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Organic vs. Fair Trade vs. Direct Trade Coffee

Nicaraguan coffee plantation (Wikimedia Commons)
What's in a name? For those of us who try to be conscious about our food and our coffee, labels like Organic and Fair Trade are often taken as a shorthand for products that are responsibly grown and produced, sustainable, and fair to the people growing and harvesting them. But when ideas about health and sustainability come up against market forces, things begin to get a lot more complicated.

Organic Coffee

Take organic foods as an example. In principle, buying organic should be better for both the consumer and the planet, since organic practices are meant to get a more healthful product from farm to table by eliminating the use of chemical fertilizers and pesticides, as well as eliminating the use of artificial coloring and flavors. In order to police the now-booming organic food industry and to ensure uniformity of standards and practices, both government agencies (in the United States, the USDA) and several private entities acting with one degree or another of government permission or oversight (QAI, CCOF, ICS, and the Northeast Organic Farmers Association, among others) enforce organic standards. However, as so often happens, lobbyists -- drawn by the secent of money like sharks to fresh blood -- have worked hard to have organic standards loosened to allow for ingredients like chemical fertilizers and artificial coloring. Tne entry of larger agribusiness concerns threatens to further dilute the organic standard, and indusrial-scale farming practices are likely to hurt smaller producers. As organic standards have been loosened, and as USDA funding and manpower decrease, enforcement becomes even more lax than it was to begin with.

Fair Trade Coffee

Another term whose use has changed -- and, ultimately, been watered down -- over the years is "Fair Trade." On the surface, Free Trade goods would seem to be a good hedge against issues that aren't addressed by buying organic. Not least of these is the treatment of the farmers and workers who grow and harvest crops, since fair trade is targeted at promoting not only sustainability but also a degree of parity between growers and exporters in the developing world and importers and consumers in developed nations. A "floor" is created for pricing, and in theory, smaller producers who would normally be shut out would now have the same chance as larger producers to get their goods to market. Coffee companies pay Fairtrade International a fee for the rights to use the Fairtrade logo, in return for which they agree to abide by fair trade practices. For packers, this means working with farmers and co-ops that meet Fairtrade criteria. For Importers, it means paying at least a minimum price to exporters (currently the greater of $1.40/pound or $0.20/pound above the prevailing market rate). Coffee retailers typically pitch Fairtrade coffee as a premium product, and price it accordingly. As with organics, the enforcement mechanism for Fair Trade isn't as robust as the average consumer would like to think, and there have been numerous complaints and controversies over Fair Trade generally and Fairtrade (the enforcement agency) in particular. There's a predictably political bent to some of these complaints, with a few on the right complaining that Fairtrade amounts to socialism or radicalism, while those on the left tend to complain that it doesn't go quite far enough. Other issues aren't quite as easy to shrug off or simply attribute to politics, however. Let's start with the money. As outlined above, a significant part of the markup on Fairtrade coffee only comes after the grower or co-op has been paid. As a result, much of the money generated doesn't make its way back to the communities it purports to help. This is compounded when buyers encourage growers to take up organic coffee, whose higher price per pound is offset by the lower net income due to higher costs and lower yields. Fairtrade is likewise opaque in reporting on its own econonic impact, leading to speculation that much of the money generated is going to larger producers rather than smaller farms, and less still of that money is making its way into the broader communities in which those farms are located. Wages on many of these farms are still dismal. And finally, since Fairtrade is a trade group and not a government oversight body, the enforcement of its rules doesn't carry the weight of law. If organic and Fair Trade certifications are problematic, what does that leave everybody, be they growers, sellers, or consumers? That's where Direct Trade comes into play.

Direct Trade Coffee

At first glance, Direct Trade has a glaring disadvantage: there is, as of this writing, no regulatory body or agreed-upon standard under which it operates. However, given the degree to which the organic and Fair Trade standards have lost much of their meaning, and therefore much of their clout, over time, the time seems right for an alternative. Direct Trade is being taken up by a number of Third Wave roasters like Intelligentsia, Union, and CounterCulture. Rather than dealing with a co-op, Direct Trade roasters typically deal with individual farms, with an emphasis on cultivating quality by building long-term relationships that foster accountability. In contrast to Fair Trade, where farmers must pay a premium for certification, Direct Trade allows standards to be worked out between the roaster and grower. Furthermore, Direct Trade encourages roasters to incentivize higher quality while allowing growers to turn a higher profit by producing a superior product. In this way, Direct Trade protects the roaster and grower alike, and allows for quicker responses to changes in market conditions, weather, and the myriad other considerations that go into coffee growing. While this process is time, cost, and labor intensive, it does allow for more parity by shifting some of that burden from the grower to points further up the supply chain. Roasters pay above minimum requirements, in other words, to receive a coffee that's excellent instead of merely competent.

A few thoughts in closing: The point here isn't, and hasn't been, to paint the Organic and Fair Trade labels as evil. They're not, and the companies that employ them are likewise not monolithic in how they approach both standards. There are some bad apples in any bunch, but there are also producers both large and small that are putting in the yeoman's work of trying to do right by both their customers and their suppliers, by delivering a product that's high-quality, sustainable, and as fair to those who grow and produce it as it is to its consumers. Given the existing state of play, Direct Trade seems to address some of what is most problematic with its predecessors' ways of doing things, but each model has its benefits and drawbacks. What we hope we've done, if nothing else, is to give our readers a bit of a call to mindfulness both in terms of how they're being marketed to, and the tools to ask the right questions about where their food is coming from. Click here to see how HiLine Coffee gives back.

Further Reading:

On organic certification:

Rodale: "Here's the Deal with the Organic Seal" New York Times: "It’s Organic, but Does That Mean It’s Safer?" Edgewater Farm: "My Problem with Organic Certification"

On fair trade:

Pearl Cup Coffee: "Fair Trade vs. Direct Trade" co.Exist: "Your Coffee Is Getting Fancier, But Is It Getting Better For The World?"

On direct trade:

Responsible Coffee: "USDA Organic vs. Fair Trade vs. Direct Trade" PBS Food: "Fair Trade vs. Direct Trade"