“Fair Trade and Direct Trade”. I am sure you’ve heard these two terms quite a few times, whether you’re into coffee or not.

Seeing that you took the proactive step to click on this link entitled, “Fair Trade & Direct Trade, Do You Know The Difference?” I take it that you’re interested to learn more.

It seems to me that among many coffee conversations, there are two concepts that get tossed around as an interchangeable term. The difference between the terms “direct trade” and “fair trade” are often misunderstood and seem to be an intimidating topic to unfold and discuss.

This is most certainly a discussion for the people, by the people. After all, we coffee lovers and shop owners are the ones buying these products and (for the most part) drinking it too, right? So I think it's fair to say that everyone should know if they are purchasing coffee that is traded in a fair way, and if the process was direct and transparent.

So on that note, I have invited one of the most bad-ass coffee writers I know to give us the skinny on the topic.

I met Rachel Northrop, author of When Coffee Speaks, coffee trader with Ally Coffee and contributor to Fresh Cup Magazine while visiting the Don Eli Coffee finca in Costa Rica.

We asked her to define each term in her own words, in order to understand the bigger picture:

Direct Trade coffee seeks to bring transparency to the transaction of buying and selling coffee by creating channels through which original producers and final consumers (or the roasters selling to final consumers) can interface directly to negotiate price, quality, and other contractual terms.

Fair Trade means guaranteeing that coffee producers are paid fairly for their work.

DIRECT TRADE

You want the good stuff. You want a high quality coffee product. You want to know where it came from and how it got there. You want to know how many hands have touched it before getting to you.

Ms. Northrop explains this clearly in a simple comparison:
“The best way to conceptualize this is as a Farmers Market. The original seller of the product and the final buyer of the product meet in an open market and the buyer purchases the goods directly from the producer, so there is complete transparency as to how much the buyer paid the seller because they literally spoke face to face and money changed actual hands. This is in contrast to a grocery store, which serves as an intermediary between original producers and final buyers.”

She goes on to explain that while this is viable on a small scale, it is more difficult on an international scale - but that this way of trading coffee is completely possible.

Instead of meeting at a Farmers Market a few miles down the road, those doing business are physically thousands of miles apart. She notes that this requires coffee to travel across seas in shipping containers and be processed using industrial equipment that is not accessible to all producers.

FAIR TRADE

Harvesting and processing coffee takes a lot of work - I mean a lot. It is one of the most laborious crops, especially when you consider that machinery has yet to replace the process of hand-picking the coffee cherry. It is important that you know that the people harvesting and processing the beans are all paid a fair wage.

Northop explains that previously, coffee was considered a commodity: much like sugar, wheat, cotton, etc. The commodity pricing is created to make the handling of large volume products uniform and more efficient. However, this does not mean that the farmers’ financial stability is carefully considered.

Thankfully, Fair Trade has evolved as a movement and can be seen in two primary international non profits, Fair Trade USA and Fairtrade International. Northop explains that they, “draft comprehensive codes of conduct against which other agencies audit in order to award companies from the farm to the roaster with a literal seal of compliance: the logo you see on packaging and marketing materials.”

Here’s the logo to look for when purchasing coffee and what it means:

“This logo intends that the original producer of the coffee was compensated at a fair price, one which accounts for real time costs of production rather than the arbitrary number generated by the futures market. There are many criticisms of Fair Trade systems’ transparency and factors that complicate the situation, including the involvement of cooperatives and local governments,” explains Northrop.

WHAT DO FARMERS THINK?

I asked Nela, born and raised in a coffee producing family in Costa Rica, what labeling people should care about when purchasing coffee and what Fairtrade means to her. This was her response:

“I would say for me right now none of these certifications are a true reality.

The certifications are good and important, but most producers can’t get these certifications because of pricing and other challenges and most of them are just a convenience for certain organizations. We, producers, haven’t gotten any real benefit from Fair Trade certifications or Organic certifications.  

If consumers want to make sure they are paying fair prices for their coffee, and they are supporting organic practices, they can now communicate with us directly.

In this day in age, with social media and other forms of direct communication, we are able to educate consumers directly about all of the work that goes into processing our coffee crops. The communicators in specialty coffee are the green buyers, the baristas in the coffee shops, the coffee roasters. They are beginning to travel directly to the source to get a better understanding of where their coffee comes from.”

TO SUM IT UP

Coffee is a complicated little bean.

But the basic coffee supply chain goes from producer, to broker (importers & exporters), to buyer.  

Unless you’re Martin Diedrich, who drove his van to Central America and loaded it up with bags full of green coffee beans and drive the van back up to Costa Mesa, CA to roast them himself, there is going to be a step solely dedicated to the logistics of product travel that won’t be taken on by a roaster or buyer because it is so complicated. And that’s okay.  

It is important to be aware of this trade. We need to ensure that whoever is negotiating directly with the farmer is proposing fair rates. We consumers need to be aware that if the coffee we are considering is inexpensive and available in large quantities, that there was most likely very little quality control involved and that the taste will definitely reflect that lack of attention.

We can stay fair and transparent by asking the right questions, asking a lot of questions, and supporting the specialty coffee movement down to its last, delicious drop.

Mugs Up,

The Coffee Nomad