![]() One roaster may compensate their farmers well and work with the growers on environmental stewardship, while another may not do either. Unless direct trade roasters are fully transparent with their supply chain, customers may be paying for environmentally damaging practices and workers’ rights violations alongside that morning coffee. Yet what direct trade truly lacks is fair trade’s strength: standardization and third-party audits. Some direct trade proponents believe that this means the cup of coffee tastes better than fair trade beans-where the flavor is not considered in certification-but that is not necessarily true, as taste is subjective and high-quality beans can result from both trading methods. The close partnerships from trading directly also mean roasters have greater control over the quality of beans. But the actual economic benefit for growers is highly variable. Naturally, this means direct traders may have an outsized impact on the economic well-being of their farmer partners compared to the broader reach of fair trade certifications that impact many. Since direct trade partnerships happen between individual farmers and smallscale roasters, the roasters have more control over social justice and sustainability initiatives. Like fair trade, direct trade is used for different types of products, like cocoa and tea. ![]() In this way, direct trade is very personal. Direct trade roasters can also identify exactly how the relationship is impacting partner farmers and the surrounding community. ![]() Without the middlemen, farmers may get paid more for their beans. ![]() What is Direct Trade?ĭirect trade is a practice where coffee roasters purchase straight from the farmers, cutting out middlemen: buyers, sellers, and certifiers. Fairtrade International only certifies organized farmers, while Fair Trade USA will also certify plantations-which may have problems such as dangerous working conditions and may contribute to environmental pollution-under the rationale that more fair trade products will be available on the market. Where these organizations differ depends on who they are willing to certify. Several fair trade certifications have emerged within the last 40 years, with Fairtrade International and Fair Trade USA among the largest. Fair trade can also certify farmer co-ops, which exist to establish a farming community, democratize decision-making, and ensure the certification is benefiting many. Not all fair trade organizations will support farmers if they have a bad year or lose their crop to natural disasters. Some fair trade certifications set standards for environmentally sustainable practices, but not all, and can vary widely between industries like cocoa, which tends to be weak when it comes to protecting forests. How it really works:įair trade certifications help to improve supply chain conditions by ensuring producers and workers receive a minimum wage and labor laws are followed. However, the price set by the fair trade organization may not necessarily equate to a true livable income. Purchasers must pay the floor price but can, and often do, pay more. Fair trade also mandates a premium to be paid on top of the floor price, which is invested into community needs, like schools or hospitals. ![]() What is Fair Trade?įair trade’s focus is alleviating farmer poverty by protecting them from predatory corporations and fluctuations in the market by setting a floor price for the commodity. Among these phrases are “fair trade” and “direct trade” which are terms to describe how a coffee bean is traded, but discerning the difference can be just as confusing as choosing between a café au lait and a latte. Ordering a coffee includes confronting a long list of lingo-if you’ve ever stood in front of a Starbucks menu scratching your head, you get it. ![]()
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