The Cauquenes Cooperative began in 1939 after a devastating earthquake destroyed much of the wine industry infrastructure in Southern Chile. The group was initially formed with 35 cooperative members. These farmers live in the coastal interior dry land of Chile in the Cauquenes province. The region has approximately 42,000 inhabitants whose main sources of income are agricultural and livestock. The region has limited rainfall, and therefore farmers deal constantly with problems of soil erosion and lack of access to irrigation water. Because of the arid land, vineyard productivity in this area is only one third that of grape yields in the major wine production areas of the Maule Valley and San Clemente. For example, average yield of the upland interior is 6,000 kilograms of grape per hectare, but in the central area of the Maule Valley yields reach upwards of 20,000 kilograms per hectare. The social implication of lower yields in Caquenes is that grape prices are driven down by higher soil productivity (and higher production volumes) in the better off areas of Maule Valley and San Clemente. One individual farmer working on five acres or less cannot earn a good living because prices are set by the large vineyards of the area every year. For a number of seasons, farmers of generic wine grapes in Cauquenes are not be able to cover their production costs, which in return results in the eventual deterioration of their personal assets and quality of life. For these farmers, the only option left to earn a more stable and fair price is to sell to vineyards like the Cauquenes Cooperative, which processes and produces wines for international markets. Fair Trade allows small producers to implement a workable business relationship with vineyards (where their sales cover the cost of production) and allow them to continue making a living in the viticulture industry.
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