This case describes a group of neighboring small coffee farmers in Costa Rica led informally by Elías Hernández. In August 2021, the group is weighing a decision to remain part of a large agricultural cooperative (roughly 1,000 members) or form a smaller, more local cooperative with only a dozen or so neighbors as members. They would like to make a decision before the next harvest in October, 2022. The fictionalized CobruCoop is typical of large coffee cooperatives: vertically integrated, staffed by professionals (accounting, marketing, etc.), and generally in the business of bulk/commodity production. The alternative micro-mill cooperative model leaves more processing—and freedom to add value by specialized production—to the growers themselves and has become increasingly common in recent years. Either way, like the majority of smallholding agricultural producers in Costa Rica and elsewhere, these growers have farms that are too small for them to each own the processing equipment themselves.
The case is designed to help students understand how cooperative enterprises benefit member-owners and evaluate why members might prefer one cooperative form over another.