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Fair Trade VS Direct Trade Coffee: Which Is Better For Coffee Sustainability?
Written by: Keith Bresee
If you’re familiar with specialty coffee, you’ve no doubt heard about Fair Trade and direct trade coffee. However, there’s a good chance you’ve heard some things of questionable accuracy. Sadly, these two coffee sourcing strategies aren’t always communicated very well.
For example, by the way some people talk about them, you might think that Fair Trade and direct trade are enemies competing for support. But that’s not really the best way to think about them. They’re not rivals - they’re just different.
Let’s chisel away the myths and false perceptions. Let’s get down to the thing that really matters: which coffee sourcing strategy is better for sustainability?
I’m guessing that you’re here because you want to make sure your coffee dollars are making the world a better place and not worse. I’m guessing you are aware of the struggles many coffee farmers face and you want to play your part in making the coffee world a brighter one.
I’m so glad you care! Your globally-conscious mind and buying habits impact real people around the world, so let’s get down to it.
Which is better for coffee sustainability: Fair Trade or direct trade?
Firstly, What Is Fair Trade?
Fair Trade USA is a non-profit organization that aims to improve the lives of all types of farmers around the world. For a coffee farm to receive the official Fair Trade Certification, it must adhere to highly regulated standards.
- They must pay their workers a fair, living wage.
- They must employ strategies for environmental sustainability on the property.
- They must adopt healthy, ethical business practices.
We could go into a lot of detail about how the organization regulates and enforces these, but there’s no need. Just know that every farm, region, and country has different struggles, and every farm has to comply in different ways to reach the standards of the certification.
As a result, these coffee producers are able to sell their coffee beans at a higher price, since the rigorous certification can prove that their business pays fairly and treats the environment well.
A very small cut also goes to Fair Trade USA. The organization employs development professionals who delegate funds responsibly to community needs, such as medical clinics, schools, and local democratic councils.
Fair Trade efforts have positively changed the lives of millions of coffee farmers.
However, there is one big thing that Fair Trade does not have high standards for: quality.
Fair Trade Certified farmers are rewarded for great business practices, but not necessarily great coffee. The organization is working to introduce a layer that incorporates coffee quality, but those standards won’t be fully implemented for a couple years.
Additionally, there’s also still a middleman exporter who collects a large chunk of the possible profits. Sadly, this reduces the final cut to the farmers by a mild percentage.
Next, What Is Direct Trade?
Direct trade is a very different approach to coffee sourcing. Instead of approaching importers who buy coffees (Fair Trade and not) from around the world, direct trade roasters work out deals with farmers directly.
This allows these roasters to develop relationships with farmers, rather than buying through a huge catalog. A middleman or two, therefore, is bypassed.
Farmers are often paid very well for their crops when they trade directly, especially if their coffee is of great quality. Intelligentsia, one of the largest specialty coffee roasters in America, guarantees farmers at least 25% more than the Fair Trade price. Few roasters are large enough to afford such a robust pricing strategy, but many come close.
Either way, goal is always this: find the best coffees, develop long-standing relationships, and pay an empowering price that benefits the community.
But here’s where the issue comes in: there’s little to no standardization.
And, thus, there’s little to no accountability.
One roaster’s direct trade may be very different than the next roaster’s direct trade. One roaster may physically go to the farm and shake the producer’s hand. One roaster may buy a coffee from an arbiter who went to the farm.
Personally, I believe the purest form of direct trade occurs when a sourcing representative from a roasting company meets with the closest possible representative from a farm.
In most countries, this means driving to the farm and meeting the farmer. In a few countries, it means contacting a farming co-op (roasters cannot buy directly from farmers in Ethiopia).
Measuring this is impossible, since there’s no single governing body that oversees effectiveness. While Fair Trade USA employs hundreds of trained development professionals to support local projects, direct trade roasters are forced to attempt benefiting partner communities without a formal education in development.
The Similarities, The Differences
Let’s start with the similarities of Fair Trade and direct trade:
- They both aim to put more money (empowering wages) in the pockets of farm workers.
- They both aim to put an end to hazardous and risky environmental practices.
- They both aim to eliminate poverty through higher wages, better education, more efficient business, and improved healthcare.
And now, the differences:
- Fair Trade alleviates poverty with strict wage, business, and environmental guidelines.
- Direct trade alleviates poverty by heavily rewarding farmers who grow great coffee.
- Fair Trade USA heavily regulates the certification with clear guidelines.
- Direct trade sourcing includes variety of methodologies (some effective, some not).
- Fair Trade roasters buy beans from importers or large sellers.
- Direct trade roasters buy directly from the farmer or close representative.
Michael Sheridan is the Director of Sourcing at Intelligentsia, but before that, he was a coffee development strategist with Catholic Relief Services. He’s one of the most respected voices on coffee sustainability in the USA.
In an article he wrote for Daily Coffee News, he claimed that the gap between the two sourcing strategies is growing smaller. Fair Trade USA is shifting focus to include cup quality on their list of high standards. Direct trade buyers are trying to get organized to improve accountability and effectiveness in poverty alleviation.
Both groups are moving toward a more unified vision: make coffee farming more sustainable in every way.
Which Is Better For Coffee Sustainability?
It’s very difficult to say which sourcing method is more sustainable. Both have visible effects, but they’re not always the same effects.
The world needs Fair Trade for their organized and educated work on poverty alleviation using sustainable and fair priced coffee. The world also needs direct trade to push coffee quality forward and innovate coffee sourcing as a whole.
We need both Fair Trade and direct trade.
I realize this isn’t the cut and dry answer you may have been hoping for. It sure would be easier if one was the clear winner, but it’s not so clean and tidy because sustainability isn’t clean and tidy.
The most important thing for you to know is that, in the end, you decide how the world turns.
Will you use your coffee dollars to reward businesses with little transparency and little positive global impact, or will you support roasters who are working diligently to source coffee in an ethical, sustainable way?
Lucky for you, finding these ethically sourced coffees isn’t hard anymore. There are more Fair Trade and direct trade coffees than ever before - and you don’t even have to go to the supermarket to get them.
Our JavaPresse Coffee Subscription sends sustainably sourced coffee right to your doorstep on your schedule, so you never have to have an accidentally caffeine-free morning. Not only do we source them from progressive farms, but we roast them freshly before each shipment. This means you’re always getting the freshest coffee possible!
Don’t waste another dime on grocery store shelf coffee and spend your coffee dollars on beans you’ll be proud of.