Direct Trade vs Fair Trade Coffee

Direct trade vs Fair Trade

If you’re anything like me, you’re completely confused by all these new coffee certifications and their implications. With the hope of being able to discover how to make an informed purchase, I set out to learn about the difference between Fair Trade Coffee and the Direct Trade Coffee. 

Direct Trade

Direct Trade is what you’ll often find in specialty coffee shops (i.e. not Starbucks). Direct trade is defined by the act of coffee roasters working directly with farmers instead of Cooperatives. This way, the roasters are able to give a premium price directly to the farmers. Furthermore, they are able to work with the farmers to help develop better quality coffee beans. The better the bean, the higher the price. It creates a dynamic that pushes the farmers to become better, and to earn more money in the process.

However, it is important to note that the roaster does not necessarily have any other standards that it regulates. It might not take into account the minimum wage paid by the farmers to its laborers. Also, it might not look to see how the coffee is grown and if the farms use environmentally friendly practices. 

Intelligentsia and Counter Coffee have established detailed criteria on their site. These are standards that they have imposed upon themselves to help guide their purchasing. One of those principles is visiting the farms at least once a year during harvest. Counter Culture has also hired a third party organization to validate that they respect their own protocol.

Another important point is that Direct Trade doesn't completely eliminate all middlemen from the process. Bird Rock Coffee has a great video explaining the key figures that are needed to help connect the roasters to the coffee farmers and ship the coffee back home. 

In resume, direct trade pays top dollar (often significantly above the market and the Fair Trade price) for coffee that is premium. They work with farmers to make better beans and create lasting partnerships. Despite that, it’s in the hand of the roasters to determine if they decide to follow other purchasing principals along the way. 

Fair Trade

Fair Trade concentrates on the labor and environmental practices. The majority of Fair Trade Coffee will be organic with no GMOs and the elimination of the most toxic pesticides during harvest. Their strength relies upon helping laborers. This means that all workers receive minimum wage, that they are allowed to work in an organized fashion and that they are guaranteed safe and healthy working conditions.

Fair Trade Coffee will set a floor price for coffee, assuring producers never get underpaid for their work. However, if the coffee market changes and the price of coffee rises, the purchase price will remain the same. This can lead to a situation where Fair Trade farmers receive less than the current market price.

Fair Trade also proposes bonuses. Farmers can receive an additional 0.30$ US if their coffee is organic and a second Fair Trade premium for social and economic initiatives and investments in their community and organization.

To become part of Fair Trade, small coffee farms have to become part of a cooperative and there can be important fees to join the program. For more information, I highly recommend visiting Fair Trade International for details on pricing and for specifications on their criteria.

It's also important to note that Fair Trade USA and Fair Trade International split in 2012 and are represented by different logos. Both have similar standards but slightly different goals. In a very brief summary, Fair Trade International focuses on smaller farm co-ops to help them gain a competitive edge, while Fair Trade USA has broken off to help establish the Fair Trade standards in bigger, mass market farms. These farms are harder to regulate and will also eliminate the competitive edge given to the smaller Fair Trade farms. It's a participation versus quality dilemma, while defeating the purpose (to some extent) of helping the little farms defend themselves from the giants. On the other hand, helping the bigger farms succeed in getting certified can also help more laborers get the minimum wage they deserved.

Both Fair Trade USA and Fair Trade International are working to help create a standard for farmers and laborers across the world. It's safer to put your money here than in non Fair Trade Coffee. 

How to choose?

Both Fair Trade and Direct Trade are working in ways that allow coffee farmers to earn more for their work, while adding incentives to encourage farmers to protect the ecology and the environment of their farms. I would encourage both these purchases before buying regular coffee at the groceries. It's up to you to see if you trust your direct trade roaster to apply ethics that align with yours. 

For information on other sustainable coffee certifications like UTZ, Rainforest and the Smithsonian Migratory Bird Center Label, read our second article here.


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