Fair Trade Coffee vs. Direct Trade Coffee
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Fair Trade Coffee vs. Direct Trade Coffee
Direct trade is a form of sourcing practiced by some coffee roasters, referring to direct sourcing from farmers, with standards varying between producers. Direct trade is seen as an alternative to Fairtrade certification, and represents the interests of roasters who disagreed with elements of Fair Trade, including:

  • The lack of increase in Fair Trade premiums paid to farmers;
  • The lack of what the direct trade advocates perceived as a sufficient quality-incentive for farmers;
  • The limits on Fair Trade participation (i.e., individual farms cannot be certified unless part of a cooperative, and plantations and estates are not allowed to join cooperatives);
  • The fees involved in being a participating Fair Trade company (e.g. fees, dues, and surcharges).

Advocates of direct trade practices promote direct communication and price negotiation between buyer and farmer, along with systems that encourage and incentivize quality. There is no agreed definition of the term, and, unlike Fair Trade coffee, there is no third party certification that the conditions stated by the coffee buyers are being complied with.

Direct trade is the practice of trading fairly without the middlemen involved in the fair trade labeling process.  Direct trade builds on the philosophies behind fair trade but strives to incorporate a direct farmer to roaster relationship. Companies providing direct trade products often seek accountability from outside certifying bodies such as International Fair Trade Association (IFAT), TransFair Canada and the Fair Trade Labeling Organization (FLO), but do not bare the same Fair Trade logo.

Fair trade certification is a product certification system that allows people to identify products that meet agreed environmental, labour, and developmental standards. Overseen by a standard-setting body, Fairtrade International (FLO), and a certification body, FLO-CERT, the system involves independent auditing of producers to ensure the agreed standards are met. Companies offering products that meet the Fairtrade Standards may apply for licences to use the Fairtrade Certification Mark (or, in North America, the applicable Fair Trade Certified Mark) for those products.

The fair trade coffee option is an alternative to the conventional market and guarantees that the means of production was just and sustainable and benefited the community where it was produces.  Both Fair Trade Certified and Direct Trade products strive towards bettering the working conditions for those producers; however, they each take a different approach to accountability and certification.

The Fairtrade International certification system covers a growing range of products, including bananas, honey, oranges, cocoa, coffee, shortbread, cotton, dried and fresh fruits and vegetables, juices, nuts and oil seeds, quinoa, rice, spices, sugar, tea and wine. These commodities differ in their locations of production and labor used for production and distribution.

In 2009, Fairtrade certified sales amounted to approximately €3.4 billion (US $4.9 billion) worldwide, a 15% increase from 2008. Sales are further expected to grow significantly in the coming years: according to the 2005 Just-Food Global Market Review, Fairtrade sales should reach US$ 9 billion in 2012 and US$ 20-25 billion by 2020. The Fairtrade industry does not reveal how much of this is extra profit to retailers and distributors in rich countries, how much is spent on Fairtrade’s own costs or how much reaches the farmer.

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