Have you always wonder what is the Difference between direct trade and fair trade? Well, in this post we will try our best explain each of term and give its benefits. Read on!

Introduction:

Have you always wonder what is the Difference between direct trade and fair trade? Well, in this post we will try our best explain each of term and give its benefits. Read on!

 

– What is Direct Trade?

Direct trade is a form of sourcing practiced by certain coffee roasters, chocolate makers, tea sellers, gemologists and more who build direct relationships with the farmers, artisanal miners and processors who sell their products ( Wikipedia source https://en.wikipedia.org/wiki/Direct_trade)

In Direct trade, the goal is to pay the highest price possible while still being affordable for consumers. We pay a premium price to directly source our beans from individual farmers and cooperatives who have met the criteria set by an independent third party organization that ensures workers are being treated fairly.

Direct trade benefits

Generally speaking, Direct trade eliminate all the costs and confusion a “middleman” brings. It also allows farmers to have greater control over sales and to interact directly with their buyers. Here are some of the benefits:

• Greater profits because you are eliminating intermediaries.
• Better control over all aspects of the transaction.
• Building relationship with your customers
• Accountability : You know whom to contact if something isn’t working, faster and more direct feedback on the product

 

What is Fair Trade?

Fair trade means that producers are paid what their goods are worth. Fairtrade is related certification. (https://www.fairtrade.net/) There are companies, organization that aims to ensure a set of standards are met in the production and supply of a product or ingredient. In this case coffee. For farmers and workers, Fairtrade means workers’ rights, safer working conditions and fairer pay. For shoppers it means high quality, ethically produced products.

Fair trade benefits:

As mentioned above, There are  organization that ensure a set of standards are met in the production and supply of a product or ingredient. Consequently they understand that The future of coffee depends on farmers being able to earn a decent living.

make sure that your coffee:

• Has a great taste
• Another advantage of fair trade products is that they’re guaranteed not to contain any pesticides or other chemicals because they’re not sprayed with chemicals during production .
• The Fairtrade Minimum Price is a safety net for farmers are fairly paid for their labor with a minimum fair trade price .
• These organizations offer a lot of support to coffee growers to become better leaders and entrepreneurs
• We know the impact of Climate change affects coffee – most of these organizations support farmers to adapt process that will not impact climate..

 

– What are the key Differences Between Direct and Fair Trade?

The key differences between direct and fair trade are the price and the quality of the product.

Direct trade products are usually more expensive than fair trade products. This is because they’re grown in smaller quantities by farmers who are paid a fair wage for their work. But some direct trade products like wine can be just as affordable as their fair trade counterparts if you know where to look.

If you’re concerned about what goes into your body, then direct trade products might be better for you .

On the other hand, fair trade products tend to have higher quality ingredients than direct trade ones because they’re selected based on taste rather than price or availability. It tastes good, then it’s fair trade! In addition, fair trade items are often more environmentally friendly because they focus on sustainable agriculture practices that preserve natural resources like water or soil nutrients. As a result, fair-trade products usually have lower carbon footprints than their direct-trade counterparts; so if environmental stewardship is important to you then fair trade might be worth looking into!

The key difference between direct trade and fair trade is that in direct trade, the companies involved in the transaction are able to set their own prices for goods. In fair trade, however, there are price floors and ceilings that must be followed so as not to exploit vulnerable populations who need these goods to survive.

Takeaway:

Direct trade is a trade where businesses are given more control over their products. Direct trade is better for the workers who negotiate their prices, receive better health benefits. Fair trade focuses on providing products that support the less privileged in the world.

Direct trade abolishes middle man and creates a relationship directly between producers and customers. Fair trade is more beneficial for the producer and possibly the society. Customers will know if and when a product is fair trade. With packaging containing these logos.