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Central American University - UCA  
  Number 154 | Mayo 1994



Worker-Owned Coffee Farms: The Bitter and the Sweet

The workers of state enterprises of the Area of People’s Property (APP) are today owners of the enterprises of the Area of Workers’ Property (APP). Do they really affect management? It is not quite clear, nor is the direction in which this novel experiment is heading. We recount two typical cases, one hopeful, one not so.

Moisés González

The transformations the Sandinista revolution made in Nicaragua's property ownership structure have suffered major roll backs in the past four years. Despite an unequal struggle with the neoliberal Chamorro government, however, organized workers managed to win one very fundamental victory: they derailed the government's plans for privatizing the body of state owned companies known during the revolution as the Area of People's Property (APP).

Using takeovers of state farms and factories to improve their position at the negotiating table, the workers won control of a significant percentage of the agricultural and industrial enterprises after long months of struggle. Those assets are now known as the Area of Workers' Property (APT).
In negotiations over the coffee sector, the Farmworkers' Association (ATC) acquired nine productive enterprises and one service unit, which their workers then organized into a sort of corporation, called AGROCAFE, S.A. All but 2% of AGROCAFE's shareholders are workers in the units, and include demobilized soldiers of the Nicaraguan Resistance, the army and the Ministry of Interior. The nine farm complexes, which are scattered through Matagalpa, Jinotega, Carazo and Managua, grow coffee and basic grains, and have some cattle. There is also a large forested section. According to AGROCAFE, its farms produce 7% of the country's coffee, which means they have to be included in any national production strategy.

For the rural and urban unions, the property fight was based on survival as well as principle. Had they not fought for these state companies, most of their workers would have lost their jobs. Today they have property, jobs and the possibility of influencing their company's actions. But do these new shareholders really have any influence over decision making?
The debate about how each enterprise will function and what course it will take is still going on, even though they have been functioning under their new ownership for several years. We will discuss two typical cases, examples of a complex and very new reality. The first, with more problems than solutions. The second, offering more hope.


The Adolfo García Agricultural Enterprise is one of the nine that make up AGROCAFE. It has 165 shareholders and comprises four farms located a short distance from Managua: El Callao, La Prusia, El Bajo and Santa Julia. They cover over 4,000 acres throughout the El Crucero municipality, of which 600 are dedicated to coffee production, another 230 are being developed for coffee and about 140 are used as family vegetable gardens.

The Adolfo García is an example of the problems in this new experience of worker self management. Strangled by the financial crisis affecting all national producers, and by a bank debt equaling nearly $100,000, the worker owners feel daily the scarcity of production resources and almost nil benefits that their new status as property owners brings them.

What Kind of Training?

They also feel a rigid power structure and lack of definition in the union, typical of ownership in the process of consolidation. Real self management appears to be a still distant goal for Adolfo García's workers.

While direct participation in decision making is not on their horizon, the training necessary to achieve it is currently being discussed among the union, the administration and the shareholders. Some argue that the workers do not need training, that it is enough to use popular wisdom as the basis of self management. Others believe that formal education cannot be avoided if technical processes are to be modernized; they are convinced that only a trained worker can have an effective voice in management.

For Bayardo Martínez, ATC's Managua coordinator, the way to resolve daily problems is not through massive and indiscriminate training. "Selective training must be done," he argues, "dealing with issues that have to do with workers' lives, what they feel they have lost since the enterprise is in their hands, and the problems they can't resolve." Training, Martinez says, should not take place outside of workers' reality, but should prepare them to face the adversities they are experiencing, increasing their understanding and allowing them to speak.

Illiteracy levels are alarming. Only 16 shareholders know how to read and write, and most of those work in administration. Union leaders believe that this high illiteracy rate partly explains the workers' passivity. Many of the farm representatives do not orient their work partners about enterprise issues because they can't read the documents given to them to discuss. They have little choice but to repeat what the administrators discuss and decide.

The enterprise does not have the conditions to carry out an adult education program. The lack of an appropriate location feeds into the workers shame about their illiteracy. "The school is in a warehouse," explains Samuel López, the union's general secretary. "It's dark and there's no air; it looks more like a chicken coop. The adults don't like this. It's no place to try to learn something."

Many of the children have stopped going to school because the Ministry of Education now charges a fee, and salaries don't allow for this. Of the 250 children of the agricultural workers, only half completed the last school year.

Too High a Price?

Every morning, while the workers shiver in the cold as they get ready for the day, they long for food, but go to work with only a cup of bitter coffee in their stomachs. Their daily diet is only cooked rice; meat disappeared from it long ago. This has sparked tensions between them and the directors. They demand wages that at least let them eat better.

The workers perform miracles with their minimum monthly wage of 162.5 córdobas, given their large families six is the average number of children. An alternative rotating salary system has been tried as well; the shareholders receive food one week and cash the next. The enterprise has a commissary, but it is small and poorly stocked. The shareholders have no choice but to shop at local general stores, paying out all of their meager salaries in debts at the end of the month. "To save is a dream," Dolores González, shareholder and activist in the union's Women's Section, told us. "There's always some new crisis and money disappears like water."

Food and salary shortages are also compounded by the loss of the medical subsidy that covered workers when the enterprise was state owned. Currently, sick workers are offered support only in truly exceptional cases.

This less than hopeful reality explains why some 40 shareholders have chosen to abandon the enterprise; survival forced them to look for better wages in private businesses. They have not resigned from the enterprise, but have put themselves outside of any decision making and any benefits that might be gained.

These workers did not feel that their ownership was a reality. They decided it was better to struggle somewhere else, even if under a boss, than live with uncertainty and scarcity. In 1992, the private growers in the area offered a wage of 10 córdobas a day, almost double what workers were paid in "their" business.
This critical situation influences production yields. Labor indiscipline prevails, and in 1992 meant the loss of 7,000 work days, raising production costs even more. Everyone is asking how they can reconcile hunger with productivity. The workers think they are required to work too hard, that management is demanding too much in exchange for little or nothing, and only listens to criteria from technicians. Their low productivity appears to be a silent protest against the absence of benefits.

"The worker has sacrificed everything for this property," commented one worker. "To continue working at a miserable wage can only come from commitment; there's no other explanation. We can't reduce this to technical administrative criteria, when the workers are getting fewer benefits than ever before." The reality challenges the administrators' abilities and affects the possibility of generating enough goods to satisfy the shareholders' basic aspirations.

Day after day the workers hear the same litany, that having a permanent job is the greatest benefit achieved up to now. "A strategic benefit," say the leaders, "only possible because we have become property owners." The reality and discouragement continually question these affirmations.

"The workers are justified in being upset, but there are situations that are beyond our control," says Marco Jiménez, president of the enterprise. "The workers only measure their individual incomes. They ask for a 20 cent increase for every half bushel they pick, but don't stop to think that if this increase is multiplied by 185,000 half bushels, it comes to 37,000 córdobas, which is 30% of all the financing we get from the bank." The reality is pathetic even with these explanations. There is only enough money to maintain traditional production and pay bank loans and debts. The surplus from last year's entire harvest was only 106,000 córdobas (about $17,000). It was decided to invest this money in the enterprise and not divide it among the shareholders, since otherwise production would have been paralyzed.

Who's the Boss?

It is not only the lack of economic and social benefits that creates tensions at the Adolfo García. The leadership maintains a top down structure that prevents workers' active and direct participation in decision making; workers do not take part in discussions that define the direction of the enterprise.

This problem is repeated at all levels. Open questioning of technical administrative and labor management is almost non existent. The shareholders resort to deceitful conspiracies and indirect criticisms, or do not follow the enterprise's progress.
The root of this problem is that the leadership council chose the shareholders' representatives rather than the shareholders themselves, which has limited the communication necessary between them. "In the field we all talk and protest, but in the meetings we're afraid," commented shareholder José Castellón. A lot of hurdles will have to be passed before the Shareholders' Assembly, theoretically the maximum authority, actually decides about production, trade and investments.

The representatives do not allow open debate on the farms. "There are communication problems," said one discouraged shareholder. "The shareholder delegates and leadership council members limit themselves to communicating already made decisions, and don't listen to what we think. It doesn't occur to them that we might have different ideas about the important decisions the enterprise makes." The shareholder representatives themselves are often intimidated, and hardly ever criticize what the administration proposes. For all these reasons, the shareholders are the last to know what is going on, and only find out when it is too late to do anything to change the decisions.

The shareholders do not accept this administration model. Many consider that the only person with real power is the president of the enterprise, and all the rest have to obey him. "Supposedly the property was privatized to us. But we don't have any guarantee as shareholders, or as workers. We're in a bad position," says Eddy Blandón. For many, keeping their job is a question of survival and not of identification with the project.

Being property owners has brought them no advantages yet. Being a shareholder is the same as being a worker: the same salary, the same food and the same difficulties. "They only tell us to struggle, that this will be for our children. But we don't know how, because all we have is debts," commented one worker.

Many workers don't even want to be called shareholders. It is enough that their salaries, food and jobs are guaranteed. Workers and shareholders consider that the enterprise authorities slow down union action by offering union leaders positions as foremen, row heads or farm delegates, so they will forget the demands of the affiliates and weaken union belligerence.

Jorge Luis López, foreman of the El Callao farm, considers the union a negative element. "It should not exist," he says, "because it can affect the enterprise. If the workers don't want to work, the union has to support them and the enterprise loses. We can't work well that way." The union also demands management and financial accountability, which some shareholders think should not be a union task.

Such an experience in 1992 caused tensions. Shareholders and temporary workers joined forces to request a 20 cent salary increase. The union supported them and, as a result, the enterprise suffered great losses.

Some people believe that the enterprise authorities will see the union in good eyes only insofar as it works with the leadership council and the administration. Others believe it necessary to reach a mutual understanding based on defense of the workers. In any case, although a union with a new profile should be developed in the APT, it cannot put to one side the demands of the shareholders and workers, or forget their needs. How to build a different union without abandoning the defense of labor benefits is an unresolved challenge.

For ATC coordinator Bayardo Martínez, the union's function is to assure the organization and defense of the enterprise within the broad vision of defense of property rights, and to assure that workers remain influential in the enterprise even though they do not get any benefits from it. This means that the union cannot ask the enterprise for benefits it cannot offer. Shareholders at the base are not convinced of this, however, and act out of their interpretation of reality and their own discontent.

Despite all its limitations, the union has become both the only place for discussion of and questions about the enterprise's future, and a tripping stone for some administrators and foremen.

Three hats

Clarifying the shareholders' identity is a hard task. The same person has three seemingly incompatible identities, or "hats": shareholder, union member and worker. The administration considers that the attempt to play three roles at the same time makes it hard to take technically recommendable actions and promotes questionable labor policies. According to the administration, the workers also take advantage of this triple identity in their battles with the administration. If there are problems with the salary or work load, they put on their union hat. If they want to make an administrative decision or are refused aid in an emergency, they put on their shareholder hat. And if they are asked to wait to get paid for two weeks, they become simple workers, demanding their salary on time.

The union leaders see the situation differently. They claim that the three hats are a myth, a pretext by administration to not confront its own errors one of which is its failure to recognize that the workers in these new enterprises live the same reality from three angles. "The union exists to contribute to the defense of property, by convincing the workers of their strength as shareholders in the enterprise," explains Santos Gutiérrez. The workers' logic is to look for all possible ways to defend themselves and not worsen the situation."

The contradictions between unions, base shareholders and the administration have made it more difficult to consolidate the enterprise. In 1992, some shareholders threatened to pick coffee on private farms, where they would be paid better and exploited less, and refused to pick on their own farms. The union leaders were the ones who finally convinced them not to do this.

Not everything can be resolved with goodwill, but something could be done so that each person takes on an appropriate role in a way that integrates the various functions and does not create such tense conflicts. For now, the worker shareholders of Adolfo García still do not feel part of a self management project, and the problems are such that it is almost impossible to find any optimism.

Positive results, even if minimum, are needed to recover confidence in management. Only if shareholders see some improvement in their living conditions will they stop being suspicious of the project. Broader spaces for discussing and changing some decisions would allow the workers to identify more with the enterprise.


Because the border department of Jinotega served as a contra corridor from Honduras, it was an area of particularly cruel armed confrontations in the 1980s. Despite the change in government, the specter of war continues to plague this region. Kidnappings, assaults and killings of producers and poor peasants have multiplied. It can be an odyssey just to get from one place to another. Transport trucks make their daily winding trips along the mountainous, dusty and semi destroyed roads, full of peasants who cannot be sure they will get to their destination.

The workers of the Jorge Vogl Agricultural Enterprise, another AGROCAFE enterprise, live in this reality. Four farms dispersed around Jinotega make up the enterprise: La Trampa, Corinto, La Unión and La Paz del Tuma. These farms cover 6,265 acres, and virtually all of their land is dedicated to coffee. The Jorge Vogl has 363 shareholders, all members of the ATC.

Threats on All Sides

Keeping this project functioning in such a conflictive zone is no easy task. The Jorge Vogl farms have been threatened by groups of both recontras and recompas demanding food and economic support. And in 1992 the government decided that the farm lands would be a good security zone for rearmed men willing to disarm. Serious losses of both cattle and crops resulted.

The enterprise, like many others privatized to the workers, has also not been immune to the tenacious struggle of former property owners to recover their confiscated properties. This group, spurred on by its support from rightwing sectors in the US Congress, is disinterested in any overall political solution to the property conflict. Bitter and very reactionary, it would delight in destroying the ATC workers' productive project.

These ex owners are using their influence in the judicial system to delay property registration, sometimes even altering documentation. The clearest and most recent case of this has been the litigation around the Las Pilas farm, one of those in the Jorge Vogl complex. Big hacienda owners in the zone filed a suit against the enterprise based on a quarrel between the enterprise and an ex shareholder. Documentation indicates that, before the change in government, this shareholder had received about eight acres of Las Pilas through the agrarian reform, which he then sold to the mother of Matagalpa's criminal judge.

The big landowners now accuse the president of Jorge Vogl, Manuel Hernández, and the manager, Jesús Zeledón, of "usurpation of private dominion, illegitimate penetration, damage to property, death threats and illicit association." Both Hernández and Zeledón were jailed and an attempt was even made on their lives, but they finally won the court case on October 26, 1993. Yet they now find themselves being again accused of the same crime. Santiago Rivas Haslam, a Supreme Court magistrate, appears to be involved in the conflict; Las Pilas borders on his land.
"The UNO Political Council in Jinotega wants to dismember us," charges Manuel Hernández. "They think that if they can take away 30 acres they will be able to threaten all the other APT properties based on precedent laws. Even though they have already filed suits for the clinic and the La Unión farm, we know that our documents are legitimate and legal, granted to us by CORNAP."

The Jorge Vogl enterprise still tries to hang on to the gains of the revolutionary period and achieve new ones, despite all the complications. The dual threat from the former property owners and the rearmed groups, which hampers administrative capability, is only one complication; there is also the confusion created among workers when armed groups claiming to defend property kill anyone who contradicts them; the integration of some workers into the armed groups in order to get money from the government; and shareholders who make exaggerated demands.

Optimum production

Due to good weather and technification, this year's production is estimated at 7,317 hundredweight (quintals) of coffee beans. This is an optimum yield of almost 13 quintals per acre, superior to the 10 the properties were producing when received and well over the 5 that large COSEP producers average. The achievement is even greater given that the bank only finances 6,521 quintals of coffee and there is a labor shortage in the area. To overcome the latter problem, the enterprise contracts a total of 200 temporary workers from the dry zones of Ciudad Darío, Terrabona or San Isidro.

Ample production of organic coffee is expected in 1995. Up to now only 43 acres of it are in production and another 68 are being developed. Organic coffee, which uses no chemicals and only fertilizers from the coffee wastes, is a high risk production but gets better prices on the international market than conventional coffee.

The enterprise is also promoting two other projects: the sale of organic flowers throughout the country and Europe, and sheep husbandry in order to improve local diets. To coordinate all this productive effort, the enterprise has trained one of its technicians in organic agriculture at the National Agricultural University in Nicaragua and the University of Colima in Mexico. It is a first step to guarantee technically planned production advances and maximize the enterprise's scarce resources.

Caring for the children

The privatization of state agricultural enterprises has meant, in most cases, the disappearance of the workers' social benefits that had been subsidized by the Sandinista state. Workers on private farms in Jinotega receive their wages and nothing more. The Jorge Vogl workers are doing everything possible to maintain at least one vital benefit for worker families the Rural Childcare Service (SIR).

Each farm in the enterprise has its own SIR. These centers care for nearly 300 young children of temporary and permanent workers. "They say that the workers used to have to carry their children on their back when they were picking coffee," says María Daisy Castro, manager of the SIR at the La Trampa farm, incredulously. With nine years of experience working in the center, she cannot relate this tale to her own life.

Shareholder Julia Ramos thinks that the SIR is an achievement that should not be abandoned, because of the support it offers so many women who have nothing else but their own wage. "The SIR benefits women, above all single mothers, and men don't help us. Even the temporary workers say how good it is, because on the private farms there is no SIR and they have to take their children along with them in the cold and the rain."
When the Nicaraguan Social Security Institute withdrew its support from the enterprise, the SIRs almost had to close. But they managed to reach an agreement with the institute to receive rice, corn, beans, milk and oil for five years through the UN World Food Program. The enterprise promised to provide the rest of the food, as well as transport and salaries for the centers' teachers.

This agreement has improved the quality of the SIRs. At the end of 1992, thanks to the profits earned from coffee sales in alternative European markets, it was possible to supply the centers with cooking utensils, toys and clothes. Home gardens are being promoted to offer more varied food, including lettuce, cabbage, carrots, beets and broccoli. The project plans to consolidate a large and varied garden that would supply all the farms and benefit not only the children but also the adult population on them. The garden covers about four acres and is being developed with collaboration from German and Austrian solidarity.

Guaranteed Health and Education

The "La Orquídea" (orchid) clinic, founded in Jinotega by the ATC Women's section, has offered gynecological and general health attention to the enterprise's women workers. Although the clinic can no longer send its ambulance to the farms due to lack of resources, the enterprise administration has made an agreement so that clinic services will be open to the women workers. The enterprise has a monthly credit with the clinic that gives the women a sense of security.

Women workers are also guaranteed pre and post natal leave, paid for by the enterprise. On the private farms this benefit is only a memory from the past or a hope for the future in the minds of the women.

And since any field can be used to play baseball, the workers at La Trampa have established a team with support from the enterprise. Moments of diversion are just as important as production and are fundamental to maintaining a sense of humor in the tense Jinotega area.

The Jorge Vogl workers believe that the enterprise's future largely depends on the training that can be offered to the workers, shareholders or not, and to their children. Each farm has a school. When the Ministry of Education withdrew the salary for the teacher on the La Unión farm, the enterprise decided to cover the cost and keep the school open. Consistent with its proposal to limit national education to primary school, the ministry only guarantees a fourth grade education in rural areas where schools still exist. This means that the enterprise will have to seek alternatives with its own resources so the children do not remain at that level. A total of 220 children attend school on the farms.

Another project is to send 20 people to the school administered by the ATC in Santa Emilia, Matagalpa, to participate in the "weekend school" program, approved by the Ministry of Education, that the center runs on weekends. "This program is fundamental because it trains the future leaders of the workers' enterprise," commented Iselda Rodríguez, of the ATC Women's section in Jinotega. The workers have also joined the Worker Peasant Education Movement, which guarantees adult education with grassroots teachers from the farms themselves, using texts based on the agricultural reality. The enterprise guarantees transport for grassroots educators to attend the movement training sessions, without cutting their salaries.
But basic education is not enough to overcome the enterprise's need for certain technicians. According to Rubén Mendieta Rayo, an experienced union member and enterprise shareholder, "The project demands investment in skilled technical labor. The project isn't just a coffee farm. It has many levels that need to be reinforced: education, health, and economic and political areas. We have to prepare ourselves without fear even if we are humble peasants."

The Union: An Effort to Redefine

No one seems to question the importance of the union at the Jorge Vogl enterprise, but views differ about what profile the union should take in this new and unique experience in worker ownership. "The union is important to organize the workers better and motivate them to improve productivity through their labor," says shareholder Asunción Ruiz.

For the moment, the union is working in a traditional manner. The struggle for workers' rights continues and generates some tensions between the enterprise administration and union leaders. Productivity could be adversely affected by the resulting confusion and antagonism.

"The union does not clearly understand that the struggle should be for property, and that the greatest victory for now is to consolidate land ownership," says union leader Ana María González, from the Corinto Farm. Administrators and union leaders are joining forces to motivate the shareholders to defend the farms and the enterprise.

The work of some union members has convinced many shareholders not to abandon the farms and has thus prevented more labor shortages, which some private enterprises are experiencing. The union struggle on the private farms is much more difficult; there they begin from zero, with almost no worker benefits, while at Jorge Vogl they are "defending what we have already won, the right to land," according to Mafaldo González, Jorge Vogl's treasurer.

The common goal is unquestionably to consolidate a profitable enterprise. "Whoever lets go of what he already has will end up with nothing, because revolutions do not happen every day," say many shareholders.

The union's fundamental challenge should be to prevent the error committed by the state enterprises during the revolution, when labor productivity was reduced to a minimum. Some administrators consider this to be a real danger, because in the last decade union efforts pushed in that direction. To fall into this trap would be disastrous for the project. Production cannot go down when social benefits are being demanded and the enterprise has a $779,000 debt.

To support the consolidation of the new property and increase productivity, the workers have had to work up to four months without pay and have also organized voluntary work campaigns very similar, according to Anastasio Muñoz, shareholder representative in La Trampa, "to the red and black campaigns during the revolution."

Looking to the future

The shareholders consider that conflicts can be resolved if there is communication between administrators and workers. A long as the shareholders elect their own representatives and collectively discuss their problems, the enterprise can plan for the future even if the present is difficult.

The appropriation of the project by the workers will be a long process full of tensions, but, as Rubén Mendieta says, "We are lucky because all of this is ours and we're paying for it."
The future depends first on productivity, which will bring new benefits and infrastructure modernization. Up to now there has been enough enthusiasm among shareholders and the administration to deal with the winds of adversity in these neoliberal times and to believe that the property will grow and new shareholders will join. This year they have begun a $75,000 cattle project with which they hope to cover their payroll.
They think about the future. "We need more houses and a water system, because our population is growing. We have to understand that the youth of today will soon be heads of families and will need land." And they think about the present, about how to improve the housing during harvest time to give the temporary workers better conditions. There is clarity that the project has to attract area workers.

For all of this, the Jinotega landlords see the Jorge Vogl as a dangerous example that should be stopped. The workers know they are involved in a long term project that requires them to look beyond the present. They are in a boat sailing to a distant port along a dangerous route, but they have a compass. They are very aware of the desires of the agrarian bourgeoisie displaced by the revolution to destroy the enterprises and the most belligerent workers. But this has not been achieved. The land and many of the workers are there, intact. There are no great economic earnings as of yet, but the political triumph has no price.


The economic crisis affecting coffee growers of every scale brought them all together in February 1994. Responding to a nationwide call from the National Coffee Commission (CONCAFE), small, medium and large growers marched together on the presidential offices to protest the government's erroneous economic policy and demand attention to the country's principal export crop.

Coffee growers from the National Union of Farmers and Ranchers (UNAG), the National Coffee Growers Union (UNCAFENIC) and AGROCAFE, as well as cooperative members of all tendencies, presented a joint list of technical, legal and fi nancial demands to the legislative and executive branches of government. The salvation or demise of coffee production will depend on the fulfillment of these demands.
The demands are summarized as follows:
* Establish an economic policy for coffee based on discussion with and consensus of the producers.
* Establish a credit policy that satisfies the needs of coffee production.
* Establish interest rates that promote investment in the productive structure:
14% short term interest rates not indexed to the dollar
10% long term interest rates indexed to the dollar
* Apply the 85,000 acre Coffee Renovation Program, under the norms determined at the time of its approval.
* Immediately turn over CONCAFE assets to the Nicaraguan Coffee Growers' Union (UNICAFE), including the ENCAFE building.
* Approve the 23,800 acre Technological Recovery Project presented by CONCAFE in 1992.
* Review and correct the costs for credit approval.
* Hand over the Coffee Stabilization Fund, established in the 1979 81 period, to producers. It currently a mounts to $20
* Restructure all of the coffee producers' debts and stop the embargo policy initiated by the national bank.
* Security in the face of armed violence in rural areas.
* Property titles for small producers so they can receive credit.

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