We don’t want today’s tripartite system; the social economy is a major actor too

This long-time agricultural movement leader analyses some of the government’s rural development policies and critiques its relations with the cooperative movement and what he calls the “social economy” in general..

Sinforiano Cáceres

First of all let me tell you a bit about myself, so you’ll know where I’m coming from. I own a farm in Masaya where I have nearly two hectares of oranges, some ten of cassava and one of irrigated maize. I’m also the president of Fenacoop, the National Federation of Agricultural and Agro-industrial Cooperatives, a 24-year-old institution. We currently work with 420 cooperatives and their 24,000 members, 45% of them women, in coffee, basic grains and cacao. We’re the only coop federation that covers coops of all kind because of the rights we’ve acquired and because we were founded before the new Cooperatives Law (Law 499). We’re also the only one whose members belong to all political parties. That’s one of our riches.

From Chamorro to Bolaños…

I want to start by going back over recent history a bit, before addressing the issues of rural development today, the cooperative movement and the social economy, which is a very little known concept in Nicaragua. The government of Violeta Chamorro, elected in 1990, launched a strategy called “Let’s return to the countryside,” whose framework was to guide the activities of the government and all institutions dealing with the public agricultural and rural sector. But we didn’t even learn about the plan, which went under the acronym SPAR, until 1996, her last year in office.

The next government, Arnoldo Alemán’s, designed a different strategy, particularly after Hurricane Mitch hit in 1998 and Nicaragua received a lot more aid. His strategy was to make Nicaragua “Central America’s granary” again. But just as in the Chamorro government’s case, that strategy took form just as his government was ending.

When Enrique Bolaños took office, we assumed that his government would provide continuity and maintain the same strategy, seeing as it was another Liberal administration. But no, it came up with yet another new one, bringing in Michael Potter, an eminent Harvard expert, to design it. That strategy was more ambitious. First they produced a National Development Plan, which neither of the two previous governments had done, and second they conceived it for 25 years. Out of that came the ProRural program, which proposed to work only in areas of the country that had at least 2,500 inhabitants, organizing eight “clusters” to link up the development of different products. For example, in coffee it would link growers, processers, financiers and exporters. The essence of the plan was the same as always, however, because all clusters would be headed by financial and commercial capital, coordinating and subordinating primary production: the cooperatives and small and medium growers. In other words, the tertiary sector would set itself up over the secondary and primary ones, extracting the wealth all the way down that value chain.

That project, which never prospered, did include the first mention of a key term: associativity. One day I came across the minister of agriculture of the time and asked him: “What’s this associativity thing?” This was his answer: “Look, it’s an issue that’s still to be defined, but we know it’s interesting.” At that point I didn’t know very well what it was either, but I was very surprised by that Cantinflas-style answer.

…to Ortega

In 2007, when Ortega took over from Bolaños, his government found that ProRural was receiving abundant financing from a common fund supported by international cooperation. That grouping of bilateral sources commented that if the new government was planning to do something new, they would decide whether or not it was valid to continue backing ProRural. The FSLN got the message behind that diplomatic wording: support for yet another new program wouldn’t be automatic. So it kept the name ProRural, tacking on the surname “Inclusive.”

In reality, the change was total: the name was the only thing that remained of the old program. The eight clusters were replaced with three national programs: Food, Forestry and Rural Agro-Industry. Those three programs included a sectorial approach based on the old SPAR with three themes: food sovereignty and security, capitalization of poor rural women and associativity.

The term associativity was still an ambiguous concept even then, which each person interpreted at will. Politically it became a catch-all, and by now has degenerated into a way to exclude those of us in the social economy in a friendly and elegant way.

What does “social economy” mean?

I had to learn what both associativity and social economy meant. I always remember very fondly a European Union representative who would invite us to her meetings with the private sector in 2007-2008. In those meetings she’d always say: “Now I want the social economy sector to talk.” Those big businessmen would just look at me quizzically, wondering what on earth that sector was. I recall once asking her, “Why don’t you treat us here in Nicaragua the way you treat the social economy representatives in Europe?” Her answer was that “there aren’t the political conditions here; there’s no legal framework and no belligerency. There’s no legislation here that recognizes the rights and obligations of the social economy sector, so basically you don’t exist. Look at COSEP; it’s recognized as a key sector for development; it’s taken into account, legislation is designed in its favor and its proposals are listened to. Big private enterprise has a spokesperson, a proposal and ideas. You guys don’t; you’re barely even discovering you’re a sector.”

She was right. Today we in the social economy are working on assessing “who we are.” The most relevant and important actor in it is the cooperative movement, which now has eleven federations, including five in the agricultural area, one in fishing and five in services: collective passenger transport, heavy cargo transport, taxis and savings & credit. While the cooperative bloc of the social economy is the most important, it’s not the only one. There are also associations of small and medium businesses generically known as SMEs; worker-managed enterprises; associations of small manufacturers like hammock makers and shoemakers; associations of exporters… We’re getting in touch with all of them to do a classification. In a few months we’ll have more exact data on how many we are, what we do and how many we represent. Our rough calculation so far is that we cover some half a million organized rural and urban people. And the number goes up a lot if we could include those who aren’t organized.

Just as the country has the state sector, with state-owned businesses that work with public resources, and the private sector, with its private enterprises, partnership companies or corporations with stockholders, all of which have mercantile and profit interests, our businesses, those of the social economy, are partnerships of people, albeit without much capital, that intervene in the economy to resolve economic, social and even political problems. Despite our weight in that effort, the social economy is still an exotic issue in Nicaragua. There are ministers and politicians of different parties who don’t even know what it is.

Academia owes us

There’s an enormous building in Europe, opposite the European Parliament, that’s the social economy institution. There are universities in Spain that offer doctorates in social economy and cooperativism. But here in Nicaragua neither politicians nor academics have taken on the term. Nicaragua doesn’t have a single lawyer specializing in cooperative law, or a single graduate in cooperative administration.

Academia has a debt to pay to the cooperative movement and to the social economy sector. And I say that because the minute the interoceanic canal started to be discussed, with talk about how there would be Chinese investments and a need for new professionals, various heads of the country’s universities announced with great fanfare that they would prepare these new professionals specialized in the profile the canal would demand. But when we talk about the need for professionals who can work with the cooperative movement, for technicians and graduates in cooperative administration or cooperative law, no university president has the time or will, much less the budget, to organize and provide such courses. It would seem they’ve forgotten or perhaps have never known the key role the cooperative movement plays in food security and sovereignty, employment, generating products and services in the different sectors of the national economy… basically in the country’s development.

We believe it’s impossible to get seriously involved in rural development without taking into account the social economy sector, including the cooperative movement, the guild associations, and the coop unions and federations. But do they take us into account? By the time it took office in 2007 had the FSLN yet assimilated the concept of social economy? Did it favor the cooperative movement, the idea of associativity? Let’s look at what it did and the problems it created.

Constantly changing institutionality

The first problem we need to mention is that all institu¬tionality related to rural development and the social economy in general has been changing continually. SPAR kept the same founding document from the nineties and so did ProRural, but the name was the only thing that stayed the same. The recent changes we’ve seen in the Agricultural and Forestry Ministry (MAGFOR) are only the first for 2014. They took the General Division of Agricultural Protection and Health away from it, turning it into an institute, but we don’t know where it will end up…

These changes began at the very start of the FSLN government. In 2007 it created the Institute of Cooperative Promotion (Infocoop), but within three years decided it was no good and turned it into a training office. The government consulted no one from the social economy sector or the cooperative federations before doing that.

Finally, they created a mega-ministry in 2012 they called the Ministry of the Family, Community, Cooperative and Associative Economy (MEFCCA). It’s a mega-mess because it covers absolutely everything: rural tourism, fishing, agroindustry, agriculture and livestock, micro-business, small and medium urban and rural business and also the cooperative sector. It’s like a plate of tangled spaghetti, in which you don’t know where one strand begins or ends. That mega-structure is currently heading up ProRural, producing tremendous bottlenecks and other problems, as is only logical given the huge differences between the structure ProRural emerged from and the current institutional one. The mere fact that today’s ProRural is run by a mega-ministry that’s busy with so many things demonstrates that MEFCCA not only doesn’t specialize in but isn’t even prioritizing rural development.

The government created Banco Produzcamos, the new state development bank, to support the development of small and medium production, but after three or four years we’ve seen that it isn’t producing anything. Right up to today that bank is more wind than rain.

How has ProRural Inclusive done so far?

In November 2012 an independent team did a midterm evaluation of ProRural Inclusive with what it called a “sectorial result approach.” After analyzing ProRural’s indicators, methodology, application criteria and the like, the evaluation concluded that its execution was “moderately satisfactory.” Saying that is the very definition of damning with faint praise: some progress, but major problems to resolve. The evaluators added that a better management system was needed to generate and demonstrate sustainable results, especially at the level of effect and impact on the life of the peasant families, given that generally speaking the data we have are how much was delivered and to whom.” In other words, the indicators they found were too vague and simple for good analysis.

The fact is that this government has basically measured the efficiency of its programs in terms of “deliveries”: thousands of productive vouchers, thousands of zinc roofing sheets, thousands of cows, thousands of pigs… Its goal is to deliver so many services and so many products, to make so many visits and hold so many meetings, but there are no data demonstrating how all that has helped people’s living standards. And the reason they don’t exist is because there’s either no capacity to measure impact or no intention to do so. I believe the capacity exists and they simply don’t want to show how little the lives of the poor have actually changed.

With such limited data it isn’t easy to analyze ProRural’s effects either qualitatively or quantitatively. The information system is deficient, there’s a high degree of turnover among the information-gathering field personnel, and work is always being done with approximations, using information from previous years or based on assumptions… It’s also important to mention that not even ProRural’s cost is quantified; there’s no information about how big a financial gap there is in its budget. And if that isn’t clear, how can they work with priorities and meet targets?

Another problem we find in the countryside is lack of coordination. Less than two weeks ago I was in Jinotega and I ran into officials from the Nicaraguan Institute of Agricultural Technology (INTA) who were fumigating in one barrio of the city as part of the campaign against the dengue mosquito. “What are you guys doing?” I asked them. They told me that this was “synergy between the countryside and the city” and that MEFCCA and the Ministry of Health were demanding that the campaign against the mosquitos be prioritized. When I asked if their priority wasn’t to take care of the native certified seed program and technological transfer, they shrugged and said the “orientation” from the top was to fumigate the barrios near INTA. It’s just one example of how priorities get marked by the decisions of whoever’s at the top and not by the needs of rural development.

Problems of the National Food Program

One of the three components of ProRural’s current manifestation is the National Food Program, whose objective is to capitalize poor peasants through the delivery of goods and services. The idea is that this should allow them to undergo an accumulation process so they can supply themselves and even produce surpluses to sell in the market.

The program established targets and an instrument to achieve them: the famous “Zero Hunger” productive food voucher the government began giving out in 2007. The full package this voucher covered—a cow, a sow, hens, a rooster, seeds and a biodigestor—was valued at some US$2,000. For purposes of including the “associativity” they had established to receive the vouchers, the beneficiaries—most of whom were women—had to organize into nuclei or cooperatives of 50 people each. And to create a revolving fund to help other families, each benefited family was to contribute 5,000 córdobas (around US$200) as a product of its capitalization in one year.

The initial goal was to reach 80,000 families, and by 2011 they had gotten to 56,800. With that, the government decided to extend it to 120,000 families and announced this new target.

When analyzing the results of this program we again come up against the problem of indicators, because virtually the only existing data have to do with the number of vouchers issued per year and the net income of the benefitted families. And that brings up the same question: Inability to obtain more data or unwillingness to reveal the results? It’s a problem that’s repeated in all the programs, not only this one.

The associativity problem: Given that the goal was 120,000 families, it meant creating 2,400 cooperatives. Three years into the program they decided to legalize all the cooperatives created around the vouchers so far. And to do that, they closed Infocoop to the public for four months at the end of 2010. Utterly disregarding our cooperatives, they closed a state institution we needed for many other transactions just so they could dedicate themselves exclusively to processing the legal status of the productive voucher cooperatives.

The most recent data we could find on Zero Hunger are from 2011. They show that of the 2,400 cooperatives they planned to organize, 1,600 were actually created, but only 230 of them—barely 17% of the plan—complied with the requisites and therefore got legal status. And to achieve that paltry result they had to close a public institution for four months. That’s neither fair nor correct.

Three days ago I was in the municipality of Limay, where MEFCCA (which took over Infocoop) had made a special effort to create 37 cooperatives. All have been granted their legal status and issued their certificate, but not one is functioning. The women there say they were trained only because the government wanted to issue them those papers, but none of the women knows how a cooperative works. And that’s true. There are books with no minutes, unused daily and general ledgers, and board members who don’t even know which post they were elected to. This shows major irresponsibility in promoting associativity. Afterwards they say cooperatives are no good, when it’s the people who go out and do such nonsense who are really no good. All those women told me that they wouldn’t have been given their voucher if they hadn’t formed a cooperative. They’d have been fools not to join a paper cooperative to get a material benefit.

The revolving fund problem: Another objective of the National Food Program’s work was that each cooperative would create a revolving fund fed with each family’s contribution. Let’s do the math: if each person who received the voucher gave the stipulated 5,000 córdobas to the revolving fund, it would mean a fund of 600 million córdobas, equivalent to some US$23 million.

As of December 2012 only 59 million córdobas had been collected. Instead of 5,000 córdobas per benefitted family, they collected just under 1,000, which is still nothing to sneeze at; it’s an important savings fund. But let’s look at what happened there. These women now had their cooperatives, but didn’t have a clue what to do, so they began to ask themselves how they were supposed to administer the fund, manage a portfolio, recover loans, make provisions… But those in the new MEFCCA had no idea how to respond to them, so they went to the National Institute of Technology (INATEC) to get it to train the instructors needed by the cooperative movement the government was creating. But INATEC didn’t have anyone to train all those people.

So that left the question of what to do with all the funds those women and all the other families in such half-baked cooperatives couldn’t administer. The women were told to deposit the revolving fund in an account each cooperative opened in the bank. So that’s what they did. But what they weren’t told was that cooperatives have to update their documents each year, so when the coop presidents would later go back to withdraw money from the bank, the bank officer asked them if they could demonstrate that they were the legal president recognized by Infocoop. When the women said yes and showed the certification, they were told it had expired and needed to be updated by Infocoop. And when the women reminded them it no longer exists, they were told to go to MEFCCA. What’s that? It’s the new ministry!

So now all these beneficiaries had to hold an assembly and elect posts and write a report… And in the end, given all that bureaucracy and all the running from pillar to post, the bank has been enjoying those funds for a good stretch of time. Today there are a lot of women and others crying: “I paid in under the illusion that the revolving fund would loan me that money back and now I’ve got nothing…” “We paid at great sacrifice and now the bank’s ended up with it all…”

Our proposal was turned down

These are the daily tragedies you don’t see, the tragedies of many people who got involved with the voucher and agreed to form a cooperative. In its propaganda the government says it has benefited 50,000 families with the voucher, or even 80,000 families! But behind these figures are traumas and difficulties that never get evaluated or analyzed. Even more serious, there’s no plan for organizationally strengthening the cooperatives formed in such an improvised and disorderly manner; so they have no future. I’d go so far as to bet there isn’t even really a gender strategy for all these women they say they want to capitalize and turn into leading players.

When they started talking about cooperatives for the productive food voucher, various federations, including ours, told the government that if any of us have cooperatives in a territory where it has productive voucher cooperatives, the one with the most influence there could help those new cooperatives and the federation would support it. All the government would have to do is tell us where it was issuing the voucher, who it was working with and we’d organize joint work.

All we asked in return was compensation for the mobilization costs. The productive food voucher program originally had an annual budget of US$500 per family for technical assistance and training. We proposed to do that same work for only $150 a year, which would be enough for our cooperatives to get around in the territory, since they were there already.

But the government brushed us off as if we were mere nuisances. “We don’t intend to work with existing federations. We’re going to create our own cooperative movement, so we have nothing to do with you.” It couldn’t have been said clearer, so we left. They cobbled together those cooperatives by themselves, or at least started to. They wanted to put together cooperative unions and federations, but it all collapsed around them because the problem with cooperatives is that they need to be updated each year, and that means financial statements, plans, bylaws, assemblies… It isn’t like a union, which is easy because all you have to do is go to the Ministry of Labor and register it. No, a cooperative is more complex because it has to do with socioeconomic issues.

Problems of the National
Rural Agroindustry Program

As I mentioned earlier, National Rural Agroindustry is another ProRural program. One of its projects, called Procaval (Project for the Inclusion of Small-scale Producers in Value Chains and Market Access), is financed by the Inter-American Development Bank and the World Bank. It’s also now under MEFCCA.

I saw one example of that project in San Dionisio. A young woman in charge of Procaval there told me that “the Zero Hunger voucher has been issued to 900 women here and they’ll each have a pregnant sow. With all those piglets we’re going to set up a slaughterhouse for San Dionisio-Esquipulas-San Ramón.” So I said, “But that number of pigs will only keep a slaughterhouse busy two days. Why not let all the people from the territory into that business? That way it’ll be able to function.” But she insisted that no, the “orientation” was that only those who had received the voucher would get in. Logically the slaughterhouse project didn’t work and the girl got fired.

Another case cost a Procaval official in Chinandega his job. There’s a women’s cooperative there that belongs to a union of five cooperatives headed up by a woman who is what’s known as a historical collaborator of the FSLN. I’ve known her for more than 30 years and respect and appreciate her a lot. One day she came to see me all worked up about something, having just come from Procaval in Managua. She told me she’d gotten a 4-million-córdoba project in which her cooperatives would put in a counterpart of 500,000 córdobas. They had pulled together their part of the money and when she went back to the local Procaval official he told her they were going to give her the 4 million, but she was going to work with other cooperatives, not her own. She protested, but got nowhere, so she told him she was going to go file a complaint about it in Managua. He just shrugged and said that was where the order had come from. She came to Managua and hooked up with the “magical spheres” where their first question was “Who said such a thing?” She gave the official’s name and they fired him, but it was true. They wanted her to work with people she knew had received three or four credits from different projects and weren’t trustworthy, who didn’t pay. “But those are the people we chose and you either work with them or there’s no money,” they told her. In the end they didn’t give her the project.

This type of abuse, this institutional imposition based on a loan, which is public money, is why we’re in the position we are. With that steamrollering they delay, distort, blackmail and complicate the social economy. I have yet to learn of any successful Provacal project; I don’t know whether it’s because we’re uninformed, or because they’re keeping its successes a secret.

Problems of Crisol...

Now let’s look at what’s happening in another program, called Crisol (Christian, Socialist, and Solidary), also coordinated by MEFCCA. Its stated objective is to get 35% of the people in the countryside to massively use improved seeds or improved varieties to increase rural production and productivity. Targets were established, but they’ve been changing each year. Our most complete information is from 2011-2012, when Crisol was still called the “Special Food Program”… names change frequently as well. The goal that year was to finance 111,765 farmers, 30% of them women. The program funded the planting of a little over 111,400 hectares of basic grains, which represented important percentages of national production: 47% of unirrigated rice, 13% of maize and 19% of beans. MAGFOR and MEFCCA provided the seeds and money, the Nicaraguan Basic Foods Enterprise (ENABAS) collected and stored the production and Banco Produzcamos recovered the credit.

In the end, ENABAS only collected 6% of the beans produced with that credit because it went in when the price was 800 córdobas a quintal, but ENABAS only wanted to pay 600, arguing that it was “a solidary price” and a “fair price.” It obviously was neither solidary nor fair, so the people argued back that “we may be Christians, we may be socialists and solidary, but we need to be able to pay back the money you loaned us.” In the end the bank only recovered 45% of the credit, in other words only US$11 million of a US$21.9 million program.

The importance of being on a list

I’ve been talking about problems related to lack of coordination, improvisation, voluntarism, disorder… but there’s also political clientelism. Given that Crisol was proposed in 2011, the year before the municipal elections, the requisite for accessing the credit was being on a list signed by the guy from the government’s Production Cabinet and by a leader of one of the producers’ guilds very close to the government. With those two signatures as their only collateral, a whole bunch of people went to the bank to get their loan, even people who weren’t farmers but were “a vote to turn away or a vote to win.” It seems like a grade B movie, but it’s the truth.

Obvious result: those who weren’t growers didn’t plant and those who planted didn’t want to sell to ENABAS and didn’t pay their debt. Moreover, it was never even learned how much of those 111,000 hectares were planted because there was no technical capacity to follow up on the project. “From now on we’re going to loan only what we can recover,” they said, seeing such poor results and understanding that it’s not correct to work with that kind of logic when you’re trying to implement what amounts to a national food plan.

The Crisol program was supposedly about improving production and productivity, but no one knows how much was planted or harvested. In the end, they calculated it based on assumptions. Nothing was resolved and no one knows whether the program was useful or not. The goal of assuring that 35% of the growers would use improved seed to increase production and productivity remains a historical wish. The available data tell us that between 10% and 15% of growers use improved seed, but that’s based on 20-year-old data that haven’t been changed since.

...and Crisol Café

What’s happening with Crisol Café given the rust fungus that’s doing so much damage to the country’s coffee crops? It’s still under discussion how much Crisol will pay per hectare, whether it’ll be US$350 as they said at the beginning or $490 as they said later. And they’re still undecided whether to give it through the existing cooperatives or the “recommended ones.” After seven years of FSLN government, its officials concluded that the first-tier coffee cooperatives were fragile and atomized and their business capacities weak and limited. So they decided to put together their own cooperative unions, which is the next tier. Finally in 2013 they recognized that the cooperative unions they formed weren’t functioning either.

Putting together a cooperative movement isn’t just a question of resources; it also involves capacities, awareness and volition, and it can’t be done from government. It has to be done from the sector itself, from community horizontality. Otherwise it won’t work. But they didn’t give up; they said instead that they would create federations, the third tier of cooperatives. And as they have MEFCCA, it doesn’t matter if the unions or federations they organize are only on paper. They began to put together “dummies” of all sizes, but in the end none of them worked. This suggests that Crisol Café hasn’t been able to get off the ground.

Sum-up of ProRural

The main problems of the ProRural program, like the others, as at least one government team recognizes, are lack of inter-institutional coordination and constructive dialogue and collaboration with the producers’ associations and different actors along the production chain. There’s no autonomy in the ministries to make decision so when someone presents a problem all they can say is “We’re going to make a note of this concern and pass it on, because it’s very valid.”

In conclusion, I don’t see today’s ProRural, with its structure and ways of acting, as inclusive. It formed 14 commissions, one for each product and thematic of the value chains. They’ve met, four, six, eight, ten times and have signed one agreement after another… yet nothing happens. I don’t know why they tagged on the name Inclusive, because ProRural is actually inaccessible, exclusive, arbitrary and imposing. The content of the public policies aimed at the rural sector may be very well written, but the institutional arrangements, work methods and styles for putting them into practice are very poor.

We need a democratization of the economy

If the government were to talk to us, what would we say to it? What would the cooperatives propose? What do those of us in the social economy sector, so subjected to this seesawing, envision?

By talking about so many limitations and also failures, I wanted in part to show you that either the politicians are very intelligent or we’re very dumb, because they’ve led us to believe that development can be achieved in five years and, worse yet, that the cycle of a government coincides with the development cycle. But when we start to analyze, we realize that governments actually have less than five years for their development plan. The new government spends the first year disqualifying the previous government’s plan so it can justify doing everything anew. It then spends the second year designing the new strategy and drafting the new policy documents. The next two years are spent getting financing and trying to implement the new policies. And by the fifth year it and the rest of us are once more caught up in the electoral campaign. In reality, “development” strategies only have two good years, so we have to shake off the idea that development can be achieved in five-year stages.

In a situation like that, the first thing we have to do is recognize our own responsibility. We in the cooperative movement have been bad at explaining what we are. Society has no idea of what a cooperative is because we haven’t been able to explain that it’s a partnership of people who come together not just to ask for and receive, but to work, share and also give. So the first thing we have to do is struggle to get the social economy recognized as a development actor; to make it understood that we have organized business expressions, interests, complaints and proposals, and that we want laws and institutionality with clear rules. We demand everything the private sector is demanding. We need stable institutions, not something called Infocoop one day and MEFCCA the next.

Our struggle is for the democratization of the economy so the income is more equitably distributed among the actors along the value chain through an adequate legal framework and more adequate laws. The policies and laws we currently have only concentrate the income and value added in very few hands. That’s what the traditional and new kinds of big businesses are made for; it’s their reason for being: to concentrate the income and power with which they protect their profitability and their monopolies.

We’re in a crisis of social cohesion

The social economy sector should be able to put forward critical opinions. It has to point out that there’s a crisis of social cohesion in this country, one that’s noted and felt in the fear and uncertainty of many people and in their distrust of political power, judicial power, in fact all the factors of power. People are distrusting and it fills them with doubts about their future: Will they cut me off? Will they give me the project? Are they going to fire my boy…? People are living with their back against the wall and their hair on end. With no social cohesion we can’t build anything, either economically or socially. So that’s our first task: to find a way to strengthen our sector’s social cohesion, projecting its identity so it will be conscious of the fact that we’re subjects, that we’re a sector that’s different from private enterprise.

Achieving social cohesion in our sector is very important. If we don’t have the identity of belonging to a single sector, of recognizing that we all have the same problems and fears, we probably won’t understand that we can only resolve the common realities and problems we’re experiencing by joining together. Every day we hear complaints by people about how unfair it is that they can’t access the Zero Hunger program or the Zero Usury program without a political endorsement. People say it to each other, but aren’t able to say it collectively. They’re scared and it’s impossible to build a collective response when people are afraid of speaking up.

The social economy sector
is seen but not recognized

Article 99 of Nicaragua’s recently reformed Constitution has conceptual and political ambiguities and contradictions in its first, third and sixth paragraphs. The first paragraph establishes that “it is the State’s responsibility to protect, foster and promote private, state, cooperative, associative, community, family and mixed forms of business property ownership and economic management to ensure economic and social democracy.” This paragraph filled us with optimism because the Magna Charta finally identified us as a sector with its own form of ownership and economic management that’s different from those of private or state enterprise.

Nonetheless, the third paragraph of the same article establishes that “the exercise of economic activities corresponds primordially to individuals. The leading role of private initiative is recognized, which in a broad sense comprises large, medium and small businesses, micro businesses, cooperative and associative businesses and others.” So that paragraph ignores us as a different social sector of the economy and by so doing ignores our importance and the role we play in national development and the country’s economy, as it only recognizes the lead role of private initiative and sticks us into that category, mixing businesses of all sizes in with cooperative and associative enterprises and others. We would appear to have the right to be identified but not recognized.

We want to be recognized,
not just identified

We’re not private sector even “in a broad sense.” We’re the third sector of the economy, not an annex of the private sector. And the sixth paragraph of that same article again identifies us as different from the private sector. So we can conclude that we’re seen, but the intent is not to give us space. We don’t want just to be seen; we want to be recognized. In economic and political terms, that would mean taking us into account when discussing laws, policies and programs that affect us and benefit us as a sector.

As our contribution isn’t identified in macroeconomic figures and Central Bank statistics, it’s as if our sector didn’t exist even though we generate jobs, contribute to the gross domestic product and export. That’s why all governments, of both right and left, stick us at the same table with the big business representatives of COSEP, and negotiate our issues through it.

Whether we’re talking about cooperatives, associations, worker-owned businesses, SMEs or whatever, our sector must join together in a socioeconomic logic with a sectorial-political, associative-political and economic-political focus. It has to cease being a simple target group or group of beneficiaries in the framework of both cooperation and government programs, as we’re reduced to now. It’s that way of cataloguing us, pigeonholing us, that makes them act as they do. And acting that way creates a certain consciousness, because when the government grants someone a credit, many think it’s doing them a favor, so they feel obliged to be grateful. But that’s not right. The government is responsible for the good use of those resources, which belong to everyone, so the population can progress and the country can pay. But there’s no awareness of that among either the people or the public servants.

We have to move from a
3-legged stool to a 4-legged table

And this brings me to a key point. The Constitution the government just reformed in the National Assembly establishes tripartite dialogue and consensus. Paragraph five of article 98 proudly speaks of the tripartite alliance model, a three-legged stool made up of the State, private enterprise and labor. We want it to be quatripartite. We have to demand that it be a four-legged table: State, private enterprise, labor and us, the social economy sector. We have to move from a stool to a table. And that’s a strategic, profound political struggle that requires public debate. COSEP needs to be told: “Don’t be so shameless; don’t speak in our name; you don’t represent us.” And the government needs to be told: “Don’t play the fool; you know perfectly well we exist.”

It’s also a problem of political and economic ethics, because by saying they’re representing us, even though they aren’t, they take advantage of our invisibility to gain benefits from us. In fact, they sit down not to represent us but to despoil us.

Our origins were social, not socioeconomic

All this marginalizing also has to do with history, with where we come from. Our cooperative movement, Nicaragua’s, in fact Latin America’s, was always promoted by churches, parties or governments. It was never given a socioeconomic focus, but rather a social one, an identity more related to the social good, the poor, the most dispossessed, forgetting that cooperatives have a political role and socioeconomic roles. The socioeconomic focus, or that of a solidary social economy, has never been promoted by anyone.

I was formed in the rural revolutionary Christian movement and in the seventies began to work in cooperatives in Chinandega with a Christian logic. While the private sector structures have been organized with a mercantile economic logic, one of profit, we organized with an ideological-social logic. We used to say that cooperatives were the school where the new man was being formed. This ideologizing of cooperativism has contributed to the lack of recognition of the social economy.

Another factor is that all governments have used us to increase their clientele via populist and palliative programs. They do that because it’s in their nature, but we haven’t impeded it due to our own lack of vision and psychological dependence on the party aspect, which has made us party activists first and cooperative members second. As a result no one has assimilated the concept of the importance of cooperatives and the social economy.

The values of associativity

We must strengthen associativity. And I want to break down how we understand that. Every day we hear in the news about some “illicit association to commit a crime.” Obviously there are illicit, illegal associations and others that are legal and valuable. Associating is nothing more than joining together, allying to do something, and it’s useful for a lot of things, for example operating on a larger economic scale: when we join dispersed micro-economies together we can concentrate both supply and demand and multiply services.

Associativity is also useful for organizing dialogue from the base to the national level and representing our interests at all levels. In our case, grassroots cooperatives represent us in the district, unions of cooperatives represent us at the municipality, federations of cooperatives represent us at the departmental and national levels, and confederations, when they exist, represent us at the national and international levels.

In addition, associativity is useful for dealing with problems related to education, health and roads, for supporting someone in the community and speaking in the community’s name. Through it we can formulate different kinds of proposals at different levels and to different authorities.

And it serves to strengthen our identity because it helps us hold on to our original sectorial and guild identity; and that’s very important because I’ve come across people who have been cooperative members for thirty years and still define themselves as and think they belong to “private enterprise.” And when I question that, they ask: “If I’m not state and I’m not private, then who am I, son of nobody?” That happens because the limited political and cooperativist education of the social economy’s leadership has hindered the emergence of that belligerent identity we so need.

A key point is that associativity also serves to establish alliances. If we don’t represent a cluster, then nobody’s going to seek us out or take note of us. Associativity gives our sector’s leadership legitimacy and that in turn builds autonomy. And if one thing should characterize the social economy sector, it’s organizational, political and economic autonomy. But that has to be worked for on a daily basis, because it’s not established in law.

Finally, associativity, in a more economic sense, serves to link up value chains, and that allows productive development to be organized at the local and national levels.

An alliance around our cacao production

In Fenacoop we now have a very interesting experience in that regard, which we’ve developed in Río San Juan and Nueva Guinea. We’ve organized a cacao value chain there. We call it the National Program for Cacao in Cooperatives and we’ve achieved it in a process that has gone on for five years now.

First we analyzed the current situation, which showed that the State’s National Cacao Plan was making very slow progress. Its plan contemplated planting 40,000 hectares, 4,000 per year, 19,000 by the private sector and a similar amount by the government, but there were neither policies nor credits for cacao. We verified that not a single client had got past Banco Produzcamos’ filters to obtain loans for cacao.

We also saw that the cacao growers in Río San Juan and Nueva Guinea have from one to three hectares and work in the rainforest. Those areas have only four inhabitants per square kilometer, with a maximum of twenty in the more populated areas. Moreover we learned that cacao has its own fungus—monilinia—similar to the rust fungus that plagues coffee. So just as rust-resistant coffee varieties are being sought, we’re looking for cacao varieties resistant to monilinia.

Meanwhile we created what we call a clonal garden: we bought a farm in association with six cooperatives and set up an experimental center where we produce propagative material that’s grafted to make the cacao pod more resistant to monilinia. We have the capacity to supply that material not only to our cooperatives but also to private companies and NGOs. We get it in a distribution alliance we made with CATIE (the Costa Rica-based Tropical Agricultural Research and Higher Education Center), through which we pay it the 10% required by law for intellectual property and thus benefit the whole country. Right now we’re financing 1,040 hectares of cacao, have two collection centers organized, are already exporting and have also started a plan to improve small-scale chocolate production. This chain is giving us linkage and financial sustainability. And it’s also giving us identity. Our federation is achieving important leadership in the field of cacao.

And then there’s the canal…

Any discussion of the project we’ve implemented in that region inevitably brings up the topic of the interoceanic canal project. Half of any of the various canal routes being considered would pass through the rainforest area, where there are many indigenous territories and communal lands and also cooperatives. We’ve seen that the canal will have some effect on the cacao groves’ zone of influence.

The mere fact that the route isn’t defined has already unleashed a land grab in the area. Buyers show up to pressure people: “Sell to me, because that Chinaman is going to pay you what he wants and I’ll pay you market value.” Between the “Chinaman’s” value and market value, people choose the market. But then some people are sharp enough to ask: So why do you want to buy me out if you’re also going to lose with the Chinaman? And they start thinking: This guy wants to buy me out because he has his connections and already knows something. There’s a lot of speculation, which is mainly serving to increase people’s uncertainty. Should I believe him or not? Will the canal pass through here or not? Some people decide it’s better to wait until the route is defined, until they get into a conversation with someone else and start thinking that once it’s defined, the price will fall…

Another problem that isn’t yet visible is the number of people who will somehow have to reinsert themselves into the country’s economic activity once the canal begins to change the life of the nation and the lives of so many people. A reinsertion and economic conversion strategy will have to be designed for so many peasants, so many farmers. This canal business is putting to the test how much the country matters to us. And my feeling is that people are still more guided by fear than by determination to have a country.

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