I'm Izzy, a writer at Coffee Annan. I love coffee and want to know where my coffee comes from. When I'm in the supermarket I automatically reach for the Fair Trade label - but I've never really thought about why...
To get a better idea of coffee's journey from the farm to my cup, I looked into fair trade, direct trade and everything in between. I also wanted to find out how the coffee trade has developed through the direct, personal communication that Coffee Annan maintains with its producers.
The birth of Fairtrade
The first thing I discovered is that the coffee trade has always been a sensitive topic. Before 1989, the price of coffee was monitored worldwide by an international agreement between producing and consuming countries - the International Coffee Agreement (ICA). But in 1989 the ICA collapsed. Coffee prices fell and producers were no longer paid. Large corporations such as Nestlé and Kraft came onto the scene to increase coffee production. They made huge profits while the quality of the coffee steadily deteriorated.
This is where Fairtrade came into play.
Fairtrade aims to bridge the gap between small-scale farmer cooperatives in developing countries and large agribusinesses in developed countries. In 1988, the Max Havelaar Foundation and the first Fairtrade certification were founded in the Netherlands. By 1997, 17 national initiatives merged into a single organization: Fairtrade International.
Here's the good news: Fairtrade International is a broad network committed to alleviating poverty in developing countries. The Fairtrade seal, which I always look for in the supermarket, is a sign that coffee producers receive a fairer wage for their hard work. The certificate increases the amount we pay for our coffee by regulating the minimum price for coffee beans and including a social premium. This guarantees slightly higher wages for coffee producers.
To obtain the Fairtrade certificate, coffee cooperatives pay an annual fee and follow the 10 principles of fair trade. These principles are set by non-profit, independent Fairtrade associations. They include methods of environmental sustainability, ethical business practices, living wages for workers and a ban on child and forced labor.
But I knew it wasn't that easy. The closer I looked, the more obvious the problems and limitations of the certificate became.
A compromise between sustainability and quality?
The complicated Fairtrade supply chain can even put coffee farmers at a disadvantage. The cooperatives must use large parts of their profits for Fairtrade controls and certifications. This means that only a small part goes to the farmers themselves, as the money goes through various stages of the value chain before it reaches the farmers. According to Helen Naegele, coffee producers only receive a sixth of the total Fairtrade premium.
I also encountered some ethical concerns regarding the transparency and quality of Fairtrade certified coffee. The coffee buyers often have no direct contact with the cooperatives and instead communicate with a Fairtrade representative. So it is more difficult to monitor the quality of the coffee purchased; and almost impossible to develop innovative, personal ideas with the farmers and roasters.
Direct trade: better for farmers and for you!
I became familiar with the term “direct trade” when I joined the Coffee Annan team. Direct trade emerged from the concerns of many specialty coffee producers about the transparency and quality of Fairtrade. There is no clear definition of direct trade and no uniform standards, but it combines many of the positive characteristics of Fairtrade.
Simply put, direct trade ensures higher quality coffee by establishing direct and mutually beneficial relationships between coffee producers and buyers.
Direct trade ensures that everyone involved in the coffee value chain - farmers, roasters and buyers - pulls together. The coffee traders buy directly from the farms and pay the farmers more for special quality standards. The direct communication channel between buyers and producers enables better negotiations. It also promotes long-term relationships so that farmers and coffee companies can work together on quality, sustainability and fair prices.
After learning so much about the coffee market, I spoke to the Coffee Annan team to find out more about their direct trade approach.
Coffee Annan is constantly assessing the social impact of its sourcing model - because coffee is delicious, but we know that it is not and cannot be everything. Authenticity and sustainability are at the heart of Coffee Annan. They take their responsibility towards the farmers seriously: their promise of quality for the cup is linked to a trusting and transparent relationship with the farms from which they buy.
Sustainability is very important to me. With every purchase you ensure that the money really goes back to the farmers without getting caught up in a complicated chain of exporting actors and certifications. Coffee Annan pays more than the minimum price for Fairtrade coffee and eliminates Fairtrade certification fees. The producers receive more money and our cups receive authentic, high-quality coffee.
Let's get personal
It didn't take me long to see how personal Coffee Annan's approach to direct trade is. Coffee Annan photographer David Hubacher documented the team's journey through Africa last year. The team visited the farms from which they source their beans. It learned a lot from local communities and was able to build long-term relationships. This is direct trade in its purest form: talking to producers, connecting with cooperatives and building relationships that empower people.
