Thanks for your response on behalf of Scott…my what interesting travels you all have .

You did a great job on answering my questions and I am now much clearer about the concept of ‘direct trade’ and EqX ‘transparency’

Actually, while some may consider it unrealistic or limiting, I am one of those who advocate for FULL transparency in all business dealings, so I encourage EqX to keep leading the way to further transparency!

Cheers
Scott

Thanks again for your comments and excellent questions. Scott Patterson, who wrote this article, is on his way to Sumatra to visit one of our trading partners, so I’m assuming he won’t be able to respond to your questions.

I can give you my opinions however. : )

Direct trade with our producer partners is an absolutely critical part of our mission and has been since day one when Equal Exchange was founded. One of the reasons why the founders formed the organization was because they had come from the food co-op world and had seen how “dangerously disconnected” U.S. consumers were from their food sources. The founders wanted to establish more direct (and mutually beneficial) relationships with producers and to find ways to bring producers and consumers closer together.

When Equal Exchange helped launch Transfair USA, direct trade became one of the principles of Fair Trade.

In recent years, a number of newer roasters, who do not purchase their coffee under “Fair Trade principles” have tried to position themselves into a new niche which they have coined “Direct Trade”. In essence, what they are doing is going to source, finding the coffee they wish to purchase and buying it from the farmer, by-passing the co-op or other organizational entity that the farmer might belong to, as well as by-passing any Fair Trade mininimum price or credit guidelines.

So, whether it’s Fair Trade or Direct Trade, direct relationships are a critical element of the work. The difference is that Direct Trade ends there, whereas Equal Exchange) goes further: we believe in social movements and in co-operation – individually, small farmers don’t stand a chance – and so, if we can purchase high quality coffee and offer higher than market prices, advance credit, training, and educational exchanges, AND support farmers’ efforts to organize themselves to achieve higher social aims for their businesses and communities…. why would we stop at “Direct Trade”?

In terms of transparency, I’ll try to be brief: you’re right, that for a multitude of reasons, every business clearly needs to carry out its work with some degree of confidentiality. However, a commitment to transparency means that built into our business model is the overall desire to share how we carry out our work – whether that’s our financials, producer partners or retail partners. As a worker-owned co-operative, it also means that internally, business decisions and strategies are shared much more openly and horizontally than in traditional businesses where information is on a “need-to-know” basis.

I hope that clarifies some. Thanks again for all your interest.

Phyllis

As one ‘just plain interested in what a cooperative economy means’, I am certainly inspired by the ideas of Equal Exchange and what you have presented here!

There seem to be many, many advantages of the co-op business model. I loved your description of how Equal Exchange moved into the banana market and built that powerful collaboration with small farmer producer groups and natural foods co-ops.

I was also particularly interested in two other aspects of your post.

Firstly, you talk about “direct trade” copycats! I am not sure I understand what you mean here? Would you be willing to explain this point further?

Secondly, I agree completely with the significance of transparency as a key driver of ‘fairness’ in the supply chain. I have however heard in other contexts that having a fully transparent supply chain makes traders vulnerable to coercion from competitors. In other words, if all your commercial arrangements are transparent then competitors will look to use that knowledge to their advantage. I don’t know enough about the intricacies of supply chains to make a call on this.

So I was wondering about your perspective on this qualification around transparency and the actual degree/extent of transparency you are advocating in the co-op business model supply chain!

Many thanks for sharing!
Cheers
(Another) Scott