San Sebastian Rio Hondo, a Zapotec highland village like many others, has traditionally supplemented its agrarian way of life through the wool industry. Long famous for its rich tradition of Indigenous handwoven textiles, Oaxaca has nevertheless fallen on hard times, along with most of rural Mexico, partly because of policies promoting urbanization and undermining the traditional rural way of life.

In San Sebastian, the hardship has been severe: as of the 2010 census, 55% of the population lived in extreme poverty, more than a third had not completed primary school, and more than two-thirds did not have a high school education. Unemployment continues to be high, compelling a high rate of migration out of the state and out of Mexico. Among the women, job opportunities were practically nonexistent.

This was the context that Eliseo "Cheo" Ramírez was born into. In his parents' and grandparents' time, villagers grazed sheep and helped cover expenses by making woolen textiles. In the 1970s and '80s, however, the Mexican government initiated a program to plant pine trees for lumber, and the pastures and native forests began to shrink. The industrial clothing industry began producing cheap synthetic yarns. Spinning and weaving, once a staple in every home, fell by the wayside. The children of weavers and farmers began making their way north to work in the U.S. as meatpackers and migrant farmworkers.

Ramírez' prospects for employment were so grim that he set off from home in 2006 at age 16 for the U.S., crossing the Sonoran Desert and nearly dying of thirst. The experience proved so traumatic that he never made the attempt again. Now 32, he has good reason to remain home: he's the chief operating officer and head of sales and part of the core team of Khadi Oaxaca, a farm-to-garment nonprofit textile enterprise aiming to regenerate the village way of life in a sustainable way. He no longer harbors illusions of an American Dream; his dream nowadays is to help generate opportunities that keep more of his people at home with their families.

Khadi Oaxaca follows what is known as the Gandhian economic model in three ways: It focuses on producing gainful employment for many instead of big profits for a few; it strives to build local autonomy and resilience at the village level, building in a cash supplement that supports the traditional agrarian life; and it follows the Gandhian strategy of making clothing from scratch, with workers spinning their own thread from organically grown cotton. And now, with the onset of the COVID-19 pandemic causing jobs to dry up everywhere, this handspun thread has become a lifeline for the local economy.

Khadi Oaxaca is the brainchild of the Mexico-educated son of a U.S. industrialist, Mark "Marcos" Brown, and with his wife, Kalindi Attar. Brown had traveled to San Sebastian as a teenager in 1974 and developed a lifelong relationship with the village. He later spent time in India, where he learned about khadi, a handspun cloth that became a cornerstone of the Indian independence movement. He lived for two years in Gandhi's ashram, studying under one of the Mahatma's last living disciples, and learned about how Gandhi's satyagraha movement used khadi as a sign of Indian national pride and resistance to the exploitative practices of the British clothing industry.

As Brown studied Gandhi's movement, the connections to the wasteful global "fast fashion" industry quickly became apparent, in the ways it has contaminated the planet and degraded the lives of millions of sweatshop workers. He vowed to live his values, learning to spin and to weave, making his own clothing, and thinking of ways in which khadi might serve the poverty-stricken people of the Oaxaca countryside that he'd come to love.

So when Brown returned to San Sebastian in 2010, he brought with him a charkha, or Gandhian spinning wheel, and a plan. Less than 1% of the thread market was handspun at that time—a dramatic contrast to his first visit in the 1970s, when many families spun their own woolen thread. In 2010, a kilogram of thread, the quantity per month that average households can spin in their spare moments, sold for just 400 pesos—about USD $18, nowhere near enough to incentivize the practice of spinning.

"Gandhi would say, you have to create a thread standard—like the gold standard used to be," Brown said. "The idea of a standard is that a woman can spin and actually survive on that spinning; she can make enough for her family to live on and meet their basic needs. Can you imagine that, spinning, where the standard can meet your basic needs of survival, where it takes you out of hunger? And that gives you a sense of security and well-being?"

Brown put the village carpenter to work duplicating the charkha. He found a supply of organic cotton, and he set about teaching the young Ramírez and his wife, Felipa, how to spin. Brown then put Ramírez in charge, and soon a team of 20 women—mostly grandmothers—were spinning, a loose affiliation of home-based businesses now seeing their labor turned into a variety of textiles and sold across Mexico and the United States. The revenue flows back to the spinners, weavers, embroiderers, and other artisans working in the village, and to the cotton growers they purchase from on the coast.

Remigio Mestas, a Zapotec textile artist, entrepreneur and cultural promoter in Oaxaca working to revive the Indigenous textile traditions, agreed to buy all the thread the women produced, which he supplied to weavers who sell through his stores. That was the beginning of a business that now, a decade later, helps to sustain nearly 500 people in the village, including cotton growers, spinners, clothing designers, and marketers.

"It's a very interesting and laudable project," Mestas said. "It could be an example for many; if it were to spread, it could address our problems of unemployment and hunger in the countryside."

Mestas also connected the group with Margaret MacSems, who co-founded a project with Mixtec farmers on the coast working to revive native coyuchi cotton production. MacSems would eventually join the Khadi Oaxaca team, becoming director of sustainability, thus connecting the enterprise with coyuchi farmers. Mestas also put Brown in touch with teachers who trained Ramírez and others how to weave with the upright pedal loom, and how to work with natural dyes.

The team has been able to raise the pay rate from 400 pesos per kilo of handspun thread to 1,500 pesos, or nearly $70 in today's dollars—a standard that makes a meaningful difference in a village economy. The thread has become the foundation of a cottage industry, now employing 350 spinners.

In the past few years, Khadi Oaxaca had seen an exponential growth in sales. Attar, as head designer, and Ramírez attended fashion expos, where she was struck by the way people would react to their displays. "They'd walk right past top designers and stop at our little stand," Attar said. "It's been amazing to me the way people have responded. It seems that doing every part of the process by hand is such an attractive quality for people."

"As (Gandhi) would always say, when we talk about village economics, if it comes from a place of nonviolence, of a truly sacred economics, then you don't need any commercialism; you don't need to market that which has its essence and its beginning in goodness," Brown said.

Now, however, the pandemic has shut down not only the expos but the entire Mexican tourism industry, which is what drew shoppers to the tourist-destination boutiques across Mexico that featured Khadi Oaxaca's unique products. That's put the group's model to the test. Less fabric is being woven, and Khadi isn't stocking finished garments, is reducing work for the sewers, stitchers, and embroiderers, and the group's core staff took a pay cut to reduce the economic impact on the artisans. Only the spinning hasn't been cut back; rather, Khadi has expanded its roster of spinners by 100 people.

The company quickly started expanding its online presence. Ramírez began posting photos of the existing stock on an already lively Instagram account, and orders began to flow in from the United States. Online sales jumped from an average of $1,300 USD per month before the pandemic to $6,500 in May. And international sales shot up from 5% of the total before the outbreak to 60% now, mostly from the U.S., MacSems said.

That growth has all come about through Khadi's Instagram account, which isn't a sales portal. The next projects are an online catalog and a shopping cart on the company website, and working to expand their presence on other social media.

Despite the cutbacks, 20 families are supporting themselves weaving cloth with upright pedal looms—fathers such as Juvenal García, who used to spend his days cutting down the pine forests in the region for lumber, and Carlos Vargas, who used to travel to the U.S. for seasonal landscaping work. Even if they had wanted to leave home, the pandemic shut down those options; but both said they much prefer to stay home and work with their families.

The largest part of the operation, however, is still the spinning. The network of spinners now extends far beyond San Sebastian into the rancherías, the tiny rural settlements where families still live in the traditional agrarian way. For Eugemia Velázquez, a 38-year-old mother of six, Khadi has provided a degree of dignity and comfort that were previously unthinkable. Before she started spinning for Khadi, Velázquez was a wool artisan like her mother and grandmother; she knitted little hats, dolls, and tortilla warmers, and every two weeks would leave them with the street vendors in the next town, who would pay her a small advance and then pay the rest later if the pieces were sold. But sometimes, none of them did, making her family's economic situation precarious.

These days, Velázquez has been content knowing that she can deliver a pound of thread every two weeks and earn enough to buy her children school supplies and other items she can't make or grow herself.

Sales doubled at Khadi from 2018 to 2019, and that was without even concentrating on online sales. This has been possible, Brown said, in part because people are willing to pay the actual cost to produce ethically and regeneratively fabricated products, and also because Khadi Oaxaca has been able to receive grants from private foundations in the U.S.

Based on the growth in sales before the outbreak of COVID-19, the business was on track to be independent of grant funding by mid-2022; now that's less certain, MacSems said. Overall sales have plummeted 56% since February. But she said she's optimistic, given the potential of online sales and the burgeoning interest in this kind of project. Meanwhile, during the pandemic, thread production has doubled, with some families saying it's their only source of income. Grant funding has allowed Khadi Oaxaca to continue buying the thread that has become a mainstay for local families.

"What we've found is that it is possible to care for each aspect of the supply chain, be ecologically mindful, empower local communities and create unbelievably beautiful textiles," Attar said. "COVID is painfully helping us globally to wake up to the fact that our Earth is indeed suffering; we are all interdependent. Our goal is to be a model and live the change we want to see in the world. May we look toward great souls like Mahatma Gandhi for guidance."