Coffee drinkers are not unique in harboring an interest in the provenance of their beverage. Tea drinkers will often have an origin of choice. Whiskey and beer drinkers usually prefer one place's tradition over others'. I'm sure I hardly need to describe how wine drinkers can be.
What set coffee drinkers apart in this context, however, are two things. The first is that it is not only connoisseurs of specialty coffee who care about where the beans come from. Many people who would not know a craft roast if it jolted them awake in the morning are sure to note their coffee's origin, and can usually tell a difference (which speaks volumes about the importance of terroir). The second is that it is not just where the coffee comes from that coffee drinkers care about, but also how it got to them from there. The particular origin is important for quality and taste, but most coffee drinkers are at least as concerned about the trade model that brought it from farm to cup, for the good reason that its import derives from ethics and sustainability, which are of course much more important in both the long and short terms.
At least on the surface (and we will see later on how the superficial scenario here is deceptive) there are two trade models competing for the hearts and minds of consumers, roasters, and farmers: direct trade and fair trade. Like most consumers, I thought I knew pretty well what the basic premise of each was, and took comfort in both taking the side of one of them and still feeling, shall we say, a tad sympathetic with the other. But also like most consumers, I misunderstood at least as much as I understood, and also remained ignorant of many important details, where (of course) the devil lies.
This article will discuss direct trade and fair trade with respect to coffee. The two models are of course relevant to scores of different products, but for the sake of simplicity, which is already conspicuously lacking with this topic, discussion will be limited to the coffee market. I will offer a conclusion with my own thoughts, but, while I certainly hope it proves itself worthy of consideration, that will not be nearly as important as the longer discussion preceding it, in which all aspects of direct trade and fair trade are more objectively explored. The goal here is to educate, illuminate, encourage thoughtfulness on the topic, and perhaps do a humble part towards making the world a better place. To that same end, thoughtful comments below are encouraged.
WHY WE BOTHER
Once upon a time, the status quo was that coffee was traded on the exchanges as a fungible commodity. This is still true in large part today, especially with lower grade coffee. Growers sold the cherries to processors, who brought about the green coffee beans and sold to exporters, who sold via commodities exchanges to importers, who sold to roasters, whence finally the coffee made it to retail: cafes, restaurants, packaging companies (e.g. for supermarket shelves), and so on. There were variations on that model among some organizations, but most crucial elements were the same.
The farmers, farthest removed from consumption, were the poorest and least able to benefit from the trade. In some instances it was a case of a large estate employing coffee pickers for a pittance, and in others it was small plots of land being farmed by a local individual or family that was likely to lack, if not business savvy, then at least a familiarity with the global supply chain and consumer preferences, which knowledge could be leveraged to produce better coffee and increase income.
The processors and exporters (and estate owners where relevant) generally took advantage of the farmers' ignorance of the larger market. They also had a tendency to lump all coffee together and both buy it sell it by weight. These practices had the effect of removing nearly all incentive for the farmers to look towards coffee as a way to improve their lives, for them to risk entrepreneurship at the production end of the industry, and for them to invest in improving the quality of their product or in differentiating it – all of which in turn contributed towards keeping them at the margins of the global coffee industry, and so on in a rather unpleasant, if not entirely vicious, cycle.
"The main instigator of Fair Trade was the lack of incentives growers were getting to improve the quality and sustainability of their product as well as the transparency and ethical handling of fair prices for the products grown," says Evan Closson of Roast Coffee & Tea Trading Co., a Long Island sourcer and micro-roaster.
By the time that fair trade as we know it today came around in the 1980s, there had already existed for many years charitable and other organizations that sought to pay poor farmers a premium for coffee. But what was different, and what really allowed for fair trade and later direct trade to take off, was the growing demand for single-origin and craft-roasted coffee – the growing understanding among professionals and consumers that Coffea arabica is no more fungible than Vitis vinifera, that stories of people and place make coffee better, and that while the particular terroir of a coffee may make or break it, the odds of "making" it are greatly augmented with investments into improved agriculture. In this way, the specialty coffee market, with its emphasis on origin, is in large part responsible for the new models of trade that have made the world a better place for coffee growers.
THE COIN'S TWO FACES
"Both Fair Trade and direct trade were originally created to help famers deal more directly with buyers and retain more value in the supply chain," says Jenna Larson of Fair Trade USA (previously TransFair USA), a fair trade certifying organization. That is about as succinct a way to introduce the big picture as possible.
We will soon see that the dichotomy between direct trade and fair trade is in large part a fiction. But it does form the basis of many important decisions that are made in real life, so it makes the most sense to first treat each separately. Before parsing details and exceptions, I would like to present an idealized, simple, textbook analysis of each.
Fair Trade
"Fair Trade is a simple way to make every purchase matter," according to Fair Trade USA's media kit. "When you buy a product with the Fair Trade Certified™ label, you know that the farmers and workers who produced it were paid better prices and wages, work in safe conditions, protect the environment, and earn community development funds to empower and improve their communities."
"Fair Trade specifically means coffee or products that are Fair Trade Certified. In other words the entire supply chain has been verified as Fair Trade from crop to cup," explains Mr. Closson. "We are a Fair Trade USA Certified roaster. This requires reporting our Fair Trade coffee supply chains to the Fair Trade USA organization a few times throughout the year."
Rodney North of Equal Exchange, a fair trade worker cooperative, rounds out the picture from the institutional angle: "Fair trade is a voluntary set of business practices designed to shift more of the rewards and the security of trade to historically disadvantaged producers." It also serves to "shift more of the risk up the chain to the historically advantaged coffee importers, roasters, distributors, and so on."
At its core, fair trade is a certification system ensuring the livelihood of the farmers and their communities. As long as both farmers and consumers are content with the certification criteria, all stakeholders stand to benefit. Farmers can be assured that their coffee will fetch at the very least a floor price and usually more; distributors and roasters can use the fair trade label as a sort of marketing tool; and consumers can rest easy knowing that they are contributing not to penury but to prosperity in the third world.
Dan Streetman of Irving Farm, a coffee sourcer and craft roaster in New York, explains that with fair trade the farmer is paid a "minimum price and 'premium' (allocated monetary value) for the product in exchange for the auditing process conducted by the Fair Trade labeling organization, the license to use the 'Fair Trade Certified' trademark, and a 'social premium' which is allocated for specific purposes at the producer level." FairTrade USA's media kit identifies just a few areas in which these premiums are typically invested: "Healthcare, scholarships, women's leadership initiatives, micro-finance programs, quality control and organic conversion."
Ms. Larson identifies four "important elements" of fair trade: "standards" ("social, environmental and economic… audited by independent third-party auditors"), "premiums" (which "go into a separate fund, managed and used by the farmers and/or workers themselves"), "price protection" (a "safety net" protecting against market price fluctuations), and "democracy". Similarly, Florentine Meinshausen of Fair for Life, a European fair trade certifying organization, notes "the basic pillars of Fair Trade: fair production methods, long term cooperation between producers and handlers, commitment to support and work with suppliers as well as fair pricing." Ms. Meinshausen adds that Fair for Life fair trade "assur[es] physical traceability from producers to the final product."
Another key element of fair trade, especially in the early days but even still today, is its emphasis on moving away from the plantation model in which the owner can take advantage of employee laborers, in favor of the small farmer model. Mr. Streetman explains, "The historical model of Fair Trade… was a move to push the market towards groups of small-holder farms… versus the large mostly vertically integrated estate style producers." Ms. Larson's focus on "democracy" (described as "organization and participation among the farmers/workers") is also a part of this facet of fair trade. Movement away from plantations is one of the principle reasons that most fair trade certifiers give preference to co-ops, so that small landholder farmers – analogous to the small businessperson of the USA, but generally without the advantages of available capital or reliable rule of law – may have an inclusive, local, and democratic institution. To his earlier mention of "historically disadvantaged producers," Mr. North appended: "…specifically small farmer cooperatives." (More on co-ops later.)
Not everyone's explanation of fair trade uses the same specific language, but the gist of each is the same. Farmers are protected economically, given access not only to markets but in fact to a transparent supply chain, and offered incentive to improve their communities socially and, often, ecologically.
Direct Trade
Many of these aims are shared by direct trade. But the model itself differs somewhat. "Direct Trade emerged due to the perception of many coffee roasters that Fair Trade was not fulfilling its mission sufficiently," says Mr. Closson. "The result was direct relationships between roasters and growers that focused on quality, sustainability and mutually beneficial business partnerships."
Marc Chiusano of The Gentle Brew, a Long Island, NY, craft coffee roaster embarking upon direct trade relationships, puts it nicely and simply: "In direct trade, the buyer or roaster goes to the farm and buys directly from there. No middlemen."
"These programs generally involve price transparency at each step in the chain, and can involve multi-year outright contracts," adds Mr. Streetman. "This means that the producer of the coffee and the roaster agree on the price of the coffee at the farm gate." While the roaster is usually responsible for such items as "transport, logistics, taxes, storage" and the like, it may hire a third party to handle such things. This is to be distinguished from the inclusion of an importer in the chain: A traditional importer actually possesses ownership of the coffee for some time and adds his own markup, while a third party in direct trade is hired by the roaster, operates under its direction, and is simply paid a fee for a service (storage, shipping, etc.).
The implication is clear: the farmer gains access to the broader market not through layers of certifications but rather through dealing directly with the other end of the chain and negotiating his own price, in person. "Most (if not all) 'direct trade' roasters believe in paying a 'fair' price for the coffee," explains Mr. Streetman, "and the underpinning principle of mutual price agreement certainly gives the producer a voice in that conversation." Ms. Larson would seem to agree: "Direct trade… focuses primarily on paying top dollar for the highest quality coffee." Mr. North sums up, "[Direct trade] is, ideally, the coffee roasters directly buying their green beans from small scale producers in ways that are economically advantageous to the producers, above and beyond what they would get in a regular commodity market."
Further, deeper benefits abound as well. The roaster can specify a variety of requirements (bean quality, certifications such as organic, etc.), and can gain access through the relationship to microlots early on. The farmer can charge higher prices for all of these premium benefits, and both organizations can make money due to the absence of middlemen. The consumer, furthermore, has the best chance (in fairness, by no means the only chance) of finding the highest quality coffees from direct traders, who can be particular about what beans and lots to purchase. The consumer also has access to the most intimate information about each bean, lot, farm, and community from the direct trade model, whereas such access varies with other models.
"For Direct Trade the benefits are the relationships that are cultivated with growers," Mr. Closson opines. "Our mission is to educate our customers about the world of coffee and the best way to do that is to know every last detail about a particular coffee. Having a direct trade relationship with a grower allows for this."
A further important item of direct trade is sustainability. It is all well and good for a farmer to do premium business, but as any businessperson will confirm, it is much more preferable in high-risk environments to have a steady source of price floor security (e.g. of the fair trade style) over many years than to net a whale one year and be left adrift the rest of the time. Indeed, a review of the principles of fair trade above reveals that sustainability is of implicit importance to all of them. But direct trade provides for that, too, in that long-term business relationships benefit both parties.
Direct trade roasters visit farms at least once a year. More than simply shopping around for beans, signing an order, and leaving, the roasters learn detailed information about each lot, offer insight as to how the crop may be improved, and often invest financially in enhancing the agriculture for the sake of growing better coffee. They also ensure return on the investment by signing multi-year contracts with the growers for specific lots of coffee, at the aforementioned mutually-agreeable prices. It is a joining of forces between roaster and farmer, and everybody wins.
A DIRECT TRADE CASE STUDY
Mr. Chiusano and some Gentle Brew co-workers recently visited the Cerro San Luís farm in Costa Rica, and their experience there exemplifies the potential contained in direct trade.
"When we landed in Costa Rica we were taken straight to the farm," recounts Mr. Chiusano. "On the farm we spent a lot of time just learning how they do everything: picking coffee, identifying different beans, processing, washing and drying, and so on.
"The main things we were looking for," Mr. Chiusano continues, "were operations and processes, how they care for the product." To that end, the Gentle Brew team observed the sorting, did cupping, and so on. But there were other considerations, too, lending themselves to the sort of sustainable relationship that is ultimately what really lets roasters and farmers connect with one another. "Can the farm grow? What are its future plans? We are looking to create a long-term bond. You don't do direct trade just for a one-off deal."
Cerro San Luís is a family business, run by its third consecutive generation of farmers. "The current generation has only been at the helm for three or four years now," says Mr. Chiusano, "and they are really positioned to explode, much like the Gentle Brew is on our own end. The current generation, they've been really pushing hard to increase standards. Also too, they have been experimenting with all different varietals of coffee, so you have in addition to the usual sorts of coffees found in Costa Rica, other types that they are hoping will give their farm an edge. It’s a gamble," he continues, "but you know, it’s worth the shot." Especially if you have a partner organization working with you.
It is more difficult, outside of direct trade – in a model in which the farmer is much more anonymous and has minimal access to feedback from the other end of the chain – for such innovation to flourish. Direct trade hardly brings any promises of results, of course. But it most solidly offers the farmer a legitimate opportunity to shape his own destiny.
The anonymity of non-direct trade models is also an irritant to many roasters and consumers on the other end of the chain. Consumers, especially craft coffee connoisseurs, relish the opportunity to engage intimately the land and people whence their coffee originates. Roasters, then, enjoy bringing to their customers a first-hand account of such communities. They also prefer to observe for themselves the quality processes of the farms and perhaps even directly influence the nature of that quality. Direct trade is the best way for them to become intimate with how things are done.
Even gaining intimacy with the "why" of things makes a big difference. Let's look at a hypothetical. Cerro San Luís employs a honey process, which is semi-dry. The Gentle Brew learned on its trip that this is to conserve water. It just so happens also to result in coffee of optimal quality. But if, hypothetically, another processing method were preferable, then Gentle Brew could have worked with the farm to invest in and develop a program to either augment the farm's irrigation, or conserve water elsewhere on the farm, or otherwise adjust the farm's infrastructure to allow for optimal processing. Cerro San Luís would be given both incentive and means to augment quality, and Gentle Brew would be given access, probably exclusive, to such high quality product. Such cooperation generally includes a contract whereby the roaster agrees to purchase a whole lot's harvest at a specified price each year for a number of years, as long as the farmer engages in the agreed enhanced agricultural practices. The details of numbers and practices would be specified in print. Both sides would be bound to the contract – and both would stand to greatly benefit accordingly, with the long-term nature of the relationship and investment adding a great deal of security to both sides.
The odds of such arrangements taking place successfully in the face of multiple layers separating all the steps of the supply chain are, obviously, substantially diminished, regardless of any certifications adhered to them.
The relationships, furthermore, once established, have the opportunity to grow beyond a unidirectional supply route in a direct trade model. When I asked Mr. Chiusano why he thinks Cerro San Luís wants to engage in direct trade in the first place, he said that money may well be the principle concern, but that there is much more to it than that, consistent with the principles of growth and cooperation. "We didn't even know this until we got there," he explained, "but they also want to get into roasting themselves, and maybe even open a café." The Cerro San Luís team has a small home roaster on their premises, and everyone experimented together with some roasting of the beans. The Gentle Brew team worked with the beans from the farm itself, and offered pointers to their hosts on the craft. That had the obvious benefit of confirming the roast potential of the varietals on the farm, but it also offers a means for the relationship to grow closer and more reciprocal. The farmers have a standing invitation to visit the Gentle Brew on Long Island and do a roasting workshop for a few days.
Cerro San Luís, should it decide to open a roastery in its community, now has cheap and easy access to real expertise. So, if it vertically integrates that way, it is looking at an enhanced chance of success, which would open the doors to growth, prosperity, and security for the organization, as well as insight into what sorts of experiences and challenges exist for the roasters on the other end of the chain. That knowledge may be used to improve the choices they make in varietals to plant, farming practices, and processing methods, again furthering their ability to grow, prosper, and sustain their business.
At this point we may feel ready to reduce the question to a few basic points. Is it not just a complex way to pit certified good ethics against determination for high quality? The answer is no, but in any event we have much more to explore before we can fully understand the legs on which each model stands. There is no better place to continue from this point than the co-ops, about which alone entire volumes could be written.
E PLURIBUS UNUM
Mr. North describes how he and Equal Exchange believe the co-op to be nothing less than the "lynchpin for enabling these small-scale producers to get ahead," whereby the prosperity of a coffee farming community cannot be tied to the success of individual farmers but must be predicated upon the shared success of all. He offers as an analogy: "You have some run-down, or sort of downtrodden neighborhood in the South Side of Chicago. And, like in a reality TV show, somebody comes in and takes somebody's little house and does a total make-over. And so someone could say, well, yeah, that homeowner's doing great. But it's done nothing for the neighborhood. And in fact, it can breed tensions, where it's like, well wait a minute, how come Joe, my neighbor, he got a big house and he's not really that much more deserving than I am?"
Background
The large coffee estates, or plantations, historically the typical coffee farm model, have always been sources of woe to the laborers who work them. These organizations exist in places where worker protections and the rule of law have rarely been worth the paper on which they are written – or rarely even written down in the first place, for that matter. Laborers are just as often cheated, swindled, abused, and otherwise taken advantage of as they are treated honestly. And "treated honestly" only means "paid what they expect," which is of course extremely little, rarely more than enough to keep a family from starving.
The tragedy here – outside of outright theft and abuse (the severe extent and frequency of which must not be underestimated) – is not the owner's greed; there is no sin in profit. It is rather the bastardization of the profession of coffee farming. Even today in many parts of the world, it is possible to belittle someone as being "just" a coffee farmer, but not to make a similar remark in admiration. If working the land and growing coffee is likely to result in wretched penury and social marginalization, and even in the best case scenario can only result in modest survival one year at a time without any hope of ownership or even recognition, then nobody is going to invest in learning how to do it well, let alone hone it into a craft.
The alternative has been individual coffee farmers owning a small plot of land and working it themselves or perhaps with the help of family or a few hired partners, building their equity through expertise and quality product. But how can a small landholder in a third world country selling a (most often) once-a-year crop be secure in his business? He must obtain credit, form relationships, negotiate contracts, weather market cycles, protect against natural and unnatural disasters, decide on investments, get certifications, be trained in best practices and stay current as they evolve, perhaps hire associates, and so on, all while competing against a large plantation down the road. All else being equal, this is rarely possible – but when a number of small farms band together to cooperatively pool their resources, they can share in increased scale, lowering costs of shared activities and augmenting their bargaining power.
Nature
Farm cooperatives, or co-ops, take many different forms, in that by their very nature they are democratic organizations in tune with local culture, norms, and conditions; and different parts of the world are home to wildly different cultures, norms, and conditions. What they have in common are the basic collective business activities, and the community orientation.
Co-ops "are primarily a method for selling coffee, and distributing earnings," explains Mr. Streetman. "Most of the time, the co-op is buying the cherry from the co-op members, and then overseeing the washing, and drying of the coffee. Usually this is important because each producer is too small to process their own coffee, or they do not have the capital to buy the equipment necessary."
Plantation owners, and others aligned with them, have not taken the threat posed by the co-ops sitting down. Many times co-op coffee is slandered as being of unreliable quality. Sometimes they are intimidated politically or physically, or both. Sometimes the old guard gets crafty.
"We see these examples time and again where the people who historically had been buying up all the coffee in a community, and buying it cheap, begin to see that they're losing market share to the co-ops, because now the small farmers are in business for themselves," tells Mr. North. "They will go into a community one year, and they'll just pay top dollar for everything – for the best coffee, for the worst coffee, and for everything in between. The idea is just to suck up all the coffee, there's nothing to sell to the co-op. The co-op is a business, it has fixed costs, salaries, mortgages… and what happens to the co-op? It has no coffee to process and export. It can't fulfill its contracts and goes bankrupt. It's gone. Next year, we're back to where we were twenty years before, and once again the small farmers are going to get squeezed."
But the co-ops have persevered. They are popular with many coffee farming communities, and also with many coffee consuming communities. Many co-op farmers have also wised up and voted for protectionist measures, such as requiring member farms to sell at least a certain percent of their crop through the co-op each year.
Ultimately, the co-op model has really done a lot to save the independent farmer from oblivion. Accordingly, fair trade organizations have typically focused principally, even exclusively, on working with co-ops, as mentioned earlier. A co-op that wants the fair trade prices and premiums must be audited and approved by a certifying body to make sure that the money is properly distributed to the farmers, community funds, and the like. Mr. Streetman mentions that "since they are democratic, the members in the co-op vote… for example on how to spend the 'social premiums' from Fair Trade, and it could be spent on anything from a school, or doctor's office, to a road… soccer fields, libraries are popular as well."
Issues
But even co-ops have their limits, and their pitfalls. Many are legitimate concerns, although some are urban legends, probably vestiges of slander. The most common complaint heard among roasters and consumers, which is important to address because it arises seemingly everywhere, is that co-ops mix all of their farmers' coffee together and sell it practically as a fungible commodity. Fair traders and other co-op defenders insist that this is completely false. The truth on this count does not so much lie in the middle as depend on the co-op. "There’s hundreds and hundreds of cooperatives around the world, and they don't all abide by the same practices," explains Mr. North, "but more and more they are segregating their coffee just like plantations do." Many co-ops divide the coffee by varietal, by growth elevation, by certification, by producer, sometimes even by micro-lot, and weigh some or all profit disbursement accordingly. Indeed, there are also many co-ops that quite disregard the individuality of member farms, and prefer to simply mix all the coffee together. It depends on the co-op's rules, just as a farm's quality depends on the individual farmer's practices.
Other issues abound as well, some real and some imagined, but I will not dwell on them here. It is extremely easy to get distracted from a comparison of direct trade and fair trade with a discussion of the co-ops, but it does not behoove this article to digress any further. What is important to remember about co-op downsides are two key points.
The first is that a co-op's policy is generally the result of democratic voting among the member farmers. Whatever its practices may be, they reflect how the majority of members themselves see best, or at least safest, to arrange their organization. Roasters and consumers in the developed world may look at a co-op and think of a million ways that the farmers could do better business, and maybe even a few such ideas would make sense. But the farms and communities are their own, and so are the rules. It is no longer an ethical issue.
The second is a series of questions, none of which can be answered categorically; just a collective grain of salt that I offer up for the sake of level-headedness. What if Mr. North, et al., protest too much? What if the picture is not so cut and dry everywhere? What if, indeed, at least in some cases, we infantilize and romanticize the farmers, indulging our "save the world" instincts at the expense of realism? No doubt, for the majority of small farmers in the third-world, the co-op has been nothing less than a life-saving institution over the past few decades. But is it such an absolute rule of thumb that the story we have heard is necessarily always how it goes and always how it will go? Could it be that, whatever the origin of the co-op's popularity in farming communities, we can ascribe a large part of its remaining popularity to the simple fact that that is where fair traders typically channel their premiums? Could it be that the co-op is not the only choice for coffee farmers to build a decent life for themselves and their communities? Could it be that at least in some communities, and at least in some cultures, the co-op is at best a historical stop along the way to independent wealth (of the honest kind) for coffee farmers and their communities? With the continuing evolution and innovation of trade models, do co-ops not face very legitimate competition for the hearts and minds of small farmers? And what if the analogy about the South Side slums fails to do justice not only to the value of a coffee’s quality but also to all that is put into creating it, and to those who would like not just to get more but in fact to honestly earn more?
How Co-ops Fit with Direct Trade & Fair Trade
For the longest time, fair trade certifiers would only certify coffee sold through co-ops. And the logic was as reasonable as it was obvious: co-ops were the only reliable, consistent way for the goals of fair trade to be realized. Build a better life for the farmers; move away from the plantation model; allow people, families, and communities to flourish; remove economic barriers to environmental protection; and make these improvements sustainable. Looking at the macro picture of a few decades ago, it was clear enough that a premium here and there for a lucky handful of planters was not going to get the job done. The fair traders found a solid ally in the co-op model, and stuck by it.
But controversy quietly ensued over whether there is a non-sequitur in there somewhere. The co-ops were (are) means to a larger end. By exclusively institutionalizing one particular mean, some argued, the fair trade system would ultimately constrain those whose best chance to reach the common goals lie elsewhere. In other words, few people were outright hostile to the co-ops, but many remained unconvinced that they alone held the key to salvation.
Still, co-op defenders continued to implore that we beware the results that may come from loosening co-op ties; that what seems like an innocuous, even promising open-mindedness may in the end spell the undoing of the co-ops and all of the progress that they have heralded.
In 2011, Fair Trade USA, the predominant American fair trade certifier, parted ways with its erstwhile associate, Fairtrade International, the major global fair trade certifier headquartered in Germany. The reasons for this were various and manifold, but of particular interest here is that, post-schism, Fair Trade USA began to certify not only co-op products, but estate products and non-co-op small farmer products as well – all along the same standards and guidelines.
This is not to say that the co-ops have been eschewed or marginalized; quite the contrary. Co-op connections have been maintained, and are in fact encouraged through a number of programs. However, plantation owners now have material incentive to improve their treatment of workers, and small farmers who do not wish to abide by the majority rule of their local co-ops are not forced out to a cold isolation. Anybody may partake of the promise afforded by fair trade principles, and co-ops must compete harder for both members and customers. And, it is only fair to note, Fair Trade USA's business has expanded quite concurrently with its scope.
It remains to be seen how this will affect the various stakeholders and institutions in the long run.
As for direct trade, it is unclear how it ties into the co-ops, for the simple reason that there is disagreement over whether a roaster going "directly" to the co-op even counts as direct trade. Direct trade purists believe that only going to the actual farm can count. They point out that cutting out all middlemen, literally landing straight at the source and working only with exactly those people who grow the coffee, is the supreme way to ensure quality, oversee investments and innovations, form close and long-lasting relationships, and properly allocate rewards. Co-ops may be good when there are a few layers of the value chain separating everyone, but, according to the purists, they are no more than obstructions in the direct trade model. There is nothing they can offer that the roaster and farmer together cannot offer better, and in any event, a middling layer is added. To involve the co-ops, the purists declare, can be called anything we want, but it cannot be called direct trade.
Others disagree. There may be situations in which contracting directly with a farmer makes sense, they counter, but there are also situations in which the farmer has a vested interest in thriving communally via his local co-op. These non-purists identify situations in which the roaster heads to a farm, bonds with the farmer both personally and professionally, reviews his practices, identifies a winning lot… and then performs the actual purchase through the co-op, which guarantees precisely the lot desired. Any investments into the farm's own infrastructure may be made either around the co-op or through it; in the latter situation, the co-op guarantees the intended improvement to the farm's production. What, the non-purists ask, is so wrong with all of that? Just which of the benefits that the farmer, roaster, and consumer expect from direct trade, they would like to know, are compromised?
As it happens, some direct trade roasters deal only with farms, others only with co-ops, and still others with both. It generally depends on the roaster's convictions, options, and goals for the venture.
WHAT'S IN A NAME? USERS, ABUSERS, & REFUSERS
We have begun to see that neither direct trade nor fair trade is a monolith; indeed, each takes a variety of forms not only on paper but also in practice. Some of these manifestations perform the vital function of allowing us to observe different ideas in action and learn from all that ensues; others, unfortunately, allow us to observe nothing but bunk.
Fair Trade
What does it mean to buy fair trade coffee? Well, ostensibly, the consumer approaches a café counter or grocery shelf; sees a fair trade label on a coffee; understands that all sorts of institutional processes, audited by good authority, have been in place along the production chain to protect the most vulnerable, pay the most to the neediest, and safeguard the environment; and based on that understanding, chooses the fair trade coffee. (Presuming, of course, that the consumer is not a schmuck.)
But wait! We have not yet begun to understand. You see, with direct trade, my more astute readers will have surely noticed, there is no certification or other third party assurance of legitimacy. More on that later; for now, suffice it to note that consumers, when confronted with direct trade coffee, are naturally curious, perhaps even suspicious. Knowing that they are being given an unverifiable story, they begin to scrutinize facts. But quite the contrary with fair trade. With the vague knowledge that fair trade is supposed to imply some sort of audit process, consumers, in the face of the fair trade logo, actually let their guard down, and become vulnerable to deception. There are, in fact, many questions to be asked upon encountering a fair trade logo.
First question: Who certified the coffee as fair trade? What are their standards and guidelines? Did the same organization travel and do the auditing, or was that outsourced, and to whom? In other words, what, exactly, is the certification certifying? Things to look for include the guidelines for what kinds of places their coffees may come from (not to mention what kind of place the coffee in front of you actually came from), how the workers may and may not be treated, how the audit process works, and under what framework the organization oversees everything.
Second question: Money. What are the prices being paid for the coffee? Some fair trade organizations institute one floor price and one premium for an entire geographic region or even for the whole world; depending on the amount, it may suffice just fine, or it may only make sense for a couple of places. And, of course, when it comes to money, it is not only the certifier to be scrutinized, but every buyer along the chain.
What counts is to not assume that "fair trade price" necessarily equals "enough". It does most often, to be sure, but a little investigation is worthwhile. That is more true nowadays that it used to be, because in recent years major retailers (e.g. Starbucks, Walmart) have begun marketing fair trade products. That says a lot of wonderful things about the average American consumer, but at the same time we must be wary of the effects. Some such retailers use their bargaining power against both their suppliers and some certifying organizations to reduce the price that they pay. That is not to claim that large retailers always pay less than a price that will work for the fair trade system; that would be a categorically false and unfair statement, and in any event, if a contract is signed, it usually means that everyone is willing to accept the terms. But still, the consumer's guard should be up.
Just as importantly, of course, we must ask: How is the money distributed down the chain to the co-ops, to the farms and farmers, to their employees, to their communities, to the environment, and so on? It is the age-old question: Cui bono? The details count more here than anywhere else.
And when it comes to money, there is more still. "A big part of it is not just how much you pay but when you pay," Mr. North tells us. "And that's one of the things that drives us up the wall is this fixation just on 'what price did you pay?'" He explains: "As you can imagine, with coffee producers… generally you get one harvest a year… which means one paycheck a year. And that makes it really hard to do the budgeting, especially if you are the cooperative and all your farmers are more or less bringing their coffee in at the same time. Where do you get all the cash to pay them?"
Indeed, the farms' and co-ops' accounts payable encompass substantially more expenses and debts than only people's paychecks. The bills pile up. That is why some organizations (including Mr. North's Equal Exchange) offer credit, or other forms of monetary commitment, in advance of harvest time. Here I asked how local roasters and other small businesses, who are fair traders but hardly sitting on piles of disposable cash themselves, can be held to such a standard. Mr. North sympathized, and then told of a few small roasters who themselves formed a buying cooperative. With their resources so pooled, those small roasters were able to fulfill this facet of the fair trade promise.
Such extraordinary criteria may not reasonably make or break a purchase decision about a cup of coffee; or perhaps they may. But in any event, they are certainly worth asking about.
Question three: When was the coffee certified? That is not to ask on what date, but rather, at what point in the value chain it was certified. People take for granted that the certification process is a step ahead of things, and usually it is, but not always. Mr. North sheds light on a particular maneuver that would probably surprise most fair trade consumers: "There is a practice in fair trade where Company X needs beans, they go to the broker, and the broker goes, 'Well, I've got this coffee from Co-op Q. I didn't buy it on fair trade terms, but we can retroactively get it certified.' So big Company X has not made these commitments in advance, but they need a few more containers that have to have the right certification. So then the importer says, 'Well, I will do the paperwork, and I will pass more money down the chain back to Co-op Q.' Bingo! Now, regular coffee has become fair trade coffee. So it's true that now the co-op got more money than it would have. But it's not just about the money. It's about these long-term relationships where the co-ops can make plans."
Most people, including many fair trade advocates, may wonder why they should get worked up about a co-op getting what seems a whole lot like a bonus. They expected to sell standard coffee, they got their money for it, and the next day they find out that extra money is coming their way because a retailer or roaster in the US wants to put a fair trade sticker on it when they sell it. And indeed, this may be among the least problematic quirks of the fair trade system.
It is certainly better than a poke in the eye with a sharp stick, no doubt. But it must be repeated: They money is not the point. Money is a means to an end, and that end necessarily includes a sustainability and prosperity in business and community. If it had known ahead of time about those extra containers of coffee being fair trade, the co-op may well have made radically different decisions about how many people to hire, how much to pay them, how much to tell the farmers and their families to expect in compensation, and so on. That, in turn, would have affected not only household spending decisions across an entire community, but also large-scale investment decisions about farm equipment and irrigation, community institutions, environmental work, etc.
It is not, in other words, like leaving a diner and then returning to tip your waitress a little more after you get back to your car and reconsider her service. Entire communities, usually with comparatively small and fragile economies hinging on a once-a-year crop, rely very heavily on financial foresight and planning. Fair trade's mission is to support and aid them in that, not pop in with a surprise handout.
"If people later, sort of 'just-in-time' – and this is a bad application of 'just-in-time' management – if they 'just-in-time' get their coffee fair trade certified," sums up Mr. North, "it's not doing anything for the stability or the predictability that the co-op needs."
If the above discussion looked a lot like direct trade talk, then do not be alarmed; it was not a mistake. What you just read was indeed a description of fair trade that emphasizes the importance of cooperation, connections, sensitivity to the needs of other players in the value chain, and holistic relationships among all such organizations. There are many businesses and consumers who see fair trade as an expensive marketing device; as a price tag and a logo sticker. But we are beginning to see that the spirit, the true essence, of fair trade goes profoundly deeper than that.
Also critical to take away from it all is that, while fair trade may reflect some of the best intentions that human nature has to offer, the logo's presence in a retail situation is, in and of itself, nothing more than a "supposed to". Logos do not create reality. People do. And people are… people. The certifying organizations do a great job of staying on top of things and keeping everything legitimate and transparent, but sometimes something slips through the cracks. It happens. So when buying fair trade, hope for the best, which so far remains a likely enough scenario – but be ready to ask questions anyway.
Direct Trade
If you think that fair trade has many different forms, wait until you consider direct trade. Talk about people being people! "Because there is no entity governing the use of the term 'Direct Trade' there is no guarantee of what is meant by that," explains Mr. Streetman. We already saw one way in which direct trade takes on different forms vis-à-vis the co-ops. But that is just the tip of the iceberg. There are nearly as many iterations of direct trade as there are practitioners of it. We can divide them (very roughly) into three categories.
First, there are the honest practitioners of direct trade. Details will always differ, but the principles will not: regular travel to farm; elimination of middlemen; close, reciprocal, and long-term relationships; bilateral planning and communication; mutually beneficial arrangements, including price, terms, investments, and more; and high quality coffee. Key concerns for all players include entrepreneurship, sustainability, quality, distinction, and cooperation.
Then there is opportunistic direct trade. There are different degrees of this, but the story usually follows the same format: A roaster heads down to a farm, looks at how pretty the fields are and how cool the equipment is, snaps a photo for his customers to see, maybe cuts a check for a few bags of coffee, and heads out before lunch, no more likely to return than to forget the name of the farm before he even gets to the airport. Obviously, this is not exactly evil, but it really misses the point in a way reminiscent of the retroactive fair trade certification. A fair trade purchase would have in fact been better in this scenario, so that the farmer could be better protected from the aloofness and caprice of the roaster, and income could be more stable and sustainable. Of course, then the roaster would not get to take a totally awesome trip to a coffee farm.
Finally, there are your hucksters – those who, though they sell "direct trade" labeled coffee, cannot honestly claim to have ever visited their local petting zoo, much less a third-world coffee farm. This is rare, thank goodness, but it does happen. I have verified the story about one coffee roaster (who shall remain nameless) who boasts on his/her website all about his/her direct trade travels and credentials – but, in the picture accompanying the narrative, the featured sack of coffee has the importer's name clearly printed on it. Whoops!
So, this must surely raise some concerns. You walk into your local coffee shop, see a picture on the wall of the owner shaking hands with a farmer somewhere exotic-ish, and note that the coffee is labeled "direct trade". How do you know if it is legitimate or not?
You don't.
Except that you do, or at least you can. The obligations imposed on the consumer in either of these trade models are rather minimal, but they play an important role. Because really, in either case, but especially in direct trade, the consumer is asked one simple question: Do you trust the people who provide you your coffee?
Do you trust them? Do you know them well enough to know that, whatever trade model they employ, they are honest, competent people seeking in earnest to make a positive difference in the world? If so, then go forth and patronize; if not, then what are you doing there?
Formal research into the roaster or retailer may shed some light onto its reputation, but there is a much better way to learn whether to trust them: get to know them. There's a crazy idea! But it is the best one. Let's review some of the principles that we have come to know and love: connection, relationships, communication, two-way streets. The consumer who would exempt himself from these principles has no business evaluating the adherence of others on the value chain.
And make no mistake: the consumer is not only a principle player on the chain, but is ultimately responsible for its existence.
Really, it is not such a burden as it may sound. Getting to know the people in your local coffee shop is no different than becoming chummy with the proprietor of your local watering hole, being familiar with the gentleman running the hardware store you frequent, getting buddy-buddy with the guys at the gym, or what have you.
For example, on Long Island, the community of craft roasters is burgeoning, passionate, and highly talented; but still small. There is exactly one in my town of Long Beach, and the town is lucky to have one. It is not just that I am on a first-name basis with the folks who run the Gentle Brew, kibitzing with them regularly. It is everything I have picked up on in general: the extent (and type) of locals on a first-name basis with them; the way they treat strangers; the no-charges when out of a customer's first choice; the popping out of the back with a new muffin recipe fresh from the oven for customers to try; the participation in local events around Long Island; and a million more tiny facets of the nature of their relationships, both informal and professional. Co-founder Bryan Baquet was a philosophy major in college; his father told me, while tending the shop for Bryan during the Costa Rica trip, that his passion for such studies is what led to the name of their first proprietary blend, "Proletariat". After Super Storm Sandy in 2012, while Long Beach lay completely demolished, unmetaphorically awash in debris, despair, and utter ruin, most of those stores left standing were empty for weeks while the workers looked after their personal business and the owners argued with insurance companies. But the Gentle Brew, having been a part of the community for only three months at that point, gathered a generator and a propane tank, and opened its doors after only a few days – just to convert the entire place into a food and clothing drive, and to offer cups of hot coffee for a dollar.
So when the Gentle Brew excitedly announces that it is dedicated to a positive, sustainable relationship with the farm they visited in Costa Rica, I have no problem believing them. It is not about doing a personal audit of their financials and investigating their travel itinerary; I could do that, but it would be beside the point. I know them, just as they are embarking on a path to know their partner on the farm. Direct trade is about that kind of knowing: engagement, familiarity, unity, community, even a type of intimacy and affection.
There is one last iteration of direct trade that needs to be mentioned here, and that is the direct trade importer. You read that correctly. Direct trade, done by an importer. A middleman-less model operated by a middleman. How can this be? Surely it must be bunk.
Depends whom you ask. Some say yes, based on exactly that description; others see a lot of good to be had.
It works exactly the same way as standard direct trade described above, except that the person visiting the farm or co-op, forming relationships, signing contracts, and all that jazz is not going to actually roast the coffee; instead, he will sell it to roasters. Mr. Streetman gives a great synopsis: "It is fairly popular especially among quality focused very small roasters. When you are a single operator it is very hard to leave your [roasting operations] and go to origin for 2 weeks, so the ability to have someone travel on your behalf is a big service. It also helps them recruit clients as they invite them on the trips and connect them with their contacts. It represents a small segment of the industry but it does seem to be growing."
So the importer goes to origin; fulfills (ideally) the direct trade promise on that end; brings the coffee, and story behind it, back to the roasters; the roasters then have assurance that the farmer and his coffee is worthy; and the roaster may even give feedback that the importer can bring back to the farm to improve the coffee.
This is not to exclude the roasters or their customers from themselves fulfilling the promise of connection and community. Mr. Streetman describes one intriguing function of these direct trade importers: "facilitating relationships with the producers." He explains: "[The importers] bring [the roasters] into the relationship by being the conduit for communication, and many times by initially connecting, or bringing the roaster along after they have been buying the coffee for a couple of years."
The middleman will take his share. And the roasters have every opportunity to buy the beans without caring a whit about where they came from. Those are undeniable downsides. But there are upsides, too. One is that, if the importer does his job right, a single relationship between him and the farmer can turn into multiple relationships between the farmer and a whole slew of roasters. Another is the elimination of risk.
One of the biggest problems that roasters have with direct trade is the risk of traveling to the farm just to find that the farmer is not a good partner to have, either because of crop quality, trustworthiness, or anything in between. A lot of time and money is spent on researching the farms, but there is only so much reliable information floating around. One roaster I heard from complained that they went all the way across the Equator just to find their hosts to be swindlers. Tours of the farm were restricted, cupping opportunities were limited to "pre-selected" beans, and the trip ended with a surprise bill charging them for the room they slept in and the food they ate.
Such things happen, and for a small business especially it represents a very substantial risk. Frankly, a farmer hosting a roaster faces a sort of mirror-image risk.
And let's not forget the invisible but tremendous risk faced by both roaster and farmer in direct trade: What if the contract is signed, things go great, and then one of them wakes up one day to discover that the other has gone out of business? There's a bad position to be in! The roaster may be suddenly left without any inventory or way to recoup his investment; the farmer may be left with custom-grown beans and nobody to sell to. (A farmer doing direct trade through a co-op is moderately protected from this risk, but still, it may cause a couple of sleepless nights.) Having an importer in the middle makes things that much safer in this regard.
I ask Mr. Streetman if he considers direct trade importers to be a legitimate offshoot of the direct trade model. "Yeah," he says. "I think the service is great for the industry. They bring more great coffees to market, and mitigate some risk for roasters and producers."
Law professor Seth E. Lipner, a wise man indeed, once said, "You can't have contracts that have no risk. You can only have contracts that allocate risk." The same goes for business models in general. Sometimes – often, in fact – risk is most safely allocated if orthodoxy is compromised. Direct trade importers certainly offer an arrangement with risk safely spread about. Is the compromise worthwhile?
There can be no doubt that a crucial element of intimacy is delayed at best, and often neglected. Even assuming that the importer is honestly dedicated to direct trade principles, the opportunistic and huckster retailers are still given an opportunity to do what they do. But does the offering of just another avenue for such people to be who they are anyway, really outweigh the opportunity that is offered to numerous small roasters and farmers who lack more viable options to embark upon direct trade?
These, much like most of my other questions in this treatise, are not for answering. Just think.
By Any Other Name
Among the questions I had for Mr. Streetman was one about the popularity of the two trade models among consumers. His answer shed light on something much more crucial. "Basically, these programs are popular wherever they have been successfully marketed," he began. "In the 'mass' market, [fair trade] certified coffee has a large popular appeal in almost all consuming countries, as a way to differentiate the commodity. In the specialty niche, roasters have moved away from wanting to promote the certificate marks, because there is not a way to differentiate between one certified coffee and another, so promoting certification becomes a commoditizing trap when you are selling a product that is differentiated by quality."
Take it from me: The importance of differentiation in any business can hardly be overstated; in today's artisan foods industry, it is arguably the most crucial element of the offering.
Mr. Streetman mentions that he and other roasters are frustrated by "people not wanting to buy coffees that [we] paid high prices for because they were not 'Fair Trade', or [we] were unable to certify because they were not from a co-op model." He clarifies: "We do not participate in marketing the Fair Trade label, even though we purchase Fair Trade coffees. This is mostly an administrative and marketing decision. We determined that is not worthwhile for us to market a mark which is used by other companies to promote our coffee. We decided this because, we generally found that promoting some of our coffees as Fair Trade, and not others led to confusion about the ethics behind the purchase decision for all of our coffee. For this reason, we found it better to focus on our holistic purchasing ethics, and promote brand loyalty through differentiation."
That may be one man protesting too much; or, it may indicate a critical weakness in narrowly defining how organizations ought to achieve larger goals. Whatever the case, the efforts of the ethical sourcer must necessarily be able to improve the popularity and marketability of his coffee.
Make no mistake about it: The roasters and retailers, and their commercial success, all count. Big time. Those who care about the farming communities and their prosperity should not for a moment doubt that the concurrent prosperity of those buyers who ethically support them is paramount. Just ask the farmers themselves.
But wait – there's more. Mr. Streetman adds further: "We are firmly committed to the idea that farmers should receive a minimum fair price for coffee, the underpinning philosophy of Fair Trade and that has always been a part of our commitment. We decided in 2011, that moving towards long term commitments with our producers would benefit us, because we would gain access to better coffee, and create a feedback loop between ourselves and the producer to work towards our common interest/goals." So, Irving Farm has decided against a strictly fair trade model because it ends up working against him and many other coffee roasters on the other end of their business. And yet we know that they ethically source from origin. So that would make them direct traders, right? Not necessarily, no.
"With the proliferation of the term 'Direct Trade' as a marketing tool, it can diminish the value of it as a point of differentiation," explains Mr. Streetman. He goes on, after adding a word about direct trade importers, to say, "For these reasons at IF, we don't explicitly talk about 'Direct Trade' even if it is implicitly understood/assumed that is what we do, instead we emphasize the relationships that we (as IF, not our agents) have with our producer partners, and focus on adding value to the coffee experience through the information provided to the customer about the coffee (this is difficult to do)."
So direct trade, as an institution, has reified itself, and fallen into a similar commoditization trap as fair trade. Therefore, the label is eschewed.
Direct trade, not having concrete and auditable guidelines, may be so broadly definable as to include Irving Farm by default. But on the other hand, the ethos of independence that direct trade bestows upon its practitioners surely ought to allow a roaster to exclude himself from that group as easily as it allows him to include himself in it.
In any event, here we encounter an insight of great moment: direct trade and fair trade are not the end of the story. They are but two fish in the sea, two stars in the sky. The universe of ethical sourcing has room for many more. "Over the time that IF has been roasting coffee (since 1999)," says Mr. Streetman, "there has been a large shift in transparency, and connectivity throughout the coffee supply chain. This has led to increase awareness about how to achieve certain goals. For us, our goals have always remained constant, buy the best coffee, and ensure that the environment and people are protected through-out that entire process. How we have tried to achieve those goals has changed as we learned new ways to achieve them."
CHOICES
Consider how we have come to understand fair trade as meaning more than a price tag and a logo, and how direct trade means more than a sojourn and a purchase order. "Both have their place as an attempt at bettering the economic, community and growing conditions at coffee origins," Mr. Closson reminds us. Indeed, the things that matter are the same, are they not? They are, in just about every profound respect, entirely identical.
"Sometimes, there's a lot of the same stuff going on," notes Mr. North. "Real direct relationships, working with co-ops, paying high prices, maintaining steady relationships, doing a lot of work on quality… That's where Equal Exchange and Counter Culture [a direct trader] have more in common with each other than we do with some of our ostensible counterparts in the fair trade and direct trade sectors." The best practitioners of each are certainly much less distinguishable than the opportunistic practitioners of each, are they not?
Sometimes such "best practitioners of each" are, in fact, one and the same organization, as we have seen with Irving Farm. It is also true of Roast Coffee & Tea. "As a coffee roaster that specializes in sourcing coffee from all over the world we work with both Fair Trade coffee and Direct Trade coffee," Mr. Closson explains. "Although no trade certification is perfect we believe the mission of Fair Trade is an admirable one and are happy to support it when using such coffees. … Our mission is to help guide coffee drinkers in their exploration of the world of coffee. This requires that we use many sources and trading approaches throughout the world in acquiring coffee. In all of our trading we stay true to clarity in our supply chain. … While there is no official Direct Trade certification and/or definition we do consider our direct farm relationships Direct Trade. The principles that guide us in Direct Trade are the ones that we adhere to for all of our business-to-business relationships. We consider them partnerships and in order for partnerships to work both parties must benefit in a sustainable way. The best partnerships benefit all parties in their personal, economic and community growth. ... Over the years as we build more direct relationships with farmers we increase the amount of Direct Trade coffees that we offer. We fully expect to continue offering Fair Trade coffees as well."
Mr. North gives us yet another example of how direct trade and fair trade are so marvelously congruous. Equal Exchange, a quintessential fair trader if ever there was one, offers a product line perhaps more thoroughly direct trade than anyone else. "I think it matters that Equal Exchange actually helped to pioneer not only Fair Trade coffee but also the core practices of direct trade – that is a coffee company trading directly with growers, not with importers or exporters," says Mr. North. "To this day we are one of the few to import all of our own coffee, and to do all of it directly."
Ms. Meinshausen points out that direct trade "re-enforces the original fair trade approach of a trader/coffee brand working long term and very closely with one or many producer groups and making all efforts possible to support the suppliers and continue buying meaningful quantities from them." Indeed, we have come to associate those principles, beautifully spelled out by Ms. Meinshausen, with both models. That is because the two models both equally embody them. The looks may differ; the details may differ; the true spirit does not. At all.
"The real 'dichotomy' that exists between Fair Trade and Direct Trade (if there is one), is that they compete in the market for finite consumer dollars to funnel into their respective supply chains," declares Mr. Streetman. "The ideal solution to this would be that the market should reward supply chains which are the most efficient at producing the product, and maximizing value to all stakeholders."
Here is the bottom line: The real issue has nothing to do with choosing between direct trade and fair trade. It is of course possible to "choose direct trade" or to "choose fair trade", but those are just two options among infinite ones, subordinate to a larger choice. The most basic, most important choice for a roaster or retailer to make in this context is whether to commit to connecting with farms and coffee growers, investing long-term in the sustainability of their enterprises and communities, and fulfilling the larger promise that has loomed over this entire discussion. Once that choice is made, the rest is just details.
To be sure, the details do matter, on the organizational level. It is frivolous to choose such an important path if no attention will be paid to how, exactly, it will be trodden. But to get caught up in the labels and dogmas of two relatively specific means is folly – not least because they are, after all, twins.
Every roaster, every retailer, every importer, every co-op, every farm, every plantation, every worker, has different resources, goals, opportunities, commitments, relationships, and capabilities. Each should evaluate for himself how best to use his circumstance in the coffee value chain to make the world sustainably better and more connected for all parties, including himself. It may or may not be direct trade; it may or may not be fair trade; and it may or may not include a trendy label.
Who cares?
SPECIAL THANKS
A special debt of gratitude is due to the people and organizations below for their very generous attention and their keen, candid insight, without which you would most certainly have been spared from reading this interminable treatise.
Mr. Marc Chiusano, Lead Barista, The Gentle Brew
Mr. Evan Closson, Founder, Roast Coffee & Tea Trading Company
Ms. Jenna Larson, PR Manager, Fair Trade USA
Ms. Florentine Meinshausen, Scheme Manager, Fair for Life
Mr. Rodney North, The Answer Man (Information for the Public & Media), Equal Exchange
Mr. Dan Streetman, VP of Wholesale & Green Coffee Buyer, Irving Farm
What set coffee drinkers apart in this context, however, are two things. The first is that it is not only connoisseurs of specialty coffee who care about where the beans come from. Many people who would not know a craft roast if it jolted them awake in the morning are sure to note their coffee's origin, and can usually tell a difference (which speaks volumes about the importance of terroir). The second is that it is not just where the coffee comes from that coffee drinkers care about, but also how it got to them from there. The particular origin is important for quality and taste, but most coffee drinkers are at least as concerned about the trade model that brought it from farm to cup, for the good reason that its import derives from ethics and sustainability, which are of course much more important in both the long and short terms.
At least on the surface (and we will see later on how the superficial scenario here is deceptive) there are two trade models competing for the hearts and minds of consumers, roasters, and farmers: direct trade and fair trade. Like most consumers, I thought I knew pretty well what the basic premise of each was, and took comfort in both taking the side of one of them and still feeling, shall we say, a tad sympathetic with the other. But also like most consumers, I misunderstood at least as much as I understood, and also remained ignorant of many important details, where (of course) the devil lies.
This article will discuss direct trade and fair trade with respect to coffee. The two models are of course relevant to scores of different products, but for the sake of simplicity, which is already conspicuously lacking with this topic, discussion will be limited to the coffee market. I will offer a conclusion with my own thoughts, but, while I certainly hope it proves itself worthy of consideration, that will not be nearly as important as the longer discussion preceding it, in which all aspects of direct trade and fair trade are more objectively explored. The goal here is to educate, illuminate, encourage thoughtfulness on the topic, and perhaps do a humble part towards making the world a better place. To that same end, thoughtful comments below are encouraged.
WHY WE BOTHER
Once upon a time, the status quo was that coffee was traded on the exchanges as a fungible commodity. This is still true in large part today, especially with lower grade coffee. Growers sold the cherries to processors, who brought about the green coffee beans and sold to exporters, who sold via commodities exchanges to importers, who sold to roasters, whence finally the coffee made it to retail: cafes, restaurants, packaging companies (e.g. for supermarket shelves), and so on. There were variations on that model among some organizations, but most crucial elements were the same.
The farmers, farthest removed from consumption, were the poorest and least able to benefit from the trade. In some instances it was a case of a large estate employing coffee pickers for a pittance, and in others it was small plots of land being farmed by a local individual or family that was likely to lack, if not business savvy, then at least a familiarity with the global supply chain and consumer preferences, which knowledge could be leveraged to produce better coffee and increase income.
The processors and exporters (and estate owners where relevant) generally took advantage of the farmers' ignorance of the larger market. They also had a tendency to lump all coffee together and both buy it sell it by weight. These practices had the effect of removing nearly all incentive for the farmers to look towards coffee as a way to improve their lives, for them to risk entrepreneurship at the production end of the industry, and for them to invest in improving the quality of their product or in differentiating it – all of which in turn contributed towards keeping them at the margins of the global coffee industry, and so on in a rather unpleasant, if not entirely vicious, cycle.
"The main instigator of Fair Trade was the lack of incentives growers were getting to improve the quality and sustainability of their product as well as the transparency and ethical handling of fair prices for the products grown," says Evan Closson of Roast Coffee & Tea Trading Co., a Long Island sourcer and micro-roaster.
By the time that fair trade as we know it today came around in the 1980s, there had already existed for many years charitable and other organizations that sought to pay poor farmers a premium for coffee. But what was different, and what really allowed for fair trade and later direct trade to take off, was the growing demand for single-origin and craft-roasted coffee – the growing understanding among professionals and consumers that Coffea arabica is no more fungible than Vitis vinifera, that stories of people and place make coffee better, and that while the particular terroir of a coffee may make or break it, the odds of "making" it are greatly augmented with investments into improved agriculture. In this way, the specialty coffee market, with its emphasis on origin, is in large part responsible for the new models of trade that have made the world a better place for coffee growers.
THE COIN'S TWO FACES
"Both Fair Trade and direct trade were originally created to help famers deal more directly with buyers and retain more value in the supply chain," says Jenna Larson of Fair Trade USA (previously TransFair USA), a fair trade certifying organization. That is about as succinct a way to introduce the big picture as possible.
We will soon see that the dichotomy between direct trade and fair trade is in large part a fiction. But it does form the basis of many important decisions that are made in real life, so it makes the most sense to first treat each separately. Before parsing details and exceptions, I would like to present an idealized, simple, textbook analysis of each.
Fair Trade
"Fair Trade is a simple way to make every purchase matter," according to Fair Trade USA's media kit. "When you buy a product with the Fair Trade Certified™ label, you know that the farmers and workers who produced it were paid better prices and wages, work in safe conditions, protect the environment, and earn community development funds to empower and improve their communities."
"Fair Trade specifically means coffee or products that are Fair Trade Certified. In other words the entire supply chain has been verified as Fair Trade from crop to cup," explains Mr. Closson. "We are a Fair Trade USA Certified roaster. This requires reporting our Fair Trade coffee supply chains to the Fair Trade USA organization a few times throughout the year."
Rodney North of Equal Exchange, a fair trade worker cooperative, rounds out the picture from the institutional angle: "Fair trade is a voluntary set of business practices designed to shift more of the rewards and the security of trade to historically disadvantaged producers." It also serves to "shift more of the risk up the chain to the historically advantaged coffee importers, roasters, distributors, and so on."
At its core, fair trade is a certification system ensuring the livelihood of the farmers and their communities. As long as both farmers and consumers are content with the certification criteria, all stakeholders stand to benefit. Farmers can be assured that their coffee will fetch at the very least a floor price and usually more; distributors and roasters can use the fair trade label as a sort of marketing tool; and consumers can rest easy knowing that they are contributing not to penury but to prosperity in the third world.
Dan Streetman of Irving Farm, a coffee sourcer and craft roaster in New York, explains that with fair trade the farmer is paid a "minimum price and 'premium' (allocated monetary value) for the product in exchange for the auditing process conducted by the Fair Trade labeling organization, the license to use the 'Fair Trade Certified' trademark, and a 'social premium' which is allocated for specific purposes at the producer level." FairTrade USA's media kit identifies just a few areas in which these premiums are typically invested: "Healthcare, scholarships, women's leadership initiatives, micro-finance programs, quality control and organic conversion."
Ms. Larson identifies four "important elements" of fair trade: "standards" ("social, environmental and economic… audited by independent third-party auditors"), "premiums" (which "go into a separate fund, managed and used by the farmers and/or workers themselves"), "price protection" (a "safety net" protecting against market price fluctuations), and "democracy". Similarly, Florentine Meinshausen of Fair for Life, a European fair trade certifying organization, notes "the basic pillars of Fair Trade: fair production methods, long term cooperation between producers and handlers, commitment to support and work with suppliers as well as fair pricing." Ms. Meinshausen adds that Fair for Life fair trade "assur[es] physical traceability from producers to the final product."
Another key element of fair trade, especially in the early days but even still today, is its emphasis on moving away from the plantation model in which the owner can take advantage of employee laborers, in favor of the small farmer model. Mr. Streetman explains, "The historical model of Fair Trade… was a move to push the market towards groups of small-holder farms… versus the large mostly vertically integrated estate style producers." Ms. Larson's focus on "democracy" (described as "organization and participation among the farmers/workers") is also a part of this facet of fair trade. Movement away from plantations is one of the principle reasons that most fair trade certifiers give preference to co-ops, so that small landholder farmers – analogous to the small businessperson of the USA, but generally without the advantages of available capital or reliable rule of law – may have an inclusive, local, and democratic institution. To his earlier mention of "historically disadvantaged producers," Mr. North appended: "…specifically small farmer cooperatives." (More on co-ops later.)
Not everyone's explanation of fair trade uses the same specific language, but the gist of each is the same. Farmers are protected economically, given access not only to markets but in fact to a transparent supply chain, and offered incentive to improve their communities socially and, often, ecologically.
Direct Trade
Many of these aims are shared by direct trade. But the model itself differs somewhat. "Direct Trade emerged due to the perception of many coffee roasters that Fair Trade was not fulfilling its mission sufficiently," says Mr. Closson. "The result was direct relationships between roasters and growers that focused on quality, sustainability and mutually beneficial business partnerships."
Marc Chiusano of The Gentle Brew, a Long Island, NY, craft coffee roaster embarking upon direct trade relationships, puts it nicely and simply: "In direct trade, the buyer or roaster goes to the farm and buys directly from there. No middlemen."
"These programs generally involve price transparency at each step in the chain, and can involve multi-year outright contracts," adds Mr. Streetman. "This means that the producer of the coffee and the roaster agree on the price of the coffee at the farm gate." While the roaster is usually responsible for such items as "transport, logistics, taxes, storage" and the like, it may hire a third party to handle such things. This is to be distinguished from the inclusion of an importer in the chain: A traditional importer actually possesses ownership of the coffee for some time and adds his own markup, while a third party in direct trade is hired by the roaster, operates under its direction, and is simply paid a fee for a service (storage, shipping, etc.).
The implication is clear: the farmer gains access to the broader market not through layers of certifications but rather through dealing directly with the other end of the chain and negotiating his own price, in person. "Most (if not all) 'direct trade' roasters believe in paying a 'fair' price for the coffee," explains Mr. Streetman, "and the underpinning principle of mutual price agreement certainly gives the producer a voice in that conversation." Ms. Larson would seem to agree: "Direct trade… focuses primarily on paying top dollar for the highest quality coffee." Mr. North sums up, "[Direct trade] is, ideally, the coffee roasters directly buying their green beans from small scale producers in ways that are economically advantageous to the producers, above and beyond what they would get in a regular commodity market."
Further, deeper benefits abound as well. The roaster can specify a variety of requirements (bean quality, certifications such as organic, etc.), and can gain access through the relationship to microlots early on. The farmer can charge higher prices for all of these premium benefits, and both organizations can make money due to the absence of middlemen. The consumer, furthermore, has the best chance (in fairness, by no means the only chance) of finding the highest quality coffees from direct traders, who can be particular about what beans and lots to purchase. The consumer also has access to the most intimate information about each bean, lot, farm, and community from the direct trade model, whereas such access varies with other models.
"For Direct Trade the benefits are the relationships that are cultivated with growers," Mr. Closson opines. "Our mission is to educate our customers about the world of coffee and the best way to do that is to know every last detail about a particular coffee. Having a direct trade relationship with a grower allows for this."
A further important item of direct trade is sustainability. It is all well and good for a farmer to do premium business, but as any businessperson will confirm, it is much more preferable in high-risk environments to have a steady source of price floor security (e.g. of the fair trade style) over many years than to net a whale one year and be left adrift the rest of the time. Indeed, a review of the principles of fair trade above reveals that sustainability is of implicit importance to all of them. But direct trade provides for that, too, in that long-term business relationships benefit both parties.
Direct trade roasters visit farms at least once a year. More than simply shopping around for beans, signing an order, and leaving, the roasters learn detailed information about each lot, offer insight as to how the crop may be improved, and often invest financially in enhancing the agriculture for the sake of growing better coffee. They also ensure return on the investment by signing multi-year contracts with the growers for specific lots of coffee, at the aforementioned mutually-agreeable prices. It is a joining of forces between roaster and farmer, and everybody wins.
A DIRECT TRADE CASE STUDY
Mr. Chiusano and some Gentle Brew co-workers recently visited the Cerro San Luís farm in Costa Rica, and their experience there exemplifies the potential contained in direct trade.
"When we landed in Costa Rica we were taken straight to the farm," recounts Mr. Chiusano. "On the farm we spent a lot of time just learning how they do everything: picking coffee, identifying different beans, processing, washing and drying, and so on.
"The main things we were looking for," Mr. Chiusano continues, "were operations and processes, how they care for the product." To that end, the Gentle Brew team observed the sorting, did cupping, and so on. But there were other considerations, too, lending themselves to the sort of sustainable relationship that is ultimately what really lets roasters and farmers connect with one another. "Can the farm grow? What are its future plans? We are looking to create a long-term bond. You don't do direct trade just for a one-off deal."
Cerro San Luís is a family business, run by its third consecutive generation of farmers. "The current generation has only been at the helm for three or four years now," says Mr. Chiusano, "and they are really positioned to explode, much like the Gentle Brew is on our own end. The current generation, they've been really pushing hard to increase standards. Also too, they have been experimenting with all different varietals of coffee, so you have in addition to the usual sorts of coffees found in Costa Rica, other types that they are hoping will give their farm an edge. It’s a gamble," he continues, "but you know, it’s worth the shot." Especially if you have a partner organization working with you.
It is more difficult, outside of direct trade – in a model in which the farmer is much more anonymous and has minimal access to feedback from the other end of the chain – for such innovation to flourish. Direct trade hardly brings any promises of results, of course. But it most solidly offers the farmer a legitimate opportunity to shape his own destiny.
The anonymity of non-direct trade models is also an irritant to many roasters and consumers on the other end of the chain. Consumers, especially craft coffee connoisseurs, relish the opportunity to engage intimately the land and people whence their coffee originates. Roasters, then, enjoy bringing to their customers a first-hand account of such communities. They also prefer to observe for themselves the quality processes of the farms and perhaps even directly influence the nature of that quality. Direct trade is the best way for them to become intimate with how things are done.
Even gaining intimacy with the "why" of things makes a big difference. Let's look at a hypothetical. Cerro San Luís employs a honey process, which is semi-dry. The Gentle Brew learned on its trip that this is to conserve water. It just so happens also to result in coffee of optimal quality. But if, hypothetically, another processing method were preferable, then Gentle Brew could have worked with the farm to invest in and develop a program to either augment the farm's irrigation, or conserve water elsewhere on the farm, or otherwise adjust the farm's infrastructure to allow for optimal processing. Cerro San Luís would be given both incentive and means to augment quality, and Gentle Brew would be given access, probably exclusive, to such high quality product. Such cooperation generally includes a contract whereby the roaster agrees to purchase a whole lot's harvest at a specified price each year for a number of years, as long as the farmer engages in the agreed enhanced agricultural practices. The details of numbers and practices would be specified in print. Both sides would be bound to the contract – and both would stand to greatly benefit accordingly, with the long-term nature of the relationship and investment adding a great deal of security to both sides.
The odds of such arrangements taking place successfully in the face of multiple layers separating all the steps of the supply chain are, obviously, substantially diminished, regardless of any certifications adhered to them.
The relationships, furthermore, once established, have the opportunity to grow beyond a unidirectional supply route in a direct trade model. When I asked Mr. Chiusano why he thinks Cerro San Luís wants to engage in direct trade in the first place, he said that money may well be the principle concern, but that there is much more to it than that, consistent with the principles of growth and cooperation. "We didn't even know this until we got there," he explained, "but they also want to get into roasting themselves, and maybe even open a café." The Cerro San Luís team has a small home roaster on their premises, and everyone experimented together with some roasting of the beans. The Gentle Brew team worked with the beans from the farm itself, and offered pointers to their hosts on the craft. That had the obvious benefit of confirming the roast potential of the varietals on the farm, but it also offers a means for the relationship to grow closer and more reciprocal. The farmers have a standing invitation to visit the Gentle Brew on Long Island and do a roasting workshop for a few days.
Cerro San Luís, should it decide to open a roastery in its community, now has cheap and easy access to real expertise. So, if it vertically integrates that way, it is looking at an enhanced chance of success, which would open the doors to growth, prosperity, and security for the organization, as well as insight into what sorts of experiences and challenges exist for the roasters on the other end of the chain. That knowledge may be used to improve the choices they make in varietals to plant, farming practices, and processing methods, again furthering their ability to grow, prosper, and sustain their business.
At this point we may feel ready to reduce the question to a few basic points. Is it not just a complex way to pit certified good ethics against determination for high quality? The answer is no, but in any event we have much more to explore before we can fully understand the legs on which each model stands. There is no better place to continue from this point than the co-ops, about which alone entire volumes could be written.
E PLURIBUS UNUM
Mr. North describes how he and Equal Exchange believe the co-op to be nothing less than the "lynchpin for enabling these small-scale producers to get ahead," whereby the prosperity of a coffee farming community cannot be tied to the success of individual farmers but must be predicated upon the shared success of all. He offers as an analogy: "You have some run-down, or sort of downtrodden neighborhood in the South Side of Chicago. And, like in a reality TV show, somebody comes in and takes somebody's little house and does a total make-over. And so someone could say, well, yeah, that homeowner's doing great. But it's done nothing for the neighborhood. And in fact, it can breed tensions, where it's like, well wait a minute, how come Joe, my neighbor, he got a big house and he's not really that much more deserving than I am?"
Background
The large coffee estates, or plantations, historically the typical coffee farm model, have always been sources of woe to the laborers who work them. These organizations exist in places where worker protections and the rule of law have rarely been worth the paper on which they are written – or rarely even written down in the first place, for that matter. Laborers are just as often cheated, swindled, abused, and otherwise taken advantage of as they are treated honestly. And "treated honestly" only means "paid what they expect," which is of course extremely little, rarely more than enough to keep a family from starving.
The tragedy here – outside of outright theft and abuse (the severe extent and frequency of which must not be underestimated) – is not the owner's greed; there is no sin in profit. It is rather the bastardization of the profession of coffee farming. Even today in many parts of the world, it is possible to belittle someone as being "just" a coffee farmer, but not to make a similar remark in admiration. If working the land and growing coffee is likely to result in wretched penury and social marginalization, and even in the best case scenario can only result in modest survival one year at a time without any hope of ownership or even recognition, then nobody is going to invest in learning how to do it well, let alone hone it into a craft.
The alternative has been individual coffee farmers owning a small plot of land and working it themselves or perhaps with the help of family or a few hired partners, building their equity through expertise and quality product. But how can a small landholder in a third world country selling a (most often) once-a-year crop be secure in his business? He must obtain credit, form relationships, negotiate contracts, weather market cycles, protect against natural and unnatural disasters, decide on investments, get certifications, be trained in best practices and stay current as they evolve, perhaps hire associates, and so on, all while competing against a large plantation down the road. All else being equal, this is rarely possible – but when a number of small farms band together to cooperatively pool their resources, they can share in increased scale, lowering costs of shared activities and augmenting their bargaining power.
Nature
Farm cooperatives, or co-ops, take many different forms, in that by their very nature they are democratic organizations in tune with local culture, norms, and conditions; and different parts of the world are home to wildly different cultures, norms, and conditions. What they have in common are the basic collective business activities, and the community orientation.
Co-ops "are primarily a method for selling coffee, and distributing earnings," explains Mr. Streetman. "Most of the time, the co-op is buying the cherry from the co-op members, and then overseeing the washing, and drying of the coffee. Usually this is important because each producer is too small to process their own coffee, or they do not have the capital to buy the equipment necessary."
Plantation owners, and others aligned with them, have not taken the threat posed by the co-ops sitting down. Many times co-op coffee is slandered as being of unreliable quality. Sometimes they are intimidated politically or physically, or both. Sometimes the old guard gets crafty.
"We see these examples time and again where the people who historically had been buying up all the coffee in a community, and buying it cheap, begin to see that they're losing market share to the co-ops, because now the small farmers are in business for themselves," tells Mr. North. "They will go into a community one year, and they'll just pay top dollar for everything – for the best coffee, for the worst coffee, and for everything in between. The idea is just to suck up all the coffee, there's nothing to sell to the co-op. The co-op is a business, it has fixed costs, salaries, mortgages… and what happens to the co-op? It has no coffee to process and export. It can't fulfill its contracts and goes bankrupt. It's gone. Next year, we're back to where we were twenty years before, and once again the small farmers are going to get squeezed."
But the co-ops have persevered. They are popular with many coffee farming communities, and also with many coffee consuming communities. Many co-op farmers have also wised up and voted for protectionist measures, such as requiring member farms to sell at least a certain percent of their crop through the co-op each year.
Ultimately, the co-op model has really done a lot to save the independent farmer from oblivion. Accordingly, fair trade organizations have typically focused principally, even exclusively, on working with co-ops, as mentioned earlier. A co-op that wants the fair trade prices and premiums must be audited and approved by a certifying body to make sure that the money is properly distributed to the farmers, community funds, and the like. Mr. Streetman mentions that "since they are democratic, the members in the co-op vote… for example on how to spend the 'social premiums' from Fair Trade, and it could be spent on anything from a school, or doctor's office, to a road… soccer fields, libraries are popular as well."
Issues
But even co-ops have their limits, and their pitfalls. Many are legitimate concerns, although some are urban legends, probably vestiges of slander. The most common complaint heard among roasters and consumers, which is important to address because it arises seemingly everywhere, is that co-ops mix all of their farmers' coffee together and sell it practically as a fungible commodity. Fair traders and other co-op defenders insist that this is completely false. The truth on this count does not so much lie in the middle as depend on the co-op. "There’s hundreds and hundreds of cooperatives around the world, and they don't all abide by the same practices," explains Mr. North, "but more and more they are segregating their coffee just like plantations do." Many co-ops divide the coffee by varietal, by growth elevation, by certification, by producer, sometimes even by micro-lot, and weigh some or all profit disbursement accordingly. Indeed, there are also many co-ops that quite disregard the individuality of member farms, and prefer to simply mix all the coffee together. It depends on the co-op's rules, just as a farm's quality depends on the individual farmer's practices.
Other issues abound as well, some real and some imagined, but I will not dwell on them here. It is extremely easy to get distracted from a comparison of direct trade and fair trade with a discussion of the co-ops, but it does not behoove this article to digress any further. What is important to remember about co-op downsides are two key points.
The first is that a co-op's policy is generally the result of democratic voting among the member farmers. Whatever its practices may be, they reflect how the majority of members themselves see best, or at least safest, to arrange their organization. Roasters and consumers in the developed world may look at a co-op and think of a million ways that the farmers could do better business, and maybe even a few such ideas would make sense. But the farms and communities are their own, and so are the rules. It is no longer an ethical issue.
The second is a series of questions, none of which can be answered categorically; just a collective grain of salt that I offer up for the sake of level-headedness. What if Mr. North, et al., protest too much? What if the picture is not so cut and dry everywhere? What if, indeed, at least in some cases, we infantilize and romanticize the farmers, indulging our "save the world" instincts at the expense of realism? No doubt, for the majority of small farmers in the third-world, the co-op has been nothing less than a life-saving institution over the past few decades. But is it such an absolute rule of thumb that the story we have heard is necessarily always how it goes and always how it will go? Could it be that, whatever the origin of the co-op's popularity in farming communities, we can ascribe a large part of its remaining popularity to the simple fact that that is where fair traders typically channel their premiums? Could it be that the co-op is not the only choice for coffee farmers to build a decent life for themselves and their communities? Could it be that at least in some communities, and at least in some cultures, the co-op is at best a historical stop along the way to independent wealth (of the honest kind) for coffee farmers and their communities? With the continuing evolution and innovation of trade models, do co-ops not face very legitimate competition for the hearts and minds of small farmers? And what if the analogy about the South Side slums fails to do justice not only to the value of a coffee’s quality but also to all that is put into creating it, and to those who would like not just to get more but in fact to honestly earn more?
How Co-ops Fit with Direct Trade & Fair Trade
For the longest time, fair trade certifiers would only certify coffee sold through co-ops. And the logic was as reasonable as it was obvious: co-ops were the only reliable, consistent way for the goals of fair trade to be realized. Build a better life for the farmers; move away from the plantation model; allow people, families, and communities to flourish; remove economic barriers to environmental protection; and make these improvements sustainable. Looking at the macro picture of a few decades ago, it was clear enough that a premium here and there for a lucky handful of planters was not going to get the job done. The fair traders found a solid ally in the co-op model, and stuck by it.
But controversy quietly ensued over whether there is a non-sequitur in there somewhere. The co-ops were (are) means to a larger end. By exclusively institutionalizing one particular mean, some argued, the fair trade system would ultimately constrain those whose best chance to reach the common goals lie elsewhere. In other words, few people were outright hostile to the co-ops, but many remained unconvinced that they alone held the key to salvation.
Still, co-op defenders continued to implore that we beware the results that may come from loosening co-op ties; that what seems like an innocuous, even promising open-mindedness may in the end spell the undoing of the co-ops and all of the progress that they have heralded.
In 2011, Fair Trade USA, the predominant American fair trade certifier, parted ways with its erstwhile associate, Fairtrade International, the major global fair trade certifier headquartered in Germany. The reasons for this were various and manifold, but of particular interest here is that, post-schism, Fair Trade USA began to certify not only co-op products, but estate products and non-co-op small farmer products as well – all along the same standards and guidelines.
This is not to say that the co-ops have been eschewed or marginalized; quite the contrary. Co-op connections have been maintained, and are in fact encouraged through a number of programs. However, plantation owners now have material incentive to improve their treatment of workers, and small farmers who do not wish to abide by the majority rule of their local co-ops are not forced out to a cold isolation. Anybody may partake of the promise afforded by fair trade principles, and co-ops must compete harder for both members and customers. And, it is only fair to note, Fair Trade USA's business has expanded quite concurrently with its scope.
It remains to be seen how this will affect the various stakeholders and institutions in the long run.
As for direct trade, it is unclear how it ties into the co-ops, for the simple reason that there is disagreement over whether a roaster going "directly" to the co-op even counts as direct trade. Direct trade purists believe that only going to the actual farm can count. They point out that cutting out all middlemen, literally landing straight at the source and working only with exactly those people who grow the coffee, is the supreme way to ensure quality, oversee investments and innovations, form close and long-lasting relationships, and properly allocate rewards. Co-ops may be good when there are a few layers of the value chain separating everyone, but, according to the purists, they are no more than obstructions in the direct trade model. There is nothing they can offer that the roaster and farmer together cannot offer better, and in any event, a middling layer is added. To involve the co-ops, the purists declare, can be called anything we want, but it cannot be called direct trade.
Others disagree. There may be situations in which contracting directly with a farmer makes sense, they counter, but there are also situations in which the farmer has a vested interest in thriving communally via his local co-op. These non-purists identify situations in which the roaster heads to a farm, bonds with the farmer both personally and professionally, reviews his practices, identifies a winning lot… and then performs the actual purchase through the co-op, which guarantees precisely the lot desired. Any investments into the farm's own infrastructure may be made either around the co-op or through it; in the latter situation, the co-op guarantees the intended improvement to the farm's production. What, the non-purists ask, is so wrong with all of that? Just which of the benefits that the farmer, roaster, and consumer expect from direct trade, they would like to know, are compromised?
As it happens, some direct trade roasters deal only with farms, others only with co-ops, and still others with both. It generally depends on the roaster's convictions, options, and goals for the venture.
WHAT'S IN A NAME? USERS, ABUSERS, & REFUSERS
We have begun to see that neither direct trade nor fair trade is a monolith; indeed, each takes a variety of forms not only on paper but also in practice. Some of these manifestations perform the vital function of allowing us to observe different ideas in action and learn from all that ensues; others, unfortunately, allow us to observe nothing but bunk.
Fair Trade
What does it mean to buy fair trade coffee? Well, ostensibly, the consumer approaches a café counter or grocery shelf; sees a fair trade label on a coffee; understands that all sorts of institutional processes, audited by good authority, have been in place along the production chain to protect the most vulnerable, pay the most to the neediest, and safeguard the environment; and based on that understanding, chooses the fair trade coffee. (Presuming, of course, that the consumer is not a schmuck.)
But wait! We have not yet begun to understand. You see, with direct trade, my more astute readers will have surely noticed, there is no certification or other third party assurance of legitimacy. More on that later; for now, suffice it to note that consumers, when confronted with direct trade coffee, are naturally curious, perhaps even suspicious. Knowing that they are being given an unverifiable story, they begin to scrutinize facts. But quite the contrary with fair trade. With the vague knowledge that fair trade is supposed to imply some sort of audit process, consumers, in the face of the fair trade logo, actually let their guard down, and become vulnerable to deception. There are, in fact, many questions to be asked upon encountering a fair trade logo.
First question: Who certified the coffee as fair trade? What are their standards and guidelines? Did the same organization travel and do the auditing, or was that outsourced, and to whom? In other words, what, exactly, is the certification certifying? Things to look for include the guidelines for what kinds of places their coffees may come from (not to mention what kind of place the coffee in front of you actually came from), how the workers may and may not be treated, how the audit process works, and under what framework the organization oversees everything.
Second question: Money. What are the prices being paid for the coffee? Some fair trade organizations institute one floor price and one premium for an entire geographic region or even for the whole world; depending on the amount, it may suffice just fine, or it may only make sense for a couple of places. And, of course, when it comes to money, it is not only the certifier to be scrutinized, but every buyer along the chain.
What counts is to not assume that "fair trade price" necessarily equals "enough". It does most often, to be sure, but a little investigation is worthwhile. That is more true nowadays that it used to be, because in recent years major retailers (e.g. Starbucks, Walmart) have begun marketing fair trade products. That says a lot of wonderful things about the average American consumer, but at the same time we must be wary of the effects. Some such retailers use their bargaining power against both their suppliers and some certifying organizations to reduce the price that they pay. That is not to claim that large retailers always pay less than a price that will work for the fair trade system; that would be a categorically false and unfair statement, and in any event, if a contract is signed, it usually means that everyone is willing to accept the terms. But still, the consumer's guard should be up.
Just as importantly, of course, we must ask: How is the money distributed down the chain to the co-ops, to the farms and farmers, to their employees, to their communities, to the environment, and so on? It is the age-old question: Cui bono? The details count more here than anywhere else.
And when it comes to money, there is more still. "A big part of it is not just how much you pay but when you pay," Mr. North tells us. "And that's one of the things that drives us up the wall is this fixation just on 'what price did you pay?'" He explains: "As you can imagine, with coffee producers… generally you get one harvest a year… which means one paycheck a year. And that makes it really hard to do the budgeting, especially if you are the cooperative and all your farmers are more or less bringing their coffee in at the same time. Where do you get all the cash to pay them?"
Indeed, the farms' and co-ops' accounts payable encompass substantially more expenses and debts than only people's paychecks. The bills pile up. That is why some organizations (including Mr. North's Equal Exchange) offer credit, or other forms of monetary commitment, in advance of harvest time. Here I asked how local roasters and other small businesses, who are fair traders but hardly sitting on piles of disposable cash themselves, can be held to such a standard. Mr. North sympathized, and then told of a few small roasters who themselves formed a buying cooperative. With their resources so pooled, those small roasters were able to fulfill this facet of the fair trade promise.
Such extraordinary criteria may not reasonably make or break a purchase decision about a cup of coffee; or perhaps they may. But in any event, they are certainly worth asking about.
Question three: When was the coffee certified? That is not to ask on what date, but rather, at what point in the value chain it was certified. People take for granted that the certification process is a step ahead of things, and usually it is, but not always. Mr. North sheds light on a particular maneuver that would probably surprise most fair trade consumers: "There is a practice in fair trade where Company X needs beans, they go to the broker, and the broker goes, 'Well, I've got this coffee from Co-op Q. I didn't buy it on fair trade terms, but we can retroactively get it certified.' So big Company X has not made these commitments in advance, but they need a few more containers that have to have the right certification. So then the importer says, 'Well, I will do the paperwork, and I will pass more money down the chain back to Co-op Q.' Bingo! Now, regular coffee has become fair trade coffee. So it's true that now the co-op got more money than it would have. But it's not just about the money. It's about these long-term relationships where the co-ops can make plans."
Most people, including many fair trade advocates, may wonder why they should get worked up about a co-op getting what seems a whole lot like a bonus. They expected to sell standard coffee, they got their money for it, and the next day they find out that extra money is coming their way because a retailer or roaster in the US wants to put a fair trade sticker on it when they sell it. And indeed, this may be among the least problematic quirks of the fair trade system.
It is certainly better than a poke in the eye with a sharp stick, no doubt. But it must be repeated: They money is not the point. Money is a means to an end, and that end necessarily includes a sustainability and prosperity in business and community. If it had known ahead of time about those extra containers of coffee being fair trade, the co-op may well have made radically different decisions about how many people to hire, how much to pay them, how much to tell the farmers and their families to expect in compensation, and so on. That, in turn, would have affected not only household spending decisions across an entire community, but also large-scale investment decisions about farm equipment and irrigation, community institutions, environmental work, etc.
It is not, in other words, like leaving a diner and then returning to tip your waitress a little more after you get back to your car and reconsider her service. Entire communities, usually with comparatively small and fragile economies hinging on a once-a-year crop, rely very heavily on financial foresight and planning. Fair trade's mission is to support and aid them in that, not pop in with a surprise handout.
"If people later, sort of 'just-in-time' – and this is a bad application of 'just-in-time' management – if they 'just-in-time' get their coffee fair trade certified," sums up Mr. North, "it's not doing anything for the stability or the predictability that the co-op needs."
If the above discussion looked a lot like direct trade talk, then do not be alarmed; it was not a mistake. What you just read was indeed a description of fair trade that emphasizes the importance of cooperation, connections, sensitivity to the needs of other players in the value chain, and holistic relationships among all such organizations. There are many businesses and consumers who see fair trade as an expensive marketing device; as a price tag and a logo sticker. But we are beginning to see that the spirit, the true essence, of fair trade goes profoundly deeper than that.
Also critical to take away from it all is that, while fair trade may reflect some of the best intentions that human nature has to offer, the logo's presence in a retail situation is, in and of itself, nothing more than a "supposed to". Logos do not create reality. People do. And people are… people. The certifying organizations do a great job of staying on top of things and keeping everything legitimate and transparent, but sometimes something slips through the cracks. It happens. So when buying fair trade, hope for the best, which so far remains a likely enough scenario – but be ready to ask questions anyway.
Direct Trade
If you think that fair trade has many different forms, wait until you consider direct trade. Talk about people being people! "Because there is no entity governing the use of the term 'Direct Trade' there is no guarantee of what is meant by that," explains Mr. Streetman. We already saw one way in which direct trade takes on different forms vis-à-vis the co-ops. But that is just the tip of the iceberg. There are nearly as many iterations of direct trade as there are practitioners of it. We can divide them (very roughly) into three categories.
First, there are the honest practitioners of direct trade. Details will always differ, but the principles will not: regular travel to farm; elimination of middlemen; close, reciprocal, and long-term relationships; bilateral planning and communication; mutually beneficial arrangements, including price, terms, investments, and more; and high quality coffee. Key concerns for all players include entrepreneurship, sustainability, quality, distinction, and cooperation.
Then there is opportunistic direct trade. There are different degrees of this, but the story usually follows the same format: A roaster heads down to a farm, looks at how pretty the fields are and how cool the equipment is, snaps a photo for his customers to see, maybe cuts a check for a few bags of coffee, and heads out before lunch, no more likely to return than to forget the name of the farm before he even gets to the airport. Obviously, this is not exactly evil, but it really misses the point in a way reminiscent of the retroactive fair trade certification. A fair trade purchase would have in fact been better in this scenario, so that the farmer could be better protected from the aloofness and caprice of the roaster, and income could be more stable and sustainable. Of course, then the roaster would not get to take a totally awesome trip to a coffee farm.
Finally, there are your hucksters – those who, though they sell "direct trade" labeled coffee, cannot honestly claim to have ever visited their local petting zoo, much less a third-world coffee farm. This is rare, thank goodness, but it does happen. I have verified the story about one coffee roaster (who shall remain nameless) who boasts on his/her website all about his/her direct trade travels and credentials – but, in the picture accompanying the narrative, the featured sack of coffee has the importer's name clearly printed on it. Whoops!
So, this must surely raise some concerns. You walk into your local coffee shop, see a picture on the wall of the owner shaking hands with a farmer somewhere exotic-ish, and note that the coffee is labeled "direct trade". How do you know if it is legitimate or not?
You don't.
Except that you do, or at least you can. The obligations imposed on the consumer in either of these trade models are rather minimal, but they play an important role. Because really, in either case, but especially in direct trade, the consumer is asked one simple question: Do you trust the people who provide you your coffee?
Do you trust them? Do you know them well enough to know that, whatever trade model they employ, they are honest, competent people seeking in earnest to make a positive difference in the world? If so, then go forth and patronize; if not, then what are you doing there?
Formal research into the roaster or retailer may shed some light onto its reputation, but there is a much better way to learn whether to trust them: get to know them. There's a crazy idea! But it is the best one. Let's review some of the principles that we have come to know and love: connection, relationships, communication, two-way streets. The consumer who would exempt himself from these principles has no business evaluating the adherence of others on the value chain.
And make no mistake: the consumer is not only a principle player on the chain, but is ultimately responsible for its existence.
Really, it is not such a burden as it may sound. Getting to know the people in your local coffee shop is no different than becoming chummy with the proprietor of your local watering hole, being familiar with the gentleman running the hardware store you frequent, getting buddy-buddy with the guys at the gym, or what have you.
For example, on Long Island, the community of craft roasters is burgeoning, passionate, and highly talented; but still small. There is exactly one in my town of Long Beach, and the town is lucky to have one. It is not just that I am on a first-name basis with the folks who run the Gentle Brew, kibitzing with them regularly. It is everything I have picked up on in general: the extent (and type) of locals on a first-name basis with them; the way they treat strangers; the no-charges when out of a customer's first choice; the popping out of the back with a new muffin recipe fresh from the oven for customers to try; the participation in local events around Long Island; and a million more tiny facets of the nature of their relationships, both informal and professional. Co-founder Bryan Baquet was a philosophy major in college; his father told me, while tending the shop for Bryan during the Costa Rica trip, that his passion for such studies is what led to the name of their first proprietary blend, "Proletariat". After Super Storm Sandy in 2012, while Long Beach lay completely demolished, unmetaphorically awash in debris, despair, and utter ruin, most of those stores left standing were empty for weeks while the workers looked after their personal business and the owners argued with insurance companies. But the Gentle Brew, having been a part of the community for only three months at that point, gathered a generator and a propane tank, and opened its doors after only a few days – just to convert the entire place into a food and clothing drive, and to offer cups of hot coffee for a dollar.
So when the Gentle Brew excitedly announces that it is dedicated to a positive, sustainable relationship with the farm they visited in Costa Rica, I have no problem believing them. It is not about doing a personal audit of their financials and investigating their travel itinerary; I could do that, but it would be beside the point. I know them, just as they are embarking on a path to know their partner on the farm. Direct trade is about that kind of knowing: engagement, familiarity, unity, community, even a type of intimacy and affection.
There is one last iteration of direct trade that needs to be mentioned here, and that is the direct trade importer. You read that correctly. Direct trade, done by an importer. A middleman-less model operated by a middleman. How can this be? Surely it must be bunk.
Depends whom you ask. Some say yes, based on exactly that description; others see a lot of good to be had.
It works exactly the same way as standard direct trade described above, except that the person visiting the farm or co-op, forming relationships, signing contracts, and all that jazz is not going to actually roast the coffee; instead, he will sell it to roasters. Mr. Streetman gives a great synopsis: "It is fairly popular especially among quality focused very small roasters. When you are a single operator it is very hard to leave your [roasting operations] and go to origin for 2 weeks, so the ability to have someone travel on your behalf is a big service. It also helps them recruit clients as they invite them on the trips and connect them with their contacts. It represents a small segment of the industry but it does seem to be growing."
So the importer goes to origin; fulfills (ideally) the direct trade promise on that end; brings the coffee, and story behind it, back to the roasters; the roasters then have assurance that the farmer and his coffee is worthy; and the roaster may even give feedback that the importer can bring back to the farm to improve the coffee.
This is not to exclude the roasters or their customers from themselves fulfilling the promise of connection and community. Mr. Streetman describes one intriguing function of these direct trade importers: "facilitating relationships with the producers." He explains: "[The importers] bring [the roasters] into the relationship by being the conduit for communication, and many times by initially connecting, or bringing the roaster along after they have been buying the coffee for a couple of years."
The middleman will take his share. And the roasters have every opportunity to buy the beans without caring a whit about where they came from. Those are undeniable downsides. But there are upsides, too. One is that, if the importer does his job right, a single relationship between him and the farmer can turn into multiple relationships between the farmer and a whole slew of roasters. Another is the elimination of risk.
One of the biggest problems that roasters have with direct trade is the risk of traveling to the farm just to find that the farmer is not a good partner to have, either because of crop quality, trustworthiness, or anything in between. A lot of time and money is spent on researching the farms, but there is only so much reliable information floating around. One roaster I heard from complained that they went all the way across the Equator just to find their hosts to be swindlers. Tours of the farm were restricted, cupping opportunities were limited to "pre-selected" beans, and the trip ended with a surprise bill charging them for the room they slept in and the food they ate.
Such things happen, and for a small business especially it represents a very substantial risk. Frankly, a farmer hosting a roaster faces a sort of mirror-image risk.
And let's not forget the invisible but tremendous risk faced by both roaster and farmer in direct trade: What if the contract is signed, things go great, and then one of them wakes up one day to discover that the other has gone out of business? There's a bad position to be in! The roaster may be suddenly left without any inventory or way to recoup his investment; the farmer may be left with custom-grown beans and nobody to sell to. (A farmer doing direct trade through a co-op is moderately protected from this risk, but still, it may cause a couple of sleepless nights.) Having an importer in the middle makes things that much safer in this regard.
I ask Mr. Streetman if he considers direct trade importers to be a legitimate offshoot of the direct trade model. "Yeah," he says. "I think the service is great for the industry. They bring more great coffees to market, and mitigate some risk for roasters and producers."
Law professor Seth E. Lipner, a wise man indeed, once said, "You can't have contracts that have no risk. You can only have contracts that allocate risk." The same goes for business models in general. Sometimes – often, in fact – risk is most safely allocated if orthodoxy is compromised. Direct trade importers certainly offer an arrangement with risk safely spread about. Is the compromise worthwhile?
There can be no doubt that a crucial element of intimacy is delayed at best, and often neglected. Even assuming that the importer is honestly dedicated to direct trade principles, the opportunistic and huckster retailers are still given an opportunity to do what they do. But does the offering of just another avenue for such people to be who they are anyway, really outweigh the opportunity that is offered to numerous small roasters and farmers who lack more viable options to embark upon direct trade?
These, much like most of my other questions in this treatise, are not for answering. Just think.
By Any Other Name
Among the questions I had for Mr. Streetman was one about the popularity of the two trade models among consumers. His answer shed light on something much more crucial. "Basically, these programs are popular wherever they have been successfully marketed," he began. "In the 'mass' market, [fair trade] certified coffee has a large popular appeal in almost all consuming countries, as a way to differentiate the commodity. In the specialty niche, roasters have moved away from wanting to promote the certificate marks, because there is not a way to differentiate between one certified coffee and another, so promoting certification becomes a commoditizing trap when you are selling a product that is differentiated by quality."
Take it from me: The importance of differentiation in any business can hardly be overstated; in today's artisan foods industry, it is arguably the most crucial element of the offering.
Mr. Streetman mentions that he and other roasters are frustrated by "people not wanting to buy coffees that [we] paid high prices for because they were not 'Fair Trade', or [we] were unable to certify because they were not from a co-op model." He clarifies: "We do not participate in marketing the Fair Trade label, even though we purchase Fair Trade coffees. This is mostly an administrative and marketing decision. We determined that is not worthwhile for us to market a mark which is used by other companies to promote our coffee. We decided this because, we generally found that promoting some of our coffees as Fair Trade, and not others led to confusion about the ethics behind the purchase decision for all of our coffee. For this reason, we found it better to focus on our holistic purchasing ethics, and promote brand loyalty through differentiation."
That may be one man protesting too much; or, it may indicate a critical weakness in narrowly defining how organizations ought to achieve larger goals. Whatever the case, the efforts of the ethical sourcer must necessarily be able to improve the popularity and marketability of his coffee.
Make no mistake about it: The roasters and retailers, and their commercial success, all count. Big time. Those who care about the farming communities and their prosperity should not for a moment doubt that the concurrent prosperity of those buyers who ethically support them is paramount. Just ask the farmers themselves.
But wait – there's more. Mr. Streetman adds further: "We are firmly committed to the idea that farmers should receive a minimum fair price for coffee, the underpinning philosophy of Fair Trade and that has always been a part of our commitment. We decided in 2011, that moving towards long term commitments with our producers would benefit us, because we would gain access to better coffee, and create a feedback loop between ourselves and the producer to work towards our common interest/goals." So, Irving Farm has decided against a strictly fair trade model because it ends up working against him and many other coffee roasters on the other end of their business. And yet we know that they ethically source from origin. So that would make them direct traders, right? Not necessarily, no.
"With the proliferation of the term 'Direct Trade' as a marketing tool, it can diminish the value of it as a point of differentiation," explains Mr. Streetman. He goes on, after adding a word about direct trade importers, to say, "For these reasons at IF, we don't explicitly talk about 'Direct Trade' even if it is implicitly understood/assumed that is what we do, instead we emphasize the relationships that we (as IF, not our agents) have with our producer partners, and focus on adding value to the coffee experience through the information provided to the customer about the coffee (this is difficult to do)."
So direct trade, as an institution, has reified itself, and fallen into a similar commoditization trap as fair trade. Therefore, the label is eschewed.
Direct trade, not having concrete and auditable guidelines, may be so broadly definable as to include Irving Farm by default. But on the other hand, the ethos of independence that direct trade bestows upon its practitioners surely ought to allow a roaster to exclude himself from that group as easily as it allows him to include himself in it.
In any event, here we encounter an insight of great moment: direct trade and fair trade are not the end of the story. They are but two fish in the sea, two stars in the sky. The universe of ethical sourcing has room for many more. "Over the time that IF has been roasting coffee (since 1999)," says Mr. Streetman, "there has been a large shift in transparency, and connectivity throughout the coffee supply chain. This has led to increase awareness about how to achieve certain goals. For us, our goals have always remained constant, buy the best coffee, and ensure that the environment and people are protected through-out that entire process. How we have tried to achieve those goals has changed as we learned new ways to achieve them."
CHOICES
Consider how we have come to understand fair trade as meaning more than a price tag and a logo, and how direct trade means more than a sojourn and a purchase order. "Both have their place as an attempt at bettering the economic, community and growing conditions at coffee origins," Mr. Closson reminds us. Indeed, the things that matter are the same, are they not? They are, in just about every profound respect, entirely identical.
"Sometimes, there's a lot of the same stuff going on," notes Mr. North. "Real direct relationships, working with co-ops, paying high prices, maintaining steady relationships, doing a lot of work on quality… That's where Equal Exchange and Counter Culture [a direct trader] have more in common with each other than we do with some of our ostensible counterparts in the fair trade and direct trade sectors." The best practitioners of each are certainly much less distinguishable than the opportunistic practitioners of each, are they not?
Sometimes such "best practitioners of each" are, in fact, one and the same organization, as we have seen with Irving Farm. It is also true of Roast Coffee & Tea. "As a coffee roaster that specializes in sourcing coffee from all over the world we work with both Fair Trade coffee and Direct Trade coffee," Mr. Closson explains. "Although no trade certification is perfect we believe the mission of Fair Trade is an admirable one and are happy to support it when using such coffees. … Our mission is to help guide coffee drinkers in their exploration of the world of coffee. This requires that we use many sources and trading approaches throughout the world in acquiring coffee. In all of our trading we stay true to clarity in our supply chain. … While there is no official Direct Trade certification and/or definition we do consider our direct farm relationships Direct Trade. The principles that guide us in Direct Trade are the ones that we adhere to for all of our business-to-business relationships. We consider them partnerships and in order for partnerships to work both parties must benefit in a sustainable way. The best partnerships benefit all parties in their personal, economic and community growth. ... Over the years as we build more direct relationships with farmers we increase the amount of Direct Trade coffees that we offer. We fully expect to continue offering Fair Trade coffees as well."
Mr. North gives us yet another example of how direct trade and fair trade are so marvelously congruous. Equal Exchange, a quintessential fair trader if ever there was one, offers a product line perhaps more thoroughly direct trade than anyone else. "I think it matters that Equal Exchange actually helped to pioneer not only Fair Trade coffee but also the core practices of direct trade – that is a coffee company trading directly with growers, not with importers or exporters," says Mr. North. "To this day we are one of the few to import all of our own coffee, and to do all of it directly."
Ms. Meinshausen points out that direct trade "re-enforces the original fair trade approach of a trader/coffee brand working long term and very closely with one or many producer groups and making all efforts possible to support the suppliers and continue buying meaningful quantities from them." Indeed, we have come to associate those principles, beautifully spelled out by Ms. Meinshausen, with both models. That is because the two models both equally embody them. The looks may differ; the details may differ; the true spirit does not. At all.
"The real 'dichotomy' that exists between Fair Trade and Direct Trade (if there is one), is that they compete in the market for finite consumer dollars to funnel into their respective supply chains," declares Mr. Streetman. "The ideal solution to this would be that the market should reward supply chains which are the most efficient at producing the product, and maximizing value to all stakeholders."
Here is the bottom line: The real issue has nothing to do with choosing between direct trade and fair trade. It is of course possible to "choose direct trade" or to "choose fair trade", but those are just two options among infinite ones, subordinate to a larger choice. The most basic, most important choice for a roaster or retailer to make in this context is whether to commit to connecting with farms and coffee growers, investing long-term in the sustainability of their enterprises and communities, and fulfilling the larger promise that has loomed over this entire discussion. Once that choice is made, the rest is just details.
To be sure, the details do matter, on the organizational level. It is frivolous to choose such an important path if no attention will be paid to how, exactly, it will be trodden. But to get caught up in the labels and dogmas of two relatively specific means is folly – not least because they are, after all, twins.
Every roaster, every retailer, every importer, every co-op, every farm, every plantation, every worker, has different resources, goals, opportunities, commitments, relationships, and capabilities. Each should evaluate for himself how best to use his circumstance in the coffee value chain to make the world sustainably better and more connected for all parties, including himself. It may or may not be direct trade; it may or may not be fair trade; and it may or may not include a trendy label.
Who cares?
SPECIAL THANKS
A special debt of gratitude is due to the people and organizations below for their very generous attention and their keen, candid insight, without which you would most certainly have been spared from reading this interminable treatise.
Mr. Marc Chiusano, Lead Barista, The Gentle Brew
Mr. Evan Closson, Founder, Roast Coffee & Tea Trading Company
Ms. Jenna Larson, PR Manager, Fair Trade USA
Ms. Florentine Meinshausen, Scheme Manager, Fair for Life
Mr. Rodney North, The Answer Man (Information for the Public & Media), Equal Exchange
Mr. Dan Streetman, VP of Wholesale & Green Coffee Buyer, Irving Farm
