Beyond Fair Trade
There is often confusion surrounding the two terms. These two purchasing methods may sound similar but in practice are quite different. So what are the two terms and why do we promote that we are a direct trade company?
What is Fair Trade
Fair trade is a certification set up by the World Fair Trade Organisation whereby the producers (such as farmers or cooperatives) pay an upfront fee as well as annual costs to obtain the fair trade certificate. The certification aims to assure buyers that the producer's work behaviour is ethical and complies with other labour standards such as the farmers being paid fair wages and being free of child labour.
In theory, manufacturers will recoup the cost of certification by charging higher prices for their cocoa beans, and chocolate manufacturers can ensure that their labour practices are fair.
However, one limitation linked to fair trade is its barriers to entry for smaller farms due to high costs associated with gaining and maintaining their certification. Although being certified as fair trade can bring benefits to farmers, these high prices come at the expense of other farmers (especially those from small scale farms) who are unable to qualify for fair trade certification.
As a large organisation there is not much transparency when it comes to their operations due to their being an abundance of stakeholders involved and a large supply chain. There is also no quality control in place, meaning that farmers get paid the same amount for high quality and low quality beans. This results in there is more of an incentive for farmers to focus on volume over quality.
What is Direct Trade Chocolate?
On the other hand, direct trade is not a certification but a description of the sourcing process. The term is often used broadly but a true direct trade relationship involves the buyer sourcing the beans directly from the farmers and cutting out the middleman meaning the money goes straight to the farmers and their employees. The farmers are often paid a premium price for higher quality beans. This combined with the fact there's no registration cost involved leads to more money being left in the farmers pockets. The relationship goes beyond this as well, often incorporating a partnership between the buyer and farmer. As direct trade chocolate makers we work to establish relationships with the farmers, buying the cacao directly.
What does mean it to us?
For Rio Nuevo Chocolate direct trade encompasses our vision of working towards improving the livelihoods of the farmers and their productivity, creating a more sustainable independent life for the farmers and their families.
When working towards a positive future for the production of chocolate, it is important we consider the total effect on the community rather than an individual to provide a sustainable and ethical environment to protect the heritage of cacao production.