The Avocado Obstacle Course

Written By: Jessica Jones-Hughes

In mid-June Nicole and I, as part of the Equal Exchange banana team, traveled to Michoacán, a southwest state of Mexico, to visit Pragor (http://pragor.com/), an avocado farmer cooperative. The question numerous friends and family asked prior to departure was “how safe is the area?”  Over the past few years, Michoacán has been in the news because much of the state is tierra caliente, aka heavily influenced by the drug war currently raging in Mexico. You can probably imagine what else grows well in the same climate as avocados… While we were a bit apprehensive, we knew that the news was a snap shot of the worst areas and had trust that our new partners would take care to avoid the “hot zones.” For us, it was important to meet the people and places behind the product before engaging in a new trade relationship.

Our worries immediately faded away when Salvador, the General Manager of Pragor, greeted us upon our arrival. There was an instant comfort with Salvador. It was an ease that only comes when encountering individuals fighting for the same revolution as Equal Exchange: changing the reality of business and trade for small producers. The next three days were a whirlwind of Huertos (the avocado farms), packing houses, negotiations, delicious traditional Mexican meals, and a crash course in the avocado industry.

The Starting Line - During our time in Mexico, we were constantly exposed to the numerous obstacles that Pragor faces daily. These producers are trying, at great risk and with incredible courage, to do something different. Over and over we asked, how do you continue to do this hard work? The answers were profound and full of the heart that is Pragor – what else would we spend our time doing? What else is more important than not giving up but moving forward until you figure it out? I was struck by the conviction of the Pragor producers and staff for upholding their integrity in an area where fear, corruption and multinationals are in control and often working in cahoots.

The best way to understand the reality that Pragor faces is by comparing it to a giant obstacle course. Instead of an obstacle course you only need to finish once, Pragor must overcome all obstacles on a weekly basis. Let the games begin.

Start: You and your 50 fellow farmer coop members enter a mountainous obstacle course; each member holds a 25lb box of avocados. To succeed and successfully sell your avocados on the other side, in the United States, you must overcome all 4 obstacles and cross the finish line with at least 20 farmer coop members/ avocados in hand.

Obstacle #1: La Tierra and the Drug Cartels - Challenge: You are in the middle of a great valley surrounded by hills. You and your fellow coop members must get to your land mid-way up the mountain. There is a Mexican drug cartel blockade somewhere on the mountain. You must bypass the mafia and get to your farm.

Despite this obstacle description, the area is beautiful, full of rolling hills, pine trees and mountains. The backdrop is a lush green paradise from the rains that fall each year, June to August. Municipalities line the main road and vary between indigenous groups touting traditional brightly colored dresses while living in wooden houses on stilts, to modern towns where individuals walk around in jeans jamming on iPods. You get the idea from how bustling this area is that the majority of the drug industry is underground, in secluded areas. There is one unavoidable reminder that pulls you from the hypnotizing beauty: military trucks full of Mexican army troops carrying large weapons, heading to the tierra mas caliente.  For farmers living in the more dangerous areas, the military presence is a good sign, as it means the government is responding to the cries of the people. Each week Pragor must be tuned into the danger level of each area and avoid mafia road blocks to get avocados to market.

Obstacle #2: Corporate Control - Challenge: You must outsmart representatives from the avocado multinational companies sprinkled throughout the hills. Your challenge is to run past them backwards with a blindfold on while holding your box of avocados. Watch out for the surprise holes covered with tempting bags of money strategically placed along the route!

Giant avocado agribusiness has a heavy presence in the region. The climate in Michoacán is ideal for avocado production. The combination of various altitudes, a short rainy season and nourishing soil, produce some of the highest quality and most delicious avocados in the world.  For this reason, Michoacán is the avocado capital of Mexico. The story of avocados parallels that of many other commodities: giant corporations receiving the majority of the profits and control while keeping producers in poverty, staking their lives for the system.  

Huertos de Aguacate - Multinational control of avocado huertos (farms) is evident. Farmer after farmer told us stories about how their only option is to sell to the big companies who pay them the “market price.” This price is typically low and fluctuates greatly throughout the season. Producers do not have enough information to negotiate an appropriate price, which the multinationals take full advantage of. The price is further controlled as companies pay producers based on the quality of the product. Category I avocados are the highest quality – the ones you see in the grocery store. Category II avocados receive a lower price and Category III are typically sold domestically in Mexico at the lowest price. When producers do not control the quality inspection they are forced to accept whatever information the buyer provides. The big company’s typical report back that 40-50% of the total avocado volume they purchased from a producer were Category I. When Pragor transitioned to managing the process themselves, they learned that 85-90% of their avocados were Category I. They now receive the higher Category I prices for 85-90% of their avocados instead of the 40-50% they received from multinationals.

Packing Houses - Another point of control in the avocado process is the packing house. The large corporations own and control their own privatized packing houses where they clean and inspect avocados. At packing houses, avocados are categorized, sized and avocados with quality issues are eliminated. Avocados are then packed by size into boxes and inspected a second time before leaving for the United States. All packing houses must be USDA sanctioned, meaning they must have USDA inspectors on staff in order to ship to the US as well as a separate packing area for US bound product. This leads to packing houses that are large, expensive and limited in number (only ~30 in all of Mexico). When Pragor sought out a packing house that would work directly with them, they faced another challenge: the large corporations’ packing houses only process avocados for themselves, and the rest of the packing houses were controlled by the mafia who charge an “extra” high price. With perseverance, the producers were finally able to contract with a packing house that was not controlled by the drug cartels, and was willing to work directly with a small farmer cooperative. The only drawback: it’s a 2.5 hour drive from the nearest farm. Despite the extra cost of transportation, it is worth the ability to manage and observe firsthand the packing of their avocados. The packing house costs are higher, but the increased income from selling 85-90% of their avocados as Category I makes it worth the effort.

Obstacle #3: The USDA - Challenge: You are suddenly back on your farm and your box of avocados is being sorted and tested for quality. If they have a brown spot, are too small in size, or come from a tree that may have contained worms, they are thrown to the hungry avocado eating guacabeasts. If enough coop members pass obstacle #3, you might just have enough volume to find a buyer at the finish line.

Since the US also produces avocados and wants to ensure that California avocados remain competitive, there are an incredible number of control points in the Mexican avocado industry. Each producer must receive about 3 certifications for quality and potential volumes alone, plus USDA certification of each hectare of land. Each individual certification is expensive and must be obtained yearly. In addition, every time avocados are harvested, a USDA approved cosechador (harvester) must be contracted to come to the farm to inspect and harvest the fruit. Larger companies can afford to hire their own harvesters, but Pragor does not yet have enough volume to cover a full time harvester. The USDA also must inspect avocados twice at the pack house, and again when the truck crosses the border into the US. By the time Mexican avocados arrive on your store shelf they have undergone 5 official inspections, all adding extra costs.

Obstacle #4: US Cheap Food System - Challenge: Congratulations! You made it to the last obstacle with enough producers to look for a US buyer. In order to cross the finish line, you must find a decent buyer who will A.) Buy and sell enough avocados all through the season (~September to March) B.) Pay enough for your avocados so that your co-op can stay in business C.) Sell your avocados to consumers who care.

Pricing on avocados is a cut throat business. Throughout the year as different avocado growing seasons begin in Mexico, USA, Chile, and Peru, supply increases and decreases, as does the price. Over the last few years, US consumer demand for avocados has grown due to year round avocado supply from a longer Mexican avocado season, and from Chilean and Peruvian avocados entering the US market. As a result, U.S. imports of Mexican avocados grew by 40% last year on top of the growth that occurred in prior years. This exponential growth has further exacerbated the price wars on the producer, distributor, and consumer level.

Last year, Pragor producers received prices as low as $0.27 per pound for their highest quality Category I organic avocados when selling to multinationals. Farmers have a very difficult time attaining an accurate asking price for their ready-to-harvest-avocados. When the market is tight, companies offer high prices to producers and low prices to the stores to keep customers and undercut competition. The shimmering high price causes producers to compete against one another, and sell their fruit for this high price, only to be offered a very low price by the same company for their next harvest. Pragor therefore has to be extra diligent when recruiting farmers to join their cooperative. It is essential to find producers who appreciate and desire being part of a fair trade and cooperative business model. The fair trade concepts of democratic decision making, minimum pricing plus an additional social premium for community development, and increased control over operations are even more foreign concepts in the Mexican landscape.

In the US market, the big importers purchase avocados at a high price and sell incredibly low to distributors, undercutting competition. They then wait for the right moment to pay ghastly low prices to producers and overcharge distributors to make up their margin. The consumer, as usual, remains relatively blind to the price war behind their avocados sitting nicely on the shelf for $1.89 each. US consumers are conditioned to want cheap food. Our cheap food mentality does not reflect the true cost of food and energizes these price wars. The stores are afraid to charge more to the consumer, the importer is anxious about charging more to the store and the producer is terrified of asking more from the importer. If we create a world where food is cheap, but only for the consumer, what kind of world have we created?

Finish Line: Pragor - You made it! You finished alongside enough fellow producers and found a buyer who cares!

After hearing about the harsh realities of the avocado market in Mexico, I was stunned. Nicole and I had dug into the avocado world ahead of our trip, but what we learned was nothing close to the challenges we heard first hand in Mexico, making Pragor’s story even more powerful. Pragor began 6 years ago with a different fairtrade organization, but still faced many of the same challenges. The trials they faced only made them stronger and more dedicated to finding a better path forward.

In 2010, Pragor courageously reorganized and decided they would control the process– organizing staff and a board of directors, managing clients and sales, and controlling the process of harvest and packing coordination, quality control and shipping to customers themselves.  Pragor is now composed of 20 socios (producer members) who each own an average of 5-8 hectares land, all 100% organic. The members of the coop farm on land that is lush and mountainous. Many of the huertos have a diverse mix of avocados growing alongside lemons, limes, peaches, apples, pumpkins and cactus. On several farms live the oldest Hass trees in the area, now 50 and 60 years old, and still producing avocados. Many of the members transitioned to organic 10 or more years ago, a revolutionary move at the time, especially in Mexico. Some decided to transition after a family member passed away from cancer. Now their farms are lined with homemade organic products used to combat tree diseases and increase fertilization. During our visit, our new friends proudly showed us around their beautiful farms. We sat on the mountaintop farms, enjoying late lunches of delicious Chile rellenos, homemade tortillas, guacamole and other traditional dishes.

Despite the pride and excitement each producer had for their land, you could see the tired lines of hard work on their faces. This work has not been easy and Pragor has been fighting the battle for many years. Right now their biggest challenge is finding trading partners to work with who believe in their small farmer mission and will engage in the respectful and fair business relationships their members deserve. As you can imagine, there are not many organizations like Equal Exchange.

To encounter a farmer coop that has the courage to organize together while facing the realities of the drug cartels, multinational control and strict USDA regulation is truly a rare moment. Pragor’s strength and perseverance is a lesson for anyone committed to working for change in the world.

Nelson Mandela put it best, “I have discovered the secret that after climbing a great hill, one only finds that there are many more hills to climb.” Pragor has reached the top of a small mound. They are looking ahead to the many more hills lying in front of them. As Equal Exchange begins our work with Pragor there are many mountains to overcome: Will distributors and stores take the risk to carry these fair trade avocados? Will consumers hear the story of Pragor and pay more for their avocados? Will enough individuals make the decision to stand with Pragor so that fair trade avocados succeed? Change will only be successful if producers and consumers band together and climb each hill united as one.
 

Read online at: http://smallfarmersbigchange.coop/2013/09/23/through-the-avocado-obstacle-course/