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The Journal of Peasant Studies

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Quality versus solidarity: Third Wave coffee and


cooperative values among smallholding Maya
farmers in Guatemala

Edward F. Fischer, Bart Victor & Linda Asturias de Barrios

To cite this article: Edward F. Fischer, Bart Victor & Linda Asturias de Barrios (2020): Quality
versus solidarity: Third Wave coffee and cooperative values among smallholding Maya farmers in
Guatemala, The Journal of Peasant Studies, DOI: 10.1080/03066150.2019.1694511

To link to this article: https://doi.org/10.1080/03066150.2019.1694511

Published online: 03 Jan 2020.

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THE JOURNAL OF PEASANT STUDIES
https://doi.org/10.1080/03066150.2019.1694511

Quality versus solidarity: Third Wave coffee and cooperative


values among smallholding Maya farmers in Guatemala
Edward F. Fischera, Bart Victorb and Linda Asturias de Barriosc
a
Department of Anthropology, Vanderbilt University, Nashville, TN, USA; bSchool of Management, Vanderbilt
University, Nashville, TN, USA; cEstudio 1360, Guatemala City, Guatemala

ABSTRACT KEYWORDS
This article examines how a market shift toward high-end (‘Third Coffee; cooperatives; values;
Wave’) coffee creates tension between two producer models moral economy; Guatemala;
of economic engagement: cooperatives, with mechanisms that Maya
promote solidarity to minimize risks, and ‘open’ markets, with
extraordinary rewards for those able to grow the highest quality
coffees. Most Maya farmers value cooperative organization and yet
a growing number are defecting, unable to forgo the premiums
intermediaries offer for their best beans. This is a complicated
moral and economic situation in which the Third Wave focus on
single-origin coffees forces changes in relations of production that
undermine the cooperative preferences of smallholding farmers.

Introduction
Sebastian grows high-quality Arabica coffee on the slopes of mountains in Guatemala’s
western highlands. You may well have had some of his coffee. A K’iche’ Maya man in
his early 50s, Sebastian belongs to a vibrant cooperative and is an enthusiastic champion
of the virtues of cooperative organization. More than once, the cooperative has saved him
and his neighbors from going broke. Their Fair Trade certification means that even during
periodic market falls, members are assured a minimum price. The cooperative also runs a
wet mill, crucial equipment for time-sensitive processing of washed Arabicas and yet a
capital investment beyond the means of most smallholders.
While he appreciates all that the cooperative has done for him, Sebastian says he
cannot turn down the occasional offer from one of the roving intermediaries (known as
coyotes) to buy part of his harvest for significantly more money. He says, ‘there is a
coyote who comes around here and pays top dollar, but he only wants really high
quality. He sent his son to look at my land. They don’t just want to see the coffee, they
want to see where it is grown, make sure it is all Bourbon (a prized varietal of Coffea
arabica) and that the Bourbon is separate from the other types.’ This is a difficult decision
for Sebastian, one that tears at his allegiances. He does well, but not so well that he can
forgo an extra 30 or 40 cents per pound. ‘We still don’t make very much,’ he states. ‘The
buyers set the price and tell us what it is.’

CONTACT Edward F. Fischer edward.f.fischer@vanderbilt.edu Department of Anthropology, Vanderbilt University,


PMB 1806, 2301 Vanderbilt Place, Nashville, TN, 37235, USA
© 2020 Informa UK Limited, trading as Taylor & Francis Group
2 E. F. FISCHER ET AL.

High-end, single-origin ‘Third Wave’ coffees make up the fastest growing segment of
the market today, although they represent just a small fraction of the overall supply.1
These coffees command significant premiums (as high as several times the commodity
price) for relatively small differences in quality (a point or two on the standard 100-
point scale). U.S. retailers such as Intelligentsia, Stumptown, Counter Culture, La
Colombe, and others charge double, triple, or more per ounce for beans described
using an elaborate descriptive vocabulary (‘with hints of orange blossom and molasses
syrup’). What are their customers consuming with a cup of such coffee? There is the
coffee itself, the stimulating caffeine and hydrating water, the chlorogenic acids and anti-
oxidants, the hint of pomegranate and cacao. But there is also a sentiment, a felt connec-
tion to an Other, a symbolic value that is hard to precisely quantify. In turn, Maya farmers in
highland Guatemala work through cooperatives to sell not only their coffee, but also the
stories that add the distinctive symbolic and affective elements sought after by importers
and roasters. In this sense, the fruit of their labors serves to satisfy both corporeal need and
imaginative desires.
At the two ends of the coffee value chain we find very different economic circum-
stances embedded in very different moral worlds, but framed by the same neoliberal
project—from smallholding farmers in places like Guatemala seeking some degree of
economic security to U.S. consumers hunting for ever more particular and unique
sensory experiences. We may understand such fluid assemblages of economic interests
and cultural desires as distinct ‘value worlds,’ arenas of valuation, each with their own
metrics (Fischer 2019; cf. Appadurai 1996; Graeber 2013; Diaz-Bone 2007; Ponte 2016).
Trade is about exchanging worth between value worlds. In the statistics of global com-
merce, myriad values are distilled into the numerical metrics of dollars and euros and
yuan. But for the people who pick coffee beans by hand, filling basket after basket in
the hope of eking out the barest of existences (cf. Taussig 1986; Agamben 1998), it is
about much more than the numbers can tell us (Nelson 2015). Neoliberal market mechan-
isms often produce morally ambiguous effects in the messy contexts of actual social prac-
tice in Guatemala (Fischer and Benson 2006; Granovsky-Larsen 2013; Copeland 2019). Here
we examine what the neoliberal project looks like on the ground in coffee growing regions
of highland Guatemala, framed in a way that breeds not so much contempt as desire
among those who assume the most risks.
Like Sebastian, a vast majority of smallholding Maya coffee farmers in Guatemala either
belong to or would like to belong to a producer cooperative. At the same time, coopera-
tives are the site of frequent political tensions and local and personal politics—a place
where collective aspirations are actually worked out in gritty specifics. It is often socially
and morally complicated trying to reach consensus. Still, farmers value the cooperative
as a form of insurance, both economic and social, and as a meaningful site of community
building. While late nineteenth-century coffee commercialization in Guatemala was built
on the forced exploitation of seasonal labor, a quality turn in the market starting in the
1990s engaged cooperatives to stimulate a boom among indigenous smallholders
(Lyon 2011; Fischer and Victor 2014). Now, the emerging high-end, Third Wave market

1
There are no precise figures on the size of this market. Peter Giuliano of the Specialty Coffee Association (personal com-
munication) estimates that coffees in the overarching category of ‘Specialty Coffee’ constitute 20–27% of global Arabica
supply. Third Wave beans make up only a fraction of specialty coffees, but they are not tracked as a separate category.
THE JOURNAL OF PEASANT STUDIES 3

is moving toward winner-take-all structures where small differences in perceived quality


make huge differences in the prices commanded. In this paper, we argue that the Third
Wave focus on single-origin beans of the highest quality marks a new pattern of relations
of production that undermines many of the cooperative preferences expressed by small-
holding producers. While only a small fraction of smallholding farmers produce coffees
that meet Third Wave quality standards, their defections threaten not only the economics
but also the social solidarity of their cooperative forms of organization.

Coffee’s waves
Following industry conventions, we may distinguish three major waves of coffee con-
sumption, with corresponding shifts in the production regimes employed in Guatemala.
While these waves emerged sequentially, earlier ones were not replaced; that is to say,
the current market is divided among First Wave, Second Wave, and Third Wave coffees
(cf. Reichman 2018). On the consumer side, the First Wave is associated with the spread
of national brands for foodstuffs in the late nineteenth and early twentieth centuries.
These emerged to assure quality (against adulteration of bulk coffee with chicory and
other substances); Maxwell House, Folgers, Jacobs and other supermarket brands had
established an implicit status quo for quality by mid-century. Each brand had its partisans,
but they were all similar blends in terms of overall quality of beans. This First Wave famil-
iarized and normalized coffee, a move from exotic beginnings to everyday staple. In its rise
as a global commodity, coffee became a volume market, requiring huge economies of
scale (and cheap labor) to produce significant returns. The impact this growth had on pro-
duction is well known, and the catalog of coffee plantation labor exploitation, in Guate-
mala as elsewhere, is long (Cambranes 1985; McCreery 1994; Roseberry, Gudmundson,
and Kutschbach 1995; Grandin 2000). As a largely undifferentiated commodity produced
in tropical regions and exported mostly to Northern hemisphere markets, First Wave coffee
serves as a posterchild for economic dependency in world systems models. For most of the
twentieth century, there was little or no Northern consumer regard for the lives and liveli-
hood of coffee workers. Demand was for a basic commodity at the lowest price possible.
In the 1970s, a turn to higher quality coffee marked the beginnings of a Second Wave,
driven by artisanal roasters and purveyors such as Zabar’s in New York, The Coffee Connec-
tion in Boston, and Peets and Thanksgiving Coffee on the West Coast of the U.S. By the
1980s, and accelerating in the 1990s and early 2000s, hundreds of local coffee shops in
urban areas around the U.S. acquainted consumers with coffee more distinctive than the
bland commodity sold in supermarket tins. Focused on quality washed Arabicas, the
Second Wave pursues a strategy of decommodification based around geographic regions
and broad flavor profiles.2 This trend reached its apex in Starbucks’ global expansion.
In no small part a realization of and reaction to the conditions of production in the First
Wave, the Second Wave coffee market placed a high value on moral provenance, assuring
2
There are two primary species of coffee, Coffea arabica (‘Arabica’) and Coffea canephora (‘Robusta’). About 70% of the
world’s coffee is Arabica, considered to be the higher quality, and virtually all Second Wave coffees are Arabicas.
There are two main processing methods for coffee: washed and natural. For washed coffees, beans are de-pulped
soon after harvest to minimize the flavor changes that result from fermentation; Second Wave coffees are overwhel-
mingly washed Arabicas. Washed Arabicas are the standard for international trade and the basis for coffee futures
pricing on the New York exchange, the ‘C price.’
4 E. F. FISCHER ET AL.

customers that their coffee was bought at a fair price to compensate those whose labor
produced it. An important part of the Second Wave, Fair Trade organizations guarantee
a floor price for producers (see Bacon 2005, 2010; Jaffee 2007; Lyon, Ailshire, and Sehon
2014; Mendez et al 2010). In addition, Second Wave retailers tend to emphasize key sym-
bolic values as part and parcel of their coffees, including a link to indigenous producers, a
concern for the environment, and an artisanal commitment to quality (see West 2012;
Daviron and Ponte 2005; Castillo and Nigh 1998). The ways these symbolic qualities
play into individual consumer identities led William Roseberry (1996) to call Second
Wave coffee the ‘beverage of postmodernism.’ Second Wave buyers sought out higher
quality, and higher altitude, beans. In Guatemala, this meant production moved up the
mountain slopes into the lands Indigenous communities had been relegated to during
the First Wave coffee boom land grab.
The Third Wave builds on the Second Wave’s quality turn, emphasizing high-altitude
and single-origin production. Within the Arabica species there are a number of varietals
(e.g. Bourbon, Caturra, Gesha); Third Wave roasters seek the more exotic beans, and the
range of new and heirloom varietals being planted has grown rapidly. Tastemakers
have even begun advocating the virtues of long-maligned natural processing, which
brings out a particular acidic brightness in the coffee. The preference for a level of
quality combined with a concern over the conditions of production and symbolic
aspects of provenance characterize the Second Wave; these become even more pro-
nounced in the Third Wave.
Both Second Wave and Third Wave coffees fall under the larger category of ‘specialty
coffee.’ In its most expansive definition, specialty coffee may comprise as much as 27%
of the global supply for washed Arabicas. The Specialty Coffee Association (SCA) devel-
oped a 100 point cupping quality scale that has become the industry standard. Coffees
scoring above 80 are considered Second Wave, and coffees placing in the high 80s and
90s are Third Wave. Altitude of production is used as an important indicator of overall
quality. In Guatemala, coffee grown at over 1400 masl (meters above sea level) is
graded as Strictly Hard Bean (SHB), denoting the highest quality of washed Arabicas. (Gua-
temala produces virtually no Robusta.) Because of its geographic diversity, volcanic soils,
and quality tradition, Guatemala has emerged as ground zero for Third Wave production.

The Guatemalan context


Guatemala ranks as a lower middle-income country in terms of GDP per capita—but it is a
very unequal one. The top quintile of the population receives 57.3% of per capita family
income (PNUD 2016, 41) . Traditionally, this has meant the concentration of economic
power in the hands of a relatively small number of elite families, one important branch
of which has been the large coffee growers (Paige 1997). Inequality in Guatemala is also
closely associated with ethnicity. About half of the population are Maya, speaking one
of 23 indigenous languages, and by any measure—income, health, education—the rural
Maya are the most deprived in Guatemala. According to the UNPD, 86.6% of the indigen-
ous population live in poverty, compared to 53.9% of non-indigenous people (PNUD
2016). A brutal civil war, at its most intense in the 1970s and 1980s, targeted Maya com-
munities in an effort to eradicate potential bases of support for Marxist rebels (Carmack
1988; Manz 2004). Today, most of the cocaine that enters the United States passes
THE JOURNAL OF PEASANT STUDIES 5

through Guatemala, and a great deal of that goes through some of the world’s best coffee
growing lands. The flow of narco dollars has created a new power elite, one that is often
better armed and better financed than state forces; the Guatemalan state suffers a crisis of
legitimacy, fueled by evidence of widespread corruption at the top levels of government.
In this context, the coffee trade has offered a ray of hope for farmers in the country’s high-
land regions.
The First Wave of coffee production in Guatemala was dominated by large, relatively
low altitude plantations owned by a close-knit circle of German and English decedent
planters, the country’s coffee oligarchy (Cambranes 1985; McCreery 1994; Wagner 2003;
Hempstead and Chajon 2016). In the late nineteenth and throughout the twentieth
century, coffee production in Guatemala was associated with harsh labor practices and
an unhealthy concentration of economic and political power in the country’s coffee
elite. The Germans came in the late nineteenth century, attracted by offers of free land
and forced labor by a government who thought the industriousness and light skin of
the northern Europeans would be salubrious for the country and its majority indigenous
population. Settling in the Cobán region, on the slopes of mountains descending to tropi-
cal forest, the Germans planted coffee at volume-producing altitudes ranging from 1000 to
1500 masl. One can still buy Dieseldorff Kaffee, but many of the iconic German farms have
left coffee production since 2000, as the market shifted toward higher quality and higher
altitude beans. Many of these lower altitude lands are now given over to large-scale oil
palm cultivation, with devastating environmental and economic consequences for local
communities (Alonso-Fradejas 2015).
The Second Wave shift in the consumer market fundamentally changed the Guatema-
lan coffee industry starting in the 1990s. A number of factors converged in somewhat
unexpected ways. First, Guatemala had a long and internationally recognized reputation
for producing quality coffee, and so the Second Wave market moving in that direction
played to historical strengths. Second, a few visionaries, most notably William Hempstead
of Anacafé, the national coffee producers association, began promoting regional differen-
tiation in the early 1990s. This positioned Guatemala early on as a leader in Second Wave
and later Third Wave production. Third, Guatemala’s coffee oligarchy, inspired by the non-
interventionist approach to markets promoted by Ayn Rand and Austrian economists,
ceded market share to new smallholders. They say they were simply following the
market, as the sought-after SHBs were grown in the Maya-majority highlands. This
created a boom in a number of historically impoverished and marginalized communities,
as Maya farmers entered the market on a tide of steadily increasing demand and prices
(Lyon 2011). Some of these communities used to provide seasonal labor for the coffee
harvest on lower altitude plantations during the First Wave. In this way, specialty coffee
production provided a path for upward mobility for certain small producers, even if
those best able to take advantage of the new opportunities were not the poorest of the
poor.

This study
Here we report the results of field research conducted in 2011–2014 in coffee growing
communities in the Guatemalan highlands. The data were collected at time when the
Third Wave was just beginning to impact these producers. In 2011, we conducted 82 in-
6 E. F. FISCHER ET AL.

depth interviews with smallholding coffee farmers to help understand their perspective on
the changing market and to inform our own research questions. In 2014, we conducted a
survey of 315 smallholder households in 10 communities (see Table 1 and Figure 1). The
preliminary sample started with the selection of nine coffee-producing Departments;
within these, we selected 10 municipalities based on their production of SHB coffees.
To reach a sample size >300, we randomly selected 40 producer households in each com-
munity, and after accounting for those who opted not to participate, we ended up with a
final sample size of 315 households. The survey included 111 questions, and took between
one and two hours to complete. In addition, we held 10 focus groups of farmers and coop-
erative members in order to stimulate a more free flowing conversation and a greater
diversity of viewpoints. Speaking in a group can stimulate viewpoints that might not
emerge in a one-on-one interview, making it possible to gauge the breadth and intensity
of sentiment within the group.
We classify smallholders as those farmers with less than 2.2 hectares of coffee; in our
sample, the average land holding in coffee production was 1 manzana, a regionally vari-
able measure rough equivalent to 0.7 hectares. On average, the producers we interviewed
had been cultivating coffee for slightly longer than 20 years, meaning that they started in
the mid-1990s. According to our survey results, they were drawn to coffee production by
family tradition, knowledge of the production process from working on plantations, and/or
by expected material gain.
All of the smallholders in our sample pursue other economic activities in addition to
coffee; such flexible, post-peasant rural livelihoods inevitably involve diversified economic
strategies and crops. Most grow milpa (plots of the maize and bean staples of the diet);
some plant coffee on land they own and then rent additional land for milpa. They may
also grow truck crops (54.6%), or work as day labor (13%) on nearby plantations when
needed. Nonetheless, coffee provides a growing share of household income (64.1% said
‘most’ and 22.5% said ‘about half’), and is universally recognized (at the time of the
survey) as the most profitable crop they could grow on their land.
Based on interviews with Anacafé’s field agents and the leaders of FEDECOCAGUA (the
Guatemalan federation of coffee cooperatives), we estimate that more than 50,000 mostly
smallholding farmers in the Guatemalan highlands began growing coffee in the 1990s and
2000s to fill the Second Wave demand (Fischer and Victor 2014, 156). This shift had pro-
found and complex impacts on the lives and livelihoods of Maya producers. Farmers we
interviewed largely saw these changes as positive. They resulted in increased incomes,
growing markets, and a deep optimism. Most of these small producers live in very
modest circumstances with limited resources and opportunities. Yet, as they described
it, coffee represented an opportunity in a context of few opportunities, an imperfect
means to a marginally better life (see also Fischer 2014).

Table 1. Guatemalan Smallholding Coffee Farmer Survey (2014, n = 315 households, 10 communities).
respondent gender 75% male 25% female
ethnicity 82% Maya 18% ladino
language 64% bilingual 36% Spanish only
religion 59% Catholic 31% Protestant
average household size 5.8 members
mean years of education males: 2.9 females: 4.8
average age males: 42 females: 48
THE JOURNAL OF PEASANT STUDIES 7

Figure 1. Sampled coffee growing communities in 2014 survey.

Cooperatives and Fair Trade


Cooperatives played a crucial role in Second Wave expansion, aggregating the small
producers most active in the high altitude regions of Guatemala—the Maya dominated
areas with high levels of poverty and social exclusion. The majority of new entrant small-
holder producers work through a cooperative and depend on cooperative technical
support and financial assistance. Cooperative membership was an often fatal associ-
ation during the country’s prolonged civil war. In this period, the U.S.-backed military
deployed overwhelming force against cooperatives and Maya communities, and large
coffee plantations were frequent targets of revolutionary renderings of justice. By the
late 1990s, cooperatives and associations were again starting to take an active role in
coffee producing areas.
8 E. F. FISCHER ET AL.

Studies of Fair Trade coffee markets in Mexico and Central America have shown that
while it reduces producer vulnerabilities, certification also carries a high cost that can
hinder capital accumulation (see Bacon 2005; Bacon et al. 2014; Jaffee 2007; Mendez
et al. 2010; Smith 2010, 2018). Bacon (2010) found that in Nicaragua the real value of
Fair Trade prices fell 41% between 1988 and 2008. Nonetheless, many of the Guatemala
smallholders we interviewed claimed that Fair Trade premiums kept them afloat in the
price crises of the 1990s and early 2000s, when coffee prices fell well below production
costs. As much as economic, the impact of Fair Trade was in mindset and motivation.
One middle-aged Maya coffee farmer from a hamlet outside of the town of Olopa told
us that ‘Fair Trade is what really got us going, it provided the base for us to build on, guar-
anteeing a minimum price–it motivated us to build up what we have today.’
In the global market, the basic price metric for coffee is a 136 lb bag of green beans and
these are usually traded in container loads of 37,500 pounds. Even ‘micro-lots’ are usually
tens of thousands of pounds of green beans. Since it takes about six pounds of ripe cherry
to produce one pound of green coffee, a container load requires 240,000 or so pounds of
cherry. Growing and harvesting coffee is hard work, requiring backbreaking labor. Quality
washed Arabicas need to be handpicked within a narrow time range (measured in days,
not weeks) of ripeness. The enormous amount of required manual labor can be a competi-
tive advantage of small producers, who often use available familial labor (the average
number of family workers was 3.31 in our sample). Even still, a container-load is a lot of
coffee to pick, almost impossible relying solely on family labor; cooperatives are
effective mechanism for aggregating such small-scale production.
For specialty coffee, the cherries need to be handpicked at maximal ripeness and, in the
case of washed Arabicas, need to be processed right away. Such periods of high labor
inputs, as well as the capital investment required for wet mills, make cooperatives
especially attractive to smallholding coffee farmers. For many Guatemalan smallholders,
it is also the alternatives that push them toward cooperatives: most are ambivalent at
best about coyotes, and many see them as leeching off the hard work of those whose
get their hands dirty working the earth.
In this context, cooperatives are crucial for smallholding farmers. Consolidating har-
vests, cooperatives are able to trade in volumes attractive to exporters. Cooperatives
allow for a division of labor in which those who speak fluent Spanish and are more familiar
with the social expectations of the market can deal with buyers and exporters (Fischer
2019). Finally, coffee is a notoriously volatile market, and yet it takes several years to
bring new production online. Cooperatives are able to provide some buffer against
market swings, especially important to the smallest producers. In some women’s associ-
ations, the incorporation of coffee production has provided an opportunity for women
to be trained to use new agricultural practices and to manage their small plots.
Over 73% of our sampled respondents belong to a cooperative These farmers have no
illusions about the limitations of cooperatives, but see them as crucial to both production
and marketing. Lyon (2011), Fisher (2013), and others show how cooperative members
often have concerns over leadership, corruption, accounting, and transparency. This
coming together of individual and collective interests is a messy business.
One often-overlooked reason for cooperative membership is that it is meaningful for
many; there is a social and affective aspect to such commitment as well as a rational, cal-
culating side. It provides a community and a sense of belonging, and builds on long-
THE JOURNAL OF PEASANT STUDIES 9

standing Maya community organizations of rotating public service cargos (Lyon 2011).
Bradley Wilson shows that cooperative farmers in Nicaragua ‘participate in Fair Trade net-
works in spite of low household incomes and cycles of indebtedness because of the ability
of the producer organization to maintain a sense of solidarity linking coffee contracts to a
longer agrarian struggle’ (2013, 177). As Bacon (2010) points out, the Fair Trade coopera-
tive as a field of practice provides an important nexus for international development
efforts and locally envisioned capacity building.
While only about 10% of coffees in the U.S. are certified under some ethical labeling
regime (e.g. Fair Trade, Rainforest, Utz), these programs, and especially Fair Trade, have
played an important role in the rise of smallholding farms in Guatemala. The idea of fair
trade coffee goes back to a 1970s collaboration between SOS Holland and the Guatemala
national organization of coffee cooperatives (FEDECOCAGUA) to produce the brand ‘Indio
Kafee’ that supported the cooperative movement. Fair trade certification as such began in
1988 (in the Netherlands with Max Havelaar brand coffee). It then spread to Germany and
U.S., and in 1997 the different national programs came together to form the Fairtrade Lab-
elling Organizations (FLO, now Fairtrade International). The FLO’s guiding principles
dictate that they buy only from smallholder producer cooperatives; in return they pay a
premium to ensure a floor price and well as provide credit and multi-year contracts (see
Jaffee 2012; Lyon, Ailshire, and Sehon 2014). Until 2012, when Fair Trade USA broke
from FLO, all Fair Trade certified coffees had to be produced by a cooperative.
Fair Trade certified coffee sales have grown exponentially since the late 1990s, although
they still only account for a small percentage the total global market. Large buyers, such as
Starbucks, have come up with their own ethical sourcing guidelines, inspired by but apart
from Fair Trade proper. Other groups, such as Cooperative Coffees, have developed ‘fairer
than Fair Trade’ alternatives.
A number of studies have documented the shortcomings and complicated impact of
Fair Trade coffee production on producers’ lives and livelihoods. Gavin Fridell (2007)
and others show how Fair Trade serves as a technique to foreshorten more radical
change, and, in fact, reflects the encroachment of a neoliberal market mentality into the
ethical world of solidarity. Sarah Lyon concurs, arguing that Fair Trade does not ‘funda-
mentally challenge the contemporary neoliberal organization of the international
market’ (2011, 11). Wilson (2010) reports on the problems of farmers growing Fair Trade
coffee, plagued by continual indebtedness, never able to get ahead really despite the
promises of higher incomes. And Daniel Jaffee (2007) shows that while Fair Trade
farmers in Oaxaca do better than their conventional peers, this is largely because of the
safety net function (when the market goes down, they lose less money).
Nonetheless, the farmers in our sample overwhelmingly saw the benefits as outweigh-
ing the drawbacks of cooperative organization. Jaffee (2007) observes that no one is
getting rich from Fair Trade coffee, but those producers who invest coffee income in
other pursuits may be able to pull themselves out of poverty. He reminds us that these
coffee producers do the math–they know, more or less, the risks and benefits involved,
and they make their decisions accordingly. They realize their livelihoods are limited by
structural conditions, but still have to act within those constraints.
One farmer in his mid-50s that we interviewed recounted the importance of Fair Trade
programs in the early days of movement into coffee. But, he reports, when prices kept
going up, Fair Trade would not pay more: ‘that was a problem for the cooperative
10 E. F. FISCHER ET AL.

because the people said to themselves, well, I will go where I get paid the most. And
people dropped out of the cooperative. But with prices lower again, they will come back.’

The Third Wave of change in the global coffee market


The Second Wave movement set a higher bar for quality. Nonetheless, this is still essen-
tially a commodity product (‘quality washed Arabica’ or ‘SHB washed Arabica’), if differen-
tiated from bulk Arabica and Robusta. Anyone producing coffee of sufficient quality can
sell into this market, which makes up a significant portion of Guatemalan exports. The
structure of the Second Wave market in Guatemala benefits medium-sized producers as
well as cooperatives—as these are small enough for robust quality control and yet large
enough to dependably supply container loads of green beans.
In recent years, the fastest growing segment of the specialty coffee market has been at
the exclusive upper end, with a Third Wave of single-origin, micro-lot coffees that offer dis-
tinct flavor profiles (see Fischer 2019). Although precise figures are elusive, this segment
likely constitutes no more than a few percent of the specialty market. In the U.S., Third
Wave coffee retails for $25/lb and up (generally in 12oz portions—subtly stressing
quality over quantity). Prized Geisha varietals routinely sell for $100+ per pound. In the
world of Third Wave coffees, altitude is often used as a quick indicator of quality, and
coffee packages are often labeled with meters above sea level. Grown at altitudes up to
2000 masl, Third Wave coffees have a richer and more complex cup than standard
SHBs. This sector has been pioneered by small and medium sized roasters in the United
States; the big players include Stumptown, Intelligentsia, Counter Culture, and Blue Bottle.
The Third Wave direct trade makes the neoliberal promise to shift even more power to
smallholding producers—at least those who grow the very highest quality beans—but it is
problematic for the collective and, for complicated and morally entangled reasons, it puts
individual producers in a difficult position, having to choose between community and indi-
vidual gain. The Third Wave market generally eschews cooperatives in favor of sourcing
from ‘single estates’ and particular farmers. This feeds a narrative of terroir and authen-
ticity, and claims of ever more exotic flavor profiles. In place of the social premium of
Fair Trade, the Third Wave market pays a quality premium that can be very lucrative for
certain farmers. Guatemala has been ground zero for Third Wave coffees. The Guatemalan
producers association (Anacafé) started associating different regions with different cup
profiles in the 1990s. Today, its eight official regions have strong recognition among
wholesale buyers, capitalizing on the country’s unique geographies and micro-climates.
Third Wave coffees carry the connotation, if not explicit claim, of solidarity through
‘relationship sourcing’ and the extensive biographical narratives that accompany many
beans (West 2012). Yet, this imagined solidarity is felt very differently on the ground in
coffee producing regions such as highland Guatemala, where new markets for ‘quality’
pose a threat to a hard-won and widely popular cooperative system for smallholders.
Our data show that in 2014 smallholding producers had only a vague idea of the final con-
sumption market for their coffee. Most of the farmers in our sample joined in the Second
Wave because it was a familiar agricultural endeavor with a booming market. They are
aware that the market changed in the 1990s in ways that created a dramatic new oppor-
tunity for them. Still, only 17% of our sample are familiar with ‘specialty coffee’ as such.
THE JOURNAL OF PEASANT STUDIES 11

They have little or no idea about roasters and baristas, cold brew and K-cups, and Third
Wave coffee shop culture.
The hefty premiums these beans command mean that the farmers who grow them are
well compensated, often earning many multiples of standard farmgate prices (e.g. $4.00
per pound versus $1.00—for smallholders, a potentially life-changing difference). But
these tend toward winner-take-all markets, with marginal differences in cupping quality
and social capital resulting in exponentially larger earnings. Between the First and
Second Wave there was a modest but significant increase in price for farmers. There
was some variation, and a system of recognized national premiums, but also a baseline
for quality washed SHBs. Yet, in the Third Wave, we see dramatic variations in willingness
to pay large premiums for relative small differences in quality and imagined or real scar-
cities. This reflects a move away from a quality commodity market to a market much more
focused on the singular and particular. Pricing is much more difficult, and variable, with
singular items such as unique batches of micro-lot coffee beans.
Let us be clear: the number of smallholding producers selling into the Third Wave
market is small, and this exclusive high-end market will likely always be dwarfed by the
demand for specialty and commodity coffee. However, for the fortunate producers able
to grow high-quality coffee and connect with the Third Wave market, the rewards are sig-
nificant and hold an outsized role in local popular imagination.

Quality versus cooperation


As the Third Wave starts to change the lives of coffee farmers in Guatemala, indications are
that the results will be more variable spread, concentrated on certain individuals and not
whole communities. On the consumer side, preferences shift quickly, but for producers
this is a multi-year project, from planting to harvest. The Second Wave market’s reliance
on cooperatives and the Third Wave’s focus on provenance and direct-trade are two
very different models of economic engagement for farmers, distinct in both ideology
and logistics. On the one hand, there is the route of solidarity (among producers and
between producers and consumers). Cooperatives have been very good at minimizing
risks, and smallholding agriculturalists justifiably tend toward risk aversion. In place of
cushioning the downsides, the Third Wave micro-lot market opens the possibility of
greater upsides, handsomely rewarding individual farmers who produce beans with
unique cupping profiles. This neoliberal route of meritocratic rewards for quality and indi-
vidual excellence can be very attractive to hard-working farmers even as it erodes commu-
nity solidarity in ways disadvantageous to those same farmers (cf. Copeland 2011; Li 2014).
The tension between these two approaches is lived and felt by the smallholding Maya
producers in our sample. It is more than just rational calculation of how to maximize
returns (if that is also a significant consideration); there are also moral obligations to the
cooperative and one’s communities that farmers must navigate. Many farmers feel stuck
between the moral economy of the cooperative, in which they believe, and the immediate
(and potentially life changing) profits from selling their highest quality beans on the Third
Wave market.
Smallholding farmers join cooperatives for a range of reasons, from risk aversion to the
creation of community and the pursuit of collective ambitions about the world in which
they would like to live. Take, for example, Ignacio, a 58-year-old Maya farmer from the
12 E. F. FISCHER ET AL.

Lake Atitlán region of Guatemala who has been growing coffee almost his whole life. He
speaks Spanish well enough, although he grew up speaking Tz’utujil Mayan and only com-
pleted first grade in the public elementary school. He is literate to the extent that he can
sign his name and read the numbers of a sales sheet. Ignacio’s father grew maize and
beans, and they subsisted mainly from what they grew. Like many families, his father
also had a number of coffee trees to supply the household and sell a little surplus in
the local market. At some point his father expanded the coffee plantings, and Ignacio
expanded it further, just as the market was taking off. While his material circumstances
would still seem exceedingly modest to most of the people who drink his coffee, he
has done spectacularly well by local standards. He made enough money to send his
kids to school; he can hardly contain the pride in describing that both finished high
school and became professionals, one a bookkeeper and the other a teacher.
At the time of our 2014 survey of smallholding coffee farmers in Guatemala, the market
was booming, and we found an overwhelming majority held positive views about the
coffee market and its impact on household finances. ‘Coffee is the future,’ is a phrase
we heard repeatedly as producers conveyed their commitment to the crop. This is not
idle speculation, but farmers literally betting the farm and their family’s livelihood on
the future direction of the global market. They are bullish: over 74% predicted that the
market would at least stay at current levels in the coming years, and 44.8% saw prices
and farmer incomes continuing to increase.
The benefits of the coffee boom on Maya communities is widely recognized among our
sample. Don Antonio, an older Kaqchikel Maya farmer from San Martin Jilotepeque, says
that today there is less emigration and that ‘the level of poverty has dropped very dramati-
cally–men who used to be day laborers now have their own land they plant.’ A young
farmer with a growing family, Eduardo, reports that coffee has provided a huge economic
benefit to his family: ‘now I have a cinderblock house, and I am planning on expanding it.’
The farmers we talked to are also deeply committed to coffee in a way that goes beyond
the purely economic. Rolando, a survivor of the civil war violence and member of a coopera-
tive that occupies land redistributed from an old finca to internal refugees of the war. He
stresses their deep commitment to coffee, even with all that they have been through: ‘we
will stay with coffee, we are used to struggle. First there was the fall in prices, they had
never been so low. Then we were hit by Hurricane Mitch, then Stan, then Agatha. Then
came an earthquake. Then the coffee rust. But here we are still, and we are moving
ahead.’ Augustin, a 42 year old Q’eqchi’ Maya farmer with a second grade education,
reports that ‘I will never abandon coffee, even in tough years like the last one.’
There is clearly a realization of the importance of ‘quality.’ Almost everybody we spoke
with, from the head of Anacafé to remote farmers, mentioned to central importance of
quality. In our sample, 73.7% reported that improving quality is the most important
market imperative going forward. For most, this means better cultivation habits and a
clean harvest, as well as warding off the coffee rust fungus. Only 5% saw the push
toward quality to also mean looking for exotic varietals. All the same, there is little
depth of knowledge among farmers of the market destination of coffee produced:
47.6% reported having no knowledge of the coffee market beyond the cooperative or
coyote; most of the rest reported ‘some knowledge’ but this is usually a vague idea that
it goes to the United States and Europe (with a few of the most knowledgeable farmers
mentioning Japan).
THE JOURNAL OF PEASANT STUDIES 13

Tough choices and uneven rewards


With the boom in Third Wave coffee, more concerned with cupping profiles than coopera-
tive arrangements, farmers fortunate enough to be located on the best coffee lands are
increasingly being lured away from cooperatives. Middlemen with an eye for quality try
to pick off the best producers, enticing them to defect from their co-op commitments
for significantly higher prices.
These are not wealthy farmers, and most live in tight-knit communities. For cooperative
members, selling to coyotes usually means defecting from at least part of one’s obligation
to the cooperative. This is not an easy decision, but it is also the case that these farmers are
in difficult economic circumstances, doing what they see is needed to survive and hope-
fully get ahead. Of our sample, 50% report selling primarily to a cooperative or association,
41% to a coyote, and 9% to both a cooperative and coyotes. A majority report that the
price floor provided by cooperatives is valuable. Some cooperatives in high demand
regions estimate the defection rate to be close to 50%. When prices are high, farmers
of specialty coffee have long diverted harvest from cooperatives to sell to coyotes, but
this is exacerbated by extraordinarily high prices offered in the Third Wave market. The
prices for Third Wave coffee have become divorced from the commodity price for
washed Arabicas, so that even when the C price is low, defection makes economic
sense for producers of the highest quality.
Don Antonio, the older Kaqchikel farmer who has been in coffee for almost twenty
years, says that ‘coyotes pay more than the cooperative’ and he does ‘not trust that the
cooperative always has our interests in first place.’ He feels that he owes it to his family
to get the best price he can for the harvest, and so he sells to the coyotes, but not
without a tinge of regret. As someone proud of his coffee and ambitious in his plans for
expansion, he hopes to make connections beyond the coyotes to exporters and roasters.
He concludes that ‘you need to make it into direct trade, a personal relationship, to make
real money.’
Eduardo, a coffee cooperative member in Huehuetenango, reports selling some of his
crop to coyotes rather than the cooperative. ‘They just mix it in with all the rest,’ he com-
plains about the cooperative, ‘and my quality doesn’t make a difference.’ In contrast,
selling to high-end intermediaries hunting for quality is very demanding—’they come
inspect the fields, make sure the right varietals are planted, and check on altitude; they
monitor the whole process.’ He appreciates being at the production end of the relation-
ship narrative that may accompany his micro-lots.
Chajul is an Ixil Maya community in an area hit especially hard by the violence of the
early 1980s. In the aftermath of a brutal counterinsurgency campaign in which any hint
of cooperative organization was considered communist subversion, the community of
Chajul came together to build one of the largest and most successful coffee cooperatives
(with over 1400 members) in Guatemala. Cooperatives are never without some level of
discord, but by most measures the one in Chajul has especially broad support in the com-
munity. It is often held up as an example of what a cooperative can do in terms of com-
munity development. Even with this level of support, cooperative members report a
constant battle with defections. One member, Arcadio, says that while Fair Trade guaran-
tees a floor price, ‘when the price goes higher, we have to scramble to keep people selling
to the association. People don’t understand that they have to sell when the market is up
14 E. F. FISCHER ET AL.

too. They just want to earn more and more. Many are not loyal to the cooperative, they go
and sell to the coyote to get the higher price.’ The reality of the situation is that ‘what most
people do, when the prices goes way up, is sell some to the coyote and some to the
association.’
These farmers have to make tough decisions, and they often feel competing pulls from
their commitments to community/cooperative and from their fiduciary obligations to their
children and families (and that seductive pull of individual maximization). Who do they sell
to at harvest time? There is the financial decision, but also the social context of cooperative
obligations and family and community ties. As Don Antonio noted, ‘either way you won’t
get rich, just hopefully a little less poor.’

Quality, decommodification, and risk


Third Wave coffee is linked to local food movements and other artisanal trends around the
world. On the one hand, these can flatten relations, bringing producers and consumers
closer together. Yet, as Jason Antrosio and Rudi Colloredo-Mansfeld (2015) show, globa-
lized artisanal markets tend to move toward winner-take-all markets, with a few artisans
who have the skill and the social capital doing spectacularly well and the vast majority
losing out in the competition for the best. Bradley Wilson (2010, 2013) finds a similar situ-
ation with high-end coffee production in Nicaragua.
The small size of the Third Wave market means that its economic impact is limited in
scope. The few winners, if they are rural Maya people in Guatemala, are still marginalized.
Their outsider-ness is part of their attraction (websites often stress the small size and mar-
ginality of producers), and yet in social contexts of systemic exclusion, winning can mean
losing: farmers are vulnerable to dislocation due to discrimination, corruption, and the
labyrinth complexity of the system. It turns out, then, that poor Maya farmers are system-
atically marginalized, in subtle and counterintuitive ways, by new (even seemingly more
direct) market structures, and they are coerced to bear a disproportionate amount of
risk in the turn to Third Wave coffees.
This is part of broader neoliberal distributions of risk in the global economy, with risk
pushed as far down the supply chain as possible (Beck 1992; Harvey 2005). In terms of
coffee, it is farmers who assume most of the risk. Farming is always a risky business, but
it becomes exacerbated in high-end markets that are constantly changing, constantly
chasing the new and rare. This risk for farmers is real and complicated: will coffee aficio-
nados in Portland or Nashville want what they grow? Such questions are in addition to
the assumed risks of disease, drought, and other crop devastating possibilities.
The Second Wave trend toward high-end coffee, and a concern for fair trade conditions,
benefitted cooperatives in the Guatemalan highlands, but the Third Wave pushes toward
greater differentiation that can threaten cooperative structures by pulling away the
highest quality producers. Third Wave decommodification handsomely rewards some
small-scale producers, the low volume of which heightens their Veblen-esque appeal.
Yet this undermines the cooperative structure so important to smallholding coffee
producers.
Whereas cooperatives seek to mitigate risks for members, the Third Wave market offers
potentially much higher rewards but at greater risk. Indeed, the other side of the many
development programs whose goal is ‘empowerment’ is that such entrepreneurial
THE JOURNAL OF PEASANT STUDIES 15

power comes with greater risk (see McAllister 2009) . These farmers are living in circum-
stances in which the continual challenge is preservation. The risk of failure is real, and
potentially catastrophic. Still, the ‘will to improve’ is deeply motivating, especially when
it is linked to meritocratic ideals of the market as neutral arbiter (Li 2007).

Conclusions
The last twenty years of growing demand for ever higher quality coffees has benefited
Maya smallholding farmers in the Guatemalan highlands. Demand has been increasing
faster than supply for the high-altitude washed Arabicas that grow so well there. As
ever, the coffee market has been volatile, but overall the trend line has been steadily
upward. These market shifts largely benefited smallholding Maya producers in Guatemala
in the Second Wave and the early years of the Third Wave by raising prices for SHB washed
Arabicas broadly. However, the structure of the market is driven by esoteric tastes and a
continual search for something new and unusual that systematically disadvantages the
same Maya smallholders, who lack information about what the Third Wave market
wants and the social capital to interpret it.
Most of the coffee farmers we spoke with want more direct connections with the
market, but also do not understand it well. Middlemen are seen as somewhat suspect,
but also the necessary agents of outside connections. The farmers themselves often
take pride in their coffee and their ability to grow it well, seeing virtue in earning a
living from the land. All the same, while farmers drink the coffee they produce in their
own fashion, they have not learned the sensory norms of cupping, and they have only
a vague notion of the final consumers. This is a particular sort of alienation, and it disad-
vantages farmers without the social capital to translate values from field to cup.
The Third Wave market undermines the raising-all-boats structure of the Second Wave
and poses a threat to the cooperative structure that most farmers see as key to protecting
their position in the market. Fair Trade certifications provided a buffer against market
fluctuations for smallholders in the Second Wave tide, but they also tie farmers to a
model that is being erroded by the market turn to quality. Third Wave coffees bring
much higher incomes to some farmers, but in so doing help erode the power of coopera-
tives (which farmers nonetheless say they support). The market is ever chasing something
new, but this shifts risks back onto smallholders (who have to invest three, four, sometimes
even five years in bushes that will produce a particular flavor profile).
The market for Third Wave coffees undermines cooperatives by picking off their best
producers. Consumers of Third Wave coffees, when they consider it, probably assume
that the high prices they pay translate into support for farmers. Some farmers – those
who produce high-grade coffees and who have the social capital to translate its value
into the market – are highly rewarded. But in the process, they also threaten structures
of mutuality in producer communities. Farmers overwhelmingly support cooperatives,
but most also are not in a position to turn down better financial offers.
This is a moral as much as an economic issue—it is a case where economic advantage
and social values come into conflict. The decisions farmers have to make about whom to
sell to reflect the tension of competing value regimes: the quality market pays higher pre-
miums but erodes the power of cooperatives, which farmers say that they value. There is
16 E. F. FISCHER ET AL.

also a new distribution of risks, with risk pushed down the value chain so that smallholders
take on more.
The collision of value regimes located in the consuming and producing worlds have
long been a defining feature of global capitalism, but we are now seeing how increased
turbulence in the moral preferences of consumers rebounds back to producers in
intended and unintended ways. Marketing moral provenance as branded values to consu-
mers can be both enabling and undermining for producers, as with the emergence of
Third Wave coffee. This is a kind of tragedy of the commons where a failure to appreciate
and communicate between moral worlds leaves the real impacts to chance – and where
the consequential risk of that chance is borne almost exclusively by smallholding
producers.

Acknowledgments
Thanks to all of the coffee farmers who aided in this research, and whose names have been changed
to protect confidentiality. We would also like to thank Dan Cornfield, Bill Hempstead, Aracely Martí-
nez, Carlos Perez-Brito, Ixchel Espantzay, Bradley Wilson, Sarah Lyon, Dan Reichman, James Carrier,
Blanca Castro, Will McCollum, and Mac Muir for their help in fieldwork and suggestions for analysis.
We would also like to thank the two exceptional JPS reviewers for their many helpful suggestions.

Disclosure statement
No potential conflict of interest was reported by the authors.

Funding
This research was funded by a Vanderbilt University Discovery Grant. Anacafé provided in-kind logis-
tical support for the field surveys.

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Edward Fischer is Professor of Anthropology and Director of the Center for Latin American Studies
at Vanderbilt University. His research focusses on value, political economy, and wellbeing.
Bart Victor is Professor in the Owen School of Management at Vanderbilt. His work focuses on multi-
dimensional approaches to poverty and the ethical climate of organizations.
Linda Asturias de Barrios teaches at Universidad del Valle de Guatemala and leads the consultancy
Estudio 1360.

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