Originally posted on the Huffington Post on June 13, 2013.
For those of us living outside of the tropics, coffee will never truly be ‘local.’ We don’t have the heat or altitude to grow coffee, and if we do down the line, something has gone dangerously wrong in the fight against global warming. So instead of making coffee local, we try to make it fair, socially responsibly, and environmentally respectful. In that vein, coffee is full of pioneers in a concept that has slowly permeated the food world, direct trade.
While not exactly a certification, like Fair Trade or the Rainforest Alliance, direct trade is really more of a loose concept: remove as many of the middlemen as possible and make sure the most marginalized and impoverished people in the coffee chain, the coffee farmers themselves, are given a bigger piece of the pie.
The vast majority of coffee is bought and sold based on prices set on the New York future’s market, where the price for coffee contracts is determined by supply and demand, with the farmer’s actual cost of producing coffee not taken into account whatsoever. When the market is low, due to favourable supply relative to demand, farmers simply make far less per pound.
So the farmer is unfairly punished (and only sometimes benefited such as in 2011 when futures contracts briefly spiked to $3.14/lb) by a market price that they have no control over, which serves to exacerbate the fact that they are typically paid far too little for their product considering the time, effort, and work that goes into producing it. In a direct trade relationship, however, the NY market isn’t considered when negotiating, so the price of coffee is actually based on the cost of production, and profit – something many farmers aren’t usually able to count on.
Typically, coffee goes from the pickers’ hands, to the mill, to an exporter, onto a boat, to an importer’s warehouse, and then finally to the roaster. For the larger portion of the coffee world, this is the way it has to go – logistics are difficult, financing can be hard to secure, the risk of not getting your coffee increases. As a roaster, the value proposition for actually doing the work to trade directly may not seem worth it at first glance.
What direct trade means, at the bare minimum, is that the roaster visits the farms, consistently communicates with the producers, negotiates a price that works for both parties, offers and provides financing to help the farmer through the thin months between harvests, and develops real and lasting relationships that will provide security going forward. This is a lot of work, but the payoff is huge – by getting more money into the hands of the farmers themselves, they can spend it where they feel it is most necessary – whether that be on the farm itself, education for their children, healthcare, or any number of long and short-term development projects – and rely less on third party groups, such as governments, NGOs, and banks.
Unfortunately, the downfalls of direct trade – the risk, the difficult travel, its scalability – means that its proliferation will be a slow one, and it’s simply not for everyone. When I first began to travel to origin countries, direct trade was still in its infancy – something only the “big three” of Third Wave Coffee did and talked about. But upon seeing the sometimes dire situation of coffee producers and their families, I began to really understand the importance of negotiating pricing of coffee in a totally different way. Instead of the question being “what can you sell me your coffee for?”, it becomes “what price do you need to sell your coffee for?”
Since my travels began, I have had the privilege of meeting and visiting coffee farmers around the world, from Tanzania to Nicaragua, and Brazil to Papua New Guinea. Not all of my trips have resulted in direct trade relationships, but all have resulted in some kind of connection with coffee producers that have led to long-term relationships, development projects, and a lot of learning on both sides of the connection. And this is what is at the heart of direct trade – sometimes the logistics, finances, or risk don’t allow a deal to be made, but all of the additional difficulties and risks of direct trade become instantly acceptable when you put a face to the beans and de-commodify coffee. It fosters a practice that creates a fair and equitable arrangement for all parties involved, and the results are almost universally positive.
For years, I have believed that coffee was somehow a special, unique product, with the ability to bring people together and battle social injustice in the developing world. I still believe that now, but only because of my experiences meeting coffee producers from around the world. It’s the people – who grow, pick, mill, roast, brew, and drink it – who are connected by coffee and care about the process that make it special. Direct trade honours that bond in a very unique way.
To sit on planes, to wait through impossibly long layovers, to ride in the back of pick up trucks for countless hours surely all makes for a great story or two. But creating direct trade relationships is as much about showing respect for the product and the people who produce it as it is about finding the best coffee we can. The more direct the trade is, the closer everyone down the line is to the producer, and that creates a more impactful cup of coffee for consumers. And if something as simple and ubiquitous as a cup of coffee can create real change, then the scope of our impact begins to seem limitless.