating fair trade within a history of agrarian struggle that stretches from the capitalist penetration of the countryside in the nineteenth 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 cooperative development. Three questions drive our analysis. First, how is crisis perceived by producers within a specific agrarian context, and in what way does this relate to an understanding of crisis in terms of price within international markets? Second, how do historical trajectories of agrarian struggle shape class and status distinctions among rural producers and the manner in which they connect to fair trade markets? And, third, what implication does an appreciation of agrarian change hold for our understanding of the positioning of development processes © 2013 John Wiley & Sons Ltd

54 James Fraser et al. within contemporary fair trade? To answer these questions, an ethnographic approach is used to focus on the political economy of coffee, agrarian crises and fair trade. Data are drawn from five months’ fieldwork in the main coffee-producing area of northern Nicaragua, conducted between November 2002 and March 2003, and fieldwork visits and semistructured interviews with representatives of the Nicaraguan fair trade movement in 2011. For ethical reasons, pseudonyms are used to confer anonymity on informants, cooperative organizations and settlements. We recognize that our Nicaraguan case has exceptional elements, but this is partly the point: 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 and material specificities of agrarian development. In this respect, coffee constitutes a commodity assemblage1 that enables us to explore fair trade interventions in local spaces. One exceptional element relates to corruption in cooperative organization, raising questions over its bearing on the analysis. We suggest that simply labelling a process ‘corrupt’ compresses complexities, such as accountability and the use and abuse of power, which need to be teased apart to understand the political process of administering resources within the agrarian economy. Unless this is done, there is a danger of emphasizing differences between us (who consume coffee and may 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-production organizations in Africa, the Americas, Asia and Oceania to use international markets for commercial opportunities (FLO 2011). Coffee grown by small-scale producers was instrumental to fair trade’s development, but today a diverse range of food and non-food products are fair trade–certified (FLO 2011). At the heart of fair trade is an emphasis on ‘fair access to markets under better trade conditions’ (Fairtrade Foundation 2011, n.d.); this is achieved through techniques of intervention that include a guaranteed minimum price to cover average costs of production and to protect against price volatility, and a premium for investment in development projects (women, children’s education, community health, environment). Linked to this is pre-financing, long-term contracts with buyers, labour rights, democratic producer organization and environmental conditions. In effect, the fair trade movement has developed a universal prescription for international market access. The expansion of fair trade through corporate mainstreaming is far removed from its origins as a market ‘alternative’ (Brown 1993; Tallontire 2006). Change was stimulated by the introduction of private standards and certification from the late 1980s. The timing is significant because it was an era when universal regulatory strategies were being promoted in global markets, shaped by neoliberal thinking on the need to reposition agricultural producers within registers of quality for production, trading and consumption. Forms of global policy regulation were introduced that located commodity circulation in world markets according to values embodied in the goods (Marsden and Arce 1995). Fair trade’s application of a universal prescription for international market access resonates with this period in neoliberal development 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).

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Reframing ‘Crisis’ in Fair Trade Coffee Production 55 Against a background of the ‘mainstreaming’ of conventional business practices and growing involvement by the corporate sector (for a review, see Fisher 2009), the intellectual politics of Western scholars has denounced a move away from fair trade’s seminal values and radical 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 and development 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 in research questioning the impact of certification schemes upon producer engagement (Shreck 2005; Dolan 2008; Raynolds 2009). Within the fair trade movement itself, there is profound tension over the direction of contemporary fair trade. Parts of the movement embrace the potential for producer impact provided by multinational corporations anxious to acquire social credentials through fair trade sourcing. Contesting this approach, however, are activists, alternative trade organizations and Southern producer networks who hold this to be a betrayal of fair trade’s radical voice for reform of the international trading system (Moberg and Lyon 2010, 12; cf. Davenport and Low 2012).2 These tensions have led to an interesting recent debate. On the one hand, there is a strong orientation towards recognizing the need to operate commercially within existing power configurations of the retail sector, through integrating modern organizational and business chain dynamics in order to provide added value to production for fair trade markets and extend 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 particular view of trade and development, and has the potential to instigate market innovations and transform commodity processes in producer countries in ways that may not benefit producer development in the long term. On the other hand, and at least partly in reaction to both corporate control and to imbalances of power in fair trade governance that until recently favoured European and North American dominance, there has been a growth in: producer-led certification schemes such as Commercio Justo México and Sistema Nacional do Comércio Justo e Solidário Brazil (Renard and Pérez-Grovas 2007; Smith and VanderHoff Boersma 2012); in connections to local trading mechanisms, identity politics and place-based concerns (Jaffee et 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 situated commodity assemblages that have developed around fair trade. Contemporary debate on greater producer empowerment, coupled with emphasis on networks and leadership in the global South, generates potential for greater democratization within the movement, for better linkages to regional development, and for improved connections to other initiatives and actors. However, against a background of growing corporate involvement in fair trade, giving value to producer-led innovation and changing ideas and practices raises profound challenges, not least through the threat of undermining current market 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 Fairtrade International/FLO and subsequently including plantations and factories within its operations. This has had far-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-scale producers (Moberg and Lyon 2010, 12; TWIN n.d.(b); WFTO n.d.).

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56 James Fraser et al. conservative terms regarding projects that are lineally integrated to a local site in order to oppose a dominant neoliberal discourse on individual rural entrepreneurs and markets. Such lineal integration is linked to emphasis on instrumental assessment of the impact of fair trade on development outcomes (Nelson and Pound 2009). A more radical position would be to locate fair trade within a development approach that encompasses grassroots action towards building commercial commons within regionally situated commodity assemblages. Fair trade advocacy can reinforce a simplistic view of development and generates an implicit ‘moral high ground’ through accounts of the benefits that fair trade brings to poor producers and portraits of development success (e.g. Lamb 2008; Bowes 2011; Haslam and Hoskyns 2011; cf. Dolan 2010). Such accounts are seldom accompanied by scrutiny of the social relations and lived experience of development (Fisher 1997; Getz and Shreck 2006; Fridell 2007; Dolan 2010), or by understandings of local complexity, conflict and political agendas (Arce and Fisher 1999; Lyon 2007; Arce 2009). In our view, without considering historically situated agrarian struggle or seeking to address local development dynamics and power relations, there is a danger that fair trade perpetuates deep-rooted inequalities and exacerbates power struggles, making principles of trade justice appear abstract – perhaps even hollow – despite laudable intentions. If a nuanced understanding of development and the politics of development is not taken into account, a more equal market perspective cannot fully open up the potential for local development through contemporary forms of social innovation (cf. Edward and Tallontire 2009). This suggests the need to situate fair trade values in relation to specific organizational experiences and material trajectories that consider the political economy of land ownership and entrenched power relations (Kruger and Du Toit 2007; Luetchford 2008b), the historical and developmental significance of cooperative organization (Fisher 1997; Luetchford 2008a; Arce 2009; Ofstehage 2012) and the role of local politics in shaping engagement with fair trade product markets (Arce 2009; Lyon 2006). Here, the significance of reflecting on crisis enters the picture. Crisis is a complex, multifaceted notion. It emerges in discourses on capitalist incompatibilities, 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 high and low product prices and associated ‘commodity crises’, captures notions of market instability and risk as a global semiotic device, but obscures a view of the social as embodied in multifaceted and diachronic agrarian change (cf. Joas 1996, 145–95). In this respect, the idiom of crisis can also be a condition of producers’ existence; it is manifest in people’s expressions of how they are affected by development interventions in experiential terms far broader than epistemological definitions of crisis rooted in capitalist economics. As Nicaraguan coffee producers interviewed for this research stated, ‘here there has always been crisis’, a perception that references local politics, patron–client relationships and cultural ideas on reciprocity. In this respect, while the notion of crisis has an underlying association with universal cyclical periods of stress and predicament, it has both material and discursive dimensions, and generates social and political ambiguity concerning local processes of change. Our perspective treads a path between understanding crisis as an aggregate economic and cyclical phenomenon within global capitalist arrangements and crisis as a social category emerging within a given context (cf. Pigg 1992). To take this path, we suggest that there is a need to encompass the relationally situated dimensions of crisis and connections to a diversity of actors, spaces and knowledge that appropriate a set of notions and legitimize their courses of action within a particular field of practice. In this sense, notions of crisis can take us beyond abstract ideas of social justice and equality, to relocate the sphere of small producers’ © 2013 John Wiley & Sons Ltd

Reframing ‘Crisis’ in Fair Trade Coffee Production 57 everyday lives within a conceptualization of how actors access markets and development resources. This may be in ways that are represented through different discursive traditions in terms of trade and justice or freedom and equality, and not simply a matter of tracing the impacts 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 have the potential to create a potent politics of conflict and sharp divisions in favour of particular social groups, stimulated by social and institutional regularization and situational adjustment to markets. Reinterpreting a past debate between Miliband (1968) and Poulantzas (1978), the internal political crises of a country may not coincide with generic economic crises of commodities. However, when these notions align, we can speak of significant discontinuities between the long-term agrarian trajectories of a locality as a social place and a discourse on fair trade that seeks to provide a range of political, democratic and equity relations, as the global socialization of an abstract discourse of fairness politically unfolds through local experience of gaining access to markets and development resources. These issues are explored in the following case, which turns to consider scholarly work on fair trade and crisis in Latin American coffee production and then focuses on the material history of the coffee bean in Nicaragua to provide a background to evidence on contemporary cooperative organization for fair trade markets. CONTESTED REPRESENTATIONS OF CRISIS IN DEBATES ON COFFEE PRODUCTION IN LATIN AMERICA Coffee was an important commodity in the development of fair trade; however, attempts to broaden the impact of fair trade upon impoverished Latin American coffee producers remain profoundly challenging (Murray et al. 2006). The sale of coffee on world markets is characterized by extreme price volatility. In the 1960s, governments sought to counter this through the International Coffee Agreement (ICA), to constrain oversupply, stabilize price and promote consumption (Renkema 2002). The first ICA was introduced in 1962, followed by 5-year agreements 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 be regulated and a free market was introduced. This was hastened by the prevailing neoliberal development model promoted by the World Bank and the International Monetary Fund and taken up by many coffee-producing countries, with the consequence that state-led producer organizations, subsidies and credit were disbanded (Talbot 2004; Goodman 2008). Speculation, market segmentation and harvest conditions all contribute to instability in international coffee markets. Rural producers benefit from high prices, but when they are low the effects are strongly felt, especially within economies dependent on coffee for export revenues. This is made acute by little value-added being captured by producer countries, with 94 per cent of coffee processing and packaging taking place in the developed world (Osorio 2002, 33). A critical situation within coffee commodity markets, characterized as a crisis by the fair trade movement, occurred between 2000 and 2003, when green coffee bean prices dropped to their lowest level in real terms for 100 years due to increasing global production and low demand (Varangis et al. 2003; Bacon et al. 2008). Research has focused on the consequences of this global ‘coffee crisis’ for farmers in Nicaragua, with varying conclusions over whether fair trade offered protection. Sick (1997), writing before the fall in coffee prices, characterizes crisis as the effect of boom and bust on households involved in the coffee economy, com© 2013 John Wiley & Sons Ltd

58 James Fraser et al. bined with population pressure, land scarcity, increased production costs and an overreliance on coffee production. Bacon (2004) finds that participation in organic and fair trade networks reduced 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 the development of a specialty coffee business for more educated, small-scale Nicaraguan farmers belonging to farmer cooperative unions selling to the fair trade market. In contrast, Utting-Chamorro (2005), Wilson (2010) and Valkila (2009) question the extent to which fair trade helps coffee farmers break free from cycles of debt. Valkila (2009) finds that 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 supported by Beuchelt and Zeller (2011), who demonstrate that over a 10-year period, organic and organic–fair trade farmers in Nicaragua have become poorer relative to conventional producers. These studies are moderately to highly critical of aspects of the production of coffee in Nicaragua for fair trade markets. This reflects wider findings from the region: writing on coffee production in Mexico, Jaffee (2007) concludes that while fair trade makes a difference to some peasant livelihoods, it is not enough to prevent them being affected by crises. This view is supported by Luetchford (2008b), who focuses on coffee producers in Costa Rica to emphasize that fair trade may benefit more affluent individuals but not the poorest, and that it remains caught in conflicts of interest that characterize the coffee industry and social divisions that reflect the wider agrarian political economy. Méndez et al. (2010) also align with these conclusions, arguing that in Central America and Mexico sales to fair trade–certified markets offer better prices, but the contribution derived from premiums has limited impact on household livelihoods. Such debates are important for understanding and representing the complexities of global capitalism and its diverse effects on small producers’ livelihoods. However, rather than discussing fair trade’s role as a buffer against the consequences of crisis, we want to focus on how an understanding of a different representation of crisis helps elucidate the local process of translation and mediation by different actors through their performance of fair trade. This will lead us to contest a representation of crisis as exclusively a price problem related to global commodity markets. At the time of writing (2011), international commodity prices for coffee are at 30-year highs. However, boom and bust are recurrent features of coffee markets, and history would suggest 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 nineteenth century, as capitalist relations transformed agrarian reality. Coffee cultivation began around 1850, drawing the country into the world economy (Samper 1999). As with other export crops, coffee was predominantly produced in the hacienda,3 with production for international markets creating an exploitative way of life for peasants (Dore 2003) that fed into processes of nation-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 Nueva Segovia and in Masaya, south of Managua, the greater proportion of coffee was grown by small producers. These are, however, exceptions.

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Reframing ‘Crisis’ in Fair Trade Coffee Production 59 Despite being part of the international coffee market, much of the domestic economy remained outside this larger process; as a consequence, and due to exploitation and loss of land and livelihood, the standard of living of peasants deteriorated and food security became an issue (Enriquez 1991). Peasant dependency and powerlessness vis-à-vis the importance of the hacienda, coupled with processes such as the large-scale adoption of a variety of export crops and cattle-raising, generated highly unequal land distribution, a state of affairs that continued into the twentieth century and was compounded by an expansion in coffee production in the 1950s. This reinforced unequal property relations and contributed to the Revolution of 1979. The Sandinista Revolution and Agrarian Reform Following the Revolution of 1979, the Frente Sandinista de Liberación Nacional (FSLN) started a process of agrarian reform and land redistribution.4 Rural people who had been hacienda workers adopted the commodity that had mediated their subjugation, with coffee becoming part of their livelihood and identity. Historically, ‘coffee labourer’ (cafetalero) was a linguistic term applied to social relations within a large landholding (latifundio): it referred to the ownership 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 an oligarchy, whose domain was the place where coffee was grown (Wheelock 1975; Dore 2003). However, coffee was not part of the personhood of the workers, who confronted it as a commodity crop that imposed hacienda relations and labour exploitation as a point of reference for development through a discourse of domination and profit, rather than being incorporated into a territorially and socially cohesive unit that gave civic respect to hacienda labourers. Questions over the identity of coffee labourers (cafetaleros) and their place in capitalist development emerged in Sandinista debate (Dore and Weeks 1992). One position held that capitalism was developed from above, with debt peonage and the state labour draft constituting a way of consuming relations of exploitation and separating coffee from the self and social relations, an objectification that generated a ‘Junker path’ to modernity. An alternative position emphasized that servitude and exploitation in the hacienda was not significant and a selfcreated capitalism emerged through processes of differentiation and land expropriation that engendered a peasant path to modern Nicaragua. The first position advocated the creation of collective state farms and the second called for land redistribution to small and medium-sized rural producers. Both, however, missed the ambiguous nature of the commoditization process in rural peoples’ subjectivities, which served to perpetuate exploitation. This subjectivity is incorporated into how agrarian trajectories are appropriated within differential resource and access strategies (cf. Arce 1993). For some, this meant the development of livelihood practices that 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 population exist beyond archetypical representations of agrarian trajectories and policies that diminish the complex 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 government 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 by international observers. Despite this, the Contras continued their counter-revolutionary struggle until 1989. In 1990, the FSLN lost the election to Violeta Barrios de Chamorro; however, in 2006 former FSLN President Daniel Ortega was re-elected.

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60 James Fraser et al. invisibility of social categories and raises questions about the policy consequences of categorizing people according to discourse representations (Fisher 2002). This is important in fair trade 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), with the consequence that parts of a rural population may not benefit from resource allocation through development and trade (see Luetchford 2008b). This raises the question of whether the fact that the 2002–3 global media reports (noted in our Introduction) referred to landless labourers as victims of the Nicaraguan coffee crisis is an indication that their social meaning is today 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 agrarian reform led a significant portion of the rural poor to become propertied, with a transformation in the social fabric to achieve more equal property distribution. The main beneficiaries were small producers, as underused land that formed part of the haciendas was confiscated and distributed to farmers organized into cooperatives (Enriquez 1991, 88).5 This stimulated the cooperative movement, such that by mid-1980, 2,512 cooperatives were operating in Nicaragua (Enriquez 1991, 88) and by the end of 1988, around 108,765 peasant families had benefited from reform, 71 per cent receiving land through redistribution and 29 per cent legalizing titles for land they had previously occupied (Enriquez 1991, 90). As the category of ‘small producer’ developed, this stimulated a transformation of rural peoples’ imagination – the discourse on land ownership enabled the category of coffee labourer (cafetalero) to be repositioned: whereas in the past it denoted an exploitative relationship 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 and ex-landless labourers sought to organize themselves for market relations. The existence of ex-landless labourers – those who were chronically poor – remained ‘invisible’ as a social category within repeated agrarian policy interventions including, implicitly, local cooperative organization for fair trade. The newly created category of cafetalero included small landholders and ex-landless labourers organized into Cooperativas Agricola de Credito y Servicio (CACS) and Cooperativas Agricola Sandinista (CAS).6 In effect, social and political ambiguities and incompatibilities were enfolded within the identity of being a cafetalero. Differences of interests and knowledge were contained in the provisional arrangements of the cafetalero discourse, which emphasized the sharing of the same agrarian history, land and cooperative experience. In effect, agrarian reform did not lead to the universal emancipation of the rural poor, but to a complex political process in which the social category cafetalero became socially fragmented and dispersed through the hierarchical legacies of the hacienda’s past into the genesis of the regularization of ‘small landholders’ and ‘ex-landless labourers’ within the cooperative movement 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 was confiscated, but a substantial proportion was not redistributed because it comprised modernized agro-export estates, 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 people working their land individually to produce staples; whereas CAS reflected revolutionary values, being based on cooperative production and defence of the land. CAS cooperatives embodied the FSLN ideal for a socialist collective, whereas the FSLN were not keen on the CACS because people worked individually. © 2013 John Wiley & Sons Ltd

Reframing ‘Crisis’ in Fair Trade Coffee Production 61 affected people and created different historical narratives to explain trajectories of agrarian change 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 and emotional importance for rural inhabitants, form an important background to contemporary coffee production for fair trade markets. Against the trajectory of revolution and civil war through the 1980s, followed by neoliberal policy strategies and unprecedented deregulation in the 1990s, anxiety grew over how to be economically competitive. Land ownership also raised substantial issues: while land titles were granted, many remained incomplete or incorrect, with property rights being a matter of legal contestation and reflecting a wider crisis of access to property, development opportunities and the market economy. This was further entrenched by the privatization of land after the Sandinistas lost the elections in 1991, as policies of land redistribution and neoliberal market economics proved incompatible. Within this, memories of the war and expectations that policy reform could provide access to land and services have each played their part in the process of imagining development in a country on the edge of the 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 of producer organization for international markets, helping to support peasant livelihoods during a difficult and hostile period between the Sandinistas and the propertied classes (Haslam and Hoskyns 2011, 57). Many of these cooperatives had their roots in the Sandinista Revolution and subsequent civil war, with the consequence that fair trade became part of a process of regularization and stabilization of the political gains of the Revolution, together with the reinterpretation of rules and relationships after the Sandinistas lost the national election in 1990. Cooperatives formed by the FSLN during the 1980s replicated hierarchical forms of political organization, including military coordination. Since this period, cooperatives based in settlements have been known as first-grade cooperatives, of which there may be more than one per settlement. Groups of these first-grade cooperatives form a Union of Organized Cooperatives (UCA) that functions to generate volume and to market the coffee of rural cooperatives, usually at regional level. After 1990, some of these UCAs were rebranded as private limited companies (PLCs) (in Spanish, Sociedad Anónima), in keeping with neoliberal language. Federations form a third type of cooperative organization, which act as larger umbrella 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 revolutionary participation and cooperative organization. This is linked to associations with families who did or did not participate in the Revolution. In effect, political belonging and relations to 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 political meaning 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 apparent that they view crisis as a condition of their existence, rather than simply a disruption to the coffee economy. This is not to downplay the extreme consequences of the fall in international © 2013 John Wiley & Sons Ltd

62 James Fraser et al. prices for coffee in 2000–3, whose effect included the inability of coffee growers to access credit to sustain themselves and their families, owing to the foreclosure of agrarian banks. As one farmer put it: Before [the current crisis] when there was money in the banks the people arrived at the bank with their land titles and the bank advanced money on loan. A part was to assist with the coffee, another part was to buy food for the family, another part to clothe the children and send them to the school. Now the result of the bank not lending money is the establishment of a subsistence form of life (sobrevivencia). (Interview, November 2002) Difficulties in accessing credit constrained the ability of small producers to employ labour or buy 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 and informal lenders, with banks seizing properties (see Wilson 2010). At the household level, reduction of income along with rising prices of basic necessities affected families profoundly and 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 urban migration. The Nicaraguan peasantry is characterized by recurrent economic, social and environmental uncertainties. Fundamentally, this is an embodiment of the historical crisis of property, a legacy of the agrarian reform, which left many incipient coffee farmers in ambiguous positions of legality regarding the ownership of land, and prey to appropriation of land titles by the banks, compounded by the privatization of land in the 1990s. Land, coffee and the global commodity crisis therefore reflect changing circumstances and contingencies, which need to be 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 dimensions of conflict within a settlement and the vicissitudes of the scaling-up of cooperative organization are explored in a discussion of how landless people were excluded from fair trade. These conflicts provide the backdrop for understanding the notion of fairness and cooperative strategies in rural Nicaragua: interviews conducted in 2003 and 2011 suggest that similar conflict has been rife in other localities where cooperatives were established as producer 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-growing area 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 hacienda called La Carbona. The cooperative was named after a man killed fighting for land for the poor 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. Resettlement from different areas created divisions based on origin, and incorporating class and status distinctions. The people from near Venezia were smallholders, while those from La Carbona were landless labourers. Differences coalesced around land ownership and personal animosities 7

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

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Reframing ‘Crisis’ in Fair Trade Coffee Production 63 between a relatively rich and powerful family that dominated Venezia – the Marquez – and representatives of the ex-landless group from La Carbona. The Victor Buendía Cooperative leader, a former Sandinista soldier named Santiago who worked 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 idea of the Revolution while the others were [landless] labourers. Those from Venezia brought many things such as cattle to the commons. The others from La Carbona brought [only] their labour and commitment. During the war there were always small problems . . . The people from Venezia had better economic possibilities and a better capacity for management. The ideologues were from Venezia too, so there was always disequilibrium. (Interview, January 2003) These comments underline how historical social divisions between smallholders and former landless labourers shaped local experiences of the cooperative movement and exposed power differences 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 ended in 1990 the land was divided up and those who could afford it obtained individual titles. In effect, the end of the war contributed to the recurrence of animosities. Political differences between 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 Victor Buendía Cooperative, originally a CAS, became an ambiguous space full of local political complexity, 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 (see Haslam and Hoskyns 2011). In our fieldwork region, a Sandinista called Macario visited settlements that were cooperatives during the war, saying that fair trade wanted to support them. Macario mobilized people to join the UCA, GIPROCOOR, by saying that they could receive US$125 per quintal oro (100 pounds weight of processed coffee before roasting) if they participated in fair trade. As Macario was well known in the Sandinista networks, he was able to 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 medium and large-scale individual coffee producers. The local Victor Buendía Cooperative became part of GIPROCOOR. However, according to 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 accomplices were accused of appropriating US$640,000 in pre-finance credit from European buyers in 1996–7 and Macario was subsequently jailed. After the demise of the UCA GIPROCOOR in 1997, a private limited company (PLC) with the name of SEPASA was created to clean up GIPROCOOR’s corruption and uphold fair trade values through good management and business principles. Five of the European buyers agreed to continue trading on the condition that they held control over decision-making and management personnel. With the pre-financed credit plus subsequent interest, the PLC inherited a debt of US$722,990 from the dismantled GIPROCOOR. Max Havelaar, a Dutch fair trade organization, sought to find an administrator to represent the European coffee buyers’ interests, which the producers agreed to as a starting point for © 2013 John Wiley & Sons Ltd

64 James Fraser et al. 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 the difference between the price of coffee on the New York commodity trading exchange and the fair trade guaranteed price in Nicaragua. Fifty per cent of the revenue was channelled into debt 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 local markets, because producers needed immediate finance. The outcome of this was that to restore market credibility and discipline among coffee farmers in SEPASA, these farmers were obliged to use the fair trade premium to pay off a debt from corruption that had not involved the vast majority. This disciplinary action brought home to local producers the logic of administration and management of fair trade, as part of a transnational business enterprise culture. The years from 1999 to 2004 were critical for coffee cooperatives: difficulties over redistributed property, processes of privatization, and land being viewed as dubious by banks and companies (cf. Fiallos 2002) were exacerbated by the coffee crisis, the effects of Hurricane Mitch (1998) and a general economic crisis, all of which led people to sell land and accumulate debt, with seizure by land speculators and banks forcing them to migrate. These processes had negative impacts on coffee production within cooperatives, certainly until national politics stimulated resurgence in the cooperative movement as a result of the Sandinistas return to government in 2007. Local Cooperative Fragmentation and (Re)-Formation At this time, people living in La Montañita who were members of the Victor Buendía Cooperative were desperate for cash, so they sought to reactivate their cooperative. A coffee exporter was sought and subsequently, in 2000, SEPASA accepted the Victor Buendía Cooperative as one of its members. However, local conflicts between the ex-landless group from La Carbona and the former landholders represented by Santiago and the Márquez family continued, because the people who were involved in the corruption case remained part of the cooperative. 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 to exclude them from joining SEPASA. This conflict emerged in fights over land. Apparently, Santiago and the Marquez family won these fights due to ties with Sandinistas in the regional police force. In effect, the division rooted in history between small landholders and ex-landless people served to exclude some from the fair trade market; only those who were willing to enter the political domain of the Marquez family were able to access fair trade. Nevertheless, widespread mistrust generated by the UCA GIPROCOOR and of fair trade as a result of the experience of corruption made many people wary of entering SEPASA. Members of the Marquez family who were within the Victor Buendía Cooperative started to work with SEPASA (with fair trade access). Others, mainly ex-landless labourers originating from La Carbona, worked with a private coffee-buying enterprise, AGRONICA, which used 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 effect of losing the land title effectively split the settlement into two groups: the small landholders and others who were now landless again because they had lost their property rights. In one interview, Santiago – representing the Marquez family – maintained a pejorative discourse to legitimize the local exclusion of people from SEPASA, saying ‘I brought fair © 2013 John Wiley & Sons Ltd

Reframing ‘Crisis’ in Fair Trade Coffee Production 65 trade to this settlement’, implying a degree of control and propriety over commercial opportunities. As one informant, originally from La Carbona said: Because of the political confrontation in 2000–3 between the two sides – people affiliated with those who originated from La Carbona don’t enter SEPASA. He [acting as the head of the Marquez family] likes people to do what he wants. He likes to act like your father;8 and further people still lack confidence in SEPASA because of the bad experience of the UCA GIPROCOOR. Development Intervention After 2003, SEPASA was becoming a success story against the odds, with a membership of around 450 small producers from 12 settlements organized into seven cooperatives.9 Part of the reason for this was because the effects of Hurricane Mitch in 1998 had led Max Havelaar and Solidarity from The Netherlands and ACRA from Italy to implement a European Community project for affected producers from Nicaragua and Honduras. SEPASA became a hub for the development relief effort in Nicaragua, with support from Christian Aid, CAFOD and Irish 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 corruption. Nevertheless, even today (2011) there are settlements and first-grade cooperatives excluded 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 and increasing coffee volumes for international markets, not galvanizing producer interests around the value of cooperative organization (Denaux 2008, 13). By 2004, the debt incurred through corruption by GIPROCOOR had been almost entirely paid and the cooperative treasurer liaised with Fairtrade Labelling Organizations International (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 agree the transition. Explanations for this decision included the fact that members wanted a form of collective organization because despite paying off the debt they were not part of the decisionmaking process of the commercial association. Also, if the buyers decided to go with their 51 per cent of the shares, this could place the PLC and producers in jeopardy. Finally, in contrast to a UCA, taxes for a PLC are very high and this money could not be used to benefit local producers.11 Underpinning these factors was also the fact that international development agencies wanted to work with a cooperative organization where local producers had decision-making power. However, the idea of bringing back a UCA provoked people involved in the corruption case who had been displaced from the original UCA GIPROCOOR; they now wanted to 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).

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66 James Fraser et al. financial decisions. However, they met with resistance and a vote decided that SEPASA would stay in its existing location but would revert to being a UCA. After the debt was successfully repaid and cancelled, only one buyer, EZA Fairer Handel GmbH from Austria, stopped buying coffee (because their demand was just for organic coffee and 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 new coffee buyers. In 2007, the Sandinistas returned to power in Nicaragua, stimulating a period in which the cooperative movement became relevant again for development and market opportunities within coffee production. In an interview in 2011, the general manager of the UCA SEPASA proudly highlighted the cooperatives’ social development programmes funded by Irish Aid. Gender awareness, educational support, school buildings, uniforms, scholarships, artistic cultural activities, libraries in rural areas and health programmes are presented as central activities of the revitalized UCA SEPASA: Today [2011] we have a different situation to the one that existed in the 1990s. We have better roads, electrification programmes in the rural areas, houses for the more marginal people and education is free. These are national policies that have positively impacted on the social development of people. Better still is that international coffee prices are good and the producer can benefit from this. Today we have channels to get credit. As an organization 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 our intention is to decentralize the credit programmes so local people are less dependent on the regional UCA. It is clear that poverty has receded but not disappeared. We are better prepared than during the 1990s to face the next coffee crisis. We should not forget that a 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 rain and 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 reorganization, with individual property and land titles being regularized. Today, the UCA SEPASA provides credit to groups of young cafetaleros and women to buy land, in the expectation that this will motivate them to became members of first-grade cooperatives and increase their numbers 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 an agrarian trajectory different from that of large-scale coffee production. Like many other cooperatives in rural Nicaragua, the Victor Buendía Cooperative was created during the civil war and reoriented itself towards the fair trade market in the 1990s post-war period. Within this process, people’s socioeconomic circumstances, interests and backgrounds shaped how they 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 of rural life, one that is punctuated by ‘events’ – within the civil war, the steep downturn in international coffee prices, the consequences of Hurricane Mitch and so on – that stimulate change within lives and agrarian trajectories. © 2013 John Wiley & Sons Ltd

Reframing ‘Crisis’ in Fair Trade Coffee Production 67 The case highlighted how acts of corruption and associated conflict led to a loss of trust in the cooperative movement and in fair trade, a situation coinciding with a neoliberal policy shift in Nicaragua. When the ability of producers to sell coffee on fair trade markets was threatened by this corruption, Max Havelaar’s representative for Central America intervened to generate a ‘new’ version of a fair trade organization by creating a PLC. This strategic move helped 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 this point, producer participation almost exclusively concentrated on small landholders and the importance of good management and market requirements. This intervention sought to reclaim solidarity values within the more mainstream market orientation of parts of the fair trade movement and the International Coffee Register, and in effect contributed to the reorganization of organizational practices within the Central American region. Despite this move, at local cooperative level the language was of conflict, power and exclusion of ex-landless labourers who entered into deals with private companies, the collapse of 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 of debt repayment within the PLC and new UCA SEPASA (producers with land titles did not want to get into the same situation). Indeed, in interviews, repayment of the debt emerged as an important action that led to the return of cooperative values, a position promoted by Nicaraguan representatives of European buyers who used issues of accountability as justification. In short and surprisingly, repayment of debt and commercial solvency acted as binding elements to return to fair trade’s ‘values’ and European buyers’ acceptance of the relationship between trade and development. Redefining the commercial language in terms of fair trade’s universal principles provided legitimization for incorporation of professional management and financial stabilization. This did not prevent local conflict, however, as changing patterns of loyalties and affiliation cut across universal principles of fair trade, particularly in the contested relationship between small landholders and ex-landless labourers. This is the basis upon which specific processes of exclusion and marginalization take place in Nicaraguan rural cooperatives and highlights their differentiated character, while revealing the flexibility of fair trade values when confronted by the pragmatics of organizing fair trade in action. The intervention was initiated to keep commercial linkages open with Europe and America. These processes bring to the fore questions concerning the relationship between fair trade and processes of development intervention. The implementation of international development programmes after Hurricane Mitch in 1998 added a new dynamic, which repositioned the life-worlds of coffee producers and associated issues of power over land and political control, including seemingly incompatible interests between small landholders and ex-landless labourers, reinforcing underlying tensions within the category of coffee producers (cafetalaros). Local concerns for health, education and self-respect permitted engagement with fair trade and international development agencies, favouring the significance of linkages between local cooperatives and the regional UCA/PLC. Indeed, rather than a confrontation between trade and development, there was an accommodation between different value repertoires and the ability to translate notions such as accountability, participation and organizational efficiency into practice. Within the above processes, small landholders opened up room for manoeuvre in the cooperative movement and built a powerful fair trade network. However, processes of exclusion cannot simply be overcome by providing producers with international market opportunities. In 2011, the General Manager of UCA SEPASA was aware of the need to address © 2013 John Wiley & Sons Ltd

68 James Fraser et al. excluded categories of people in the settlements, but considered that the only way to secure social development programmes was through further embedding the UCA within local cooperative ‘reality’ and expanding the domestic and regional market. However, she acknowledged that two scenarios could undermine this process: a new global coffee commodity crisis and the need to develop commercial relations with Nicaraguan mainstream retailers. The latter situation is already taking place, with potential to de-territorialize the UCA/PLC SEPASA’s orientation from local social development to concentrate on the national market, where alliances with retailers would trigger organizing processes specializing in the trading of nonfair trade-certified coffee. CONCLUSION A severe fluctuation in the world market price of coffee in 2000–3 has permitted exploration of 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 the dynamics of agrarian production for fair trade markets. Highlighted within this process is how local conflict and existing political ideologies both facilitate and restrict organizational repertoires within a commodity assemblage. This reminds us that the commoditization process does not expand in a linear fashion from the global to the local or vice versa, and calls into question the assumption that crisis is the same everywhere. Our argument over crisis has taken the paradox of fair trade working in and against the market and engaged with local narratives of crisis to demonstrate that there are pluralistic ways of socially organizing market production. Historical trajectories of agrarian change are not overturned by fair trade but influence producer organization, with agrarian struggle generating unintended outcomes. In this respect, focusing on crisis offers a window through which to understand how agrarian change transforms social and spatial processes of boundary formation within cooperative organizational forms supplying products to fair trade markets. When considering how historical trajectories of agrarian struggle shape class and status distinctions among rural producers and the manner in which they connect to fair trade markets, the case of coffee production through cooperative organization in rural Nicaragua has demonstrated that fair trade becomes part of a commodity assemblage that incorporates particular sets of social relations, political connections and economic practices with historical roots and complex inter-linkages to contemporary development interventions and product markets. Against this background, some social groups are excluded from fair trade due to lack of political acumen and property ownership, while others readily grasp market opportunities: ex-landless labourers are considered different and often deviant from the small landholders who are drawn into fair trade through global flows of coffee. In effect, local experiences of the 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 the application of abstract principles such as equity, democracy or social justice. Instead, it is part of the boiling pot of local politics and power relations, with ideas and practices becoming appropriated and embedded in locally situated interrelationships that reflect divisions based on class, status and territory. These dynamics challenge universal representations of ‘fairness’ and suggest 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 and contested in a variety of arenas from international to local. In this respect, the danger of treating market and development projects as totalizing and at times ahistorical objects ignores © 2013 John Wiley & Sons Ltd

Reframing ‘Crisis’ in Fair Trade Coffee Production 69 the nuanced forms of social differentiation, power relations and socioeconomic inequalities that underpin producer experiences and organization. We have asked what implications an appreciation of agrarian change holds for our understanding of the positioning of development processes within contemporary fair trade. As we have argued, prescriptions for fair trade simplify complex development realities. This has in fact permitted the successful growth of a niche market, but in view of the growing dominance of a model for fair trade based on corporate business norms and private agrifood standards and certification, the scope for social development is narrowing. Can an understanding of the history and political economy of agrarian change contribute to more effective producer organization for fair trade markets, or make the governance of fair trade more effective and responsive to producers’ life circumstances and priorities, taking social inclusion into account? Three aspects emerge from our evidence. First, prescriptions for fair trade need to be more flexible with regard to issues that local actors’ identify as significant: international product markets may be one in a range of priorities that include land rights and differential access to resources. How this is translated into practical action must emerge from giving scope to the driving dynamic of producer groups and supporting actors within localities and regions. In Nicaragua, when the corruption case became apparent, a constellation of measures were introduced to save the reputation of fair trade and the viability of the model connecting local small producers and international markets. The intervention included convincing the international coffee buyers that corruption was 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 repayment to international buyers, and the UCA and first-grade cooperatives were reorganized. However, debt repayment legitimized local exclusion processes and reignited conflict between small producers and ex-landless labourers. The UCA’s transformation to a PLC and subsequent return to a UCA demonstrates how the flexible use of contextual elements within the commodity assemblage can facilitate the establishment of rural cooperatives through dialogue between the institutional orientation of public policy and the existing scope of human agency. During this process, the market pushed social development orientations to the margins of fair trade values, thus making fair trade legible and open for commercial scrutiny. When the international debt was repaid and Hurricane Mitch generated development actions to support people in the affected rural space, it triggered a revival of cooperative values under the lessons learned from the business experience – development and trade became entwined. The study reveals a flexible mode of operation drawing on variants of private and cooperative values to actualize a commercial commons. Recent Southern-driven change within the fair trade movement may provide scope for more systematic analysis of how history and political economy frame contemporary development concerns around a commercial commons, and the construction of a framework to incorporate local and regional elements within local commodity assemblages; however, new innovations remain far from becoming the fair trade alternative for an equal and just form of social development. Second, issues of exclusion and social differentiation raise the question of how to deal with the conflicting interests, ambiguities and incompatibilities enfolded in notions of a common identity and livelihood as associated with seeking social justice through markets. It is today common to address certain socioeconomic categories – notably women and children – within considerations 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 © 2013 John Wiley & Sons Ltd

70 James Fraser et al. sites of fair trade production needs to arise through adequate analysis of social and place-based identities. Third, it is apparent that there is local accommodation between different value repertoires and a flexibility of fair trade values within the pragmatics of organizing fair trade as a commercial venture in action. This complexity ‘on the ground’ is typically not reproduced in fair trade advocacy; we would contend that if fair trade is to continue to have a radical edge to challenge the ‘unfair’ status quo for producers in a way that reflects Southern voices and empowerment within twenty-first century concerns, then advocacy needs to capture more complex development dynamics within fair trade. These changes emerge in a global configuration of relationships and linkages that provide situated answers to a challenge posed by reflexive consumers: how within the framework of fair trade is it possible to increase people’s living standards through market participation while at the same time raising political involvement in ways that contribute to social justice? To answer this question, theories favouring the liberalized market or state regulation do not provide room for citizen engagement when new social forms of market participation and cooperatism emerge. The actualization of the cooperative movement in Nicaragua through the last coffee commodity crisis constituted a process of making tangible fair trade practices and the potential of local producer organization to tackle rural poverty. To dismiss the trajectories of agrarian change may result in making invisible some categories of rural inhabitants and igniting contradictions and conflicts. But this is always the risk of external intervention when framing the boundaries of modern agricultural production and organization against customary policy practices that discursively blur conflictive and contradictory aspects within the social relations of agrarian change. Understanding these processes contributes to the debate on fair trade markets and development.

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