Industry Insight: Mexico, Where Fairtrade Began

On 15 November 1988, coffee carrying a new label went on sale in Dutch supermarkets (Canon van Nederland). The label was Max Havelaar, and the coffee came from UCIRI, a cooperative of indigenous communities in Oaxaca, southern Mexico (Oxfam). Coffee was the first product ever sold under a Fairtrade label, and it started here.

The story of that label is also the story of how Mexico's coffee industry was organised, and what happened when that organisation came apart.

When the state ran the market

Mexico created Inmecafé, the Mexican Coffee Institute, in 1958 and made it the country's counterpart to the International Coffee Organization. According to a paper by René Mercado Dávila of Mexico's Universidad Autónoma Chapingo, Inmecafé intervened in the market to stabilise prices, worked to raise growers' incomes and managed the export quotas set by the International Coffee Organization.

Its reach went well beyond pricing. Inmecafé organised growers into production and marketing units, set up collection centres, warehouses and dry mills, and sold coffee both at home and abroad. Its experimental centre at Garnica, in Veracruz, developed the Garnica variety and distributed it in the 1970s (Mercado Dávila).

A cooperative in the Isthmus

In the Isthmus of Tehuantepec, in Oaxaca, indigenous coffee-growing communities took a different route. In 1982 they formed UCIRI, the Unión de Comunidades Indígenas de la Región del Istmo, to produce, market and distribute their own coffee and other local products.

UCIRI moved early. In 1986 it made its first export of organic coffee, through the alternative traders GEPA in Germany and Levelt in the Netherlands (United Nations). It also had contacts with Solidaridad, a Dutch development organisation, and those contacts were the first spark for the Max Havelaar Foundation, set up in May 1988. One of the two people who started the first Fairtrade labelling initiative was Frans van der Hoff, a Dutch priest who had moved to Oaxaca and was involved with UCIRI.

The idea was a label that guaranteed shoppers their coffee had been bought from small farmers' organisations under fair trading conditions (Canon van Nederland). It took its name from an 1860 novel about the exploitation of coffee producers in Indonesia under Dutch colonial rule (Oxfam).

The deal behind it was concrete. According to Mercado Dávila, small European roasters agreed to buy coffee grown under organic standards by democratically run organisations, in return for a better price, premiums for organic certification and quality, and an advance of 60% of the price.

The label caught on quickly. By early 1989, 65% of Dutch consumers knew it.

The state steps back

A year later, the state stepped back. In 1989, Inmecafé stopped operating and the buying and selling of Mexican coffee was left to the market. Prices fell sharply, and most of the rural organisations that had grown up in the Inmecafé era collapsed.

Other organisations followed UCIRI, with its support. Mercado Dávila names the Indígenas de la Sierra Madre de Motozintla (ISMAM), the Federación Indígena Ecológica de Chiapas (FIECH) and the Unión de Ejidos de la Selva, and, in the late 1990s, Tzi Jib Babi in northern Chiapas, which first exported with UCIRI's help. With Inmecafé gone and the Max Havelaar label in place, producers in several Mexican organisations moved towards organic coffee.

The label spread too. Similar initiatives followed in other European countries, and in 1997 they founded an international umbrella body, Fairtrade Labelling Organisations International (Canon van Nederland). Today, more than 775,000 smallholder coffee farmers in over 20 countries belong to Fairtrade-certified cooperatives.

Mexico's coffee industry today

Mexican coffee is still in the hands of smallholders. Many organise into cooperatives, which provide technical training, access to certifications such as Organic and Fairtrade, and direct sales to exporters, partly bypassing intermediaries (Ineffable Coffee).

The intermediaries haven't gone. In some areas, buyers known as coyotes are still the first point of sale, offering farmers quick cash but often at low prices. Export companies buy from cooperatives or intermediaries and ship the coffee to the United States, Europe and Asia (Ineffable Coffee).

The state is less hands-on than in Inmecafé's day. Its support is now more indirect, through social programmes, subsidies for inputs and research through INIFAP (Ineffable Coffee). According to a 2026 USDA report, the government's Production for Wellbeing programme paid US$388 per producer per year to 181,364 coffee producers in 2026.

Certification remains one of Mexico's strengths. It is one of the largest exporters of certified Organic and Fairtrade coffees, and in 2018 Mexico and Peru each supplied about 30% of the EU's organic coffee imports.

So, how fair is Fairtrade?

According to Fairtrade International, the farmers and activists behind the first label were looking for a way to trade their products more directly. Nearly four decades on, the picture is more complicated.

As we've written in How fair is Fairtrade, really?, getting certified involves licensing fees, paperwork and audits, and there's no guarantee a producer's coffee will sell as certified or bring a better price. The benefits tend to land further down the chain, while the work and expense sit with producers.

We think there are better ways to do this, and they're already working: transparent sourcing relationships, micro-loans for processing upgrades, and buying early in the harvest so farmers have cash when they need it. Funnily enough, paying farmers up front isn't a new idea. The very first Max Havelaar deal with UCIRI included a 60% advance on the price.

What this means for us, and for you

When you see a Mexican coffee from a cooperative, the cooperative may have provided the farmers' technical training, their access to certification and their route to an exporter. Knowing who sits in that chain, and who gets paid what, tells you more about a coffee than a label can on its own.