Monday, October 29, 2012

Fair trade vs. direct trade coffee: Is fair trading a bad thing?

In a global marketplace the wages for the little man are often reduced to a bare minimum leaving the coffee farmers with a very little paycheck in the end. In a way for global coffee companies to reach the more critical consumer mass, which cares about the wellbeing of the farmers, the certification Fair Trade was developed. 

Fair trade is about securing higher wages for the farmers. In the coffee industry there is often a lot of middlemen and undereducated farmer are often the ones who suffers the most. The Fair Trade trademark is securing the same minimum price so the farmers get more for the coffee.
So why could this be a bad thing? Well there are a lot of downsides to the Fair Trade certification.
First, Fair Trade is not invented by the farmers, but by the big players in the coffee industry in an attempt to reach a new class of consumers who want to secure the wages of the farmers. Only a very little percentage of the extra money charged actually reach the farmers, in some cases as low as 2%.
Second, Fair Trade is a minimum price that puts an artificial pressure on the free trade market and removes the incitement to produce better coffees and the quality may lack.
So in the end the Fair Trade certification only helps the rich and again the ones to suffers the most are the farmers, but maybe also the consumers with higher prices and lower quality. 

To ensure a better coffee the term Direct Trade was introduced. The Chicago based company Intelligentsia was one of the first companies to introduce the term in 2008. Direct trade does basically mean that the company is dealing directly with the farmers and thus cutting of a lot of middlemen. This does not only ensure a much bigger paycheck for the farmer and therefore increasing the incitement to produce better coffee, but the close connection between the roaster and the farmer means that the finished product can reach a much higher quality in that the path from crop to cup is much smaller. Direct Trade has already showed its potential in increasing the quality of coffee a lot in only a few years. Specialty coffee roasters almost only use direct traded coffee and the consumers get a much better cup in the end.
So while fair trade coffee may ensure the farmers a little more for their coffee, the quality and the farmers may suffer more with the fair trade certification then without it.

1 comment:

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