SO every now and then, we get someone who comes into the shop and starts interrogating us on why our coffee isn’t fair trade.  And I (that goofy American girl far too enthusiastic in the morning) obediently explain that our coffee is in fact fairer than fair trade, it’s direct trade.

 

But I just wanted to take some time to examine all the forms these labels come in, and the impact they actually have on the people growing our beans.  Is direct trade really fairer than fair?  There’s all kinds of interesting debates in the coffee world, and sometimes the international development world, on these issues, and with a toe in each, I just wanted to offer my own two cents.

 

First: Middlemen are overwhelmingly bad.

I unleashed a lot of curiosity and questions traveling and studying in Bangladesh a couple summers ago, and along with a smattering of Bengali, and opinions on the Hill Tracts and microfinance, I wandered away with that conclusion.  Farmers growing rice (or coffee) sometimes often only receive a tiny fraction of the price paid at market, and nowhere does this seem to be worse than in the developing world.  Sellers, both in country and abroad, are often selling at a price many times more than the producer was paid.  A lot of development efforts have looked at this problem, examining ways to cut out the middlemen, provide farmers with tools to compare offers, and opportunities to form cooperatives.  Direct trade seems to be the ultimate answer to this.  If the seller is also the buyer, it’s a lot easier to ensure the farmers are being paid a fair price, a ‘living wage,’ if you will.

 

Developing the Farmers

In direct trade, coffee buyers (like Union) establish a direct relationship with the people on the farm, providing them with theoretical and practical support, farming and processing methods, and also supplying needed equipment. This is what makes direct trade a better way of trading – it’s the sort of more personal relationship, knowing the guys who grow the coffee and being able to relate to and really appreciate their work rather than seeing them as anonymous labourers. The people at Union and the other independent London roasteries genuinely care about the farmers…and the farmers deserve that recognition!  Because as the World Barista Champion rightly says in his presentation (Featured in Free Coffee Wednesday recently -LINK) the farmers and the person processing the beans have an immense impact on the taste of the coffee we drink, and they should be acknowledged for it. This is what direct trade, at least partially, achieves.

 

Has Bean – Direct Trade Sucks?

Of course, direct trade definitely has it’s downsides, as the coffee guys over at Has Bean definitely discovered.  If the relationship becomes unbalanced, it obviously won’t work.  Sometimes you can’t directly import coffee from one country to another, and you need to use an importer, and then that coffee where you’ve worked with the farmers so long is no longer Direct Trade.  Direct Trade is very much dependent on the relationships that you build with your suppliers, and if the tape or the relationships go awry, so too very definitely does your coffee sourcing.

 

No certifying body – no fees or forced cooperatives

Unlike fair trade, which has a well organized international certifying body, and has farms pay a membership fee, there is no international standard on direct trade.  There are basically a few variants, each created by a large Direct Trade coffee company, like Intelligentsia, Counter Culture, and our very own Union, and each brand has their own rules and standards for how they treat their coffee farmers.  The Fair Trade Foundation, on the other hand has a whole litany of rules and standards to ensure that something that bares its logo really is fair trade.

 

There are other cons as well.  The traditional fair vs free trade argument says that fair trade prices distort the economy, which is also partially true.  If some farms in an area are receiving higher prices for their goods than others than that creates strong imbalance in the local community and stymies general development, both to the farms and to the country’s economy (rebalancing away from small stakeholder farming).  Direct trade solves one aspect of this and exacerbates another – the idea is that farmers are paid above Fair Trade prices and the buyers work with the farmers to help them improve their farms and methods (where direct trade’s emphasis on quality comes in).  Direct Trade also doesn’t force farmers to create collectives like Fair Trade rules, which is good, because people shouldn’t be forced into things (especially when it’s the ‘west’ coming into the ‘developing’ world), but this lenience does perpetuate the existence of potentially farms that are just too small.

 

If you’re interested in the subject, here’s what our coffee seller UNION has to say on the matter, and a really well thought out article from them at the Guardian that’s much more eloquent than anything I could write.  There’s also quite a full debate in the article’s comments section.  I think the only hard and fast rule you can have regarding fair and direct trade is that the labels are situational, and the best way to judge for yourself is to find out what has happened and what would otherwise be the norm in that situation.