The sweet spot: Latin America's poorest farmers find rich niches in the United States and Europe. (Exporting).

What's in a package of roasted coffee beans or a chewy chocolate bar these days? Perhaps a bit more profit for struggling small farmers all over Latin America, thanks to increasingly savvy trade networks and an awakening interest among producers--often indigenous people--in organically grown and fair trade exports.

Fair trade associations in Europe and the United States guarantee higher minimum price than commodities markets to farmers in poor countries. Organic foods--many of which are also sold via fair trade arrangements--command a premium since consumers seem willing to pay more for food produced using no pesticides, hormones or fertilizers and on farms meeting ecological standards designed to reduce pollution and erosion. Consumers of both fair trade and organic foods, their proponents say, tend to be socially conscious people willing to plunk down the extra dollars.

It's a drop in the bucket, for now: Around 1% of coffee in the world is now fair trade coffee, and organic food sales in the United States, while growing, are around US$10 billion, compared to $460 billion a year spent on groceries in the United States, says the Organic Trade Association.

But producers are optimistic, as are fair trade promoters who have toiled for the past decade to develop markets for their clients' increasing variety of wares. "This is globalization from the grassroots, a different kind of trade, one that respects cultures and the environment," says Oscar Mendieta, general manager of Bolivia's Association of Ecological Producer Organizations, which represents approximately 25,000 indigenous growers exporting 7,000 tons annually of organic fruits, cereal, alpaca fiber, clothes, cocoa and coffee.

Growers got a big boost in October from the U.S. government, which decided on a single label for foods that meet organic standards. Previously, consumers relied on a patchwork of state-sponsored labels. Major U.S. food companies, like General Mills, have responded by launching organic brands to capture the market, estimated to be growing at 20% annually and expected to top $20 billion in the United States by 2005.

Latin American companies like the indigenous-owned and operated El Ceibo, in Bolivia, are setting the pace. Last year, it sold more than $1.5 million worth of high-quality, organically grown cocoa and chocolate to Europe, the United States and Japan.

Many larger exporters would like El Ceibo's problems. The company says it's selling at nearly full capacity, and foreign sales increase each year. "We need to help our suppliers to expand the land area devoted to cocoa growing," says Bernardo Apaza, export manager for El Ceibo.

Apaza attributes much of El Ceibos success to the lucrative specialty market interested in paying higher prices for products grown in an ecologically sound manner. Each year we go to the BioFach Organic Trade Fair in Germany and make almost all the contacts we need to sell our products," Apaza says.

Franklin Alcala Pommier works on developing exports at the Bolivian government's Centro de Promocion. "Many now have a better understanding of markets abroad, that they can make more money by exporting," he says. "At the same time they have received international technical and financial assistance in recent years to help put out products of good quality."

Come together. Of Latin America's 40 million indigenous persons, only a handful actively export, and most sell handicrafts. In Mato Grosso, Mato Grosso do Sul and Acre states in Brazil, however, Yanawama natives produce urucum and andiroba seeds for Aveda, the natural cosmetics company. Brazilian organic agriculture totals an estimated $70 million annually.

In the Dominican Republic, a collapse in cocoa prices in 1988 pushed 9,000 small farmers representing 126 villages to band together, forming the Confederacion Nacional de Cacaocultores Dominicanos (Conacado). The group sought a fair trade label for its cocoa output and started exporting under fair trade standards by 1997. In Paraguay, sugar producers have made similar arrangements.

Meanwhile, on Chile's southern coast, a small, 1,800-person Mapuche community in Tirua two years ago began exporting a ocean algae called cochayuyo to Taiwan and Japan, where it is not only eaten but also used as a key ingredient in facial and skin creams. By exporting, the village is fetching a 50% increase on the price per pound of the seaweed.

Looking ahead to other exports, the tribe has formed its own chamber of commerce. "Mapuches are discriminated against in all aspects of Chilean society. We decided to do something to help our-selves," says Francisco Painepan, president of the recently formed Mapuche Business Association. "Eventually, we want to be on the same level, to be seen as an equal, with every other business association in this country."

At the top of the list of fair trade products is coffee, and the overwhelming majority of fair trade coffee stems from Latin American indigenous peasant communities in countries such as Mexico, Colombia, Guatemala and Peru. This year, the United States is expected to import some 10 million pounds of the beans, about 1% of U.S. coffee consumption.

Fair trade-certified importers pay $1.26 per pound to cooperatives in the network, and $1.41 per pound if the coffee is certified organic (about 80% meets the organic standard). Roasters pay the trade network a licensing fee of 10 cents a pound to cover certification costs, including annual visits to farmer cooperatives and promotional efforts to increase consumer demand, according to Oakland, California, fair trade certification group TransFair, which pay its own overhead with philanthropic grants.

"Fair trade importers often pay the small producers five times as much as the market rate since they cut out the middleman and buy directly from cooperatives," says Kari Hamerschlag, national campaign manager for TransFair. "Fair trade assures them a living wage, which keeps their children in schools, their families fed and help saves the environment, as fair trade farmers grow coffee beans in an ecologically sustainable way."

Almost no market is too far. Luis Ticona, who grew up poor in a rural Aymara Indian community just outside of La Paz, exports for indigenous llama and alpaca herders in the Andean highlands. Ticona recently closed a $1.5 million deal in Shanghai with Chinese clothing producers to export to them 250 tons of washed, carded and combed alpaca fiber. The contract will provide an income boost over the next year for the 1,500 indigenous families who are members of the Camelids Production Co. (Coproca).

Ticona says Coproca's phone is ringing a lot more these days. "We are proof that indigenous [people] are capable of organizing an industry and exporting to other markets," he says. "We are advancing constantly and this is a great satisfaction for us."

Middlemen. Latin America's native groups need only look to Ecuador to see the potential. By far the most successful indigenous exporters have been the Otavalans, a Quechua-speaking indigenous group in northern Ecuador.

Their entrepreneurial skills can be traced back to the late 1800s, when some Otavalan families discovered they could compete with the large-scale imports of cheap British cloth by making tweed suits for the businessmen of Quito out of a higher-quality domestic cloth, "Their real talent is not that they can make great handicrafts," says David Kyle, a sociologist at the University of California at Davis. "It's that they have cut out the middleman and are involved in every level of the business chain."

For Herman Choque, an Aymara llama and alpaca herder in Bolivia's Oruro province for more than 30 years, the time has come for millions of native producers to reach new markets, something declining tariffs from free trade deals and fair trade networks facilitate.

Globalization is not necessarily a one-way street of foreign goods swarming in, says Choque. Properly managed exports--even on a small scale--can finance a better quality of life. "All we need," he says, "is a market."