Introduction

Coffee cultivation in Mexico stands out for its economic, social and environmental importance. The value of production in the 2011- 2012 cycle amounted to five billion pesos, which amounted to 1.1% of the national agricultural PIB (^{SIAP, 2011}). Coffee production generates over 700 000 direct and indirect jobs, they depend on around three million Mexicans in the entire production chain (^{SPC, 2006}). More than 90% of the area cultivated with coffee is under diversified shade, which becomes the refuge of flora and fauna endangered (^{AMECAFE, 2011}). The major coffee states are Chiapas, Veracruz, Oaxaca and Puebla, in order of importance. The acreage in the country is divided into 58 regions and 404 municipalities (^{SIAP, 2011}). In the state of Veracruz, there are 10 coffee growing regions, and within these regions, Huatusco ranked as the most important in terms of production with a cultivated area of 28 000 hectares in the 2011- 2012 cycle; in addition to 12 800 producers dedicated to the aromatic (^{AVERCAFE, 2009}).

Small producers are restrictions on access and inserted favorably in dynamic markets (^{Ramírez et al., 2006}). These difficulties are particularly related to: i) limited to the factors of production, ii) weaknesses of their human and social capital, iii) the costs and risks of high transactions and iv) their weak bargaining power linked to a strong asymmetry information (^{Berdegué, 2000}). The role of producer organizations increasingly focusing on addressing the challenges posed by small producers and to facilitate, through collective action, access to global markets and a more complex operation (^{Rondot and Collion, 2001}, ^{BM, 2003}; ^{Bernard and Spielman, 2009}; ^{Ampaire et al., 2013}). Thus, in many countries, strengthening producer organizations is a challenge for development of farmers and reducing poverty (^{World Bank, 2003}).

The economic organization can be defined as an association of small-scale producers with any legal entity or not, which are oriented to business development and seek to generate economic surpluses and concrete benefits for its members and the communities where are present (^{Camacho et al., 2007}; ^{Gottret et al., 2011}). Also, producer organizations may perform other support functions producers such as: improving agricultural production practices, facilitate producer access to inputs and services, improve production technologies, realize the financing and represent the interests of producers within the framework of the negotiation of agricultural policies. All this contributes to increase the income of farmers and to obtain a series of services that will help them grow and increase their capacities (^{Rondot and Collion, 2001}; ^{BM, 2003}; ^{Ramírez et al., 2006}).

The organization of coffee producers in Mexico was it promoted by the Mexican Coffee Institute (INMECAFE) from 1958 to 1989. From 1989 a period of deregulation of the coffee market that culminated in the dissolution of the institute in 1993. Began after this date, some of the facilities that were operated by the institute were transferred to organized groups of producers and the private sector (^{Pare, 1990}; ^{Hoffmann, 1992}).

For a long time the end of these producers was union organizations, aimed at seeking grants and recognition as a means of representation and political dialogue. The objectives of an economic nature were nonexistent and not glimpsed the developing markets, improve production processes or reduce the costs of processing and sale of aromatic (^{Eakin et al., 2006}). In the context of the price crisis in the coffee sector in 2001, new organizations with a more economic nature which sought to counteract the negative situation arose producers; for it will instrumented different strategies: search for differentiated markets, improving quality, vertical integration, value added, promotion of culture of national consumption and the introduction of alternative crops (^{Pérez-Grovas and Celis, 2002}).

The competitive position of the organization becomes relevant considering that the main reason leading to the producer to enter and stay as a partner in an organization is the economic aspect. An organization will be able to provide benefits to its members only if you have business and is able to survive and stay in a highly competitive environment (^{Alic, 1987}; ^{Bermeo and Bermeo, 2005}; ^{Cabrera et al., 2011}). For an organization to achieve sustainability, prosper and be effective in time there are three basic pillars: 1) the existence of an ideology, culture or central philosophy; 2) clear value proposition, mission or set of fundamental reasons; and 3) the ability to deliver value to its partners (^{Muñoz et al., 2010}).

Materials and methods

The study was conducted in the region of Huatusco, Veracruz covering the municipalities of Huatusco, Ixhuatlán del Cafe, Totutla, Tlaltetela, Zentla, Tenampa, Comapa, Tlacotepec de Mejia, Sochiapa and Tomatlan. The collection of information was carried out in 2012. With information from regional council of coffee in Huatusco a list of producer organizations in the region was performed. The interviews with regional leaders were made in the coffee sector to identify which organizations were active; i.e. those that were providing a service to members. From the list thus formed, which had an economic orientation to proceed with in-depth study were selected.

An economically oriented organizations were given a certificate of self-adapted from the one proposed by ^{SAGARPA (2009)}, where the management of the organization in the organizational, administrative, financial, commercial and operational axes were analyzed. Each of these axes joined by a number of variables that were scored on a scale from 0 to 2, where 0 means that there is no documentation indicated or not the activity is performed, 1 existing documentation is incomplete or activity takes part, and 2 that the documentation is complete or activity is fully realized. To obtain the information in this section, in addition to interviewing leaders, managers, technical staff, administrative staff and partners, minutes of meetings, reports and logbooks of the organizations were reviewed. The value network is composed of four groups of stakeholders: customers, suppliers, competitors and complementary.

(own calculations based on ^{Nalebuff and Brandenburger, 2005}).

Figure 1. Network value of producer organizations 

The providers were defined as cherry coffee producers supplying organizations. The 40 surveys were applied to members of three of the most important organizations, considering the number of partners that integrate and for the time been operating. The producers interviewed were selected by purposive sampling, selecting those who were referred by the leaders of the organization as important actors in the process of emergence and development of the organization. By using business model compared to producer organizations competing with companies from the perspective of competition for supplier (^{Cassadesus- Masanell and Ricart, 2007}). For this strategy supply organizations and competitors analyzed. Five categories were defined: price hedging (CPre), payment (CP), logistics collection (LA), quality policies raw material (Ca) and services (S).

Semi-structured interviews with the authorities of government institutions responsible for promoting and supporting the cultivation of coffee and located in the region of studies, researchers and specialists were applied, since they represent the completer actors. These actors were chosen by references provided by the leaders of organizations. In determining the competitive position scores on internal management (organizational, administrative, financial, commercial and operational) and taken aspects of network analysis value (strategy supply, the strength of the sales network and management retook of complementizes).

With the score obtained for each of the indicators a matrix was described to each of the organizations was developed. The maximum score that could get the organization meets all the criteria were 1 000 points. Based on this, four ranges were defined where they were located organizations according to the score obtained: 1) 0-250: very weak competitive position; 2) 251-500: weak competitive position; 3) 501- 750: average competitive position; and 4) from 751 to 1 000: strong competitive position.

Results and discussion

In the region of Huatusco 14 producer organizations that bring together 43% of the farmers in the region they were identified; however, only six are active, and of these, four out economic and productive activities. According to its internal characteristics they were classified organizations in to three types. The first type is called management organizations. Within these nine organizations they were located. They are called "managers" because they do not have business and aims to negotiate resources and services for its members. Most were created from 2008 to access to public resources and were induced by external actors. Internal coordination is based on little coercive informal rules, so the involvement of partners in the activities of the organization is not guaranteed. Such organizations are financially fragile and usually depend on the outside. Of these organizations only one was active.

The second type was classified as community development organization. Within this type it was found only an organization. The objectives of this organization are focused on developing families of its members and their communities, combining economic activities around the cultivation of coffee, management productive projects and community development assistance. To function makes strong alliances with external actors to get training and credit.

The third type is called economic organizations. Within these organizations four organizations these organizations are tripping over themselves to provide services around the production, processing and marketing of coffee are located. They have gradually professionalized and have acquired expertise in the coffee chain. Internal operating rules are formal. The membership criteria of the partners are based on a commitment to deliver its production to the organization; however, the rules governing this relationship does not allow to avoid opportunistic behavior of partners often do not hesitate to sell to other companies if the conditions are more favorable to them. The granting to members of the services needed for production (funding, supplies, training, technical assistance, etc.) or the coordination of those services provided by external actors has been an important element sustainability of these organizations.

Economic organizations within organizations were found with medium and high degree of development (Table 1). Organizations with average development level comply with legal matters. Functions are in supervisory boards and management. The meetings are formal through assemblies in which reports are issued. And they have a defined mission statement, vision and values chart. The partners contribute to the assets of the company through discounts or fees. It has technical, managerial and administrative team in consolidation or hire outside consultants to help the organization accomplish these functions. Participate in the market with differentiated products and services that partners focus on the processing, marketing, financing and technical assistance.

Table 1 Organizational Performance and degree of development of economic organizations. 

The high degree of organization development differs from organizations with average degree of development for their good performance in the administrative and financial management. The operating rules are formal, which are included in internal regulations. They have an established professional management. Bases its strategy on track a business plan. They have application procedures manuals. Apply internal controls over customer and partner satisfaction. Trade relations with customers are more consistent. Its economic position is solid and stable. It has some leadership in the area and has had an increase in its equity capital. Economic organizations have an area of influence in 17.5% of the cultivated area in the region of Huatusco region. The main suppliers for organizations are partners, through which hoard 75 to 100% of the production process. In the 2011- 2012 cycle they will hoard 10.9% of the production in the region for that cycle (Table 2).

Table 2. Supplier of producer organizations. 

In any type of company providers are individuals or companies totally detached from the activity of companies that provide products or services. However, producer organizations, suppliers relationship with the company is owned; that is, the organization created by these suppliers for the processing and marketing of its products (^{Mozas, 2000}). This creates tensions between the organization and the partners that have to do with the clash of interests between the individual and the collective (^{Camacho et al., 2007}). On the one hand, the interests of the partners have to do with the need to increase their income and on the other hand, the company as such seeks to ensure its sustainability for requiring cover its costs and generate a surplus for capitalization and reinvestment.

Partners are not likely to make financial contributions to make investments, they are not likely to allocate funds to increase capital or reserve them for self-financing. In addition, the socio-provider looking to get the best price for their product so no doubt allocate its production to other companies if the conditions are more favorable. This creates problems for suppliers and breach of contract. To avoid such conflicts the organization must be able to shape a system of rules and standards governing the relationship between partners and between the organization with the outside (^{Berdegue, 2000}). This system of norms and rules involves: 1) well-defined limits; 2) provision congruence between rules "costs" and appropriation ("benefits"; 3) participation of partners in changing the rules; and 4) graduated sanctions for violation of the rules.

Establish clear and effective within the organization and with the outside world limits, it means regulating who are those who are entitled to the benefits of collective action and to face their costs (^{Berdegué, 2000}). In the cases studied, the organizations established in their statutes who are considered as partners; however, not all (O2, O3, O4) have a regulation where the obligations thereof to receive those benefits. In most cases only some partners bear the costs, but the benefits can become partners alike. In addition, in the case of the purchase of conventional coffee, they are paid exactly the same price and under the same conditions to members and nonmembers; however, the partners are those who are required to attend meetings and to make capital contributions. This situation constitutes a disincentive to bring to the organization.

The congruence between rules of supply and ownership implies a balance between the contribution to the organization and the benefits to collective action (^{Berdegué, 2000}). Again, all organizations formally declare this intention, but they work so that the benefits are not commensurate with the magnitude of the effort and level of commitment required of members. The consequence is again that the partners gradually cease to contribute to the organization or do so to a lesser extent. This is a difficult issue to resolve, due among other reasons to frequently profit expectations by which the partners originally decided to engage in collective action, ends up being replaced by other criteria benefit. For example, 64% of respondents’ partners said the main reason that prompted them to join the organization was access better prices by selling their product; however, the partners argued that this goal had not been achieved, that prices had not improved or were not different from those perceived unorganized producers.

^{Camacho et al. (2007)} believe that organizations should not focus its strategy only in granting a better price to their members, but should generate a number of indirect benefits, because if the company fails to generate visible benefits short term, the partners stay away from the organization, and this, it will weaken. Partners provide tangible benefits (attractive price and other services) and intangible (pride, self- esteem) to develop a sense of belonging to the organization that is reflected in concrete attitudes that contribute to the sustainability of the company.

To the members of the organizations were asked about the benefits they had gained by participating in the organization, responses were varied. The largest proportion of respondents partners (37%) believes that it has not received any benefit; these partners are those who aspire to better prices by participating in the organization; however, are also those who are not certified and conventional coffee sold to the organization. Health programs are regarded as an important benefit; however, only one of the organizations (O1) provides such services. We also consider it important to obtain new knowledge especially in matters of field production and quality through training and technical assistance; improved housing and lower costs.

Moreover, it is necessary that systems of rules and regulations have the social legitimacy; that is, they are the same partners who define and modify the order to be operable, punishable and low transaction costs (^{Berdegué, 2000}). Thus, decisions are taken and the partners necessarily feel bound by the agreement. All organizations surveyed are characterized by a system of decision-making involving most partners regularly and permanently. Basically, the mechanisms are of two types: annual meetings of all partners or in smaller groups, frequent but informal meetings. The rule system must also have gradual and effective sanctions for non-compliance of the commitments (^{Berdegué, 2000}). In the cases studied, only the O1 and O3 formally have these rules and their practical application is observed. In other organizations there is a system of self-monitoring. This is based on the fact that the partner knows that if he commits a foul, there is a high probability that it will be detected and that the result will be guaranteed a penalty.

The first competition that producer organizations are facing, are traders who have traditionally purchased crops partners in the production areas (^{Rudas, 1991}). In this regard, the partners interviewed, 34% sold all their harvest to the organization of which he is a member, that in the 2011- 2012 cycle; the rest sold all or part of their harvest to other companies. In Figure 2 supplier model of producer organizations and presented competitors. The competitors have advantage in logistics of collection, payment policies and quality of raw material. As for logistics collection, competing companies have collection centers distributed throughout the region and transport equipment needed for production at the farm level. In contrast, only two organizations O1 and O4 established shopping centers in major communities where they are located or residing partners. O2 and O3 organizations receive the benefit production.

Figure 2. Models supplier of producer organizations and competitors. 

The competitors have the ability and financial liquidity to offer a better price and pay cash (auction). Organizations typically use the auction mode with free suppliers and mode of payment or consignment with partner suppliers. When consignment, the producer decides when to sell your coffee and paid once the customer has paid. In the case of advance payment, the producer is given an advance and should sell coffee at a higher price the producer receives an increase that is given with the settlement.

The logistics of collection and payment terms are very important for suppliers and are the main reasons why members of organizations sometimes decide to sell all or part of their crops to these companies. Producer organizations have been putting greater emphasis on providing other benefits to producers, including price hedging, financing, training, technical assistance, supplies, health programs, education, etc.

Competing firms do not deal directly with producers, the collection of production comes from 70 to 80% of intermediaries. This allows them to reduce their transaction costs by not having to collect the scattered production. Recently these companies have been establishing other relationships with producers, beyond buying and selling, such as providing technical assistance and financing vegetative material. They are also undertaking projects to support producers in certifying their plots, mainly organic certification, 4C and uzt Kapeh; for that we have supported aid Nestle and Starbucks, who serve as their clients. Notably producers they work with are those with more than five hectares. One of the competitors (EC3) has undertaken projects with producer organizations for fair trade certification. The strategy to get closer to producers and seek certification of the plots by competing firms, threatens to organizations because until recently these were the competitive advantages that had producer organizations.

Economic organizations are linked to different markets (Table 3). In the 2011- 2012 cycle, 61% of what is produced by these organizations marketed in certified markets within which include organic and fair trade. While most organizations are linked to different markets, they have failed inserted efficiently and stably. Only O1 organization has strong and consistent relationships with customers with which it has marketed production for over 10 years; This has allowed it to establish commitments to its customers that go beyond buying and selling such as financing, training, technical assistance, vegetative material, etc. O1 and O2 organizations have the infrastructure and capacity to produce green coffee quality and have the equipment to produce roasted and ground coffee, packaging and own brand; however, could not yet establish business relationships with their customers’ long term. The above, has pushed to sell most of their production in the form of green coffee to the usual intermediaries.

Table 3. Volumes of production of economic organizations and market linkages. 

The complementizes that add value to the product in terms of quality and differentiation have had a positive impact on the positioning of organizations because certifications have allowed greater appreciation of coffee. However, not all organizations have access to these certifications, because they involve improving organizational, productive and management structure of the company and additional costs that are not always reflected in higher income for members. Of all the organizations, O2 has little capacity to manage and properly articulate the complementary agents, so generally you do not provide added strategic value.

The economic organization can only achieve their social purposes if such company survives, and it must be able to adapt and compete in the market (^{Camacho et al., 2007}). The inner workings of organizations and articulating your value network determines its competitive position. Figure 3 graphically presents the competitive position of each organization, the size of the spheres indicates its competitive strength. The position relative to "Y" axis represents growth prospects. O1 organization which has a weaker competitive position mainly due to shortcomings in the organizational, administrative, operational management and the fragility of its sales network. It has the chance of passing the state of weak competitive position middle position since partners are fully involved in the processes and activities. This requires professionalize their management, acquiring skills and bond with complementizes agents.

Figure 3. Competitive position and growth prospects of producer organizations. 

The O3, O4 organizations are at an average competitive position. Although different factors that are determining their competitive position, share a common trait, its administrative mismanagement. They lack a consolidated technical and administrative body. Of the two, O4 is the one most limiting. This organization although already embarked on the process of export certified product volumes sold through this channel are very small. This situation has created a climate of uncertainty and lack of motivation in partner; some of them have failed to deliver their production to the organization and others have stopped participating in activities and make contributions.

The O3 organization has broad prospects for sustainability, especially for the high involvement of partners in shaping the social capital. This organization is working on the development of capabilities in their partners and children, in order to form a technical picture that comes from the same community. The O1 organization is the strongest of all. Through its 20 years of operation it has been able to consolidate its network of clients and continues to work on providing its partners an attractive value proposition. Its main challenge now is to ensure that the partners are really appropriate the organization and have a good system of government that operates transparently, achieve a solid internal connection and a strong partnership. Among the necessary values, inner confidence, leadership, equitable participation of members and collective vision are some of the most important.

Conclusions

Nine of the fourteen coffee organizations identified in the region of Huatusco, Veracruz were set up to manage various supports for coffee growers. These do not promote their economic development and building social capital. Only an organization engaged in business activities around coffee and additionally promotes productive projects and assistance among its members.

The organization has more developed a consolidated professional management, consistent trade relations and a more solid and stable economic position. Organizations with average degree of development are deficient administrative and financial management. Among these, the organization with weaker competitive position does not establish relations with other actors in the value network what hinders access to important resources such as training, technical assistance, financing and information on market trends.

While most organizations involved in certified coffee markets, the relationships they have with their customers they are not yet consolidated their problems supplier. Sustainability of its strategy of product differentiation and establish long-term customer therefore depends on improving its procurement by.

The main threat to economic producer organizations in private companies that are establishing relationships with producers beyond the buying and selling of production such as technical assistance, training, financing and provision of inputs and efforts are under certification with these producers, seeking to satisfy specialty coffee markets.

The organizations need to develop to their partners as efficient suppliers offering incentives that enable them to improve their productivity, quality and sustainability. Additionally they need to develop a strong capital and strong internal cohesion to ensure the sustainability of the group and deal with any crisis. Alliances of organizations with other actors in the value network is an important strategy in terms of sustainability, access to resources and complementarity of efforts.