directtrade

Direct trade is a sourcing approach in which a buyer purchases goods directly from producers, bypassing traditional intermediaries and brokers. The term is most closely associated with the specialty coffee sector but is also used in other commodities such as cocoa, tea, wine, and some agricultural products. The central idea is a closer, collaborative relationship between buyer and producer, with emphasis on quality, transparency, and longer-term engagement.

In practice, direct trade involves on-site visits, farm assessment, and cupping or quality evaluation of lots. Prices are often negotiated directly and linked to quality and specific attributes rather than fixed market prices. Contracts may cover multiple harvests, with payments including advances or pre-harvest commitments. Producers may receive premiums for quality, sustainability, or social impact goals, with a portion of profits reinvested in farms or communities. The model aims to align incentives so that improved quality and sound farming practices benefit both parties.

Direct trade differs from fair trade certification in that it does not rely on universal standards or price floors. Outcomes depend on the specific buyer–producer agreement, and certification labels are not always present. The emphasis is on transparency and traceability rather than external verification alone.

Advantages cited by supporters include higher incomes for farmers, improved quality, and clearer supply-chain visibility. Critics point to potential power imbalances, lack of independent verification, and questions about the distribution of added value—especially if higher consumer prices do not consistently reach farmers. While coffee remains the clearest example, the approach is applied to other products where buyers seek closer access to producers and more direct price signals.