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roaster-grower relationship with greater quality control ture, and entrepreneurship. As a comparison, the Fair
and transparency, thus benefitting roasters, growers, Trade model only pays farmers 0.5% and at the very
and final consumers. Most importantly, a higher pre- most 5% of the final retail value of “Fair Trade” coffee.
mium (10-25% of the final retail value) is paid for the Additionally, the farmers have to pay thousands of
quality beans. This encourages them to reinvest in the dollars a year as a “membership” fee while agreeing to
quality of their coffees, a safe and ethical working cli- standards for pesticide and fertilizer use, which un-
mate, and environmentally sustainable coffee produc- fairly increases their cost of compliance due to low-
tion. They can enjoy better living standards, send their er productivity and diminished economies of scale.
children to school and afford better health services. Not to be too academic about this, but a joint UC San
Diego and UC Berkeley study estimates that Fair Trade
What is Fair Trade in the Coffee Industry? certification costs about $0.03 per pound, which is a
lot for impoverished farmers, with little to no long-
In contrast to the Direct Trade model, Fair Trade term benefit (there are many academic papers and
is the practice of buying coffee through an interna- articles out there confirming this). So Fair Trade isn’t
tional cooperative. Fair Trade is one of many certifica- as great as it’s been purported but we shouldn’t be too
tion organizations worldwide that inspects and evaluates quick to trample all over it and at least appreciate the
coffee estates and plantations according to a set criteria, international movement towards fairer supply chains
before Fair Trade certification is granted. Historically, across different agricultural trades. One can only
Fair Trade was established to ensure a minimum price imagine how much more devastating the impact is on
and wage to sustain small farmers and enable them to growers that are neither involved in Direct Trade nor
improve their living standards. However, while the Fair Fair Trade. Not to mention the unsustainable farming
Trade movement started off with great purpose, it has practices used in such instances to increase the yield
been corporatized and misappropriated in recent and turnover rate.Direct Trade is, in fact, fairer than Fair
years. At best, Fair Trade ensures farmers get paid a Trade, and Direct Trade has far more advantages both
very subjective “fair” price determined at higher levels to growers and buyers like us, and even to you because
of the supply chain (usually the certification company the quality of the beans are as good as they can get. We
or international cooperative), and the money is almost hope this article has been useful and enlightening, and
never enough to be reinvested into improvement in key the reason we choose to do Direct Trade over Fair
poverty reduction areas of education, health, infrastruc- Trade is pretty obvious as it is a win-win for everyone.

Belco
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@Belcocoffee
Hook Coffee
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