What is Direct Trade Coffee?
When Bali Beans decided to establish their business right in the mountains, on the border between Plaga and Kintamani, it felt somewhat counterintuitive. They are more than an hour away from the major coffee-drinking hubs in Kuta, Canggu, Seminyak, and Ubud, making distribution more complicated. However, when Ayu started talking to me about Direct Trade and the importance of reducing the journey from bean to cup, I began to understand why being close to the farmers is so crucial.
Contact Bali Beans to visit the plantation and learn more about the Coffee Bean Journey.
Fairtrade Coffee
One common assumption about Direct Trade coffee is that it’s some kind of successor or extension of Fairtrade coffee. But that misses the point.
Fairtrade aims to provide fair prices to farmers.
In the 1980s, we started hearing about Fairtrade coffee. It was an initiative that emerged in response to the struggles of Mexican coffee farmers after the collapse of global coffee prices in the late 1980s. Famine in Africa was making world news, and people became more aware of the social impact of their purchasing choices, particularly for commodity crops like coffee grown in some of the poorest regions. People started buying Fairtrade coffee, knowing that farmers were paid fairly, and could enjoy their daily cup with a clean conscience.
Problems with Fairtrade Coffee
Fairtrade can lead to the production of large quantities of low-quality coffee. The problem with the Fairtrade system is that it doesn’t address some of the more complex issues that keep farmers impoverished. An article from The Huffington Post outlines some of these issues, explaining why Fairtrade not only fails in its mission to provide better deals for farmers but also how it can incentivize the production of lower-quality coffee.
Benefits of Direct Trade Coffee
Bali Beans believes that Direct Trade is the path to better coffee.
Recently, we’ve learned about Direct Trade coffee, which aims to improve the quality of the final product by removing intermediaries and having greater control over the process—from production to processing and roasting. Remarkably, all of this is driven by market forces; there’s no external organization to pay (unlike Fairtrade). Farmers see that as their crops improve, so do their profits, all without having to overproduce—forcing themselves only to meet quotas for the sake of a meeting.
In an article about Direct Trade, Geoff Watts, Director of Coffee at Intelligentsia Coffee, explains how the Direct Trade philosophy was shaped in response to Fairtrade and all other certification systems designed to help consumers distinguish between “good” and “bad” coffee:
“The point is that there is NO certification that works equally well for every roaster, farmer, or farming group. We’re not trying to create one, and I’m not sure such a thing could exist given the stark and profound differences between producing countries, individual farmers, and individual companies. We want something that can account for those differences and remain relevant and effective in many individual contexts while still leading to the same place—better quality, full transparency, complete traceability, and true sustainability.”
However, the lack of certification or standardization has caused confusion about what Direct Trade really means.