Click here to read Part I of “Through the Avocado Obstacle Course” by Jessica Jones-Hughes
Obstacle #2: Corporate Control
Challenge: You must outsmart representatives from the avocado multinational companies who are sprinkled throughout the hills. Your challenge is to run past them backwards with a blindfold on while holding your box of avocados. Watch out for the surprise holes covered with tempting bags of money strategically placed along the route!
Giant avocado agribusiness has a heavy presence in the region. The climate in Michoacán is ideal for avocado production. The combination of various altitudes, a short rainy season and well-nutritious soil, produce some of the highest quality and most delicious avocados in the world. For this reason, Michoacán is the avocado capital of Mexico. The story of avocados parallel that of many other commodities: giant corporations that receive the majority of the profits and control while keeping producers in poverty.
Huertos de Aguacate
Multinational control of avocado huertos (farms) is evident. Farmer after farmer told us stories about how their only option is to sell to the big companies who pay them the “market price”. This price is typically low and fluctuates greatly throughout the season. Producers do not have enough information to negotiate an appropriate price; the multinationals take full advantage of this fact. The price is further controlled as companies pay producers based on the quality of the product. Category I avocados are the highest quality – the ones you see in the grocery store. Category II avocados receive a lower price and Category III are typically sold domestically in Mexico at the lowest price.
When producers do not control the quality inspections they are forced to accept whatever information the buyer provides. The big companies have always reported that only 40-50% of the total avocado volume they purchased were Category I. When Pragor transitioned to managing the process themselves, they found that 85-90% of their avocados were eligible for Category I. Consequently, they now get paid the higher Category I prices for 85-90% of their avocados instead of the 40-50% they received from multinationals.
Another point of control in the avocado process is the packing house. The large corporations own and control their own packing houses where they clean and inspect avocados. There they categorize, size and eliminate avocados with quality issues. Avocados are then packed by size into boxes and inspected a second time before leaving for the United States. All packing houses must be USDA sanctioned, meaning they must have USDA inspectors on staff in order to ship to the US and have a separate packing area for US-bound product. This leads to packing houses that are large, expensive and limited in number (only 30 in all of Mexico). When Pragor sought out a packing house that would work directly with them, they faced another challenge: the large corporations’ packing houses only process avocados for their companies, and the rest of the packing houses were controlled by the mafia who charge an “extra” high price.
With perseverance, the producers were finally able to contract with a packing house that was not controlled by the drug cartels, and was willing to work directly with a small farmer co-operative. The only drawback is that it’s a 2.5 hour drive from the nearest farm. Despite the extra cost of transportation, it is worth the ability to manage and observe firsthand the packing of their avocados. The packing house costs are higher, but the increased income from selling 85-90% of their avocados as Category I makes it worth the effort.
Tomorrow, read Obstacle #3: The USDA