Cooperative Detail
Overview
"El Ceibo comes from my dream of applying to Bolivia the cooperatism I saw during my
studies in Israel.…We began a cacao mill linked to a 10 horsepower motor; now we have
a small plant in La Paz and the best cocoa industry in Bolivia…And we did all of this
with producers. From the general manager to the doorman, we're all producers or sons
of producers and we keep on training our people to operate the replacement."
- Emilio Vilcas, Founder, El Ceibo
El Ceibo cooperative formed in 1977 following a massive rural exodus in the 1970s,
where thousands of families migrated towards the plains regions due to infertile
high plateaus. Located almost 200 miles north of La Paz in the Las Yungas region,
El Ceibo consists of 38 sub-cooperatives (800 producers, or 16,600 inhabitants,
who own an average of 4 acres). Its objective is to promote economic development
and commercial activity of small regional producers, and its principal activity
is to assist in the production, transformation and commercialization of Organic cocoa.
Located in Sapecho in the Bolivian Amazon (10 hours by bus from La Paz), each season
El Ceibo purchases Organic, dried cocoa from its producers at a fair price-at least
550 Bs (Bolivian boliviano), approximately 70 USD per quintal. (As the world price of
cocoa has recently exceeded the Fair Trade minimum, El Ceibo producers now receive
more than 500 boliviano per quintal.) El Ceibo also owns a factory in La Paz where
it produces cocoa mass and cocoa butter, as well as sells chocolates and cocoa to
local consumers. El Ceibo's local sales account for 25% of its earnings,
while export sales account for 75%.
The producers of El Ceibo come mainly from the Andean Highlands and live in
communities located 25 miles from the village of Sapecho, in the Alto Beni
region. Andean peasants settled in the Alto Beni region between 1960 and 1970
with the initial support of the Bolivian government that considered life conditions
in the Andean highlands too hard and lacking real potential for agriculture
modernization, social and economic development and growth. After a period of
absence, government support to settlers' families returned starting in the 1990s
with the implementation of municipal decentralization, called "Participación Popular,"
that transfers 20%-25% of the government's budget to municipalities for
investment in social and economic development projects, as identified by each farmer.
Since this period, more investments have been made in social projects (e.g. building
of primary schools and bridges, attempts to improve drinking water). The Bolivian
government has also co-financed some projects with local municipalities in Sapecho and
Palos Blancos, in particular the sewers and electricity networks.
Despite new local development policies, basic services and infrastructure are
still very scarce. Sapecho is accessible by a tenuous, mountainous dirt road.
Health services are also rare-some communities have primary care centers, but
the majority of health services and the hospital are located in Sapecho and
Palos Blancos, the closest town, located 12.5 miles to the south east. The only
high school is in Sapecho village, which it maintains with adjacent communities,
but does have access to electricity. In general, local communities have primary
schools but have neither a drinking water system nor sewers.
The Alto Beni region was very poor before El Ceibo introduced cocoa production,
where previously the area's farmers grew mostly bananas, rice and oranges. As
the first economic-focused peasant organization of the region created under
grassroots initiative and its own goals, El Ceibo's aim is to increase farmers'
income, improve living conditions and increase farmers' capacity to negotiate
with middlemen, state agencies, municipalities and development agencies. Aware
of the possibilities offered by Fair Trade and Organic markets to ensure
environmentally and economically sustainable development, El Ceibo chose to focus
on those kinds of quality productions in 1987, with some support from NGOs.
Today, El Ceibo constitutes the main and strongest organization of producers in
Alto Beni. Involvement in Fair Trade and Organic markets has allowed El Ceibo to
provide secure markets with high demand to 800 of the 1,300 families planting
cocoa in the Alto Beni region. As a key element of social identity and cohesion
at the regional level, El Ceibo provides average annual incomes of 1,200 USD per
family. In addition, farmers earn between 1,000-1,100 USD from orange and banana
production. (On average, cocoa income accounts for 75% of farmers' total income.)
This money is generally used by planters to pay the education costs of their
children and to buy second homes in El Alto and La Paz suburbs, where their children
settle to start university and technical studies. The growth of cocoa producers'
income and the vitality of El Ceibo encourage farmers' children to try to remain
in Alto Beni to produce cocoa.
The impact of the co-op in improving the health of its associates is also evident.
On one hand, the cooperative subsidizes its members' medical costs. On the other
hand, members of cocoa producer's families living in La Paz have access to improved
public health services. Moreover, the cooperative has opened its infrastructure to
allow several meetings (social, cultural, those linked with municipal governance
and adult education, including literacy and technical assistance for several kinds
of productions) to take place in its locales. By sharing its resources, El Ceibo
has contributed to reinforce the common identity and initiatives of the local collective.
In comparison, non-member producers living in Alto Beni face economic problems due
to the vast distance from important markets (such as La Paz) and the limited
diversity of agricultural production and, in the past, from the national policy of
liberalizations of agricultural imports coming from Peru. On average, incomes of
farmer households producing banana, oranges and conventional cocoa and living in
Alto Beni hover near 800-1,000 USD per year.
Operationally, El Ceibo cooperative is organized into two main bodies with autonomous
decision-making privileges: the business branch and the projects and services branch.
The business arm is based in El Alto (La Paz suburbs) and led by a general manager
assisted by several teams in charge of trade, accounting, collection, and processing.
The business arm also concerns itself with transforming cocoa powder and cocoa butter
into chocolate food products for local retail, as well assisting in the trade of these
products.
The projects and services branch, called "PIAF" is based in Sapecho, and provides
El Ceibo and its affiliates with technical assistance, as well as seeds and small
trees for Organic cocoa production and forestry. The PIAF team also assumes
responsibility for the internal Organic certification of El Ceibo's sub-cooperatives,
and trains in accounting and helps to organize the democratic elections of producer
leadership. In addition, El Ceibo administrators make sure each sub-cooperative has
a member in close contact with El Ceibo.
Gender equality and issues of age discrimination are of great import to the farmers and
administrators of El Ceibo. Women and young people are invited to participate in
training sessions to improve their knowledge, their leadership capacity, and their
business management skills. In addition, participation of women and young people in
El Ceibo's decision making is encouraged at the grassroots level. When a general
assembly is held, each sub-cooperative sends three delegates as representatives,
one of whom must always be a women or a young person.
Despite having different locality and ethnic origins, the farmers and administrators of
El Ceibo enjoy good relationships with one another. The right to free union affiliation
is also respected. All of El Ceibo's workers belong to grassroots, sub-cooperatives and
are co-owners of El Ceibo. Children are not exploited, nor are people discriminated
against based on their religious, ethnic or gender affiliations. Indeed, each community
is composed of immigrants who hail from different regions yet who have created strong
social links not affected by their differences, such as religious beliefs
(e.g. Catholics, Protestants, Animists). In addition, local labor regulations
(including contracts, minimal salary and weekly labor times per worker) are
respected in conformity with BIT regulations. El Ceibo's collection center and
factory abide by local health regulations, as well as meet industrial quality
procedures, such as HACCP requirements.
Fair Trade helps Bolivian small-scale farmers and their communities not only to survive,
but also to plan and invest in future activities and generations. With the Fair Trade
Premium paid by ALTER ECO, El Ceibo has been able to provide technical assistance by
spreading production knowledge generated in its own experimental station for cocoa and
agro-forestry, as well as provide producers with hybrid and grafted young cocoa plants
with higher yields at low prices. With its net revenue and Fair Trade Premium, El Ceibo
also provides and funds the internal Organic certification of its associated cocoa
producers, as well as contributes to more sustainable and productive cocoa, citrus,
banana and timber crops. This Premium is also partly used by the co-op to increase
the price paid for Organic and Fair Trade cocoa. El Ceibo also operates a cooperative
grocery store where it sells goods to its affiliates at lower prices than other dealers
in the region.
Other ways in which the Fair Trade Premium has benefited El Ceibo's small-scale partner
farmers are setting up infrastructure for social projects (particularly schools), as
well as providing loans for university education, subsidizing the co-op members' health
expenditures and financing five high schools in Alto Beni. Since 2006, a portion of the
Fair Trade Premium is used to provide modest retirement loans (30 USD / year) to
El Ceibo's farmers. In addition, each year El Ceibo proportionally distributes 50%
of its net revenue among the members of its sub-cooperatives.
Area Brief
Populated with over 8.5 million inhabitants, 60% of whom identify as indigenous,
Bolivia has a Human Development Index (HDI)
of 0.692, one of the lowest in South America. The environment is quite diverse, spanning
highlands and dry valleys-1/3 of the land-to tropical valleys and lowlands-2/3 of the land.
These environmental and topographical differences account for a wide range of crops,
including those adapted to cold and dry climates (e.g. quinoa, potatoes), and those that
require warm weather and moisture (e.g. cocoa, coffee, bananas, Brazilians nuts).
Since the implementation of neo-liberal policies in 1986, the Bolivian economy has been
relatively stable with an average growth rate of 2%-3% that, with population
growth taken into account, corresponds to a real increase of 1%. This growth has
come from the exportation of raw agricultural products (soy, Brazilian nuts, coffee) and
natural resources (gas, minerals, timber).
Despite good macro-economic results from these policies, poverty and insecurity have
considerably increased, as reported by World Bank and international organizations.
Poverty has continued to have an important impact in rural areas, particularly those
producing for national markets, which now face increasing competition from products and
food imported from neighboring countries. Poverty has also increased due to growing land
scarcity, particularly in Highlands regions and near urban centers. Regions where farmers
produce quality agricultural products with higher added value for export
(i.e. Organic and Fair Trade labels), however, have been less effected by these factors.
As Bolivia's first indigenous leader since the Spanish Conquest of the New World some
500 years ago, a majority of voting Bolivians elected President Evo Morales on
December 18, 2005. One week after his inauguration, Morales cut his Presidential
salary on January 28, 2007 by 57% to approximately 1,875 USD per month.
While capital flow to foreign countries was reduced before and following the
presidential elections, the international press reports that, overall, confidence
has returned to Bolivian entrepreneurs and foreign companies.
Notwithstanding, on International Worker's Day, May 1, 2006, President Morales
nationalized the country's natural gas reserves, second only to Venezuela's
resources of natural gas in South America-a move met by much disfavor from foreign
governments and investors. (Morales has also nationalized Bolivia's other natural
resources, including tin, silver and lead; Morales' government has also been successful
in its bid to halt eradication programs of Bolivia's indigenous coca crops, with
national coca transformation factories expecting to export its products to Venezuela
as early as October 2007.)
In February 2007, areas of La Paz region were paralyzed while 20,000 miners protested
a tax hike to the Complementary Mining Tax (ICM) by the Morales government, which was
later diffused by the government's announcement that the tax was aimed at large private
mining companies, not at the 50,000 members of miner cooperatives of the region.
Protests continued, however, by those who had already gathered in the Bolivian capital
of El Alto, numbering in the thousands. In addition, further social unrest this summer
delayed international shipments, with the blocking of the roads leading to the port
city of Arica, located in northern Chile. Large-scale social movements, such as the
aforementioned, may represent the scale of change on the road ahead from the
controversial social policy put forth by Morales and his government.
