Organic Agriculture in Mexico: Case Studies of Small Farmer Associations in Chiapas and The Yucatan Peninsula

Case Study 6
Organic Agriculture in Mexico:

Case Studies of Small Farmer Associations in Chiapas and the Yucatan Peninsula
By Octavio Damiani
Consultant, Office of Evaluation and Studies
Report prepared for the Office of Evaluation and Studies

of the International Fund for Agricultural Development
Rome, December 2001
2
Table of Contents
I. Introduction
II. The Importance of Organic Agriculture in Mexico
III. Case Studies of Small Organic Producer Associations
A. Coffee Production by ISMAM Indigenous Producers in Chiapas
B. Honey Production by Three Associations of Indigenous Producers, Yucatan Peninsula
IV. Effects of the Organic Model of Production on Small Farmers
A. Investments and Changes in the Costs of Production
B. Effects on Yields and Product Prices
C. Effects on the Natural Environment
V. Factors Explaining the Emergence of the Organic Producer Associations
A. Policies and Programmes Dealing with Organic Agriculture
B. Government Agencies and Programmes Supporting Associations of Organic Producers
C. The Role of NGOs
D. The Role of Producer Associations
VI. Conclusions and Lessons for Project Design and Implementation
A. Conclusions
B. Lessons for Project Design and Implementation
References
Annex: List of persons interviewed
Map 1: Location of the state of Chiapas and the area of the area of ISMAM activity
2
Acronyms
Banrural The Rural Credit Bank

EDUCE Education, Culture and Ecology
FONAES National Fund for the Support of Solidarity Enterprises
INI National Indigenist Institute
ISMAM Indígenas de la Sierra Madre de Motozintla San Isidro Labrador
NGO Non-Governmental Organization
Sagarpa Secretariat of Agriculture, Livestock, Rural Development, Fisheries and Food
UCIRI Union de Comunidades Indígenas de la Región del Istmo
1
I. INTRODUCTION
1. This report focuses on organic agriculture in Mexico. It analyses cases of small farmer
associations that produce and market organic coffee in the state of Chiapas and organic honey in two
states of the Yucatan Peninsula (Campeche and Quintana Roo). Mexico became a well-known
producer of organic agricultural products during the nineties, occupying the first place in Latin
America and the fifth in the world in terms of areas of organic crops under cultivation. By 2000, the
area under organic crops had reached 103 000 ha, with an annual average growth of 45% since 1996
and annual exports of organic products close to USD 140 million. More than 33 000 producers – 95%
of them small farmers and 5% medium-size and large farmers and firms – were cultivating organic
products, and organic agriculture involved more than 16.4 million person-days of labour annually.
Mexico was also the largest world producer and exporter of organic coffee, with more than 70 000 ha
– 70% of them certified and 30% in transition towards certification – and exports of
USD 32.6 million. The production of honey was also very important, involving more than 1 100
producers, most of them in the southern and south-eastern states of Chiapas, Oaxaca, Campeche and
Quintana Roo, who were producing about 400 t per year and exported for a value of USD 473 000 in
2000.1
2. The study provides an overview of organic agriculture in Mexico and analyses a set of cases of
small organic producer associations:
3. (a) The coffee producers of the Indígenas de la Sierra Madre de Motozintla San Isidro Labrador
(Indigenous Peoples of the Sierra Madre de Motozintla San Isidro Labrador, ISMAM) in the state of
Chiapas. ISMAM is a well-known success story in Mexico. By 2001, it included 1 300 indigenous
producers in 146 communities in 18 municipalities of the Soconusco region in Chiapas (see Map 1).
These farmers were cultivating close to 5 000 ha of certified organic coffee, about 10% of the area of
certified organic coffee in Mexico. ISMAM was created in 1988 with the support of the Catholic
Church, which had long been working with indigenous communities in Chiapas. The newly created
association aimed at opening alternative marketing channels for the coffee production. Marketing was
dominated then by middlemen who allegedly paid low prices to farmers.
4. At that time, the demand for organic products in European countries – with which ISMAM had
close links through coffee buyers and non-governmental organizations (NGOs) in those countries –
had started to grow rapidly. Because most producers had a history of little or no use of chemical
inputs, ISMAM’s leaders saw the organic certification of the coffee crops of its members as a great
opportunity, and they focused their efforts on making the changes in their organization and among the
farmers necessary to obtain organic certification. The first contacts with foreign certification agencies
were established in the late eighties through one of the buyers of ISMAM’s coffee. After initial
inspections, the organization started the certification transition period of three years and was
eventually successful in certifying the coffee production of its members in 1993. After selling its
organic coffee for a year through a farmer association in Oaxaca,2 ISMAM established its own
marketing contacts and began exporting directly an annual average of 65 000 quintals (2 900 t) of
coffee, mainly to Europe and the United States.3 ISMAM was able to export its organic coffee at
prices between 30% and 87% higher than the price for conventional coffee in the period 1993 and
2001. Since the mid-nineties, ISMAM has also been able to sell about 30% of its coffee in the fair
trade market, thus obtaining even higher prices: USD 165 per quintal in 2001, compared to USD 75
per quintal for organic coffee and USD 40 per quintal for conventional coffee.
1
The information on the areas cultivated with organic crops, on the number and type of organic producers and
on exports is taken from Gómez Cruz, Schwentesius and Gómez Tovar (2001).
2
The Union de Comunidades Indígenas de la Región del Istmo (Union of the Indigenous Communities of the
Istmo Region, UCIRI), an association of small coffee producers that became the first exporter of organic coffee
in Mexico in 1985-86.
3
1 quintal = 100 lbs. = 45.5 kg.
2
5. (b) The honey producers of the Honey Producers Association of Calakmul in the state of
Campeche and the Kabi Jabin and Chilan Kabo’ob Association in the state of Quintana Roo. These
three associations comprised altogether 349 indigenous families that were beneficiaries of the Rural
Development Project of the Mayan Communities in the Yucatan Peninsula, funded by IFAD and
implemented by the National Indigenist Institute (INI) (see Map 1). The three associations represent
farmers in different circumstances in the process of producing organic honey, and they have taken
advantage of the outstanding natural conditions in the Yucatan Peninsula for the production of organic
honey. Indeed, the Yucatan Peninsula has one of the most diverse and well-preserved ecosystems in
Mexico and is host to several biosphere reserves with more than 80 000 ha.
6. The Kabi Jabin association started the shift to organic production in the mid-nineties with the
support of Education, Culture and Ecology (EDUCE), an NGO based in Hopelchen (Campeche) that
specialized in working with groups of small honey producers who were exporting to the foreign
organic and fair trade markets. EDUCE helped Kabi Jabin through a three-year process of intensive
training, which convinced farmers of the potential benefits involved in the adoption of organic
methods of production. Kabi Jabin has followed a gradual approach that incorporated relatively small
numbers of new organic producers every year and has been able to build a well-organized monitoring
system with the active participation of all association members.
7. The Chilan Kabo’ob Association was supported beginning in the early nineties by INI, which
provided technical assistance, credit and grants so the association could build storage and processing
facilities. Chilan Kabo’ob was successful in obtaining organic certification and started exporting
honey directly to European countries in 1996. However, the association faced problems that led to the
loss of the certification in 1998. This caused the association to lose markets, and it had to lower the
prices it paid to its members for their honey substantially. At the beginning of 2001, Chilan Kabo’ob
started to work intensely to recover its organic certification. It was supported in this by a project of
the office in Mexico of the United Nations Development Programme and the IFAD Yucatan project
being implemented by INI.
8. Finally, the Calakmul association is a successful producer of conventional honey, and it recently
started the process of obtaining certification with technical assistance and credit from INI and the
Yucatan project. Calakmul is the least advanced of the associations in the organic-certification
process, and it offers interesting lessons in terms of the challenges and problems that associations face
when shifting to organic production.
9. Organic production has had significant positive effects on the incomes and the quality of the lives
of the farmers in the associations in this study. This is important because Chiapas and the states of the
Yucatan Peninsula (Campeche, Yucatan and Quintana Roo) are among the poorest in Mexico and
have large indigenous populations. Poverty and marginalization were at the root of an uprising that
took place in the mid-nineties and that was led by the Zapatista movement in Chiapas. The successful
marketing of coffee has allowed ISMAM members to receive higher prices for their coffee (MXN 800
per quintal in 2000, 45% higher than the MXN 550 received by conventional small producers, and
MXN 650 per quintal in 2001, 62.5% higher than the MXN 400 received by conventional small
producers). The organic output of honey has been exported by the associations in the Peninsula de
Yucatan at prices between USD 1 500 and USD 1 600 per t, about 45% higher than the price of
USD 1 100 per t for the conventionally produced honey.
10. In addition, the organic models of production have had positive effects on the environment. Most
coffee producers in Chiapas are small farmers who, even when they were producing conventional
coffee, were using environmentally friendly technologies, cultivating the crop under the shade of
native trees and employing little amounts or no chemical inputs. Organic production has led to the
introduction of further improvements by members of ISMAM, among them the use of soil-
conservation measures that are absent among the conventional producers, thus improving the health of
soils. Meanwhile, the organic production of honey has become a valuable alternative in a strategy of
conservation of the forests and natural ecosystems in the region. Indeed, the production of organic
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honey has not been merely compatible in this effort, but itself requires the preservation of the natural
forests, as organic production must be carried out far away from other crops, roads, or houses. Most
certification agencies require a minimum distance of 3 km from these as a key condition for
certification. In other words, organic honey is incompatible with an approach which relies on the
destruction of forests in order to open new land for cultivation.
11. This paper analyses the factors in the emergence and growth of the coffee and honey producer
associations in Chiapas and the Yucatan Peninsula, paying particular attention to the following issues:
(a) the role of government laws, programmes and agencies dealing with organic agriculture; (b) the
main problems that producers have faced when producing and marketing their organic products and
(c) the solutions to the main problems and the role of government institutions, private agencies,
farmer associations and NGOs. The main questions addressed in the report are the following:
(a) What have been the effects of organic production on the output and incomes of small farmers?
(b) What have been the main problems that small farmers have faced when they started to grow and
sell organic products?
(c) What have been the key factors that have led to successful production and marketing of organic
products by small farmers?
(d) What lessons can be obtained for projects that aim to support organic production among small
farmers?
12. The findings in this report are based on fieldwork carried out in Mexico between 19 November
and 7 December 2001. During that time, interviews were conducted among officials and professionals
at federal and state government agencies and at NGOs in Mexico City and the states of Chiapas,
Campeche and Quintana Roo. The main agencies interviewed included the Secretariat of Agriculture,
Livestock, Rural Development, Fisheries and Food (Sagarpa), INI, the Commission for the
Development and Promotion of Coffee in Chiapas, the National Fund for the Support of Solidarity
Enterprises (FONAES), the Chiapas Secretariat of Rural Development, and EDUCE. Also
interviewed were researchers in organic agriculture at the University of Chapingo. In addition, visits
were made among organic coffee farmers in Chiapas and organic honey producers in the states of
Campeche and Quintana Roo. There, leaders, farmers and professionals working for the organizations
analysed in the study were interviewed.
13. The report is organized as follows. The second section provides an overview of organic
agricultural production in Mexico. The third section describes in more detail the cases in this study.
The fourth section analyses the most important effects of organic production on the output and
incomes of small farmers and on the natural environment. The fifth section examines the influence of
different forces in the development of the organic products in the cases. The sixth and final section
offers conclusions and lessons for project design and implementation.
II. THE IMPORTANCE OF ORGANIC AGRICULTURE IN MEXICO4
14. Mexico is one of the most important producers of organic agricultural products in Latin America.
The first organic areas were cultivated in the eighties, and the expansion since then has been amazing.
By 2001, organic agriculture involved 33 600 farmers and 102 800 ha, of which 71 500 ha (70%)
were certified and 31 300 (30%) were in transition and were expected to be certified within the next
one to three years (see Tables 1, 2). Exports of organic crops accounted for about USD 139.4 million,
4
The analysis in this section is based on information collected by the Centre of Economic, Social and
Technological Research on Agro-Processing and World Agriculture of the University of Chapingo. The centre
has carried out a study of organic agriculture in Mexico that was funded by the Secretariat of Agriculture,
Livestock, Rural Development, Fisheries and Food (Sagarpa). The results are published in Gómez Cruz,
Schwentesius and Gómez Tovar (2001) and Gómez Tovar, Gómez Cruz and Schwentesius (2000).
4
and organic agriculture generated more than 16.4 million person-days of labour annually. While
organic agriculture is still a relatively small sector, it was one of the most rapidly expanding economic
activities during the nineties. The area under organic crops increased 45% annually between 1996 and
2000, while the number of organic farmers rose 26.3%, employment in organic agriculture 45%, and
exports of organic products 42% (see Table 1).
15. Organic agriculture in Mexico included more than 30 products, the most important ones being
coffee, corn, beans, sesame, fresh vegetables, medicinals, vanilla, oranges, papaya, mango and honey.
Coffee was the most important crop in terms of cultivated area and number of producers: 70 800 ha,
or 10.4% of the area under coffee cultivation in Mexico, and 28 400 farmers, or 84.6% of all farmers
doing organic agriculture. Meanwhile, fresh vegetables and coffee were the most important in terms
of exports: USD 47.2 million and USD 32.6 million, respectively, in 2000, which represented 33.9%
and 23.4% of the total exports of organic products (see Tables 2, 4, 5). While organic agricultural
production existed almost everywhere in Mexico, it was concentrated in the southern states, mainly
Chiapas and Oaxaca, which together accounted for 69.8% of the area cultivated with organic crops
(see Table 3).
16. Most organic producers in Mexico were small farmers with less than 30 ha, though the share of
medium-size and large producers has been increasing substantially since the mid-nineties. By 2000,
small farmers represented 98.6% of all organic producers, accounting for 84.2% of the area and
generating 68.8% of the exports of organic products. Most of these small producers were of
indigenous ethnicity, including Maya, Mame, Mixteca, Tojolabal, Totonaca and many others.
Medium-size and large farmers – defined as those farmers with more than 30 ha – represented only
1.4% of the organic producers, but they accounted for 15.9% of the area and 31.2% of the exports of
organic products (see Table 5). About 173 small farmer associations were involved in organic
agriculture, while medium-size and large producers included individual or family-owned firms (64%
of the large producers) and shareholding firms (46%).
17. By 2000, the average area of the organic crops cultivated by each producer was 3.1 ha, though
there were great variations depending on the crop and the size of the farm (see Table 3). Small
farmers were dominant in the production of coffee, corn, beans and vanilla, while medium-size and
large farmers dominated in the cultivation of sesame, mango, apples, papaya and vegetables. The
average cultivated areas were significantly higher for the latter crops than for the former.
18. Organic production in Mexico started in the eighties and expanded dramatically during the
nineties. A few isolated middle-size and large foreign farmers had pioneered the production of coffee
with organic methods as early as the sixties, selling their products directly to European buyers who
channeled them through specialized stores that were the predecessors of the organic stores in
Germany. These farms – notably Finca Irlanda (Ireland Farm) in the state of Chiapas – became a
model for small farmer organizations that started to produce organic coffee in the eighties. By that
time, several farmer organizations of coffee producers had emerged as a result of intensive work by
the Catholic Church, which was very active in Chiapas and other states. The Catholic Church
promoted the creation of farmer associations that could sell coffee directly rather than to middlemen
who paid low prices. In addition, it promoted the adoption of technologies which were compatible
with local resources and which required little capital or credit. Thus, when organic production started
to gain momentum in Europe in the eighties, the farmers saw the potential of undertaking the certified
organic production of coffee. The Union de Comunidades Indígenas de la Región del Istmo (Union of
the Indigenous Communities of the Istmo Region, UCIRI), an association in Oaxaca, became the first
well-known case of an association of small indigenous farmers that exported organic coffee. It was
soon followed by other similar associations in Chiapas, notably Indígenas de la Sierra Madre de
Motozintla San Isidro Labrador (Indigenous Peoples of the Sierra Madre de Motozintla San Isidro
Labrador, ISMAM) and the Union of Ejidos La Selva (see Table 7).
Table 1: Main indicators of organic agriculture in Mexico

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1996 1998 2000 Average Annual Growth Rate

Area (ha) 23 300 54 500 102 800 45.0
Number of producers 13 200 27 900 33 600 26.4
Number of person-days (‘000s) 3 722 8 713 16 448 45.0
Exports (USD millions) 34.3 72.0 139.4 42.0
Source: Gómez Cruz, Schwentesius and Gómez Tovar (2001).
Table 2: The expansion in the areas cultivated with selected organic crops (in ha)
1996 1998 Certified, 2000 In Transition, 2000 Total, 2000

Coffee 19 040 32 161 49 512 21 326 70 838
Corn n/a 970 2 074 2 596 4 670
Sesame 563 1 895 2 843 1 281 4 124
Vegetables* 2 387 4 391 3 307 524 3 831
Medicinals n/a n/a 2 454 57 2 511
Mango n/a 284 875 1 200 2 075
Orange n/a n/a 1 850 0 1 850
Beans n/a 1 241 1 334 263 1 597
Apples 380 2 010 743 701 1 444
Papaya 15 73 72 1 100 1 172
Others 888 11 432 6 436 2 254 8 690
Total 23 273 54 457 71 500 31 302 102 802
* Vegetables in 1996 and 1998 include medicinals.
Table 3: Area cultivated with organic crops, by state, 2000*
Cultivated Area %
Chiapas 43 678 42.5
Oaxaca 28 038 27.3
Michoacán 5 452 5.3
Chihuahua 4 206 4.1
Guerrero 3 667 3.6
Jalisco 2 364 2.3
Sonora 2 256 2.2
Veracruz 2 036 2.0
Sinaloa 2 023 2.0
Zacatecas 1 205 1.2
Other 7 877 7.5
Total 102 802 100.0
* Including areas already certified and areas in transition.
Table 4: Number of producers and average cultivated area for selected organic products, 2000
Number of Producers Average Area/Producer

Coffee 28 371 2.5
Corn 4 615 1.0
Beans 3 732 0.4
Vegetables 3 592 1.1
Vanilla 1 510 0.2
Medicinals 805 3.1
Sesame 488 8.5
Mango 457 4.5
Apples 120 12.0
Papaya 43 27.2
Total* 33 587 3.1
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Source: Based on Gómez Cruz, Schwentesius and Gómez Tovar (2001).

* The total number of organic producers is smaller than the aggregate value of the column because producers
frequently grow more than one crop.
Table 5: Exports of selected organic products, 2000
Exports (USD) %
Fresh vegetables 47 218 600 33.9
Coffee 32 560 200 23.4
Mango 16 964 000 12.2
Avocados 6 350 600 4.6
Pineapples 4 456 500 3.2
Medicinals 1 568 200 1.1
Guinea 1 029 400 0.7
Sesame 981 133 0.7
Corn 837 700 0.6
Papaya 789 500 0.6
Honey 472 900 0.3
Orange 396 000 0.3
Others 2 577 267 1.8
Total 139 404 000 100.0
Table 6: Share of small, medium and large farmers in organic agricultural production
% of Producers % of Cultivated Area % of Exports

1996 2000 1996 2000 1996 2000
Small farmers (<30 ha) 97.5 98.6 89.0 84.1 78.0 68.8
Medium and large farmers and firms (>30 ha) 2.5 1.4 11.0 15.8 22.0 31.2
Table 7: Main small producer associations of organic coffee
Location Year Established Total Members

CAOSA-CNC Oaxaca 1992 12 000
UCIRI Oaxaca 1982 2 780
Otilio Montano Chiapas 1989 1 600
ISMAM Chiapas 1988 1 300
Unión de Ejidos de La Selva Chiapas 1989 1 300
Majomut Chiapas 1981 1 200
Organización Tzeltal de Productores de Café de San Juan Cancuc Chiapas 1988 426
Source: Based on information provided by FONAES.
III. CASE STUDIES OF SMALL ORGANIC PRODUCER ASSOCIATIONS
A. Coffee Production by ISMAM Indigenous Producers in Chiapas
19. The creation of ISMAM had its origins in a meeting of indigenous leaders in the Soconusco
region, close to the border with Guatemala in the state of Chiapas in 1988. The Church promoted the
meeting. The Church had been working with indigenous communities in Chiapas for a long time not
only carrying out religious activities, but also supporting change and improvement in the production
of coffee and other economic initiatives. The Church supported the meeting in 1988 in order to
discuss crucial problems affecting coffee, the main crop in the region. Community leaders identified
and discussed several issues, but they focused mainly on those problems related to marketing and to
production technology. The marketing of coffee was considered to be dominated by middlemen who
paid low prices and did not care about the quality of the product. Meanwhile, the technologies
promoted by public extension services and input suppliers were thought to be inappropriate because
they were based on expensive inputs that small farmers found difficult to purchase. The meeting
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concluded that the organization of the small farmers into an association would be a key to solving the
marketing and technology problems and that it was essential to search for alternative sustainable
technologies.
20. The discussions at the meeting led to the creation of ISMAM at the end of 1988. The association
initially consisted of 200 small indigenous farmers in several ejidos (lands held in common) and
focused on the collective marketing of output and the strengthening of the association at the grass-
roots level through two types of actions: (a) support for collective initiatives in order to reduce the
need to hire paid labour and cut costs and (b) the creation of local committees to facilitate the
participation of members in the decisions of the newly created association.
21. At that time, organic production was expanding rapidly in Europe, and several buyers with whom
ISMAM had established contact to sell coffee showed an interest in buying organic coffee, an
alternative that they viewed as suitable because most of the farmers already were not using chemical
inputs. ISMAM contacted UCIRI, an indigenous organization in Oaxaca supported by the Church.
UCIRI had experienced a similar process and had been exporting organic coffee since 1986. Through
UCIRI, ISMAM was able to establish links with certification agencies and started the transition to
certification, which took three years. In 1993, ISMAM sold a first harvest of organic coffee through
UCIRI, and a year later it started to export directly.
22. By 2001, ISMAM had 1 300 members in 146 communities in 18 municipalities of the Soconusco
region in Chiapas, while 200 other farmers were in the process of becoming members. All ISMAM
members are small farmers and cultivate only organic crops. In fact, every member of ISMAM must
have a maximum of 10 ha under coffee cultivation and must be an organic producer exclusively.
Farmers growing a mix of organic and conventional crops are not allowed to join. The total area of
organic certified coffee accounted for by ISMAM was 5 000 ha, which represented an average of
3.8 ha per farmer. The crops were certified by recognized European and US certification agencies,
including Naturland, Oregon Tilth Certification Organic and the Organic Crop Improvement
Association. ISMAM exported about 65 000 quintals (close to 2 900 t) a year to several countries,
including Argentina, Austria, France, Germany, Italy, Japan, the Netherlands, Spain and the United
States. The high quality ISMAM coffee won several awards, including the National Exporters Award,
official recognition by the government of Chiapas in 1995 and the International Trade Association’s
International Award for the Best Trade Mark in 1998.
23. ISMAM focuses on the collective processing and marketing of the coffee produced by its
members. It has a toasting and packing plant in the city of Tapachula that contains new equipment
with a 2.5-t-per-hour processing capacity. In addition, ISMAM provides its members with technical
assistance, training and credit. The technical assistance and credit are aimed at improving and
monitoring the application of organic technologies for coffee. In addition, ISMAM has recently
undertaken programmes to promote the diversification of the output of its members. It has supported
the introduction of the production of organic honey (certified since 1996) and seeks to improve the
production of the organic honey. It helps women carry out alternative activities like animal-husbandry
and the cultivation of vegetables for family consumption. ISMAM also possesses a 237-ha farm
where organic coffee is cultivated.
8
Map 1. Mexico. Location of organic coffee production in Chiapas

and organic honey production in the Yucatan Peninsul
B. Honey Production by Three Associations of Indigenous Producers, Yucatan Peninsula
24. The production of honey has been traditional among indigenous communities in the Yucatan
Peninsula, where it was once used for ceremonial purposes. About four decades ago, it became a
common commercial alternative among indigenous farmers in ejidos who found it an ideal
complement to the cultivation of other crops, mainly corn, beans and occasionally chili peppers. Most
of the honey production was sold on the market. It was harvested about twice a month over four to six
months between January and June, a period during which there were no other sources of income.
Thus, the sale of honey became an important source of revenue that helped farmers achieve a more
steady income throughout the year. In addition, farmers often used part of the revenues they obtained
from the sale of honey to finance the cultivation of their subsistence crops, which they started around
August. The honey thereby helped reduce their need for credit.
25. The three honey associations under study here had several features in common: (a) they were
located in a region characterized by extensive areas of natural forest that offered great potential for the
production of organic honey; (b) they had been working with the National Indigenist Institute (INI)
and IFAD’s Yucatan project implemented by INI and (c) they had been created to market collectively
the honey of their members. However, they had carried out different strategies, faced different
obstacles and were operating under different circumstances at the time of the fieldwork (see Table 8).
26. (a) Honey Producers Association of Calakmul. The Calakmul association was created in 1993 in
order to market collectively the honey of its members. By 2001, it had 128 producers in 22
communities in the municipality of Calakmul in the state of Campeche. Calakmul had focused on
conventionally produced honey and was undertaking efforts eventually to produce organically. INI
provided grant funds for the construction of storage and processing facilities, and it supplied technical
assistance to individual members of Calakmul.
27. (b) Kabi Jabin Association. Kabi Jabin was created in 1996, and by 2001 it had 65 producers in
five communities in the municipality of Othon P. Blanco in the state of Quintana Roo. Kabi Jabin
received support mainly from Education, Culture and Ecology (EDUCE), which had promoted the
creation of the association to market honey collectively. Immediately after the creation of the
9
association, EDUCE started providing Kabi Jabin with technical assistance in technology and
organization. It paid the salary of a veterinarian who was specialized in the production of organic
honey. This technician worked with Kabi Jabin for three years, visiting the association twice a week
and training the members in the technologies that needed to be adopted to improve the quality of
honey and to produce organically. In 1999, an assembly of the association decided to initiate the
process of obtaining organic certification. Gradually increasing numbers of the members took part in
this process. In 1999-2000, six producers began producing organically; eight others began in 2000-
2001, and another 13 have done so in 2001-2001. In addition, Kabi Jabin was able to put together a
well-organized monitoring system to assure that its members comply with the organic standards of
production, and it began exporting to the fair trade market through EDUCE.
28. (c) Chilan Kabo’ob Association. Chilan Kabo’ob was created in 1995, though the farmers
involved had been working together since the early nineties with the support from INI, which
provided technical assistance, credit and grants for the construction of infrastructure for the storage
and processing of honey. By 2001, Chilan Kabo’ob had 156 members in 22 communities in the
municipality of Francisco Carrillo Puerto in the state of Quintana Roo. The association obtained
organic certification in 1995, but several problems led to the cancellation of the certification in early
1998. This generated a crisis marked by the loss of markets and substantially lower prices for the
output of the association’s members. In 2000, the association started to work to recover the
certification and obtained support in this through a United Nations Development Programme project
that has been helping to solve the main organizational and technical problems that led to the 1998
crisis. Thus, the leaders and technicians working for Chilan Kabo’ob are expecting the first organic
inspection by early 2002 and recertification by 2003.
Table 8: Main characteristics of coffee and honey producer associations
Association Area of Main Tasks Total Members/Total Status of Main Markets Main Supporting
Influence Organic Producers Certification Agencies
ISMAM Soconusco, marketing of 1 300 certified since sells directly to buyers in Catholic Church,
state of organic coffee, 1993 organic and fair trade FONAES,
Chiapas technical markets in Europe and Banrural, Sagarpa
assistance, US (Alliance for the
training, credit Countryside)
Calakmul municipality marketing of 128 started process in national buyers who INI
of Xpujil, state conventional 2001; expected to export conventional
of Campeche honey, technical be certified in three honey to Europe
assistance, years
credit
administration
Kabi Jabin municipality marketing of 65 transition towards fair trade and organic EDUCE, INI
of Othon P. organic honey, certification; markets through
Blanco, state technical expected EDUCE
of Quintana assistance, certification in
Roo training early 2002
Chilan Kabo’ob municipality marketing of 156 certified between had direct links to fair INI
of Francisco organic honey, 1995 and 1997; trade and organic
Carrillo technical lost certification in
buyers, but lost them in
Puerto, state assistance, 1998; restarted 1998;exports to fair
of Quintana training, credit process in 2001 trade and conventional
Roo markets through
EDUCE
Source: Based on interviews carried out among the leaders and technicians of the respective associations.
IV. EFFECTS OF THE ORGANIC MODEL OF PRODUCTION ON SMALL FARMERS
A. Investments and Changes in the Costs of Production
29. The shift to organic production has been relatively easy for farmers, requiring relatively small
investments and minor changes in the technologies of production. In the case of ISMAM, coffee
producers had traditionally used technologies similar to the ones applied in the organic production of
coffee. They cultivated coffee under the shade of forests, applied labour-intensive technologies and
did not use chemical inputs or used them only occasionally. The most important problem that they
10
faced – a disease caused by a fungus called Broca – was controlled using manual practices rather than
the chemical inputs that were characteristic among large farmers. The most important changes that
ISMAM farmers undertook during the shift to organic coffee production consisted of the application
of soil-conservation measures and of special management practices, such as the introduction of new
species of trees. These new practices had relatively little investment costs and demanded mainly
labour for the construction of terraces and other soil-conservation measures, which were the most
costly of the changes.
30. Though the costs of production of organic coffee were significantly higher compared to
conventional production (about 47% higher compared to low-input conventional production),46% of
the total difference in costs are explained by the higher yields obtained for the organic coffee, which
has generated higher costs for harvest, on-farm processing and transportation. The other 54% of the
difference in costs is explained mainly by the labour required to implement soil-conservation
measures and the manual control of pests and diseases. In fact, the cost of the production of organic
coffee is 11% lower than the cost of the high-input conventional technology that would be required to
obtain the same yields (see Tables 9, 10, 11).
31. The organic production of honey required additional changes in technology and in investments
relative to organic coffee, though some of these investments were needed in both organic and
conventional production for export. The most important changes were the following:
32. (a) Changes in the location of the apiaries. Most conventional producers of honey in the Yucatan
Peninsula kept their apiaries close to their houses, to roads and to their other crops because this made
the care of them easier. Organic production methods required that the apiaries be located in the
forests, at least 3 km from houses, roads and other crops for which chemical inputs are used. The
change in the location of the apiaries demanded a substantial amount of work to move the apiaries to
the forest and then to reach them so as to care for them during the production cycle. Indeed, the access
to the forests was usually difficult, so organic producers needed an average of one or two hours
simply to travel to the apiaries, especially during the rainy season.
33. (b) Avoiding the use of chemical inputs, especially sugar and antibiotics. Honey producers in the
Yucatan Peninsula often used sugar to feed the bees during certain times of the year when the flowers
were scarce in the forest, thus limiting the production of pollen. Organic production prohibits the use
of sugar unless it is organically produced, which is not the case in Mexico. Thus, organic producers
needed to keep a portion of their honey from one year to the next and use it instead of sugar to feed
the bees. In addition, honey producers frequently used antibiotics to protect the apiaries against
varroasis, a disease that found its way into Mexico during the nineties. Antibiotics are prohibited in
both organic and conventional production for export, so farmers needed to find alternative organic
inputs.
34. (c) The purchase of new equipment and materials. Organic producers had to make some
investments in new equipment and materials, mainly honey extractors and knives of stainless steel to
replace the ones commonly used, which might be subject to oxidation. While these requirements
initially applied to organic producers, there was already a trend among foreign buyers to demand the
use of stainless-steel equipment among all honey producers both organic and conventional.
B. Effects on Yields and Product Prices
35. Organic producers increased their yields and received better prices for their organic products,
especially coffee. The implementation of soil-conservation measures and better management practices
led to an increase in coffee yields of about 50% among most ISMAM farmers over a period of eight
to ten years. In addition, the marketing of coffee in the organic and fair trade markets allowed
ISMAM to pay substantially higher prices to its members. In 2000, the members of ISMAM received
MXN 800 (USD 89) per quintal of coffee, which was 45% higher than the MXN 550 (USD 61)
received by conventional small producers. In 2001, organic farmers received MXN 650 (USD 68) per
11
quintal, which was 62.5% higher than the MXN 400 (USD 42) received by conventional small
producers.
Table 9: Cost of the production of certified organic coffee (MXN per ha)*
Unit Quantity Cost per Unit Total Cost

Shade regulation person-days 8 35 280
Manual land cleaning person-days 16 35 560
Pruning person-days 8 35 280
Manual control of diseases person-days 3 35 105
Fertilization
–Preparation of organic fertilizers person-days 10 35 350
–Application of fertilizers person-days 12 35 420
Manual pest control person-days 3 35 105
Harvest
–Bushels unit 8 15 120
–Plastic bags unit 8 5 40
–Labour person-days 52 55 2 860
On-farm processing quintals 13 55 715
Transportation quintals 13 20 260
Certification MXN 1 216 216
Total 6 311
Source: Based on information provided by Banrural.
* MXN 9.5 = USD 1.
Table 10: Cost of production of conventional coffee, more intensive technology (MXN per ha)*

Fertilization
–Fertilizers kg 250 3.60 900
–Transportation of fertilizers unit 1 70 70
Application of fertilizers person-days 4 35 140
Insecticides
–Insecticides l 1 85 85
–Application of insecticides person-days 2 35 70
Fungicides
–Purchase of fungicides kg 2 35 70
–Application of fungicides person-days 4 35 140
Harvest
–Bags unit 8 5 40
Total 7 080
* MXN 9.5 = USD 1.
Table 11: Cost of production of conventional coffee, low-input technology (MXN per ha)

12
Harvest
–Bags unit 6 5 30
Total 4 295
* MXN 9.5 = USD 1.
36. None of the three associations in this study were selling organic honey at the time of the
fieldwork. Only Chilan Kabo’ob had sold organic honey in the mid-nineties. Two of the associations
(Kabi Jabin and Chilan Kabo’ob) were selling part of their honey as conventional in the fair trade
market, obtaining around USD 2 000 per t. Based on these better prices, Kabi Jabin paid its members
MXN 8 (USD 0.84) per kg of honey, compared to the MXN 7 (USD 0.74) per kg paid for the
conventional honey in the region. Other organic honey producers in Mexico were exporting their
output at prices between USD 1 500 and USD 1 600 per t (free on board in Veracruz harbour), about
45% higher than the USD 1 100 per t paid for conventionally produced honey.
C. Effects on the Natural Environment
37. Although there have not been specific research projects analysing the effects of organic coffee
production on the environment of the Soconusco region in Chiapas and of honey in the Peninsula de
Yucatan, there are several indications that these effects are mostly positive. Most coffee producers in
Chiapas are small farmers who, even when they were producing conventional coffee, used
environmentally friendly technologies, cultivating the coffee under the shade of native trees and
employing few or no chemical inputs. Organic production involved the introduction by ISMAM
farmers of technologies that helped in the preservation of the environment, notably soil-conservation
measures that had been absent among conventional producers.
38. Meanwhile, the production of honey – both organic and conventional – requires the preservation
of the natural forests, as the production of pollen – the basic ‘raw material’ of honey – is directly
dependent on the diversity of species and the density of the forest. In addition, organic honey must be
produced far away from crops, roads, or houses. Most certification agencies demand a minimum
distance of 3 km from these as one of the conditions for the organic certification. In other words, the
production of organic honey is incompatible with the destruction of forests so as to open new land for
cultivation.
V. FACTORS EXPLAINING THE EMERGENCE OF THE ORGANIC PRODUCER

ASSOCIATIONS
A. Policies and Programmes Dealing with Organic Agriculture
39. While a vibrant organic agriculture was being developed in Mexico, no government agency or
programme dealt specifically with organic agriculture, and the legislation on organic production was
sparse and somewhat outdated. The only specific government measure relating to organic agriculture
consisted of a norm (NOM-037-FITO-1995) approved by the Secretariat of Agriculture, Livestock,
Rural Development, Fisheries and Food (Sagarpa) in April 1997. This norm provided various
definitions for organic agriculture and established the specifications for organic certification and the
processing of organic products. Among other elements, it defined the characteristics agricultural
products needed to be considered ‘organic’, including the minimum distance required between the
organic crop and a crop grown with conventional technologies and the type of inputs that could be
employed in organic production. The norm included an annex with a list of inputs that could be used
in organic agriculture, and another annex listing he inputs which could be used to control pests and
diseases only with the authorization of Sagarpa.
13
40. While the definitions were important, the norm was little known among the government agencies
dealing with agriculture, non-governmental organizations (NGOs) and producers. In addition, the
specialists who were interviewed stressed that the norm did not satisfy the minimum European Union
requirements so that, in the trade in organic agriculture, Mexico could gain third-country status and
thereby be considered on a par with European countries. This created several problems for organic
producers in Mexico. First, they had to depend on foreign certification agencies for the certification of
their products, which led to higher certification costs. Some foreign agencies set up national branches
in Mexico, and three local agencies were created in the second half of the nineties, although only one
(Certimex) was active enough to be viable and become established. This contributed to a decrease in
certification costs, as the inspections can now be usually carried out by inspectors based in Mexico.
However, the costs were still high for small farmer associations, and most of these were only able to
expand and develop because their certification costs were subsidized by NGOs during the first few
years, or they were able to negotiate so that buyers would cover the costs.
41. In short, the development of the small producer associations included in this study and of organic
agriculture in Mexico in general has not been due to government policies, programmes, or agencies
which specifically targeted organic agriculture. On the other hand, the absence of targeted government
policies and programmes and of agencies specialized in organic agriculture has not represented an
obstacle to the emergence and growth of the vibrant organic sector in Mexico.
42. Though organic producers in Mexico have not been supported by government policies,
programmes, or agencies specifically working in organic agriculture, they have benefited from the
support of several government agencies and programmes in agricultural and rural development in
general. These agencies and programmes helped both conventional and organic producers. They made
an important contribution to individual conventional farmers who undertook the shift to organic
agriculture by providing grants and subsidized credit for investments and inputs and technical
assistance that helped the farmers introduce the new technologies.
B. Government Agencies and Programmes Supporting Associations of Organic Producers
43. Mexico possesses a wide range of government programmes and agencies dealing with agriculture
and rural development that support small farmers in various ways. Several of the programmes are
funded jointly by the federal and state governments. While these agencies and programmes do not
work specifically in organic agriculture, they are flexible enough to support organic farmers. They
played a key role in the development of ISMAM and of the honey associations in the Yucatan
Peninsula. The most important agencies and programmes include the following:
44. (a) Sagarpa, mainly through its Alliance for the Countryside.5 The Alliance for the Countryside
was one of the most important interventions of the Mexican Government in support of agricultural
and rural development during the nineties. It was funded jointly by the federal and state governments
and was usually implemented by each state’s Secretariat of Agriculture and Rural Development, while
Sagarpa focusing on monitoring and evaluation. In the case of Chiapas, the support of the alliance to
coffee producers was channeled through the state’s Commission for the Development and Promotion
of Coffee in Chiapas, which was part of the Chiapas Secretariat of Rural Development.
45. The Alliance for the Countryside provided subsidies to individual farmers and farmer associations
for investments, inputs, technical assistance, training and research in a great variety of agricultural
5
Another important programme implemented by Sagarpa is Procampo, which provides subsidies to individual
farmers cultivating one or more of seven crops (corn, beans, wheat, rice, sorghum, soybeans and cotton).
Subsidies are paid to farmers according to the area cultivated up to a ceiling of 150 ha per farmer, and they are
expected to be in place until 2008. In order to promote the cultivation of other, more profitable crops, the
programme continues to pay the subsidies even if a farmer substitutes other crops for the ones included in the
programme. In 2001, the subsidy was MXN 829 (USD 87) per ha. The programme started in 1993 and is
expected to end in 2008.
14
activities. These activities were organized into programmes in which the types of goods and services
that could be subsidized and the level of the subsidies were clearly laid out. Each farmer had to
present a simple project proposal. If it was approved, the alliance would provide subsidies usually
between 25% and 50% of the total cost of the project, though it could provide even greater support to
some components such as research (66%) and technical assistance (75%). For some activities, the
programme did not cover all the costs of goods and services, but provided investment credit with a
zero nominal interest rate (for example, for the cultivation of flowers). Among other initiatives, the
alliance subsidized the purchase of agricultural machinery, irrigation investments, the implementation
of soil-conservation measures, the purchase of post-harvest equipment and the implementation of
intensive greenhouse agriculture. In addition, some programmes of the alliance targeted specific crops
and products, including fruits and vegetables, cotton, soybeans, canola, saffron, sunflowers, palm and
palm oil, coconuts, citrus, cacao, coffee, honey, beef and dairy livestock. The provision of extension
services and training to farmers was supported both by some of the programmes targeting particular
products and by a specific programme.
46. The alliance was a key initiative for producers in most of the associations under study. Coffee
producers received support for key investments and inputs through the alliance Programme for the
Support of Coffee Production, while apiculturalists were assisted by the Programme for the Support
of Apiculture. Both programmes helped conventional and organic farmers.
47. The main objectives of the alliance Programme for the Support of Coffee Production were to
modernize the production of coffee, improve crop management (especially with respect to the fight
against pests and disease), modernize processing facilities, strengthen associations of coffee growers
and upgrade the skills of farmers and the labour force involved in coffee production. The programme
supported a wide range of investments and inputs, including the replacement of old plants with new
improved varieties, the implementation of phytosanitary practices, the purchase of equipment by
individual farmers and farmer associations and the contracting of extension services. In the case of the
Soconusco region of Chiapas and specifically of the ISMAN producers, the coffee programme
concentrated on three areas: (i) the replacement of old varieties of coffee plants and the financing of
labour and seeds for the establishment of fields dedicated to the production of coffee plantings; (ii)
investments in farm equipment and infrastructure for post-harvest coffee processing and (iii) credit at
zero nominal interest rate to support the purchase of coffee by farmer associations from their
members. During 2000 and 2001, through the Programme for the Support of Coffee Production, 262
ISMAN members received help in the production of seeds and plantings, 10 in the construction of 10
drying yards, 21 in the purchase of pulp extractors and 600 in the renovation of coffee plantations.
48. The alliance Programme for the Support of Apiculture financed the purchase of apiaries, bees,
inputs (such as insecticides against acari) and equipment for extracting, processing and storing honey.
It usually paid 50% of the estimated costs. Although it has not been possible to obtain precise
information about the funds provided to individual members of the honey associations in this study,
the three associations had each obtained support through the alliance.
49. Although the Alliance for the Countryside helped organic producers in several ways, it also
created some problems for organic producers.
50. First, neither of the alliance programmes provided the subsidies for farmers in cash. In order to
ensure that the farmers made the investments as proposed, the programme purchased the equipment
and inputs and then delivered them to the farmers on condition that the farmers paid their share. This
occasionally created problems, as the delivered inputs sometimes did not comply with organic
standards of production. For example, the honey programme frequently financed and delivered inputs
against a pest called varroasis that started to attack apiaries in Mexico in the mid-nineties. While
there were organic methods to control the pest, mainly the use of formic acid, the programme initially
purchased only chemical inputs that were prohibited to organic producers. These inputs created
chemical residues in the honey.
15
51. Second, while the Alliance for the Countryside was open to the provision of financing for organic
production, it focused principally on conventional methods and supported technologies through
specific programmes – such as irrigation, mechanization and greenhouse agriculture – that were often
associated with the intensive use of chemical inputs. Because the organic certification of production
requires that the organic crops be a minimum distance from conventional crops, the expansion of
conventional agriculture created a problem for many organic producers. This problem affected mainly
organic honey producers, who are required to keep their apiaries at least 3 km from a crop on which
chemical inputs are used.
52. The interviews carried out among coffee and honey producers in the case studies revealed
additional problems with the support provided by the alliance, problems that were not specific to
organic producers, but general to the alliance. While the operational rules of the alliance permitted a
large number of activities to be financed, the budget was limited and often insufficient to support all
these activities or to satisfy all the demand in a particular year. Thus, it was common for the alliance
to define a small number of activities in each programme that were to be supported each year. For
example, the honey programme focused on financing apiaries, while the coffee programme focused
on the renovation of the coffee plantations, the production of seeds and plantings and the purchase of
specific equipment (pulp extractors). In addition, it was common for farmers – this occurred to all the
associations studied here – to receive approval for their proposals, but only obtain the subsidies a year
later. Finally, some associations found it easier to gain access to the programme than did others. This
seemed to depend on contacts and the influence of political factors in the selection of beneficiaries.
53. (b) The National Fund for the Support of Solidarity Enterprises (FONAES) is aimed at
strengthening farmer associations through subsidized credit (zero nominal interest rates) that varies
according to the type of project. The programme started in 1992. It was implemented first by the
Secretariat of Solidarity Development, but has recently been transferred to the Secretariat of the
Economy. It focuses on three areas: (i) the provision of credit for labour and inputs to informal farmer
groups lacking access to formal credit; (ii) credit for formal farmer associations that is usually
employed to build marketing and processing facilities and to purchase product from members and (iii)
grant funds to contract technical assistance.
54. FONAES support has been most important in the case of ISMAM, which has received funds
through all three focal areas of FONAES since 1992. Initially, ISMAM used the funds mainly to
purchase storage and processing facilities, part of which had been owned by the Mexican Coffee
Institute and were transferred to ISMAM in the early nineties. Considering only the period between
1998 and 2001, FONAES supported ISMAM through eight different projects, seven focusing on
coffee and one on the promotion of crop diversification among ISMAM members through the
production of organic honey. The projects included the modernization of the ISMAM processing
facilities and the supply of credit to ISMAM members to help maintain coffee plantations, expand the
areas under coffee cultivation, purchase inputs and pay wages in the coffee fields owned and
cultivated by ISMAM. The project on crop diversification financed the purchase of equipment for
honey processing and capital for the purchase of honey. The total credit funds in these projects
reached MXN 11.7 million (equivalent to USD 1.3 million).
55. (c) The National Indigenist Institute (INI), a federal government agency, was created in 1948 to
design and implement programmes supporting indigenous communities. It is part of the Secretariat of
Solidarity Development. INI has supported indigenous communities in a wide variety of ways,
including through health and education programmes, the construction of infrastructure (mainly access
roads), the establishment of farmer associations through credit and grant schemes and the provision of
technical assistance and training to individual producers. INI has obtained part of its resources
through international donors, among them IFAD. In the Yucatan Peninsula, IFAD funded the Rural
Development Project of the Mayan Communities in the Yucatan Peninsula, which was initiated in
August 1998. The project provides funds mainly for extension, credit, training and the strengthening
of INI in the region. It has a total cost of USD 17.3 million, including contingencies.
16
56. A great deal of INI’s support since the early nineties has focused on strengthening farmer
associations. INI determined that marketing represented one of the main barriers to indigenous
producers since most sold their output individually to middlemen who therefore had the power to set
prices. In the case of honey, the middlemen usually visited producers and purchased the honey in the
field. They then usually sold the honey to large firms that processed and resold it on the domestic and
foreign markets.
57. In order to tackle this problem, INI promoted the creation of associations that could market
collectively. In most cases, INI not only organized meetings and otherwise assisted farmers in the
creation of associations, but also supported them in the initial stages by helping them meet to elect the
association directors, providing funds and legal advice to help them obtain legal status as a formal
producer association and offering material support for operations. The creation of Calakmul, Chilan
Kabo’ob and, to a lesser degree, Kabi Jabin resulted directly from INI’s promotion of producer
associations.
58. Once the honey producer associations had been created, INI supported them in many ways.
59. (i) INI established several funds and transferred them to the newly created associations at low or
no interest rates so that the associations could purchase the output of their members. One of the funds
was created specifically for honey, and money was provided through it to the three associations
considered here.
60. (ii) INI also started a programme to promote the creation of regional funds, which were second-
tier organizations comprised of several farmer associations in a specific zone. Each regional fund
received grant funds from INI and lent them to the associations, which in turn provided loans to their
individual members for investments and the purchase of inputs. During the first few years, the
regional funds were poorly managed and showed very low repayment rates. However, INI started to
strengthen them, and many were performing significantly better by the end of the nineties.
61. (iii) In 2000, INI created the Peninsular Fund for Apiculture, a second-tier organization
comprising six associations of indigenous honey producers. Five of these associations were located in
the state of Campeche, and one in Quintana Roo. INI has transferred to the fund a total of
MXN 2 million (approximately USD 210 000) since its creation, which the fund has lent to its
member associations to support their purchase of honey. The associations have had to repay the loans
within a year at zero nominal interest rate. During the first two years, the member associations fully
repaid their loans to the fund.
62. (iv) INI provided grants to the associations for the construction of storage and processing
facilities. The Chilan Kabo’ob Association received MXN 200 000 in 1996 and MXN 200 000 in
1997 to build facilities in Francisco Carrillo Puerto for the storage and processing of honey.
Meanwhile, the Calakmul association also received grants that allowed it to build facilities in X’Pujil
with a processing capacity of about 150 t per year.
63. (v) Finally, INI provided technical assistance and training to the associations and their individual
members. The technical assistance and training for the associations focused on strengthening
managerial capacities, while the farmers received assistance mainly in production and technology.
64. The funds that INI provided to the three associations of honey producers through the various
programmes (first through the honey fund, later through the regional funds and, in the case of Chilan
Kabo’ob, through the Peninsular Fund for Apiculture) were essential in helping the associations
purchase the output of their members. Chilan Kabo’ob received this support every year between 1994
and 2001. The support totalled MXN 1.9 million, which represented an average of around
MXN 170 000 annually. None of the programmes providing funds for the purchase of honey was
specific to organic production, but supported both conventional and organic production. However, the
funds were crucial in the development of the organic associations because, without them, the farmer
17
associations would not have been able to purchase the output of their members, leaving the field free
for the middlemen. In addition, the regional funds also supplied money that the associations were able
to use to give loans so that their members could invest in honey-processing equipment.
65. The INI technical assistance that focused on technology also helped in the development of the
farmer associations, notably in the case of Chilan Kabo’ob, which was assisted in obtaining
certification as an organic honey producer in 1995. INI provided the technical assistance necessary to
implement several of the required changes. INI provided a technician from the Fernando Carrillo
Puerto branch of the agency who worked full time for the association for four years between 1994 and
1997. The technician actively assisted the association in production technology and marketing.
66. While INI support was very important for all the organic associations, there were problems that
affected the performance of the agency and the impacts on the indigenous beneficiaries. Some of the
most important problems related to the budget of the agency. The insufficient budget made it difficult
for the agency to provide adequate services, particularly extension services. Delays in the
disbursement of funds from the public budget affected the agency every year, leading to delays in the
payments to extension workers and the delivery of services. This problem affected the quality of the
extension services, increased the turnover among extension workers and frequently left the
associations and the farmers without extension services for several months a year. In addition, INI
was sometimes viewed as too paternalistic in its approach to its beneficiaries. During the first years of
the regional funds, the agency transferred the funds without requiring good performance. As a result,
the beneficiaries, which lacked appropriate management capacity, showed poor repayment rates.
More recently, INI has provided training and technical assistance that have strengthened the
management capacity behind the regional funds and to a substantial improvement in the respective
financial indicators.
67. (d) The Rural Credit Bank (Banrural). One of the problems that organic producers often face is
the difficult access to credit from formal financial institutions. If they have little experience in organic
methods of production, the producers of organic crops face problems similar to those of producers of
new products, who have difficulty getting credit because financial institutions find it risky to finance a
business which has little experience and knowledge. In contrast, Banrural has financed ISMAM
activities for a long time. Banrural is a public bank that has had an important role in financing in the
agricultural sector. According to the Banrural manager in Tapachula, the share of organic coffee in the
credit provided to coffee growers over the last few years has averaged 60% of the total in the
Tapachula branch and 90% in the Motozintla branch. Banrural has even determined the different
production costs of organic and conventional coffee, so that it can take into account these differences.
68. The role of Banrural has been important mainly in the case of ISMAM, since most honey
producers have not used the credit from this institution. Banrural provided credit both to ISMAM and
to individual ISMAM members since the initial stages in the life of the association. According to the
bank’s manager in Tapachula, ISMAM has become the bank’s fourth largest customer in Chiapas.
The support for ISMAM has included the following:
(i) A loan of USD 1 million provided in 1999 for the expansion of the association’s processing
facilities. The loan has a two-year grace period and a ten-year repayment period, with an interest rate
of 3% over the Libor rate.
(ii) A revolving credit line available for three years for a total of USD 7.5 million, which the
association used to purchase coffee from its members. This credit is covered by an insurance scheme
that is pegged to a fixed minimum international price for coffee.
(iii) Credit for individual ISMAM producers for the maintenance of coffee plantations. The credit
totals about MXN 10 million (equivalent to around USD 1.1 million) for approximately 800 farmers
annually. The credit has been provided to ISMAM members by Banrural for the last eight years. In
18
2001, it had an annual nominal interest rate of 8.5%. ISMAM has provided the collateral for the loans.
So individual farmers have not needed to present their own collateral.
69. The availability of the credit from Banrural has been a key in the success of organic coffee
production for several reasons. First, it has been the most important source of funds available to
ISMAM for the purchase of coffee from its members and to pay the members in a timely fashion.
Other funding sources, such as the funds from FONAES and occasionally from payments in advance
by foreign buyers, have had significantly less importance. Second, the credit from Banrural has been
essential in financing new investments to raise ISMAM’s processing capacity. Third, the credit
obtained from Banrural has helped ISMAM members carry out the labour-intensive activities required
by organic production. In the two credit lines provided directly to ISMAM, there has never been a
default, while the credit line for individual ISMAM members has shown very low default rates (only
2% by the end of 2001).
C. The Role of NGOs
70. Non-governmental support has been important in the development of several of the associations
in this study. The Church has been the main actor in the case of ISMAM, while EDUCE has been the
most important in the case of Kabi Jabin and has recently helped Chilan Kabo’ob in its efforts to
regain organic certification.
71. The Church has had a long involvement with the indigenous communities in Chiapas. In the case
of the Soconusco region, it has helped the communities solve some of the problems they faced in the
production and marketing of coffee. Two of the main steps that priests working with these farmers
promoted have had a long-lasting effect and have been essential in the successful adoption of organic
production. One of them is the creation of ISMAM itself. The Church promoted a series of meetings
among the leaders of several indigenous communities in the mid-eighties in order to discuss the main
problems that affected coffee production and the possible solutions that could be undertaken. The
discussions led to the creation of ISMAM in 1987. The second step consisted in the promotion of
working collectively in the fields in order to minimize the need of farmers to hire wage labour.
Collective work used to be common among indigenous communities in the region during
colonization, and since then it has been encouraged, with some adaptations, by the Catholic Church in
the Soconusco region. Collective work typically involves groups of 10 to 20 farmers within a single
community who all work together on one particular day on the coffee plantation of one of the group
members, carrying out tasks that must be accomplished on the plantation at that time of year. The next
week the group works one day in the fields of another group member, and so on throughout the year.
72. ISMAM has become a key association in the production and marketing of organic coffee.
Collective work has been an essential part of this success, as it permitted some tasks to be carried out
that are required in organic production, but that demand substantially more labour than that required
in conventional coffee production. Because most farmers do not have the resources to hire wage
labour and do not have enough family labour available to carry out some of these tasks, such as the
implementation of soil-conservation measures and the production of natural fertilizers, collective
work has been important in the introduction of organic agriculture. Moreover, collective action is also
an essential part of organic production because it contributes to the effectiveness of the monitoring
system that ISMAM established to control the compliance of members with organic standards.
73. The role of the Church has continued to be substantial for ISMAM. One of the priests who had
been working with indigenous communities before the creation of ISMAM has become an advisor to
the association and now works full time in the marketing of coffee, making new contacts and
negotiating with buyers, financial institutions, government agencies and donors.
74. In the case of the honey producer associations, EDUCE has been a major player in the
development of Kabi Jabin as an association focusing on organic production, and it has helped Chilan
Kabo’ob recover its organic markets. EDUCE has been working with indigenous communities in the
19
Yucatan Peninsula since its creation in 1989. It is supported mainly by European and US donors. The
organization has recently been contracted by INI to provide training in organization and production
issues.
75. Like INI, EDUCE has encouraged farmers to create associations focusing on marketing, and it has
provided training and technical assistance. The training has concentrated partly on the skills needed to
strengthen the associations and partly on production issues. The approach of EDUCE has been to
promote productive activities that foster a sustainable use of the forest, so it naturally started to
emphasize honey, a product that is highly compatible with the conservation of forests. The creation of
Kabi Jabin resulted from the promotion work that EDUCE carried out in the communities of Othon P.
Blanco in Quintana Roo.
76. In contrast to INI, which covered a large number of communities, EDUCE focused on a small
number of communities, but undertook a much more concentrated effort among them. The
organization supplied extension services to Kabi Jabin for three years by paying a veterinarian
specialized in the organic production of honey who visited the organization one or two days a week,
gave courses and workshops and visited individual farmers. It also provided training and extension
services to other honey producer associations that marketed on the organic and fair trade markets,
among them Chilan Kabo’ob and Kabi’tah, an association in Campeche that obtained organic
certification in 1996, but later lost it because of problems partly due to hurricanes that affected the
Yucatan Peninsula.
77. EDUCE worked actively in marketing and established contacts with organizations and buyers in
the fair trade market. The organization obtained a license from Fairtrade Organizations Labelling
International to sell honey produced by small farmer associations in Mexico. It created a commercial
trade company and later helped create the Latin American and Caribbean Agroecologic Movement, a
second-tier organization comprised of associations of small honey producers in several Latin
American countries that sell honey on the fair trade market. EDUCE’s manager stressed that the fair
trade market for conventional honey is saturated, so that there is no more room for additional small
producer associations producing honey by conventional methods. Only 800 t of the 30 000 t exported
annually from Mexico (that is, 2.7%) were sold on the fair trade market. However, there is a rising
demand for organic honey on both the fair trade and the normal international markets. The honey
associations working with EDUCE – among them Kabi Jabin and recently Chilan Kabo’ob – all sold
their honey through buyers contacted by the organization and obtained much higher prices. In 2000,
these associations obtained on average about USD 2 000 per t for conventional honey on the fair trade
market and USD 1 500-USD 1 600 per t for organic honey, which is much higher than the average
price for conventional honey of USD 1 100.6
D. The Role of Producer Associations
78. Strong producer associations have been essential to the success of small farmers in cultivating and
marketing organic products. The role of the associations has been significant in the following ways:
79. (a) Organizing the marketing of organic coffee and honey. The associations have been important
in marketing because foreign buyers have preferred to negotiate with farmer associations rather than
with isolated individual farmers, an alternative that would be too costly. In addition, buyers want to
deal with a reliable organization that delivers organic products of good quality and is able to carry out
the tasks required to ensure that the products are obtained according to organic standards. In the
words of one foreign buyer who was interviewed: “When we buy honey, we want to deal with a firm
or a farmer association that can deliver to Veracruz harbour the volumes of product that we require,
without us having to worry about any logistics other than the transportation from Veracruz and
marketing the production in our country. We want to deal with providers who are serious and reliable,
6
All prices are free on board in Veracruz harbour, which is located about 1 000 km from the production areas in
the Yucatan Peninsula.
20
meaning that they send us the agreed volumes of product at the agreed time, and whose product does
not give us any headaches in terms of its organic nature and quality.”
80. Buyers have the choice of purchasing organic coffee or honey from small farmer associations, but
also from large firms producing and marketing their own products or from marketing firms that have
purchased the output of small farmers. In the case of honey, larger producers and, especially,
marketing firms that buy honey from small producers supply an estimated 65% of the exports of
organic honey from Mexico, while small farmer associations supply the rest. There are many cases of
firms that do not produce themselves, but purchase organic honey from farmer associations and
support the producer groups with some technical assistance and money to cover the cost of
certification. Their relationship with small producers is frequently complicated and costly because the
marketing firms must usually negotiate contracts and make sure that the producers comply with
organic standards. Thus, marketing firms often prefer to deal with producer groups that are well
organized and able to implement monitoring systems. This means that most organic honey is
produced by small farmer associations, some of which export directly, while most sell to exporting
firms. The interviews showed that many of the buyers had had problems with producer associations.
They had received volumes that were smaller than agreed, or they had received products after
significant delays, or low-quality products, or products with traces of prohibited inputs (antibiotics).
Thus, they frequently preferred to deal with firms or NGOs such as EDUCE and leave them the
responsibility of organizing the marketing and delivery of the honey produced by the farmer
associations.
81. In the case of coffee, in Mexico, small farmer associations have been dominant in both production
and marketing, and only a few firms produce and sell organic coffee. In contrast to honey, the
associations of coffee producers are much larger, more well organized and highly experienced in
dealing with foreign buyers (see Table 7). They have learned how to deal with these buyers directly,
and they have learned the importance of building a relationship based on trust and respect for
agreements. Thus, they have been able to organize efficient marketing systems. They purchase coffee
from farmers in their areas of influence and deliver it to buyers in a timely manner. They have also
been able to establish quality standards to ensure that the exported product meets buyer expectations.
82. Because the coffee farmer associations in Mexico have had access to subsidies from government
programmes and NGOs and because part of their organic coffee receives better prices on the fair trade
market, they have had significant advantages over large coffee producers. These large firms usually
face higher costs, so they have had to compensate for their lack of access to the fair trade market by
creating brand-name coffees that buyers could readily identify as high quality.
83. (b) Setting up monitoring systems to ensure compliance with organic standards of production.
The capacity of the associations in Mexico to organize efficient and reliable monitoring systems has
been a key to success as organic producers. A well-functioning monitoring system (for instance the
ISMAM system) must be able to identify easily and quickly those farmers who are not complying
with the organic standards of production and penalize them in an exemplary way. A good monitoring
system must make it very risky for an individual farmer not to comply, since he can be readily
discovered and the losses he would suffer because he can no longer sell to the association would be
devastating. In contrast, a monitoring system that does not work well and cannot adequately identify
those farmers who are not complying with organic standards is likely to leave room for free riders
who seek to obtain the better prices of organic products without paying the higher costs. This problem
is illustrated by the experience of Chilan Kabo’ob, which was unable to inhibit the use of chemical
inputs among its members. As a result, traces of antibiotics were discovered in the honey exported to
Europe, and this led to the lose of certification.
84. The international norms that regulate the organic certification of products from groups of small
farmers have established the obligation that the group must organize what is called an ‘internal
control system’, or monitoring system. ISMAM created its system between 1991 and 1994. Kabi
Jabin did so between 1999 and 2000, and Chilan Kabo’ob started to organize its system at the
21
beginning of 2001. The monitoring system is designed to collect and organize detailed information
about the association and its members, including mainly the following:
(i) Information on each member of the association, including name, location, total farm area, total
area and location of the organic crop or crops, total area and location of other crops, the technologies
applied in their cultivation, total output sold and quality characteristics of the product sent to the
association.
(ii) Information on every activity organized by the producer association and the participants or
beneficiaries, such as training sessions, workshops, technical assistance, credit and visits by inspectors
to the fields.
85. The monitoring system must involve periodic inspections throughout the year among all the
members of the association in order to check for compliance with the organic standards of production.
The results of these inspections must be recorded in detail among the information collected through
the monitoring system. In order to carry out these inspections and to manage all the information
required by the monitoring system, ISMAM created a certification department in 1994. This office is
run by an agronomist, who acts as director, and three full-time technicians. The department has
computers and appropriate software to organize the information collected. The other associations all
have less formal monitoring systems, but they still have some full-time personnel who perform the
same functions as in the ISMAM system.
86. In addition to the monitoring system, associations which have been certified or are in transition to
certification are inspected annually, as well as on an unscheduled surprise basis by the certification
agency. While the annual and unscheduled inspections result in a snapshot of the situation at a
particular time, the monitoring system ensures that the association members are regularly in
compliance.
87. The participation of members in the monitoring systems depended on the association. Higher
levels of participation are associated with better monitoring systems. ISMAM has shown the highest
level of member participation. In this case, the participation has been based on the groups that the
Church promoted in each community to carry out collective work in the coffee fields. In the late
nineties, ISMAM turned each of these groups into a local committee with formal representation
within the ISMAM decision-making structure. Each committee elects a representative who takes part
in an assembly of representatives that meets once a month at the ISMAM central offices in Tapachula
to receive and discuss reports from the association’s board of directors. These reports include all
important facts, including the amount of coffee being marketed by ISMAM, the prices received, the
forms of payment and the credit applications being presented to banks. The committee representatives
are elected for a two-year period, and each committee also elects a secretary and a treasurer.
88. The local committees also have a major role in the monitoring process because they receive
complaints and determine penalties against those farmers who are not complying with the organic
standards. The local committees have only had to deal with a few such cases since their creation, and
their decisions have always been very harsh, usually involving a recommendation to the ISMAM
board that the farmer be expelled from the association. The monitoring process has worked very well
because ISMAM has trained all its members intensely about the potential negative effects of the use
of chemical inputs and the fact that, if a single farmer does not comply with the organic standards, the
association could lose its markets and the farmers would receive substantially lower prices. The
interviews showed that, because the farmers had a good understanding of the potential negative
consequences of free riders, most were willing to complain about any member who did not comply
with the organic standards.
89. The local committees and the groups carrying out collective work have had an important part in
the provision of technical assistance to farmers. ISMAM asked every committee to select one of its
members for training as a ‘promoter’. This farmer must: (i) attend training sessions organized by
22
ISMAM on organic methods of production; (ii) organize meetings with his local committee to transfer
the skills that he has learned during the training sessions and (iii) visit the coffee plantation of each
member of the local committee at least once a month. During each of these visits, the farmer must
collect information in order to fill out a form provided by ISMAM. The form includes space for
observations on the quality of the plantation and any problems that are identified. By 2001, ISMAM
had a total of 74 such promoters, who were each responsible for an average of 18 farmers in two
communities. Promoters usually met once every two months for two days at the ISMAM offices in
Tapachula in order to hand in the forms, coordinate future activities and participate in training
sessions.
90. The case of Kabi Jabin is similar to that of ISMAM, though Kabi Jabin is not as advanced since it
undertook the shift to organic production much later than ISMAM. However, the monitoring system
of Kabi Jabin is effective and easier to handle because the association has fewer organic farmers and
thus fewer producers to monitor (only 14 producers in 2001 and an expected 27 during 2002).
Because the number of producers is so small, the monitoring system does not depend on a formal
department within the association. However, the association board does have a technical commission
that is in charge of collecting and preparing the information required by the certification agencies. The
basic information about each producer must be supplied by each member himself, who must fill out
forms every eight or ten days with basic data, including number of apiaries, bee and queen population,
estimates of the expected output of honey and any problems that are being faced. In addition, each
community has organized a technical commission that is responsible for making unscheduled visits
among all local producers throughout the year and for the preparation of reports on the management
of the apiaries and any problems that may have arisen. The association is in the process of organizing
a system whereby the commissions visit the producers in other communities. Kabi Jabin has also
established penalties that depend on the infraction. For example, minor infractions, such as non-
attendance at meetings where production decisions are taken, are punishable by fines of MXN 50
(about USD 5.30). More serious infractions, such as the use of chemical inputs, are punishable by
expulsion from the association. A farmer so punished would have to undertake the transition process
once again.
91. ISMAM has had an experience that has given the association an additional incentive to organize a
good monitoring system. ISMAM needed to have a precise estimate of the harvest every year several
months in advance in order to be able to negotiate effectively with foreign buyers. Without a precise
estimate, ISMAM might promise to deliver certain volumes and then be unable to meet its promises,
which would be unacceptable to the buyers. Alternatively, it would have to wait until the harvest in
order to have a precise estimate of the volumes available, which would leave little room to negotiate
prices and would make the association lose business opportunities that emerge well before the
harvest. The monitoring system that ISMAM organized served well the purpose of estimating harvest
volumes in advance. ISMAM used five of the promoters to collect the information necessary to make
the estimates. The promoters visited the plantation of each member during February and March
(immediately after floration) and during June and July (when the fruits had started to develop) in
order to make individual estimates of the yields expected between September and November (in the
lowlands closer to the coast) and between December and mid-February (in the highlands).
92. (c) Establishing connections with government agencies and NGOs. Effective associations are
important for organic producers not only because they can help organize marketing, provide training
and technical assistance in organic methods of production and monitor the compliance of members
with the organic standards. They are also very important because they can help establish links with
government agencies and NGOs, often in foreign countries. These links help the associations acquire
important market information and access to funding and technical assistance.
93. For example, ISMAM determined soon after its creation that organic production might be an
attractive alternative. It was able to do this because of its contacts with foreign buyers of coffee.
Through a Catholic priest who had worked with ISMAM producers and later became the main person
responsible for negotiating with potential buyers, ISMAM established contacts with European buyers
23
and NGOs. Through these contacts, ISMAM learned of the opportunities in the organic market, which
was expanding rapidly. Some of the buyers of conventional coffee were also interested in buying
organic coffee, so, through them, ISMAM contacted organic certification agencies, which eventually
certified ISMAM, in 1993. In addition, ISMAM obtained substantial support from government
agencies and programmes, which provided the funds ISMAM needed to purchase the coffee of its
members, finance the production of its members and carry out investments to improve the processing
capacity of the association.
94. INI and EDUCE were important in the identification of organic production as an alternative
market in two of the cases (Calakmul and Kabi Jabin). Chilan Kabo’ob was more directly responsible
on its own for gaining access to the organic market. In all cases, INI and EDUCE helped create the
associations – INI worked with Chilan Kabo’ob and Calakmul, while EDUCE worked with Kabi
Jabin – and assisted them in taking advantage of economies of scale in the marketing of output.
EDUCE also helped Kabi Jabin by demonstrating organic technologies to the producers and
convincing them that organic production is an attractive alternative. For Calakmul, this same type of
work has been carried out by INI, which, with the support of the IFAD Yucatan project, provided the
association with technical assistance and training.
95. INI provided technical assistance to Chilan Kabo’ob in the conventional production of honey, and
the leaders of the association established direct contacts with foreign buyers of organic coffee who
were visiting Mexico. These buyers were impressed by the favourable natural conditions in the
Yucatan Peninsula for the production of organic honey. The region is characterized by extensive areas
of natural forest and forest preserves, including the Calakmul Biosphere Reserve, which, at 70 000 ha,
is the second largest in Latin America. The population density in the region is low, and crops occupy
small areas and are usually cultivated with low-input technologies. Thus, the shift to organic
production required little effort and a short transition period of only two inspections in one year,
compared to the inspections over a three-year period needed in more intensely farmed areas. The
buyers even agreed to pay the cost of certification.
96. The contacts that organic producers have established with government agencies, NGOs and
foreign buyers have been essential to success. These contacts would not have been possible if the
associations had not been effective and had not been considered as serious partners by external actors.
VI. CONCLUSIONS AND LESSONS FOR PROJECT DESIGN AND IMPLEMENTATION
A. Conclusions
97. Mexico has become an important producer and exporter of organic products. During the nineties,
organic production expanded more rapidly than any other economic activity in the country. By 2001,
Mexico was the first country in Latin America and the fifth country in the world in terms of the area
under cultivation with organic crops, and it was the first country in the world in terms of exports of
organic coffee. Small farmer associations produce most of the organic output.
98. Government policies, laws and institutions have not had a significant role in the emergence of
organic products in general or of organic coffee and honey in particular. However, the case studies of
small organic producers show that these producers and their associations have taken advantage of
government programmes and agencies and received public funding and technical assistance in the
implementation of the changes necessary to shift to organic production, though none of the agencies,
programmes, or projects specifically targeted organic production.
99. The organic production of coffee and honey by the successful producer associations in this study
have had positive impacts on the incomes of small farmers. Organic production has not required
significant on-farm investments since few alterations have been necessary in the production systems
already dominant among the small farmers in Chiapas and the Yucatan Peninsula. The most
significant change has been the increased demand for labour, especially in coffee, which posed the
24
potential problem that the farmers would not have sufficient resources to hire labour. However,
ISMAM has been able to avoid this problem to a large extent by organizing groups in each
community to carry out tasks collectively once a week in the fields of each group member.
100. The prices of organic products are significantly higher than those of the conventional products
in the region. Thus, between 1993 and 2001, ISMAM was able to sell organic coffee on the
international market at prices between 30% and 87% higher than the prices of conventional coffee,
and the association has sold about 30% of its organic coffee on the fair trade market since the mid-
nineties, thus obtaining even higher prices: USD 165 per quintal in 2001 compared to USD 75 per
quintal for organic coffee and USD 40 per quintal for conventional coffee elsewhere. This successful
marketing of coffee allowed ISMAM members to receive MXN 800 (USD 89) per quintal of coffee in
2000, 45% more than the MXN 550 (USD 61) received by conventional small producers. In 2001,
organic farmers received MXN 650 (USD 68) per quintal, 62.5% more than the MXN 400 (USD 42)
received by conventional small producers.
101. The average price for the honey exported by Kabi Jabin ranged between USD 1 500 and
USD 1 600 per t, about 45% higher than the USD 1 100 per t paid for conventional honey. However,
these good prices were due to access to the fair trade market, since Kabi Jabin was still in the
transition process towards certification and was not obtaining the premium prices for organic honey.
However, the premium price allowed Kabi Jabin to offer more to its members for their honey during
the transition period in order to encourage the shift to organic production. The association paid its
members MXN 8 (USD 0.84) per kg of honey, compared to the MXN 7 (USD 0.74) per kg paid for
the conventional honey in the region.
102. Organic models of production are associated with positive effects on the environment, though
it has not been possible to obtain precise measurements or results from specific research in the region
where the associations are located. Most coffee producers in Chiapas are small farmers who, even
when they were producing conventional coffee, relied on environmentally friendly technologies,
including cultivation under the shade of native trees and only limited or no use of chemical inputs.
Organic production has led to the introduction of further improvements by ISMAM members, among
them soil-conservation measures that are absent among conventional producers.
103. Producer associations have played an important role in the development of organic production
in several ways:
(a) They have made it possible to take advantage of economies of scale through the collective
marketing of the output of their members. The larger volumes have attracted the interest of foreign
buyers. Buyers have also been eager to negotiate with the associations because the associations have
lowered significantly the transactions costs involved in negotiating and implementing contracts.
(b) They have been able to train a large number of small farmers in the basics of organic production
and to promote among them the adoption of new technologies of organic production.
(c) They have been able to organize monitoring systems to check on the compliance of their members
with organic standards of production. The monitoring systems have been most successful when (i) the
associations have been able to help all their members understand the basics of organic production; (ii)
the associations have been able to help all their members understand the risk to all members if even a
single farmer does not comply with the organic standards and (iii) the systems have benefited from
the active participation of all the membership. Such participation gives a strong role to all members in
controlling any deviation from the organic standards of production and in determining penalties.
(d) They have been able to attract government agencies and NGOs to help them and their members
adopt the changes necessary to shift to organic production.
B. Lessons for Project Design and Implementation

25
104. The experiences of organic producers of coffee and honey in Mexico have generated useful
lessons for future projects:
105. (a) Organic production may be a good alternative for small farmers if they do not need to
carry out significant changes in the technologies they apply in their current production systems. This
occurs when farmers are already relying on a production system characterized by the application of
technologies not based on chemical inputs. This is a frequent situation among small farmers who do
not have the resources to pay for expensive inputs. In this case, the requirements in training and
technical assistance are likely to be significantly less demanding. In addition, the transition to organic
production is likely to require a shorter amount of time and is likely to be less expensive since the
farmers will probably not experience the fall in yields that typically occurs when the use of chemical
inputs is eliminated in input-intensive production systems.
106. (b) Farmer associations are absolutely essential in the shift of small farmers to organic
agriculture. This is so because associations can: (i) take advantage of economies of scale in the
organic certification and marketing of output; (ii) design and implement permanent monitoring
systems to ensure that all members comply with the organic standards of production and to generate
information that is satisfactory for certification agencies and (iii) promote new technologies that can
enhance the organic methods of production, improve yields and raise quality. The monitoring systems
may also serve other purposes in marketing, such as enabling estimates of harvest volumes in
advance.
107. (c) Organic production poses great organizational demands on farmer associations. This is so
for several reasons:
(i) Most organic agricultural products produced in developing countries such as Mexico are sold on
foreign markets since the demand in most developing countries is still often small. Thus, the
association must deal with foreign buyers, who are quite exacting in terms of quality and the timing of
deliveries. In addition, exportation is much more difficult in terms of logistics and coordination.
(ii) Organic certification requires enormous efforts because the requirements are difficult to satisfy:
• The costs of the inspections and the certification agencies are high and usually need to be paid
over several years (the transition towards organic certification) during which the association
cannot yet obtain the premium organic prices for its products.
• The establishment and management of the monitoring system require that several people be
hired and that equipment be purchased to gather and manage the information on each
association member as required by the certification agencies. Information must be collected
on all members. Periodic inspections must also be carried out.
• The association must promote participation at the grass-roots level in order to discourage free
riders who do not comply with the organic standards of production and could thereby hurt the
association. To accomplish this, the association must undertake an intense effort at
awareness-building and training among all the membership to ensure an adequate
understanding of organic production, of the way the market for organic products functions
and the risks involved in non-compliance even by individual farmers. The association must
determine penalties that will be sufficiently severe to discourage non-compliance.
108. Projects that aim to support organic agriculture among small farmers should target groups of
farmers who show good prospects of success through collective action. The projects should focus on
strengthening producer associations that can successfully market the output of their members,
disseminate organic technologies among their members and monitor the compliance of their members
26
with the organic standards of production. Projects should offer significant support during the
transition to organic certification and subsidize the costs of certification. Projects should also support
intensive training among association members in the characteristics of organic production and
markets and the problems of non-compliance, and they should support the creation of well-
functioning and participatory monitoring systems.
27
References
Gómez Tovar, Laura, Manuel Gómez Cruz and Rita Schwentesius (2000), Desafíos de la Agricultura
Orgánica: Comercialización y Certificación. 2nd edition. Mexico City: Centre of Economic,
Social and Technological Research on Agro-Processing and World Agriculture, Autonomous
University of Chapingo.
Gómez Cruz, Manuel, Rita Schwentesius, and Laura Gómez Tovar (2001), Agricultura Orgánica en
México: Datos Básicos. Mexico City: Sagarpa, Autonomous University of Chapingo.
28
Annex: List of persons interviewed
1. Professionals and officials at government agencies, NGOs and farmer associations
Julio Pérez Román, manager, Tapachula branch, Banrural

Alvaro Zenteno Paniagua, secretary of rural development, Soconusco region, Chiapas
Rafael Villa Vázquez, manager, Centre of Financial Analysis, Banrural
Manuel Yoc Orozco, vice-director general, Commission for the Development and Promotion of
Coffee in Chiapas
Carmelino Vázquez Gómez, Commission for the Development and Promotion of Coffee in Chiapas,
Tapachula (Chiapas)
Felipe García Hernández, Commission for the Development and Promotion of Coffee in Chiapas,
Motozintla (Chiapas)
Juan Hernández Colloy, coordinator, Programme for the Promotion of Non-Traditional Products and
Successful Projects, Sagarpa-District of Tapachula (Chiapas)
Guadalupe Heras Rodríguez, coordinator, Procampo, Sagarpa-District of Tapachula (Chiapas)
Gilberto Hernández Morales, regional representative in Soconusco, FONAES
Manuel Aguila, director, Certification Department, ISMAM
José Antonio Pérez Vázquez, manager, Processing Facilities, ISMAM
Noel Galindo, Certification Department, ISMAM
Jorge Aguilar, consultant, ISMAM
María Eugenia Espinoza, general coordinator, Yucatan project, INI
Víctor Huc Hernández, responsible for the Yucatan project in the state of Campeche, INI
Jorge Reyes, responsible for the Yucatan project in the state of Quintana Roo, INI
Samy Rivera Soria, director, INI at Xpujil, Campeche
Guzmán Hau Chuc, director, INI at Francisco Carrillo Puerto, Quintana Roo
Antonio Trejo, extension worker, INI at Francisco Carrillo Puerto, Quintana Roo
Norma Toloza Dzul, responsible for the development of technical services component, Yucatan
project, Campeche
Luis Carlos Pot Chan, extension worker, SSS Unión de Apicultores Indígenas Cheneros, Campeche
Miguel Munguía, executive secretary, EDUCE
José Antonio Mendoza Zazueta, general director, FIRCO
José Zamorano Ulloa, director, Programme for the Promotion of Non-Traditional Products and
Successful Programmes, Sagarpa
Leonel Ramírez Farías, general director, General Directorship of Risk Management and Investment
Projects, Sagarpa
Manuel Molano, director, General Directorship of Risk Management and Investment Projects,
Sagarpa
Verónica Barrios, secretary, General Directorship of Risk Management and Investment Projects,
Sagarpa
Nuria Costa, director, Priority Groups, Sagarpa
Jerónimo Pruijn, executive director, Fair Trade Mexico AC
Rita Schwentesius Rindermann, director, Centre of Economic, Social and Technological Research on
Agro-Processing and World Agriculture, University of Chapingo
Laura Gómez Tovar, researcher, Centre of Economic, Social and Technological Research on Agro-
Processing and World Agriculture, University of Chapingo
Bernardo Peters, general director, Ireland Farm, Chiapas
Ulrich Walter, general manager, U. Walter GmbH, processor of certified agricultural products,
Germany
Joel Dzib Cruz, extension worker, Xpujil Regional Fund, Campeche
Alfonso Vergara Ek, extension worker, INI Xpujil, Campeche
Carlos Covich Tzu, extension worker, Honey Producers Association of Calakmul
Eloy Vitz Chi, extension worker, Fondo Regional Xpujil, Campeche
Juan José Muñoz, extension worker, INI at Francisco Carrillo Puerto, Quintana Roo
Ana Rosa Parra Canto, extension worker, Sociedad de Apicultores Chilan Kabo’ob
29
Chavier de Araujo Freitas, extension worker, Sociedad de Apicultores Chilan Kabo’ob
2. Farmers
Luciano Ramírez, president, Executive Committee, ISMAM

Constantino Ross Silvestre, secretary, Executive Committee, ISMAM
Armando Pérez Vázquez, Consejo de Vigilancia, ISMAM
Rosario López, director of marketing, ISMAM
Dagoberto Escalante De León, member, ISMAM
Octavio López Pérez, member, ISMAM
Rutilo Roblero Hernández, member, ISMAM
Ceferino Pérez Hernández, member, ISMAM
Oquendo García Galindo, member, ISMAM
Patricio Hernández Matías, member, ISMAM
Arturo Matías López, member, ISMAM
Elizander López Roblero, member, ISMAM
Abel Pérez Villalobos, member, ISMAM
Onésimo Sargento Escalante, member, ISMAM
Furmencio Mejía González, member, ISMAM
Catalina Mazallegos Díaz, member, ISMAM
Celso Jacob González, member, ISMAM
Ermelindo Escalante Mejía, member, ISMAM
Claudio Pérez, member, ISMAM
Artemio Escalante, member, ISMAM
Adolfo Vázquez, member, ISMAM
Artamas Galindo, farmer, Ejido Chimalapa, Chiapas
Víctor del Castillo Toledo, farmer, Ejido Chimalapa, Chiapas
Leonel Martínez, member, Financial Commission, Fondo Apícola Peninsular
Marcelino Hernández, president, SSS Unión de Apicultores Indígenas Cheneros, Campeche
Felipe Juárez Ramírez, coordinator, Fondo Regional Xpujil
Javier Rivera Soria, representative, Apicola Sector, Fondo Regional Xpujil
Rousvelt Gallegos Arévalos, president, Honey Producers Association of Calakmul
Silverio Eck Eck, treasurer, Honey Producers Association of Calakmul
Luciano Cauick Camal, Consejo de Vigilancia, Honey Producers Association of Calakmul
Leandro Ku Marin, secretary, Honey Producers Association of Calakmul
Vicente Eck Eck, member, Honey Producers Association of Calakmul
Gregorio Eck Eck, member, Honey Producers Association of Calakmul
Moisés Tun Chan, president, Kabi Jabin Association
Alfredo Tun Cuxim, vice-president, Kabi Jabin Association
Pedro Tun Tuz, treasurer, Kabi Jabin Association
Víctor Ek Pot, Kabi Jabin Association
Román Pot May, president, Chilan Kabo’ob Association
Daniel Tuk Yam, secretary, Chilan Kabo’ob Association
Pedro Canul Cohuo, member, Chilan Kabo’ob Association
Julio Tún May, member, Chilan Kabo’ob Association

Organic Agriculture in Mexico: Case Studies of Small Farmer Associations in Chiapas and The Yucatan Peninsula

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Organic Agriculture in Mexico: Case Studies of Small Farmer Associations in Chiapas and The Yucatan Peninsula

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Case Study 6

Organic Agriculture in Mexico:

Report prepared for the Office of Evaluation and Studies

Annex: List of persons interviewed

Banrural The Rural Credit Bank

II. THE IMPORTANCE OF ORGANIC AGRICULTURE IN MEXICO4

Table 1: Main indicators of organic agriculture in Mexico

1996 1998 2000 Average Annual Growth Rate

1996 1998 Certified, 2000 In Transition, 2000 Total, 2000

Table 3: Area cultivated with organic crops, by state, 2000*

Number of Producers Average Area/Producer

Source: Based on Gómez Cruz, Schwentesius and Gómez Tovar (2001).

Table 5: Exports of selected organic products, 2000

% of Producers % of Cultivated Area % of Exports

Table 7: Main small producer associations of organic coffee

Location Year Established Total Members

III. CASE STUDIES OF SMALL ORGANIC PRODUCER ASSOCIATIONS

A. Coffee Production by ISMAM Indigenous Producers in Chiapas

Map 1. Mexico. Location of organic coffee production in Chiapas

B. Honey Production by Three Associations of Indigenous Producers, Yucatan Peninsula

Table 8: Main characteristics of coffee and honey producer associations

IV. EFFECTS OF THE ORGANIC MODEL OF PRODUCTION ON SMALL FARMERS

A. Investments and Changes in the Costs of Production

B. Effects on Yields and Product Prices

Unit Quantity Cost per Unit Total Cost

Unit Quantity Cost per Unit Total Cost

Unit Quantity Cost per Unit Total Cost

C. Effects on the Natural Environment

V. FACTORS EXPLAINING THE EMERGENCE OF THE ORGANIC PRODUCER

A. Policies and Programmes Dealing with Organic Agriculture

B. Government Agencies and Programmes Supporting Associations of Organic Producers

C. The Role of NGOs

D. The Role of Producer Associations

VI. CONCLUSIONS AND LESSONS FOR PROJECT DESIGN AND IMPLEMENTATION

B. Lessons for Project Design and Implementation

Annex: List of persons interviewed

1. Professionals and officials at government agencies, NGOs and farmer associations

Julio Pérez Román, manager, Tapachula branch, Banrural

Chavier de Araujo Freitas, extension worker, Sociedad de Apicultores Chilan Kabo’ob

Luciano Ramírez, president, Executive Committee, ISMAM

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