“The ethical trade of sustainable coffee”: An experience sharing seminar for Master’s students at the Free University of Amsterdam (VUA).

Is soon three years since Tonamil was born as a project that aimed at supporting the social and environmental welfare of small-scale farmers by offering fair trade partnerships & business advising to coffee producers in Mexico. On December 2021 Professor Eric Cezne gave us the opportunity to tell the whole story about how T O N A M I L came to life and developed until nowadays on a seminar for his Environmental Governance Master’s students at the Free University of Amsterdam (VUA).

This is an article derived from the original lecture but edited to fit a more comfortable reading format.

About me, the Co-Founder of Tonamil

Hi everybody, my name is Margie Maria Gonzalez.

Today I will give you a short introduction about myself, and from there I will tell you the timeline of my company (how it started, developed, and how it is going). I will also mention some of the things I have learned about fair trade (the movement) in coffee, and finally, some thoughts about entrepreneurship, or being an entrepreneur as a sustainability graduate.  

So, here I go: 

For my Bachelor’s degree I did International Relations (IR) at the National University of Mexico (UNAM), and like many people that study IR, the first part of my studies I dreamed about joining the United Nations in NY or Brussels. But then during a Political Economics course, I learned about rural development at the local level and its global implications, and from that moment on everything changed! I became passionate about sustainability in agriculture, and decided to keep learning more about Environmental Studies in Norway.

Why Norway? That was a very personal decision. I feel like when you are into IR you always dream about traveling the world and living in places that are very different from what you are used to, and Norway was that for me…

I actually grew up in the Mexican rainforest, and that is why I am very inspired and interested in that type of landscape and its agricultural development.  

Today I am living in the North Pole, and working for the rainforest. That sounds weird, but without rainforests, there is no snow or glaciers and vice-versa, without ice in the poles the rainforests become in great danger of disappearing. That is why I love ecology and environmental studies: It teaches you how everything and everybody is connected in this world.

About Tonamil

Tonamil was born almost right after I graduated from University. I actually got the name from my thesis research; It is the name of the winter agricultural season in the South-east of the country where I come from. There, Indigenous farmers consider this season as a very powerful and resilient activity; to be able to cultivate in the coldest months of the wintertime. 

Just like many of you, I was nervous and scared about my professional future, and I was just in the middle of a post-graduated crisis when a Norwegian friend -that had lived and studied in Mexico- asked me If I wanted to start a coffee business that could distribute ecological coffee directly from Mexican small-scale farmers. After his proposal I became very excited and motivated, because sustainability in coffee production was exactly the topic I felt most passionate about.

I started working from Mexico right away after my friend reached out, and as one of my first steps, I visited and tried to partner up with a huge coffee cooperative named “Tosepan”, which I knew from many years before and used as a case study for my Master’s thesis about sustainability in coffee production. But the short story of this experience is: They ignored me because – among many other reasons- they source huge coffee orders to big companies. This is a cooperative made out of 800 certified organic & fairtrade producers, and close to 5,000 conventional producers. The last time I checked, they were able to gather and trade around 800 tons of coffee every year, and my initial order plan back then was only 200 kilos. 

From that experience, I felt discouraged and sad because “Tosepan” cooperative (and all of its indigenous members) were my sustainability heroes! But now I am thankful that rejection happened because it open my eyes to the reality of the majority of the coffee farmers in Mexico: Those who are not a part of a cooperative, or that do not own large amounts of lands and capital, they are on the very bottom of the coffee value chain, and just as the books and articles that we read during our studies describe: They are poor, they lack basic services -such as basic education or information that is crucial to improve their lives- and they receive extremely low prices for their coffee. 

In this process of looking for other coffee suppliers, I visited a couple of very small farms in the South of Mexico and met the producer families, most of them of indigenous origin. One story that I often tell is when the mother of the family was giving me a tour around their amazing coffee plantation, and she pointed out her chickens on a fence and said “look at those chickens, thanks to them we didn’t starve last year”. Just the thought of this family not having money for food really made me cringe and gave me a feeling of how economic inequality for these farmers looked like. 

Now at this point of the process back in early 2019, I was also working and doing research on international trade & logistics (how to do the export-import transaction), while I was also using my savings to do fieldwork to visit farms around Mexico. My Norwegian friend was the main investor with his savings as a baker and bartender in Norway, and my partner and partner’s family registered a company in Norway to import the coffee. We had some capital, but not that type of capital that big transnational companies have, so we started very small. Instead of my dream transaction buying from different farmer families around the country, we had to focus on only one coffee partner. 

Aguilar Family from Veracruz, Mexico.

In the end, I met a farmer family that had a daughter living in Mexico City that was very eager to distribute her family’s coffee, and also, she had the power of knowledge! Or an education that allowed her to go through administrative and commercial processes with more confidence. I am not saying that all farmers or people living in rural areas should hold a Ph.D., but just having basic studies really made a big difference for our project. Julissa Aguilar (the daughter of this family) and I literally learned together HOW TO EXPORT coffee to Norway step by step, and then I learned how to Import it. Our first shipment of 400kg. arrived in Norway at the beginning of 2020. 

This experience was so rich for me and for this one family because talking about contributing to the fair trade movement: The Aguilar family started their own registered business for the first time in their coffee-productive life. I learned that what happens is that most of the time (at least in Mexico)  there’s is so little information -and also zero trust in the national tax system- that the coffee farmers sell their entire harvests on simple cash transactions -to the lowest possible price- to a local or regional middleman that then take that coffee and distribute it nationally and even internationally.

Here I make a parenthesis to ask an open question: Do you think those same types of small-scale farmers that I have been describing throughout my field experience are able to pay, get involved, or commit to certification schemes such as organic, Fairtrade, or Rain Forest Alliance? 

In the Mexican case, 90% of the coffee producers own less than 5 HA of land, which is in agricultural productive terms very little. Almost all of them live with a low income and are isolated from useful information to navigate today’s trade alternatives, technologies, and administrative processes. Besides, coffee production is only one of their income sources and activities, they actually have to work a lot more outside the plantation to sustain themselves and their families. 

Back when I did my thesis research about the Tosepan cooperative I have been telling you about, I learned about their own internal member’s controversy back in 2007, when the most politically active producer- members wanted to turn the whole producer’s cooperative into “certified organic – fair trade”, but they didn’t manage the majority of the votes for this proposal to pass, and the final agreement was to make a “certification program” that became optional for the producers to join. Nowadays, more than 10 years later after this situation, only 800 out of the 6000 producers are in this specific program. 

Tosepan Trade’s Cooperative: Maseual. Archive picture taken from “La Coperacha”, 2018.

I think this says a lot about relying on certification schemes as the final solution to fair and ethical trade. And by the way, the members of the trade council of Tosepan cooperative have learned how to trade coffee in the NY stock market, so they are not just any farmer’s organisation with little experience and few resources, but still, most of their producer members won’t join certification yet due to their specific socio-economic conditions.

I am adding this comment so you guys think about the reasons why It’s been so difficult to make all farmers become certified producers and benefit from “better prices”. There is still a long way to go for small-scale farmers to join the economic system in better terms…  and that is why Tonamil might never end up selling certified  coffee. 

Parenthesis closes. 

Going back to where we were, among many of the positive things that happened during this journey is that I have managed to sell around 800 kilos of coffee bought directly from the Aguilar family in Mexico to the trading company in Norway, that then distributes this coffee at the national level.

With this numbers I am not saying it has been super easy to sell it, I have had quite a few challenges: In my experience, Norwegians are quite rigid with their beliefs. They want to buy the brands and products that they already know, especially if it has a Norwegian flag on it. Another challenge is that I have seen that the predominant buyer dynamic in the country is either getting cheap and low-quality coffee at the retail store, or buying fancy -specialty grade- expensive coffee, and Tonamil’s coffee is in the middle of this situation to explain in a few words.

Nevertheless, with both Business 2 Business, and Business 2 Consumer sell strategies, Tonamil and the registered company in Norway has endured the pandemic and its shutdowns that affected the food industry a lot, and have managed to sell its entire coffee stock as of December of 2021.

Personally, I also endured my initial Norwegian friend and investor leaving Tonamil because he decided that “sales weren’t his thing”, among many other challenges that came after that…

However, from 2020 until now I have bought and distributed this 800 kg of coffee from our partner family farm in Mexico, which means that is almost two of their entire harvests paid at prices way above the International Coffee Price Average (ICO) and the Fairtrade certified standards. 

Here you can see how the price-comparison looks like:

 I want to clarify that for “business” or “financial” standards It looks like I am overpaying the coffee per kilo. But apart from valuing and respecting farming and natural resources a lot, in this price I consider the daughter’s time and work to do all the necessary logistics in Mexico to send the coffee to Norway. I like the fact that most of the value remains within the farmer family, as opposed to paying any business agent, or third part company that has nothing to do with farming so they do the official export, just as many coffee traders are used to doing.

For me the fact that this small-scale farmer family is both the raw material producer and its own “formal” trader or distributor is a huge accomplishment, this is rare in Mexico if you are not a coop. or a big landowner, and that is the business model I am proud to have supported and would love to replicate in the future! 

Thank you for your attention!

After my presentation a Q & A ++ session followed. The students, assistants and professor’s input really helped me and inspired me to keep Tonamil’s goals and dreams alive in whatever shape it takes in the years to come.

Happy Holidays and Happy New Year!

Margie Maria M. Gonzalez, TONAMIL.

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