Esperanza Dionisio of Pangoa on Cooperativism, Women Leadership, & Covid-19

Photo courtesy of Mark Corpus of Reanimator.

Esperanza Dionisio has a reputation that precedes her. Leader of the Pangoa cooperative in Peru’s Selva Central and the first ever woman cooperative leader in Peru, Esperanza is an incredible speaker and a powerful voice for gender equity and women leadership. In this Q&A, Red Fox’s Ali Newcomb and Carina Barreda talk with Esperanza about her unique position in the Peru coffee world, her singular history as well as that of the Pangoa cooperative, and the impacts of Covid-19 on the most recent harvest and shipping season.

Ali Newcomb: I’m here today with my colleague Carina Barreda, who’s responsible for quality control here in our office in Peru. We’re honored to have a very special guest, Esperanza Dionisio. She is the manager of the Pangoa Cooperative in the Selva Central region of Peru. Esperanza, you were the first ever woman manager of a cooperative in Peru and you’ve had a very interesting experience. You’ve been a big inspiration for many of us here that work in coffee. Could you tell us how you started working in the coffee world and at the Pangoa Cooperative?

Esperanza Dionisio: I studied agronomy at University of La Molina, then went to Germany to study crop physiology. I’ve always been drawn toward tropical crops. I came here to Satipo, where one of my aunts worked as a teacher. That connection helped me find cooperatives who needed agronomic help. First, I worked in Satipo, starting in 1978. In 1980, I started with the Pangoa Cooperative, but in the technical area, in agricultural extension. My passion was rural development. At the cooperative I was in a good place to do rural extension. When I talked to the farmers, the agrarian federations, and all the engineers and cooperatives, they always raised the issue of low productivity, that the coffee crop produced just 11 quintals per hectare. I started working on that. I traveled to Costa Rica and Brazil, and the Pangoa Cooperative supported me with all of this. I achieved the goal of increasing the productivity from 11 to to 90 quintals per hectare.

I saw that the farmers were receiving much more money because of increased productivity, and I wanted to make a sustainable living as an agronomist. So I opened my own office in the plaza, which was another challenge, and waited for clients, the producers.

But then the Shining Path (Peruvian Communist Party) came in 1987, and I couldn’t do that work anymore. When people would come to my office, they would tell me such and such person is dead, and because I knew them, it would bring me sadness. One day one of the militants came to my office, and I had to close it down. Then I left for Ica with my husband. Later, we came back to the jungle. We hadn’t sold anything, we closed our home and we left, because we had thought, this too shall pass. The “senderistas” (militants of the communist party) weren’t going to stay here forever.

When we came back in 1995, the Pangoa Cooperative was going through a difficult period because they had paid out the members but not as they had promised. They had promised them $25, but they only gave them $1.70. So everyone was in conflict. They came to my house to find me, and asked me to help them sell the coffee, to manage the coop.

I accepted for one year, and now I have been here for more than 22 years. We renew every year. That is a good thing about Pangoa. When my year is up, it is evaluated. The team of directors comes and gives me advice, or they tell me what I should improve, and we continue working.
When I started, the cost of the coffee was $50. So, I said, “Wow. How is this going to work? How is the farmer going to be able to cultivate the coffee at that price?” The group was buying and selling based on the C market alone, and when the price was down it wasn’t sustainable at all—but even when it was up, it wasn’t enough to save. What farmer is going to be able to save when they are always in debt? I decided to investigate and see what else is out there, because I didn’t think that the C market price was our only option. That is not the purpose of the cooperative—the cooperative is an institution that develops something more for the members. We found we could make more from organic coffee, fair trade coffee, so we decided to pursue those certifications.

There were challenges throughout that. The bank would treat me so poorly every time I would put on the t-shirt of the Pangoa Cooperative. When we would go to the bank in the early years, our balance was in the red and they would say: “Are you the manager?” “Did they hire you?” “Well, you are all walking cadavers.” Wow! Walking cadavers.

We called an assembly, and during that assembly, I told them how I was treated when I was wearing the clothes of a farmer. It is horrible. So, I said, let’s work on improving the esteem of the famer so he can get some respect. Because at the end of the day, he produces good coffee, good plantain, good rice, he has the food. He has good cocoa. And that is how I started, and the next year, it was more interesting, and the next one, even more interesting. We kept surviving and growing and in 2003 we started to export.

Carina Barreda: You’ve mentioned many challenges that you’ve faced in past seasons, from production to coffee prices to certification. I wanted to ask you, this past year, how has the pandemic affected the work of the cooperative? What new challenges have come up, both for the cooperative and for the workers? And within the cooperative, what have been the challenges both to production and distribution of the coffee?

Esperanza Dionisio: On March 16th, the lockdown was announced, and everyone had to go to their houses. We had to meet quickly, the board members and the staff. The pandemic woke up our neurons to be able to face the quick changes, and adapt to the changes.

We also saw, as a group, that some of us were weaker, others were stronger. We agreed that to face this, our knowledge must emerge to face this pandemic collaboratively. It was a team effort, from the best team that exists. That’s how we have gotten through this.

The offices were closed at the beginning, but the cashiers were here, the registers were up and running. Others would work from home on their computers, and the rest worked in production and planning. We also had to study what Covid was. What is this virus, how does it attack? We trained ourselves a lot. We all did our part, we all brought news about how things were around us, in the hospitals, our relatives, our members, and we made team decisions.

In the beginning, we decided that the producers would all go back to their farms. Once there, they couldn’t leave, so we had to buy them groceries. We contacted people from Lima, and I have a colleague who works in the wholesale market. I called her and asked her, “can you get me this order?” We checked with everyone here. Then we started, like “coyotes,” to distribute groceries to all seventeen committees. The cooperative is well organized, all 17 committees participate in training. All technicians had the phones of the members so we could all communicate. Each person in their place, using phones to see how we were going to collect the coffee, how we were going to be able to move the coffee, how we were going to collect the cocoa, and ultimately reach our goals. We did an analysis to determine, if the farmers don’t have help from pickers, the harvest is going to decrease, and what is the minimum that we would have to collect, no matter what, to be able to maintain ourselves financially?

From there, we got a loan offer from the state through Fondo Peru with an interest rate of 1%. We have received 1.7M soles plus 500,000 soles. That’s helped. We were all attentive to what was happening. We retracted to the production area. If someone was down, the rest would cheer them up, and we would go on as a group. We didn’t get sick until August, and we were very well informed. We received a very important document from a doctor in Iquitos that gave us the security to work safely. Just like a simple flu, we learned about the first phase, the second phase, the third phase. And if someone got it, we would send them home. We didn’t buy the huge quantities of antibiotics that we were planning to purchase because we received this information from this doctor that helped us a lot.

We’re also grateful to the clients who continued to purchase from us, because what would we have done if the clients didn’t buy our coffee? They were buying our coffee, and our cocoa, just like in a normal year. The solidarity and the trust made all the difference. The farmers would send their coffee, right here we would do the analysis, and by phone or WhatsApp, we would send them the number of kilos that they would have to charge. Then the farmer would come to the register and get paid.

Ali Newcomb: Impressive, and it is something that we have always highlighted about Pangoa, its people, and its team. I remember in June, I talked to Mr. Albino, and he told me a bit about the things that you have just shared with us, the impressive speed and the scale with which everything was handled during the pandemic.

Esperanza Dionisio: We sent a letter to all our customers at the beginning, in the thick of the shock and the fear, and we sent another one at the end, now in December talking about how everything went. As I said, our neurons started working, and many skills have been recognized within the staff, the members, and the directive team. It has been very interesting.

Ali Newcomb: Changing the subject a bit, you have a committee for Women’s Development, right? Could you tell me about how it started and what kind of work do you do there?

Esperanza Dionisio: The committee for Women started in 1997, with PADECO, a program from the NGO SOCODEVI, back when we belonged to the cooperative union (Central de Cooperativas). In addition to a lot of practical initiatives, we do a lot of training on self-esteem. It’s a very important subject, for women to learn how to say no, with confidence, how to talk to their husbands, and for them to be able to help their kids feel confident as well. That subject isn’t something you learn overnight, it is something you do long-term. It never ends, we have new generations, new youth, the first ones are already grown, and we have to continue working on that subject, self-esteem.
In terms of projects, the women do a lot. They raise small animals, they cultivate vegetable gardens, we have sold and continue selling coffee produced by women (“Café Mujer”). Now we also have reforestation, with 90 women and 45 hectares reforested, half a hectare of solid wood per woman. Why have we committed to reforestation? Because we want to teach our kids to love Mother Earth. We want to teach them by taking them to plant a little seedling, so when it grows, they can have a feeling of belonging and love for Mother Earth.

Ali Newcomb: It’s very important. When it comes to the subject of self-esteem, it is clearly a challenge in the coffee industry. Are there any other challenges faced specifically by women?

Esperanza Dionisio: Women face how to ensure there is food for their children, for their family, they also take on the education of their children, the well-being of their children. Well, during the pandemic it helped that they had to stay together, children and parents. But usually they send them here, to town, so the mother suffers when the children aren’t with her, and they have to take on the responsibility of their kids being down here in the town. So, yes, women have a lot of challenges here.

Carina Barreda: We also wanted to ask you about the program of rotating economic funds that Pangoa has to help its members. Could you tell us a little bit about the program, where it started and how it has developed?

Esperanza Dionisio: Yes, that is a story! Yes, we have a rotating fund that we started with money from FLO Cert in 2006. That’s for the Education Fund which now has $100,000 in members’ hands, for the youth that are studying as well as the Health Fund. Why did we decide that the children have to study? In 2005, we noticed that our members were all elders, so we started having the youth participate in assemblies. That’s when we started to worry about their education: they had to gain the knowledge so they could qualify for positions here in our cooperative business. The youth wanted to take over the leading positions, but they had to be prepared first, so they started studying for various careers. There are lawyers, pharmacists, some studied for ADEX (export association). Later, we received a really good program from the government, Beca 18. That helped a lot, because now we have a lot more professionals in the field. That is important because in that way the companies improve the quality of their service. So, we have funds for health, renovating coffee farms, for quality control, for solar dryers, wet milling areas on the farm, fertilizers, a solid fund to rotate from producer to producer. It is in dollars and with 0% interest. Each has its own purpose.

Carina Barreda: I wanted to come back to something you mentioned before, about the younger generations. It’s a big problem in the coffee sector when the young generations leave the field and move to the city, or they choose a different path, and then we only have the oldest generations as the producers. This is different in Pangoa?

Esperanza Dionisio: Yes, we have been working with the youth since 2006. It has been many years. In 2012, we complemented, alongside VECO, an NGO that took over a project for youth, to train them in production, cupping, and the entire coffee production chain, to make the coffee industry more attractive. Once the youth start to cup, they start to think about where the coffee comes from: they know it comes from this farm, so they start noticing the plant, the variety, and at times they end up growing coffee, taking care of the land and preventing the land from being sold. Our message has always been, do not sell the land. Instead, reforest it. We have been reforesting constantly since 2000, reaching one million trees, and also to have the youth who work invest their money in trees, so they can have wood and money when they are old. We don’t have retirement; therefore, those trees would be their retirement plan. So the youth see reforestation as a business, and coffee as a business, especially now with this pandemic because they had to come back from the capital to their farm. Many young families have come back to the countryside, because Lima is impossible now, a city with a lockdown, there is no work, but the field still offers work. Fish farming, small animals, the diversification of crops, plantain, pineapple, coffee, cocoa. There are now more business opportunities here on the farms than in the city and they are valuing the land.

Ali Newcomb: Thank you, Esperanza. I love that you, as a cooperative, approach everything from an integrated perspective. The project that you have with the youth, environmental aspects, financial aspects, and that makes you much more solid.

Esperanza Dionisio: At the end of the day, we are a group of people, families, we have to exist, and if we want to exist in the market, we have to help each other and see the perspective and change strategies constantly so we can continue to go forward. You know, review the vision. This year, we are in the year of re-engineering, and Covid has accelerated the re-engineering for us.

Ali Newcomb: Yes, faster. That long-term vision is what brought you where you are today and what helps you to maintain and grow. This takes me to a question about prices, because with Pangoa this year, we tried out something that we had never done before. We started with Pangoa about three years ago with our usual pricing structure, which is to pay different prices for different quality tiers: one price for 84 and 85 point coffees, another price for 86 and 87 point coffees, etc., and what happened is, in reality, with all the work that comes with producing and selling microlots, the base price for those coffees wasn’t all that much more when compared to what some of your other loyal customers were paying. So last year, you and Albino proposed the idea of increasing the base price, and we decided to have just one base price that is much higher and differentiates us from your other customers instead of differentiating between an 85 and an 86. I wanted to know what, now that we’re at the end of this season, how did it work for Pangoa?

Esperanza Dionisio: It went very well. The higher base price is great, because it helps the farmer to differentiate himself from the rest. The technicians go and teach them so they can produce good quality coffee, and they make the effort. For the farmers who produce specialty coffee, not all of the coffee production is special. As the name itself says, one part of the production is special. That small part has a special price. And for the farmer that wants to do the work, it’s very good. Encouraging them with price is very good, and I thank you for that, and I thank your customers who are supporting Pangoa with that price.

Carina Barreda: Pangoa has demonstrated being an exceptional cooperative, a very successful case in the domestic and international markets. Coming from you, what advice would you give to other managers from other cooperatives, that are hoping to grow or become more productive?

Esperanza Dionisio: First, observe, see, talk, work as a team, and get everyone’s vision. That vision has to go along with the vision of the manager. If the manager doesn’t share the vision of the team, then there is a divorce there, so there has to be a union of visions, to be able to grow as a business. Another aspect is to comply with the cooperative principles. If we are a cooperative, we have to follow the Rochdale principles, that they fought for in 1844 and that we embody today. The manager should be a leader without a position. Do things right, and it is that easy. Work as a team, members, directive team, staff, see the strategies and be able to go on in the business.

Ali Newcomb: Thank you very much. Anything you want to ask us or share with us?

Esperanza Dionisio: I want to thank you for this interview, and to tell you that cooperativism is a very good system. It’s something that every organization can learn from.