We linked up recently with local Wirral-based specialty coffee shop WYLDE Coffee and chatted about how best to support producers/farmers amid the pandemic, being on the brink of a global recession and climate change related pressures. Continue reading for their take on it.
For years now we’ve been so focused on whether the cup of coffee we’re drinking is ‘Fairtrade’ or not. Originally, the Fairtrade certification was set up to ensure a more fair wage for farmers, depending on them achieving certain environmental and social criteria. However, a common misconception is the promise of good quality coffee and just how ambitious the certification is.
The intentions are to assure Farmers, who pay for certification, are paid a minimum price; which can never fall below market/commodity level. The UK is the world’s largest market for Fairtrade products and there are more than 5000 products carrying the certification on our shelves. On the surface, it seems positive for developing countries, bringing more stability; but It’s fair to say there have been persistent critics of the well-known certification for a while. Arguments to say that they’ve exaggerated claims and priced out the poorest sector of producers.
Let’s work backwards with the traditional coffee supply chain and start with the coffee shop or restaurant. They’ll purchase beans from a roaster, who buy in green beans from either brokers and green buyers. So that brings us nicely to the question of what ‘Direct Trade’ actually is and why it’s becoming more commonly spoken about in the coffee community.
Coffee roasters have started to travel to some of these countries in order to meet the producers themselves and form relationships. They become more connected to the coffee they’re buying and have more control over how they can help in a mutually beneficial way. This direct relationship means that the producer will be paid directly without any complex supply-chain structures. Sometimes the roaster may even financially support them through purchasing processing equipment. However, with the term ‘Direct-Trade’ being a relatively new one; there is yet to be a formal definition or framework of guidelines/policies set in place. Potential for lack of protection?
Here at Sunda, we’re big believers in transparency and a greater connection to all stages of the supply chain. This method of trade certainly has potential to be in line with that! However, there are definitely still risks involved. For example, with brokers playing the mediator role between roasters and producers; the roaster is given the opportunity to sample and turn down a shipment of coffee. With a direct relationship, payment for shipment is often made pre-arrival; so the risk lies in quality control for the roaster. Additionally, with no existing guidelines, a farm may accept payments direct from the roaster but continue to pay their workers less than what has been communicated. It’s important to not assume all farms as small and family owned. There are also no ways for roasters to ensure consistent high standards of environmental protection whilst not present to witness production; which further reinforces the need for policy and legislation.
The assumption of this trade mechanism is that more value is being provided by the roaster directly to the producer. However, concerns are, that the more we speak about the term ‘Direct Trade’, the more popular it will become and as we know from other buzzwords, that can easily lead to Greenwashing. The last thing we want is for roasters to exploit producers merely to reap the rewards of being known as a ‘direct trade’ roaster. In other words, treating meetings with producers like a holiday and opportunity to take loads of pictures for social media will not benefit your company long-term and certainly will not benefit the producers in these regions. We repeat this sentiment A LOT; but we should ALWAYS, as business owners, be self-reflecting and questioning ourselves over the real value we are bringing to our customers and all stakeholders involved throughout our supply chain.
So bringing this back to Fairtrade. A common misconception of Fairtrade certification is that farmers are locked into a specific wage bracket and can’t be paid higher. In actual fact, it provides a safety blanket for when the market price dips and allows producers the stability to budget and plan. There’s nothing stopping them from striving for higher quality and thus higher prices. Which raises the question…….Why are we treating these different trade mechanisms as individuals and incapable of working symbiotically?
Collaboration of systems and people will be the hallmark of sustainability in coming years. With climate change being one of the greatest challenges faced by the coffee industry, the future for agriculture in general is looking uncertain at best. Volatility of currencies and global markets as well as conflict will only contribute to this. Empowering coffee-producing communities with the stability of Fairtrade but also the potential for greater long-term income from a ‘direct trade’ relationship with roasters, surely can only be a good thing? Equipping producers with the foundations to take risks and experiment. Sustainability in the coffee industry relies on producers being able to take on the challenges they face and that depends on the absence of exploitation.
