Can Free be Fair? The Road to Liberalization and the Way Forward for Mexico’s Coffee Farmers

Since the collapse of the International Coffee Agreement (ICA) deregulated the global coffee market in 1989, Mexican coffee farmers have suffered reduced incomes, less autonomy, and more volatility. This deregulation coincided with a rapid liberalization strategy led by Mexico's government. The coffee trade experienced a transition in power from producers to consumers, and Mexican farmers have been restricted by private traders and roasters with higher market power. Attempts have been made to improve the livelihoods of coffee farmers in Mexico and around the world, most notably the Fair Trade movement and a shift towards organic and specialty coffee production. However, research calls into question the efficacy of fair trade for farmers, and the prices received by producers remain consistently lower than their pre-1989 levels. This research project seeks to put the coffee crisis in the context of economic and political changes in the latter part of the twentieth century. It analyzes both the events leading up to the decline in the livelihoods of Mexico's coffee farmers and responses to it. While liberalization marked the beginning of a new set of struggles for these farmers, this paper argues that this decline takes its roots in the shortcomings of Mexico's import substitution model and the challenge of recovering from the 1982 debt crisis. The plight of Mexico's coffee farmers is due to both internal economic and external geopolitical pressures that are not limited to the coffee trade itself. The changing dynamics of the Cold War and the influence of the United States in regional affairs have held particular importance. This study concludes by arguing that the Fair Trade movement, while flawed, has the potential to benefit Mexico's coffee growers under the current politico-economic conditions, but it must be modified to better align producers and consumers.