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48. Perspectives on Direct Trade

I have had the privilege of working on sustainable coffee issues since 2004, but have only recently gotten to know some of the pioneers of the Direct Trade approach.  I am still trying to understand how Direct Trade works on the ground, and how we, as a development agency working to promote more sustainable trading relationships, should advise smallholder farmers to approach it.  As part of my own ongoing education in Direct Trade, I have been seeking out different perspectives on the approach and finding plenty of good resources.

The Direct Traders.

The New York Times published a few years ago an article on Direct Trade that seemed to consecrate the ascendancy of what have become known as the “big three” Direct Trade roasters: Counter Culture, Intelligentsia and Stumptown.  Whether you agree with the Times’ subjective assessment, the objective reality is that these are the only three companies that certify select coffees as Direct Trade (or at least mark their Direct Trade coffees with little seals that look like certifications.)

Having a look at the Direct Trade standards for these companies seems like a natural place to start in understanding the approach.

(After I drafted this post and dropped in my publication queue, Counter Culture published its extraordinary Direct Trade Certification Transparency Report, which instantly became part of the Direct Trade canon.)

The Critics.

The approach has its critics, who tend to worry about that Direct Trade undermines smallholder cooperative structures.  Counter Culture did make reference in its Transparency Report to a group in Nicaragua that split off from its cooperative:

“…in 2009 the growers of the Yasica-Yucul grower group decided to leave the exporting co-operative with whom they had been working in order to sell coffee directly to Counter Culture…”

The report doesn’t explain the circumstances, and it is entirely possible that the split had nothing to do with the Direct Trade model, but this may be the kind of detail that confirms people’s fears.

The most recent critique I have seen was published by the Just Coffee cooperative and focuses on the issue of transparency.  (Wonder what Just Coffee’s take would be on Counter Culture’s report.)

The Searchers.

Last week, as I was turning the issue over in my mind, I stumbled upon a couple of great discussions of Direct Trade on the Transcend Coffee blog.  In the first, Poul Mark asked people to define Direct Trade.  In the second, he offered his own searching reflection on Direct Trade — what it is and what it might become.

And Counter Culture’s publication of the Direct Trade Transparency Report generated good exchanges at Sprudge and Shot Zombies.  Great evolving discussions.

The Wiki.

While not perhaps as diversified in its sources as other wiki entries — this one relies almost entirely on an interview with Geoff Watts, one of the high priests of coffee quality and pioneers of Direct Trade — the tone and content of this green wiki on Direct Trade strikes me as pretty balanced.

1 Comment

  • Jonathan says:

    Great posts on an important subject. I think it would be very helpful for everyone in the industry to explore the different models of change between fair trade and direct trade. I have some questions forming to help push this dialog forward:

    For fair trade, how does supporting the cooperative structure impact the surrounding communities? How does it effect individual farmers? How does the pricing system effect quality?

    For direct trade, how does focusing on quality first impact local communities? Existing cooperative structures? Individual farmers? Quality?

    And, exploring focusing on base level cooperatives versus secondary and tertiary cooperatives is another important question. Even some cooperative development organizations that focus on primary cooperatives undermine the secondary cooperatives and therefore slow down macro political change. Check out the history of CLUSA after WWII for a complicated view on cooperative development!

    Finally, has anyone else noticed that the red direct trade logo looks strikingly similar to the original Equal Exchange logo?

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