What is Direct Trade?

CCC_DTCseal_CCCThis week, we’ll be taking a look at the idea behind direct trade. A few weeks prior, we discussed the practice of fair trade: it’s an agreement that allows producers in developing countries to sell their products at a fair price, helps to keep their products sustainable, and makes sure their workers are being treated fairly. Fair trade acts as a sort of partnership which aims to make sure that no one is being taken advantage of.

Some consumers take issue with fair trade for a multitude of reasons, the most prevalent of which involves a lack of substantial evidence proving that fair trade practices positively impact the very countries which it claims to benefit, and that much of the money does not even go to the farmers who produce these goods (or their economy). Some critics claim that while fair trade is a good idea in theory, in practice, fair trade has “…evolved from an economic and social justice movement to largely a marketing model for ethical consumerism.”

Regardless of your opinion on fair trade, direct trade is worth taking a look at. It’s seen by many as an alternative, better, and more personalized version of fair trade. One of the biggest names in direct trade certification belongs to the co-owner of Counter Culture Coffee, Peter Giuliano, who self-identifies as a student of coffee (despite being in the industry for decades). He is also the director of the Specialty Coffee Association of America.

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Counter Culture Coffee boasts its own direct trade certification. According to their site,


“Counter Culture Direct Trade Certification is based on the principles guiding our coffee purchases and our relationships with coffee growers and grower groups. We engage an external auditor on an annual basis to verify Counter Culture’s compliance with four quantifiable measures, and coffees that meet the following standards qualify for Direct Trade Certification:

  1. Personal & direct communication: Counter Culture has visited all growers of certified coffees on a biennial basis, at minimum.
  2. Fair & sustainable prices paid to farmers: Counter Culture has paid at least $1.60/lb F.O.B. for green coffee.
  3. Exceptional cup quality: Coffees have scored at least 85 on a 100-pt. cup quality scale.
  4. Supply chain transparency: Counter Culture maintains direct communication between buyers, sellers, and any intermediaries (like importers). All relevant financial information is available to all parties, always.”

If you’ve read our fair trade post, you’ll probably recognize many of those practices. The difference is that with direct trade, a lasting relationship is built with the growers. Additionally, rather than meeting an extensive list of requirements (many of which may not apply to some growers, and may completely exclude those who are poor), requirements are personalized. In this way, direct trade is built to directly benefit the growers.

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What is Fair Trade?

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In your time spent as a consumer, you’ve probably seen items labeled ‘fair trade,’ or ‘fair trade certified.’ You likely have a general idea of what this means; that one thing is being traded for another, and the terms of doing so are fair for everyone involved. What is it specifically, though, that makes something fair trade?

At its core, fair trade is an idea. It allows producers in developing countries to sell their products at a fair price, helps to keep their products sustainable, and makes sure their workers are being treated fairly. It’s a sort of partnership which aims to make sure that no one is being taken advantage of.

One of the main groups supporting this idea is the World Fair Trade Organization. Here are their 10 Principles of Fair Trade:

  • Create opportunities for economically disadvantaged producers, which helps to increase quality of life and reduce poverty in their region
  • Transparency and accountability with management, commercial dealings, employees, and producers.
  • Fair trading practices, always keeping in mind the well-being of the producers (socially, economically, and environmentally).
  • Payment of a fair price, which has been agreed upon mutually.
  • Ensuring no child and/or forced labor.
  • Non discrimination in regards to things such as race, religion, sexual orientation, or disability.
  • Good working conditions; the producer must maintain a healthy and safe environment for its workers.
  • Providing capacity building (helping employees, management, etc. to develop their skills).
  • Promoting fair trade.
  • Respect for the environment, maximizing the use of sustainable materials, buying locally, reducing energy consumption, and more.

In addition to fair trade being an idea, products can also be fair trade certified by groups such as Fairtrade International (a non-profit organization). There are different sorts of standards which vary depending upon your role in the process (if you are a producer, you are subject to different standards than the buyer).

In order to obtain certification, there is a list of mandatory criteria that needs to be met and upheld, such as purchasing at a minimum price and keeping their dealings transparent. If the company meets all of the necessary standards, they may apply for a license. This allows them to put the fairtrade certification mark on their product. Companies using this mark will be audited annually, making sure they are still in compliance with all fair trade standards.

Products that can be fair trade certified include: bananas, cocoa, coffee, cotton, flowers, fresh fruit, honey, gold, juices, rice, spices and herbs, sports balls, sugar, tea, wine, and certain composite products (products that contain more than one ingredient).

*Some people take issue with fairtrade in practice; this topic will be covered at a later date.