El Salvador Co-ops

This spring a dozen cooperators and students had the opportunity to travel to El Salvador for a firsthand look at coffee production. The trip was sponsored by Equal Exchange, a workers' cooperative of coffee importers working in "alternative trade" with cooperative producers in several countries.

Our trip was composed of a series of contrasts: meeting one morning with the leaders of SOCRA, a coffee exporting cooperative federation located in a rundown building in a poor section of San Salvador, and meeting in the afternoon with an official of ABECAFE, a trade group representing large private coffee interests, whose offices were air conditioned and decorated with original oil paintings depicting coffee production. Part of our trip was based in urban San Salvador, with its Burger Kings, Toyota dealerships and other signs of emerging consumerism, and another segment on a rural cooperative, only 50 miles away, where life is much simpler and consumerism has barely touched.

The starkest contrasts of all were the differences immediately noticeable throughout the country between rich and poor. Poverty in El Salvador is everywhere and affects a large majority of the population. It is exacerbated by laws and policies that are designed to promote business and stifle organization of workers. Again and again we heard accounts of the effects of government action supporting a small oligarchy to the detriment of the majority of Salvadorans: in regressive tax policies, in law enforcement, in the judicial process, in educational policy, etc.

Among the most insidious of the new forms of oppression we learned of is the system of machilas, or sweatshop factories, that are sprouting up in various districts and are being exported worldwide by multinational corporations. This system of manufacturing is supported by the government with tax incentives designed to attract factories to industrial zones. Conditions are largely unregulated by the government; the machilas are harsh places to work. As a condition of work, some require a two week unpaid "training" period. Women who become pregnant are often fired. Oppressive shop conditions -- workers allowed one bathroom break a day and not permitted to speak to one another -- are routine conditions for unorganized workers.

The current political reality

Speaking out against oppressive working conditions or social injustice is still dangerous. While the level of violence in El Salvador has declined significantly since the signing of the Peace Accords, important problems still exist. Workers organizing union rallies have been attacked by armed gangs of "security officers" hired by the company; the attacks often happen with the police passively observing the violence.

We met a mother of a union organizer of coffee workers whose son had been a victim of the death squads. Another union organizer told us of continuing threats to herself, to union leaders and to other social activists. She also described a tactic whereby owners of unionized coffee processing plants declare the business bankrupt, then open the same plant a few months later with non-union workers. All of these activities are "illegal," but there is no attempt by the government to stop the violations.

We also met with Nidia Diaz, an opposition member of the National Assembly. Despite continuing threats made to her life, she spoke movingly about the new path to economic reform and democracy. She called the Peace Accords the largest step forward for the country since its independence from Spain in 1821. Unfortunately, the economic component of the Accords is the weakest element, and the sad ending to her presentation concerned the failures of the government to fulfill key aspects of the new laws, particularly in the crucial field of credit policy.

In the aftermath of war, the country is flooded with weapons. The country has scarce resources to devote to infrastructure improvements, and vast numbers of the population remain desperately poor. Within this context the Salvadoran Army acts as a civilian police force, a role prohibited it under the Peace Accords. They are a heavily armed force and do routine patrols in many areas, permitted in this activity by an "emergency" proclaimed by the president, the emergency ostensibly a dramatic (and real) rise in the crime rate. But due to its past association with death squads and the massacres of civilians, the army also serves as an intimidating force for social groups which may pose a problem for the existing order.

Even with this undercurrent of repression and fear there is a democratic process in place, with vigorous debate concerning the path of economic development. The debate, which cuts cleanly between right and left on the political spectrum, is one of the accomplishments of the Peace Accords. The ruling rightwing ARENA party sees the priorities for economic development to be tied to the expansion of consumerism. The contrasting view held by the left is that development should happen througb investment in infrastructure, which will generate wealth in the longer term, and in education and social programs. According to the ARENA theory, a middle class will emerge through the creation of jobs in any form. Since they control the legislature, laws are written to create an environment attractive to multi-national corporations. But the many jobs created -- factories, Pizza Huts, car dealerships - are generally very low wage and with oppressive conditions. The power of the government is used to protect the businesses againstthethreats toprofits Posed by organized labor.

This is a dilemma faced not only by El Salvador, but by every country in the new world economy. If the workers of El Salvador are successful in organizing, the government fears the multi-nationals will flee for another country that can offer the low cost labor they demand. So worker organization is repressed, wages remain low, and the consumer society fails to appear. This dilemma, and the ubiquitous poverty, gave me a feeling of hopelessness about the current situation.

Cooperative alternative

After a week in the urban capital, our group was split between two rural cooperatives. My group went to the Las Laj as Cooperative, 1200 acres of lush, mountainous land that is home to a couple hundred families. The family I stayed with lives in a small house with one room the dimensions of a typical living room in the U.S., and another very small closetlike room. There were ten children in the family, all but two under 12 years. They lived about five kilometers from the cooperative offices and had no electricity or running water. At each meal the family and I ate beans and tortillas and drank cups of coffee. The father had lived his entire life on the land that for the past 12 years has comprised the cooperative.

Before the land reform, the former owner of the land used armed guards to bar workers from entering the office. Now any co-op member walks through these offices on a daily basis. There is a great deal of need at the Las Lajas Cooperative, but standards are improving all the time. There are now three schools on the co-op, an infirmary and a wood shop. Access to schools is universal for the children of campesinos. Today the workers can add to their families' income by sharing in the earnings of the co-op at the end of the year. Many families now have electricity, and most have access to running water. By the standards of the rest of the country, the living conditions at Las Lajas are good.

The cooperative members are hard working poeple who generally have little education but who do have a dedication to both improving their lives and the cooperative. It was at this co-op and at other, poorer cooperatives that there seemed to be hope of a better future. The contrast with the situation of unorganized workers in the private economy was stark.

Cooperative development

In the late 1970s, faced with the breakdown of the society into civil war, the government, prodded by the U.S. Agency for International Development, instituted an agrarian reform that broke up large land holdings and distributed them to campesinos organized into cooperatives. The laws that created the cooperatives also stipulated payment schedules for the land given to each cooperative. After the agrarian reform, campesinos had land but no capital and little infrastructure with which to build the business. Ccjnsequently, the new cooperatives have used much of their cash flow to pay for day to day operations and for equipment, and have repaid very little of the debt to the former landowners. To exacerbate the problem, the banking community is reluctant to loan money to the agrarian cooperatives, and there is no viable cooperative banking sector to furnish needed capital.

I was able to witness first-hand the work that could be done in seemingly hopeless situations by people who are applying cooperative values of continuing education, equality of ownership and cooperatives helping cooperatives.

Repayment ofthe cooperative sector's agrarian reform debt has been rescheduled several times; the latest deadline for debt repayment is October 1995. Meanwhile, the country's legislature, dominated by the ARENA party, has passed legislation that allows for cooperatives to sell off land to individuals (prohibited in the original agrarian reform legislation). This legislation is viewed as a wedge which will ultimately lead to the dismantling of the agrarian cooperatives and the agrarian reform itself, and is being challenged in court. There was a feeling among many we talked to that government policies and banking practices are designed to ensure the failure of the agrarian reform cooperatives, leading to the reacquisition of the land by the original landholders.

Failure to reschedule the debt of the agrarian reform cooperatives could signal a return to the pre-war status of thousands of rural Salvadorans as landless workers and could spark a new round of violence and destruction.

The outlook?

El Salvador is one of the poorest countries of Latin America and literally cannot support its population. The single greatest source of income is not coffee, the leading export, but rather the money sent back from Salvadorans living in the United States. Approximately one-fifth of Salvadoran nationals live in the U.S.

The infrastructure of the country, never in good shape, has been devastated by years of civil war. The lack of sewerage in densely populated areas has led to degradation of water supplies and plays a part in the high infant mortality rate and low life expectancy. The lack of roads and bridges means agricultural areas cannot be developed to produce for export markets. Because there is no incentive or means to curb pollution, the country is the most polluted in the hemisphere. With capital concentrated in the hands of a very small minority, there is only minimal movement toward the structural changes needed to propel more rapid growth that will have an impact on the majority of Salvadorans.

Where does the hope for Salvadorans come from? Ironically, in one of the most devastated countries in the world, one hope is to attract tourists to the country. In fact, El Salvador is very beautiful and supports a wide array of plant and animal life. Salvadorans we spoke with have a deep pride in the beauty of their land and a belief that they can attract "eco-tourists" to the country.

We visited four agrarian cooperatives while in the country, and at each we learned of projects either planned or already functioning to improve the local ecology. On the Las Lajas Cooperative there was an active organic coffee program in place. Compost mounds, fertilizer for the nearby coffee fields surrounded the clear areas near the house I visited. In eastern Usulatan, on one of the co-ops belonging to a confederation with the acronym CODEUSME, we saw more compost piles and thousands of coffee seedlings to be planted using organic methods. One cooperative member explained that the decision to develop organic production was two-fold, to decontaminate the land and the people from the defoliants used on the land during the war, and to earn better returns for the co-op members. We also learned that the loans these farmers were using to produce the coffee were coming from a cooperative coffee processer and a credit agency of the agrarian reform co-ops.

A result of my eleven days in El Salvador was that I was able to confirm my belief in cooperatives as a vehicle for development and of renewal. I was able to witness first-hand the work that could be done in seemingly hopeless situations by people who are applying cooperative values of continuing education, equality of ownership and cooperatives helping cooperatives. Certainly, life in those cooperatives is difficult, but I found an optimism there that they could make life better in the future.

I also found a gratitude there from the people for groups such as Oxfam, Neighbor to Neighbor and Equal Exchange, which are working in concert with the cooperatives to bring about meaningful and sustainable development. I urge you to support the work of these and likeminded progressive organizations.

Related Organizations and Projects

Oxfam America
Education/outreach campaign
contact: Betty K. Richardson
26 West St., Boston, MA 02111
telephone: 617/482-1211
fax: 617/728-2594
Equal Exchange
contact: Ann Bokman
101 Tosca Dr., Stoughton, MA 02072
telephone: 617/344-7227
fax: 617/344-7240
e-mail: [email protected]
Neighbor to Neighbor
contact: Mary Ann Buckley
2601 Mission St., #900
San Francisco, CA 94110
telephone: 415/824-3355
fax: 415/824-7874
National Cooperative Business Association
International Development Division
1401 New York Av. NW, #1100
Washington, DC 20005
telephone: 202/638-6222
fax: 202/638-1374
e-mail: [email protected]

NCBA oversees the El Salvador Non-Traditional Agricultural Export Production and Marketing Project, which works to increase exports by cooperatives and other farmers. The project currently works with some 50 cooperatives, businesses which in recent years have handled two-thirds of El Salvador's fresh produce exports, including oranically grown coffee, sesame, melons, flowers, and cashews. Two organizations involved in the project won major environmental awards.

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