COOPERATIVES, GRASSROOTS DEVELOPMENT, AND SOCIAL CHANGE EDITED BY MARCELA VÁSQUEZ-LEÓN, BRIAN J. BURKE, AND TIMOTHY J. FINAN COOPERATIVES, GRASSROOTS DEVELOPMENT, AND SOCIAL CHANGE Experiences from Rural Latin America with translations by Maisa C. Taha TUCSON The University of Arizona Press www.uapress.arizona.edu © 2017 by The Arizona Board of Regents All rights reserved. Published 2017 Printed in the United States of America 22 21 20 19 18 17 6 5 4 3 2 1 ISBN-13: 978-0-8165-3474-6 (cloth) Cover design by Nicole Hayward Cover photo by Daniel Duncan The chapter by Elisa Echagüe in the Paraguay section and the four chapters in the Colombia section were originally written in Spanish and were translated by Maisa C. Taha. The chapter by Joana Laura Marinho Nogueira and João Nicédio Alves Nogueira in the Brazil section was originally written in Portuguese and was translated by Timothy J. Finan. Publication of this book is made possible in part by a subvention from the Bureau of Applied Research in Anthropology and the Center for Latin American Studies at the University of Arizona. Library of Congress Cataloging-in-Publication Data are available from the Library of Congress. This paper meets the requirements of ANSI/NISO Z39.48-1992 (Permanence of Paper). CONTENTS Foreword by Charles C. Cox ix Acknowledgments xiii Introduction: Smallholder Cooperativism as a Development Strategy in Latin America 3 Marcela Vásquez-León, Timothy J. Finan, and Brian J. Burke COOPERATIVE EXPERIENCES IN PARAGUAY The Paraguayan Context of Social Inequality 19 Marcela Vásquez-León Grassroots Organizing as a Key to Cooperative-Led Change: Lessons from Rural Paraguay 26 Brian J. Burke Collective Challenges and the Fair Trade Alternative: The Manduvirá Cooperative 38 Marcela Vásquez-León and Andrés González Aguilera Is Monoculture a Viable Strategy?: The Case of Guayaibi Unido 50 Rodrigo Rentería-Valencia VI CONTENTS Capiibary Cooperative: A Strategy of Diversification to Reverse the Rural Exodus 61 Marcela Vásquez-León Paraguayan Cooperativism in Context: A Practitioner’s Perspective 73 Elisa Echagüe COOPERATIVE EXPERIENCES IN BRAZIL Cooperativism in Brazil: The Development Context 85 Timothy J. Finan The Evolution of Cooperativism in Brazil 89 Joana Laura Marinho Nogueira and João Nicédio Alves Nogueira Atotori: The Discourse and Practice of Sustainability in the Amazon Rain Forest 100 Jessica Piekielek and Timothy J. Finan Sharecroppers Transformed: The Case of the Cooperativa dos Produtores do Curupati-Peixe (CPCP) 112 Luis Barros and Timothy J. Finan Solidarity, Tension, and Change Along the Amazon River: The Case of ASCOPE 121 Timothy J. Finan Bringing Power and History into Cooperative Design: Lessons from AmazonCoop’s “Fair Trade” Partnership Among Indigenous Brazil Nut Harvesters and The Body Shop 133 Brian J. Burke COOPERATIVE EXPERIENCES IN COLOMBIA Small Producers and Cooperativism in Colombia 151 Miguel Ricardo Dávila Ladrón de Guevara Coffee Associations in Colombia: Strategic Changes for Adapting to the Global Context 161 Luis Alberto Cuéllar Gómez and María Isabel Ramírez Anaya COLANTA: A Cooperative Unafraid of Change 176 Lilliana Andrea Ruiz Marín CONTENTS VII Rural Savings and Loan Cooperatives: Five Cases in the South of Santander 187 Sonia Carolina López Cerón Conclusion: Cooperatives as Change Agents in Rural Latin America: Synthesizing Experiences Across Countries 203 Marcela Vásquez-León and Brian J. Burke References 221 Contributors 237 Index 243 FOREWORD charles C. cox HIS PUBLICATION AddRESSES ISSUES AND OPPORTUNITIES that present themselves to smallholder agricultural cooperatives in selected Tregions of Paraguay, Brazil, and Colombia. The context of the discus- sion is how these enterprises react to confront the challenges of operating suc- cessfully in a global economy that will reward winners and leave poor perform- ers out of the marketplace. This process is characterized as management of change, an adaptation exercise all businesses and organizations must embrace to prosper in complicated and often rapidly changing circumstances. In many regions of the world, cooperatives and other agribusinesses are flourishing because, among many positive factors, they provide products and services for which there is demand, they are sufficiently capitalized and have ready access to credit facilities, they receive substantial governmental sup- port through favorable legal and regulatory frameworks that promote coop- erative development instead of imposing state control on these entities, and there are technical and technological assistance providers locally available to these producer groups. Internally, successful cooperatives in prosperous regions can recruit professional managers and competent support staff from a robust human resource base, and their offices are equipped with the requisite tech- nological tools. They possess a rich pool of strong candidates to compose in- formed and involved boards of directors, and they can finance member training X FOREWORD to strengthen farmer participation in achieving the financial objectives of the enterprise. The majority of cooperatives participating in the management of change analysis presented in this publication can count on very few of the positive factors cited above to help them flourish. They do have marketable products, and Brazil, Paraguay, and Colombia enjoy favorable legal and regulatory atmo- spheres for cooperative development. However, the cooperatives are located in remote areas of the Brazilian Amazon region and in some of the most poverty- stricken locations in eastern Paraguay, and, in the case of Colombia, some of the cooperatives are located in regions where there is illegal crop production. One might question why this USAID-funded worldwide Cooperative Devel- opment Program (CDP) activity (2004–2010) even targeted such locales for assistance and analysis.* The response is that USAID, the Bureau of Applied Research in Anthropology (BARA) at the University of Arizona, and the Ag- ricultural Cooperative Development International and Volunteers in Overseas Cooperative Assistance (ACDI/VOCA) prioritize worldwide efforts to help small farmers increase family income and quality of life, hopefully reducing the exodus to cities of the rural poor—especially young people. The selection of participating cooperatives in the assessments conducted by BARA, all limitations notwithstanding, centered on ACDI/VOCA’s determi- nation that indeed the cooperatives were producing marketable products and, crucially, that their management and boards of directors embraced the concept of adapting their thinking and actions to successfully confront demanding mar- ket conditions and challenges. It is important to note that the term “marketable products” used here connotes that the participating cooperatives are currently marketing one or more products. On the positive side, they are marketing in- ternally, and some of them have found markets abroad, including in the United States, Japan, Western Europe, Russia, Uruguay, and Argentina. Issues con- fronting them on the exporting front include increasing production volumes, improving quality controls, and securing new markets. *All of the cooperative experiences presented in the Paraguay and Brazil sections of this volume were assessed as part of the USAID-funded worldwide CDP activity (2004–2010). Of the cooperative experiences presented in the Colombia section, only that of Cuéllar and Ramírez was part of the CDP project. The chapters by Dávila and López are based on research at the Universidad de los Andes and the chapter by Ruiz is based on independent research. FOREWORD XI The more complex side of the equation is the management of change. While the leadership and management of the cooperatives selected were interested in participating in the BARA assessments of their history, traditions, capabili- ties, capacities, and inclinations to survive and hopefully grow stronger, those statements of interest thereby engaged the leaders and managers in a process that could take them down a challenging path. Management measures deemed necessary, in some cases, might focus on management shortcomings, but it is recognized that many of these cooperatives are located in remote regions that don’t have a large presence of trained managers and other professionals. Fur- thermore, the smaller cooperatives don’t have the financial resources to em- ploy well-qualified professional staff or adequately equip their offices. A recon- figuration of a dormant board of directors might be in order, but such efforts can be complicated; board members are recognized local opinion leaders, and they might not want to surrender their position of status in the community. A merger of two small, economically unviable cooperatives producing the same product in the same county might result in a stronger, competitive enterprise with the ability to attract more qualified staff, access credit, gain some econo- mies of scale, and expand markets. The problem: the merger would result in the unwelcome redundancy of one manager and one board chairman and perhaps several board members. The BARA interviewees at the village level have listed the plethora of road- blocks in their path, several of which are mentioned above. However, these man- agers and leaders have stated their inclination to adapt to changing circumstances despite the numerous limitations. The findings of BARA published here—in conjunction with those of ACDI/VOCA in cooperative organizational/manage- rial strengthening and value