UNIVERSITY OF CALGARY

Direct Trade Coffee:

Prospects and Pitfalls

by

Justin Badiyan-Eyford

A THESIS

SUBMITTED TO THE FACULTY OF GRADUATE STUDIES

IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE

DEGREE OF MASTER OF ARTS

INTERDISCIPLINARY GRADUATE PROGRAM

CALGARY, ALBERTA

January, 2013

© Justin Badiyan-Eyford 2013

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Abstract

This thesis aims to begin a discussion about the potential of direct trade relationships

to provide an alternative to coffee producers that can balance quality, competition and trust.

The research conducted explores the circumstances and motivations that attract coffee

producers to direct trade relationships. Qualitative interviews, relevant literature and Pierre

Bourdieu’s conceptual tools of field and capital are used to analyze the relationship

between macro structures and the subjective world of individuals. This thesis finds that

coffee producers are not only attracted to the high and stable prices of direct trade but they

are drawn to the potential of gaining more control in the trade process. The emphasis

placed on quality encourages trust and investment and facilitates a shift in the power

dynamic between roasters and producers. This suggests that direct trade has the potential to

be a fair alternative for producers.

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Acknowledgements

I would like to extend my sincere gratitude to Dr Jeffrey Everett. His interest in this

topic was encouraging, his logistical support made this research possible, his questions

guided my inquiry and his feedback was constructive. I would also like to thank Dr.

Maureen Wilson for her insights and gentle guidance and Dr Don Ray for giving me

perspective and direction at the outset of this project. Pauline Fisk must also be

acknowledged for the integral role she played in the planning and structure of my program.

I would like to thank my wife for her endless support, frequent sacrifice, and

intellect, which I strive to equal. I would like to thank my family for making me the person

that I am; my dad for teaching me the value of ideas and role of criticism, my mom for

showing me what persistence can accomplish, my brother for his limitless imagination that

reminds me to dream, my sister for her creativity and positivity that inspires me to look on

the bright side of life. The ingenuity of Mark, sincerity of Ben and inspired humour of

Dale have evoked admiration and inspired me to be a better person. This thesis would not

have been possible without the generous support of Vernon and Ezmina, examples of unity

and reminders of what is important in life.

I would also like to acknowledge Phil and Sebastian, who have facilitated much of

my learning about coffee and provided me with the caffeine to finish this project.

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Dedication

To Grayson, your endless wonder inspires me

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Table of Contents

ABSTRACT .......................................................................................................................... II

ACKNOWLEDGEMENTS .............................................................................................. III

DEDICATION ................................................................................................................... IV

TABLE OF CONTENTS .................................................................................................... V

TABLE OF FIGURES ................................................................................................... VIII

CHAPTER 1: INTRODUCTION ....................................................................................... 1

CHAPTER 2: DEFINITIONS AND TERMINOLOGY ................................................... 4

2.1 TERMINOLOGY ............................................................................................................... 4

2.2 FAIR TRADE ................................................................................................................... 5

2.3 DIRECT TRADE ............................................................................................................... 6

2.3.1 One driving concept, several motivations, many models ....................................... 7

2.3.2 Definition ............................................................................................................. 12

2.3.3 Discussion ............................................................................................................ 14

CHAPTER 3: A REVIEW OF LITERATURE ............................................................... 18

3.1 TRADING PARTNERSHIPS: MARKET ALTERNATIVE OR SHAPED ADVANTAGE? ............ 20

3.1.1 Is Fairtrade an alternative to the conventional market? ..................................... 20

3.1.2 Can direct trade provide an alternative trading model? ..................................... 25

3.2 IMPACTS: POWER AND STRUCTURE ............................................................................... 27

3.2.1 Power and equality .............................................................................................. 31

3.2.2 Cooperative values and market values ................................................................ 32

3.2.3 Direct partnerships based on unequal power ...................................................... 34

3.3 SOCIALLY SENSITIVE, SUSTAINABLE DEVELOPMENT .................................................... 39

3.3.1 The relationship between Fairtrade and social capital ....................................... 40

3.3.2 Certification standards and social capital .......................................................... 42

3.3.3 Case Study: Oaxaca, Mexico ............................................................................... 43

3.3.4 Direct trade: Communities and Cooperatives ..................................................... 47

3.4 SUSTAINABLE AGRICULTURE ....................................................................................... 50

3.4.1 Direct trade: environment ................................................................................... 52

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3.5 REASONS AND QUESTIONS FOR DIRECT TRADE ............................................................. 54

CHAPTER 4: METHODS, METHODOLOGY AND THEORY .................................. 56

4.1 METHODOLOGY ........................................................................................................... 56

4.2 THEORETICAL PERSPECTIVE ......................................................................................... 59

4.3 ANALYTICAL FRAMEWORK .......................................................................................... 62

4.3.1 Capital ................................................................................................................. 63

4.3.2 Fields and Habitus ............................................................................................... 70

4.3.3 Bourdieu’s concepts in this thesis ........................................................................ 73

4.4 METHODS ..................................................................................................................... 75

4.4.1 Interview design ................................................................................................... 76

4.4.2 Reflection on interview selection and limitations ................................................ 79

4.5 REFLEXIVITY ............................................................................................................... 84

CHAPTER 5: ANALYSIS ................................................................................................. 89

5.1 ECONOMIC ................................................................................................................... 89

5.1.1 Lack of access ...................................................................................................... 90

5.1.2 Power and Influence ............................................................................................ 92

5.2 GOVERNMENT .............................................................................................................. 95

5.2.1 Lack of resources: INACOP ................................................................................ 96

5.2.2 Political influence: ANACAFE ............................................................................ 99

5.2.3 Policy and Corruption ....................................................................................... 101

5.3 FAIRTRADE ................................................................................................................ 103

5.3.1 Impact of requirements on capital ..................................................................... 104

5.3.2 Need for social capital to facilitate assistance .................................................. 108

5.3.3 Insufficient market and power dynamics ........................................................... 110

5.3.4 The desire for something more .......................................................................... 112

5.4 DIRECT TRADE ........................................................................................................... 114

5.4.1 Focus on quality ................................................................................................ 115

5.4.2 Feedback through relationships ........................................................................ 117

5.4.3 Potential impacts of relationships ..................................................................... 120

5.4.4 The beginnings of a relationship ....................................................................... 123

5.4.5 The power of quality .......................................................................................... 127

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CHAPTER 6: DISCUSSION ........................................................................................... 130

6.1 FIELDS AND CAPITAL .................................................................................................. 132

6.1.1 Distribution of capital ........................................................................................ 133

6.2 SYMBOLIC VIOLENCE ................................................................................................. 136

6.3 ACCOUNTABILITY ...................................................................................................... 140

6.3.1 Dynamic sourcing .............................................................................................. 140

6.3.2 Importance of trust in aligning habitus ............................................................. 141

6.3.3 A built-in alternative .......................................................................................... 144

6.4 REFLECTION ............................................................................................................... 146

6.4.1 Bourdieu ............................................................................................................ 149

6.4.2 Future research ................................................................................................. 150

CHAPTER 7: CONCLUSION ........................................................................................ 153

APPENDIX A: INTERVIEW QUESTION REFERENCE SET ................................. 157

APPENDIX B: FIELDS ................................................................................................... 159

REFERENCES ................................................................................................................. 160  

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Table of Figures

FIGURE 1: DIRECT TRADE PRINCIPLES ................................................................................................ 13

FIGURE 2: A VISUAL REPRESENTATION OF THE APPROXIMATE POSITIONS OF FIELDS IN RELATION TO

EACH OTHER ............................................................................................................................ 159

FIGURE 3: AN APPROXIMATION OF THE DISTRIBUTION OF CAPITAL IN EACH FIELD ................ ERROR!

BOOKMARK NOT DEFINED.

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Chapter 1: Introduction

In an increasingly integrated global economy the fairness of relationships between

producers in developing economies and retailers in developed economies is being

questioned. This questioning is especially active in the coffee trade, which has pioneered

alternative trading relations such as Fairtrade and direct trade. This thesis considers the

prospects and pitfalls of direct trade in the context of the commodity market and Fairtrade

framework. The analysis focuses on the circumstances and motivations of producers who

consider direct trade relationships and asks whether direct trade can provide a sustainable

and fair alternative for producers.

Small coffee producers operate in a volatile market and often deal with buyers that

are only concerned with a price determined in New York. These producers lack the

capacity and influence to challenge their relationship with these international trade

structures and many have turned to alterative markets for security and stability. While

Fairtrade certification has attracted many producers with a stable minimum price, social

benefits and access to an ethical market, direct trade offers select producers the chance to

receive higher prices, tailored assistance and increased control over the terms and

conditions of trade. There has been substantial research on the benefits and drawbacks of

Fairtrade, but no academic research has been done on the viability and appeal of direct

trade. This thesis relies on the Fairtrade literature to shed light on the structures and

challenges that surround producers and the options that Fairtrade provides. The research

for this thesis builds on this literature to consider the circumstances and motivations that

lead producers to seek out direct trade relationships.

The Fairtrade framework grew out of a desire for greater equality in international

trade. This initiative has attracted thousands of producers who have decided that it is worth

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the time and energy to satisfy Fairtrade requirements. The Fairtrade model provides

farmers with a stable minimum price and social assistance. If a producer organization can

effectively leverage its social capital, it is able to access this market and reap the benefits

that it provides. A limited demand for Fairtrade products, however, has restricted access to

buyers and encouraged the Fairtrade label to welcome the entrance of larger corporations

that hope to capitalize on the ethical consumer market. Access to the market, stringent

standards and requirements and companies that violate the spirit of Fairtrade have led to

producers seeking alternative trade networks.

Direct trade emerged out of the specialty coffee market and is limited to coffee that

meets a high standard of quality. This model provides producers with an opportunity to

receive higher prices that are both stable and responsive to commodity market movements.

It offers a relationship with the buyer that provides technical assistance that is tailored to

the needs of the farmer. The importance of quality in direct trade allows farmers that can

consistently produce exceptional coffee a greater degree of influence over the terms and

conditions of trade than is possible in the Fairtrade or conventional commodity market.

These benefits are only available to select producers that can produce quality coffee

that is distinctive and appealing to roasters. This requires the producer to make significant

investments in knowledge, skill and infrastructure. However, this does not guarantee a

healthy direct trade relationship; while better quality can fetch better prices on its own,

stability and increased control of the terms of trade come from establishing relationships of

trust. Trust and mutual respect are integral to direct trade because these relationships lack

regulation and accountability to a third party. As a result, the outcome of relationships

often depends on the intentions of the roaster and the ability of the roaster to garner the

respect and trust of the producer.

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The importance of relationships in direct trade has facilitated a shift in the balance of

power and provided a different form of accountability. The value placed on quality coffee

has created an incentive structure for roasters to provide farmers with the tools for their

own empowerment. The procurement of consistent quality motivates roasters to create

trusting relationships and invest in the producer. Meanwhile, the production of quality

coffee provides farmers with the capacity to shape the relationships that they are involved

in. The impact of what is needed to achieve consistent quality has an impact on the

dynamics of direct trade relationships that reveals the potential of direct trade to provide a

fair framework for producers.

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Chapter 2: Definitions and Terminology

2.1 Terminology

This thesis addresses questions and issues revolving around three terms: Fair Trade,

Fairtrade and direct trade. The first two terms, Fair Trade and Fairtrade, are distinguished

by criteria developed by Fairtrade International (FLO):

The term Fairtrade is used to describe the certification and labelling system governed by FLO. The Fairtrade system allows consumers to identify goods that have met Fairtrade standards. The term Fair Trade is used to refer to the Fair Trade movement as a whole and can be used to describe both labeled and unlabeled goods and the work of Alternative Trade Organizations (ATOs), Fair Trade federations and networks such as NEWS, EFTA etc. (http://www.fairtrade.net/faqs.html) The term direct trade refers to the emerging trend of sourcing quality coffee in close

partnership with producers. There is no industry standard for this model of coffee sourcing,

nor is there standard terminology; one specialty coffee roaster has copyrighted the term

Direct Trade, however, others in the industry use it freely, while some refuse to call it direct

trade and opt for terms such as relationship coffee. This thesis will use the lowercase term

‘direct trade’ to refer to a compiled definition, created from the sourcing practices of

multiple companies and not the specific definition provided by any single company. This is

not an authoritative definition but rather a synthesis intended to provide a representative

model for analysis.

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2.2 Fair Trade

For the purposes of this analysis, the definition and principles of Fair Trade laid out

by FINE1 will be used, as they are the most commonly cited and widely acknowledged:

Fair Trade is a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers – especially in the South. Fair Trade organisations (backed by consumers) are engaged actively in supporting producers, awareness raising and in campaigning for changes in the rules and practice of conventional international trade. (FINE, 2001, p. 1)

FINE elaborates on this definition by providing five basic principles that are intended to

guide the criteria and standards of the various networks and organizations in Fair Trade.

These are summarized below:

• Commitment to the Fair Trade ideals of empowering producers, raising

awareness and campaigning for change in conventional international trade.

• Promoting a transparent and mutually beneficial partnership.

• Improving trading conditions through a fair price, financing and long term

commitments.

• Secure a socially responsible, safe and healthy workplace for producers.

• Promote the sustainable development of the economic and social opportunities

of small producers and in their environmental practices. (FINE, 2001, p. 2-3)

The literature reviewed in this thesis is focused on evaluating Fairtrade according to these

principles. This literature, along with the limited literature surrounding direct trade, will be

                                                                                                               1 An acronym referring to a group of four Fair Trade organizations: FLO (Fair Trade Labeling Organizations International), IFAT (International Fair Trade Association, now renamed the World Fair Trade Organization), NEWS! (Network of European Worldshops) and EFTA (European Fair Trade Association)

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used to develop an understanding of the circumstances and motivations of producers in

considering a direct trade relationship.

2.3 Direct Trade

“Direct trade,” a term used by roasters who buy straight from the growers and cut out (or in some cases just demand a fair shake from) the traditional middlemen, is now giving fair trade a run for its money. Direct trade roasters typically negotiate a price with farmers, as well as any middlemen that will remain part of the process. Negotiations are transparent – a characteristic that is rare in coffee-growing nations. And unlike fair trade, which fosters a “fair” but minimum price for the coffee, direct trade roasters offer a premium price and then charge more to connoisseurs back at the trendy café or market up North. The details of how direct trade plays out can vary from one company to the next since there is no overarching body like FLO International and it is not centrally regulated by something like the Fair Trade Certified mark. Each coffee company develops its own system for engaging with smallholder farmers and offering premium prices. The real advantage is that by creating that link, there is a built-in advantage for these companies to also make an investment in the coffee farmers’ long-term capacity and well-being. (Bramucci & Mulholland, 2011, p. 201-202)

This definition captures some of the essential components of direct trade. However, for the

purposes of this thesis a more nuanced understanding of direct trade values and practical

applications is required in order to ascertain the circumstances and motivations of

producers in considering a direct trade relationship.

The definition of direct trade used in this analysis will be constructed from a select

group of “the most respected small companies that roast the highest-rated coffees”

(Weissman, 2008, p. xiii). These are the companies that are leading the way in the drive for

a quality-centric, ethically inspired model of direct trade. This will allow for a more

nuanced understanding of the structure behind direct trade and facilitate a critical analysis

of the appeal and potential of direct trade.

The initial premise of direct trade is based on a trade arrangement built on a coffee

roaster’s desire to source the highest quality coffees in an ethically responsible manner.

This is done in collaboration with coffee producers whose hard work and dedication are

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rewarded with higher prices and, at times, varied forms of technical assistance (Culture,

2010; Intelligentsia, 2010; Stumptown, 2010). Each roaster has developed an approach to

direct trade that suits the values and priorities of the company. These philosophical

underpinnings drive the unique relationship that is developed over time with specific farms.

This is both the great strength and weakness of direct trade, as this allows for dynamic

solutions that are tailored to the needs of farmers but can also obscure transparency and

accountability.

2.3.1 One driving concept, several motivations, many models

This definition is based on the various direct trade programs that roasters have

developed and market on their websites and in their promotional material. Two of the

largest direct trade roasters are Intelligentsia Coffee & Tea and Stumptown Coffee

Roasters. These roasters have often pushed the envelope of what is considered possible in

a purchasing program and have been at the forefront of defining what a direct trade

relationships entails. This is how they describe their direct trade programs:

[Stumptown’s] Direct Trade purchasing strategy has been built on a few simple pillars: improving coffee quality through our experience and expertise on the ground at origin, incentive based rewards to the farmer for doing so and complete transparency of our supply chain. Those pillars support the vision of Stumptown to provide the finest coffee experience possible… (Stumptown, 2011)

Intelligentsia Coffee’s buying philosophy is not very complicated. We believe in coffee quality and have made a commitment to our customers to offer only truly dazzling Specialty Coffees that speak for themselves in the cup. We believe that to get such coffees we need to work closely with actual producers, not just importers or exporters, so that we can build great coffees from the very start. Almost all coffee roasters claim that they "work with farmers" but few can back the promise. Intelligentsia travels to our coffee’s source each of the 12 months of the year. We visit farms, roll up our sleeves, and get to it. We take 24-hour redeye flights and 10-hour, high-altitude pick-up rides over serpentine roads. You pick up our coffee and we shake the hand of a farmer in Peru. Or Rwanda. Or Guatemala. And when you see the Intelligentsia Direct Trade logo on our bag, you know how much effort is invested in each bean.

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In the broadest terms, these coffees should be understood as a true collaboration, with both sides investing a great deal of time, energy and ideas to produce something great. At the end of this process, the coffee farmer who grows an award-winning cup is an artisan, and should be regarded as such. We believe human effort is the most critical factor in quality coffee and that the growers who do the best work should get the best price and individual recognition. (Intelligentsia, 2010b)

These statements convey an overriding commitment to quality, a feeling that the farmer

deserves more compensation and recognition, and the implication that there should be some

accountability along the way. These ‘pillars’ present, in broad strokes, the main tenets of

direct trade. Quality is, most often, the impetus behind direct relationships and, as quality

is a core part of the business for these companies, they can justify spending the time and

money necessary to develop unique programs with each farmer. “Stumptown doesn’t have

a mission statement. But if we did it would say quality and relationships period” (quoted

from an interview with Stumptown's Matt Lounsbury, Parker, 2011, p. 189).

Both price and relationships are used to achieve quality; price is used as an

incentive to achieve quality, while the relationship is often used to provide farmers with the

knowledge, tools and infrastructure to improve their quality and achieve a better price.

There is the implication that the farmer wants to improve his product, get a better price and

be recognized for his work, and that this is desirable and ‘fair’ for the farmer. Although

direct trade claims to have transparency, there is scarce mention of how roasters hold

themselves accountable. Stumptown mentions that their supply-chain is transparent and

Intelligentsia proudly mentions that they shake every farmers hand, but can this provide

insight in the relationships and how they have impacted the farmer?

Four Barrel, a roaster in San Francisco, prefers to take a narrative approach in

defining its model of trade:

As with everything we do at four barrel, sourcing the highest quality green coffee requires a relationship built on mutual respect and a passion for quality. This

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relationship, perhaps more than any other, is the backbone of our tireless pursuit of the perfect cup of coffee. Phrases like “social sustainability” or “direct-trade” represent very real buying practices that we spend the lion’s share of our time making a reality. These practices mean something different to us in every region and country—it is impossible for us to use one phrase to describe how and why we buy the coffees that we do. We’d rather spend our time and resources working toward something that is tangible, namely, our constantly evolving commitment to our producers and to quality. We’d rather tell the stories behind our coffees and let those stories speak for themselves. Just as there is no quick and simple way to explain buying practices across all countries, there is no easy way to simplify the components that affect quality. Each country and region has its own climate, varied soil composition, varietals and processing methods. Most of our time in each country is spent learning about why farmers do what they do. The pursuit of quality becomes a conversation, one that begins on the dirt roads of the farm and continues until the coffee sits under its own crust on the cupping table. Sourcing coffee the way we do is time consuming, expensive and plain hard work. But it is the only way we can vouch for the quality of our coffees, firsthand. And the only way we can uphold our end of our most important relationships—the ones with our farmers. (Barrel, 2010)

This description highlights the advantage of direct trade, which has the potential to be very

effective in addressing the individual needs of producers. Four Barrel describes their

commitment to producers and quality as “constantly evolving,” a statement with which

many direct trade roasters would agree. They use terms – like mutual respect, commitment

and conversation – commonly associated with a partnership or relationship and they

explicitly state a commitment to social sustainability. While acknowledging the

complexity of these concepts, they also highlight how difficult it is to convey that these

things are being done. Once again, the challenge with this model comes back to

accountability and transparency. Without transparency it is easy to cherry pick stories and

evidence. Four Barrel’s description sheds light on both the strength and weakness of the

direct trade model; it gives direct trade practitioners the flexibility to achieve what they

need to and address localized needs without being bound by regulatory requirements, while

requiring very little transparency.

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So far, the direct trade models considered look very similar; quality coffee sourced

through relationships with farmers that aim to develop good coffee and give the farmers the

recognition, support and payment that they deserve. This model implies that direct trade is

not only a good model to find and develop quality, but it is also ethically motivated. This

implies that consistently good coffee necessitates ethical sourcing and, consequently, it is

counterproductive to spend time and money on accountability measures. This is the

common conception of accountability found in direct trade models and it inordinately relies

on consumers to trust that roasters are doing what they say they are doing. The common

response to questions about accountability is that the “proof is in the cup,” (Intelligentsia,

2010b) but is that a sufficient answer?

Counter Culture, a roaster in Durham, North Carolina, has approached the issue of

accountability by regulating its own model through a third party certification program:

Counter Culture Direct Trade Certified coffees are guaranteed 100% compliant with the following standards: 1. Personal & Direct Communication: Counter Culture has visited grower partners on a biennial basis, at minimum. 2. Fair & Sustainable Prices: Counter Culture has paid at least $1.60/lb. for green coffee. This exceeds the Fair Trade Certified floor price by at least 19%, not including quality-based financial incentives paid to growers. 3. Exceptional Quality: Coffees have scored at least 85 on a 100-pt. cup quality scale. 4. 100% Transparency: Counter Culture maintains direct communication between buyers, sellers, and any intermediaries. All relevant financial information is available to all parties, always. We partner with Quality Certification Services (QCS) to verify our compliance with Counter Culture Direct Trade Certification standards... Personal, long-term relationships with our farmer partners—and the quality, sustainability, trust, and learning they foster—are the essence of our Direct Trade model. ”(Culture, 2010)

This commitment ensures a higher level of accountability and, by certifying transparency it

provides assurance to its customers that the company is doing what its criteria require it to

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do. However, the “sustainability, trust and learning” are not certified, they are the exalted

but unaccountable ‘essence’ of the model. This is understandable because a relationship is

hard to quantify or standardize, but how much better is this than the Fairtrade model?

Counter Culture certifies price, guarantees a paper trail and a handshake for the farmer – all

things that Fairtrade claims and certifies. The only difference is the quality guarantee,

something that is already required of a specialty coffee roaster. The promise of a long-term

relationship, the unique and innovative aspect of the model, is the only thing that is not

certified. The certification program then only serves to guarantee a very basic set of terms,

while distracting and detracting from what is potentially the most important aspect of the

model.

Coffee Collective, a roaster in Denmark, orients its model to emphasize the

relationship. In doing so, the company equates good coffee with good ethics while

providing some concrete steps towards establishing a transparent relationship:

Good coffee begins with good ethics. We are working closely with people in parts of the world where the living standards are low. Naturally, we have a responsibility. This is why we have developed our own Direct Trade Model. The purpose of our Direct Trade Model is to ensure we get the best possible quality and that our farmers are rewarded for the extra work they put into producing this quality. It’s really quite simple: Better quality of life leads to better quality of coffee. We have our own model because there are no alternatives that ensure the best coffee quality and social responsibility at the same time. Our Direct Trade Model consists of four elements:

• We pay a quality premium directly to the individual farmer. • We seek long-term collaboration with these farmers with the purpose of

developing our common product to the best possible quality. • We show our customers the prices we pay the farmer for his coffee - which

is always significantly above the Fair Trade price. • We create a platform for the farmers to meet our customers so both parties

can meet and learn more about each other’s approach to coffee and quality. (Collective, 2010)

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The main purpose of this program remains in line with Intelligentsia, Stumptown and Four

Barrel, emphasizing collaboration and relationships to improve quality; but the approach

and design of the program allows for a commitment to good ethics that is backed by some

real transparency. Coffee Collective openly publishes the price that they pay farmers; this

lets consumers see the price paid to the farmer and is a gesture that engenders trust. The

price that a farmer receives is an objective indicator of the quality of life that a farmer can

afford, but can price tell us about the circumstances and motivators that shape the

relationship between the farm and roaster?

Price does not guarantee the fair and just treatment of farmers but it is a start. In

place of a guarantee, the Coffee Collective have created a platform for the farmers to meet

the customers and establish a dialogue. If conducted in an open and honest fashion, these

forums could allow for transparent dialogue and a glimpse into the dynamic of the

relationship. Accountability is, however, limited by a couple of factors: the platform and

agenda is set by the roaster, time and resources limit the number of producers that this

initiative can include, and the efficacy of this program (as a tool for accountability) is

dependent on the volition of consumers to show up and ask the hard questions. It is also

worth considering how allowing strangers to question the farmer affects the dynamics of

trust and respect in the relationship.

2.3.2 Definition

From the similarities of these models, the fundamental principles of direct trade can

be gleaned, while the differences can demonstrate the possible permutations of this model.

From the statements above, the foundational principle for direct trade can be described as a

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commitment to sourcing and developing quality coffee, while the operational model often

incorporates the following elements:

• Developing relationships of trust and reciprocal benefit with farmers in order to develop quality

• Engaging consumers in a narrative, creating a story around quality coffee and direct relationships with farmers

• Belief that the farmer deserves to be rewarded and recognized for producing extraordinary coffees

• Creating a sourcing model that is socially responsible and sustainable

These elements are representative of common practices and will be used in this thesis as the

operative definition of direct trade. This definition attempts to capture the basic principles

of a quality-centric model that attempts to balance the search for quality with ethical and

sustainable practices.

This thesis aims to begin a discussion on how well direct trade has been able to

strike this balance by looking at the motivations and considerations of producers entering a

Figure 1: Direct trade principles

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direct trade relationship. In looking at the perspective of the farmers, this thesis hopes to

inform questions about the sustainability of direct trade and how direct relationships can

allow for dialogue and promote equitable transactions.

2.3.3 Discussion

There have been important steps taken, from within the industry, towards providing

transparent information on price. While price is important, it is not what matters most for

the roaster or producer. For the roaster, price factors into the bottom line but quality takes

precedence. Each roaster has a price that they are willing to pay for a certain level of

quality that correlates with what they are able to charge. The narrative that roasters develop

around quality and direct relationships allows them to charge consumers more for quality

while paying farmers more and still making a decent profit for themselves. For the

producer, a higher price for quality coffee provides them with an opportunity to increase

their revenue but also requires more work, commitment and knowledge. The appeal of

direct trade relationships often lies in the possibility of a relationship that provides stability

and the ability to influence the terms of trade.

Direct trade, then, offers more than just a price adjustment for the farmer; it changes

the terms of trade. The emphasis on quality shifts the priorities of roasters and producers

and provides an opportunity for a more balanced relationship between roasters and

producers. The maintenance and development of quality requires the roaster to invest time,

energy and often money into a relationship that may or may not produce results. The

producer, in turn, must be committed to receiving feedback and investing time, energy and

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money into improving the coffee that he2 produces. The development of trust and respect

is essential for any investment to succeed; the roaster needs to trust that his investment is

secure and the producer must understand why changes need to take place and how these

changes can benefit him.

However, no existing model systematically holds roasters accountable for the

principles they espouse or the impacts that their relationships have had. Many direct trade

roasters revel in the fact that they do not adhere to third party certification programs;

arguing that it separates them from Fairtrade, lets them cater to the individual needs of each

producer, and lets them pay the premium (that would otherwise go to a certification

agency) directly to the producer. These are all valid points but, without accountability,

what is to prevent direct trade from becoming a corporate gimmick aimed at winning the

hearts and minds of consumers? Attempts at accountability, up to this point, have been

limited to price transparency and a ‘quality equals sustainability’ argument. The common

approach to accounting for social impacts can be found on the Intelligentsia website:

“Q: How does the consumer know that we do what we say? A: The proof is in the cup. Quality is not an accidental thing, and it does not happen without very careful attention to detail at every step of the way: from fertilization and pruning, to picking only ripe cherries, to fermentation, drying, and sorting. All of this takes a lot of work, and it does not happen without a tangible incentive or reward. Farmers that don’t get paid well for their work don’t do these things, and those who don’t respect their land and the people who work on the farm face a constant uphill battle to produce quality. Rarely do they produce "Grand Cru" caliber coffees. There may be the occasional exception, but in 10 years of working intensively with coffee this premise has been proven true over and over and over again.” (Intelligentsia, 2010b)

                                                                                                               2 The term ‘he’ or ‘his’ will be used to refer to the producer/roaster as an individual entity for the sake of simplicity. This does not reflect gender.

  16  

This statement connects quality with the idea of sustainability and conceptualizes a fair and

just model as a relationship where farmers get the price, recognition and support that they

need and deserve.

The equation of good coffee with good ethics has some merit from an economic and

agricultural perspective, but the basis of these actions has more to do with sustainability

than ethics. Farms that are blessed with favourable terroir3 and farmers who are able to pay

for timely coffee cherry picking, buy the right equipment, maintain infrastructure and

process the cherries in a clean and controlled environment are more likely to attract

specialty roasters and get a good price for their coffee. They are also likely to be able to

take better care of their land and families. While it is not clear (and rather difficult to

establish) whether this success is a result of initiatives driven by the farmer or is motivated

and supported by the relationship with the roaster, the question of ethics has more to do

with social considerations and the dynamics of the relationship. Is it enough to give the

farmer a good price and recognition? Or, do good ethics require a relationship that

establishes a dialogue and takes into account the needs, goals and concerns of the farmer?

As Michael Sandel argues, a just or ethical relationship is one that establishes a

dialogue that is messy, that accounts for the narrative of all involved parties, and, although

it may not give a clear result, develops mutual trust and a politics of moral engagement that

is an inspiring and promising basis for justice (2009). In the interests of beginning this

dialogue, this thesis attempts to delve into the considerations and motivations of farmers in

entering into direct trade relationships. It is hoped that the insight gleaned from this

                                                                                                               3 Terroir refers to the soil, weather and typography that contribute to the taste and quality of coffee. Definition adapted from, (Trubek, 2008, p. 19-22)

  17  

research will spark discussion around the ethical nature of direct trade relationships and

further consideration of its prospects and pitfalls.

Direct trade, then, is an ethically-minded business model that focuses on creating

quality from relationships with producers and consumers. The focus on quality in direct

trade provides an incentive for roasters and producers to have healthy relationships.

Although direct trade can be unabashedly opaque about interactions with farmers,

relationships of trust and respect contribute to the promotion of a sustainable and just

model. This thesis will explore the circumstances and motivations that attract producers to

enter into direct trade relationships. It is hoped that this will provide further insight into the

social, economic and environmental prospects and pitfalls of the direct trade model.

  18  

Chapter 3: A Review of Literature

This literature review situates our discussion of direct trade in the larger academic

debates surrounding Fairtrade in order to present some of issues and choices facing the

coffee industry and farmers. This will allow for a discussion of the strengths and

weaknesses of the direct trade model that is both focused and relevant, as well as identify

the need for more research. The Fairtrade literature is reviewed because it is considered not

only a point of comparison to direct trade but also the main alternative for farmers who are

looking for a better price and more predictable relationship with the market. The Fairtrade

literature will supplement scarce literature on direct trade and allow this review to identify

the issues facing the industry and farmers, as well as develop a more nuanced

understanding of the motivations and considerations of farmers in engaging direct trade.

This literature review has been structured around recurring themes in the fair trade

literature that have relevance to producers’ consideration of direct trade. The first theme

considers the ideological foundation of the Fairtrade network and asks whether the current

arrangement is able to establish “trade as a mutual beneficial partnership based on dialogue,

transparency and respect” (FINE, 2001, p. 2) and provide an alternative to conventional

international trade. This develops a picture of what has been hoped for, what is possible

and what the current Fairtrade network can offer.

The second theme moves past the issue of alternatives to focus on the efficacy and

impacts of the current Fairtrade framework, considering how Fairtrade “contributes to

sustainable development by offering better trading conditions to, and securing the rights of,

marginalized producers and workers.” (FINE, 2001, p. 2) These authors consider the

structures and power distribution within the Fairtrade system and how they intersect with

the goals and lives of the producers. These articles discuss the lived experience of

  19  

producers and provide some valuable insight into the previous experiences of farms and

cooperatives and possible motivations for seeking a direct trade relationship.

The third theme continues this thread, looking more closely at the relationship

between Fairtrade and social capital. The articles consider how Fairtrade relies on and

affects social capital. This allows us to consider how Fairtrade impacts the interweaving

social networks, families and environments of producers and provides a more

comprehensive analysis of motivations of individuals living in communities, working in

cooperatives and operating on a global stage.

The fourth theme considers the environmental aspect of sustainability. Standards

and attitudes that promote healthy environmental practices are essential for any program

that claims to be sustainable or work in the interests of farmers. The farm is the livelihood

of the farmer and must be treated in a way that it will not only maximize immediate returns

but also continue to provide for the farmer for years to come. How Fairtrade and direct

trade engage environmental issues will provide insight into the current and future

circumstances of farmers.

The analysis contained in this literature review considers the similarities and

differences between the Fairtrade and direct trade movements. This will help to clarify the

mission and definition of direct trade as well as present the alternatives available to

producers. These considerations will provide the background information and elaborate on

the circumstances and motivations that influence a producers’ decision to engage in a direct

trade relationship. This will allow for a more complex consideration of the research

question: what are the prospects and pitfalls of direct trade?

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3.1 Trading Partnerships: Market Alternative or Shaped Advantage?

3.1.1 Is Fairtrade an alternative to the conventional market?

The ideological foundations of Fairtrade seek to provide producers with an alternative

to the conventional commodity market and to neoliberal capitalism, seeking to substitute

the competitive nature of capitalism with the values of equality and cooperation (Fridell,

2007, p. 99; Raynolds, Murray & Wilkinson, 2007, p. 6). Fairtrade has been criticized for

straying from these roots, failing to provide an alternative and evolving to work within the

conventional commodity market (Boersma, 2002, p. 5-6; Fridell, 2007; Jaffee, 2007). This

has created a schism between what the “fair trade movement”4 aspires to accomplish and

what the “fair trade network”5 is capable of attaining (Fridell, 2007, p. 99).

There are two main streams of thought that look to address this schism, Fridell terms

the first camp the “alternative globalization perspective” and the second the “shaped

advantage perspective” (2007, p. 83). In the former camp, authors call for a return to the

cooperative ideals of the Fair Trade movement and the creation of a “genuinely alternative,

inclusive, and just” market (Fridell, 2007, p. 290; Jaffee, 2007, p. 266). The latter camp

looks to further improve the terms of engagement with the free market by concentrating on

how Fairtrade can better serve the needs of producers (Helms, 2011; Moberg & Lyon,

2010; Murray, Raynolds & Taylor, 2006).

The alternative globalization perspective asks whether “working within conventional

markets erodes the [Fairtrade] movement’s historical mission of challenging the unjust and

inequitable nature of conventional international trade?” (Raynolds, Murray & Wilkinson,

2007, p. 9) Fridell uses a historical materialist approach to identify the “macro-structures                                                                                                                4 What this thesis refers to as Fair Trade, see definition section 5 What this thesis refers to as Fairtrade, see definition section

  21  

of power” (2007, p. 11) and asserts that working within the neoliberal framework has

perpetuated, not eradicated, the power discrepancy between the roasters, consumers and

certifiers, and the producers:

The fair trade network as it is currently articulated is premised on the belief that global inequality and injustice can be combated with radical reforms to trade, at the level of both individual firms and the international trade regime, without a fundamental transformation of political power, class relations, and property ownership within the states that constitute the capitalist world system. (2007, p. 14-15)

Fridell acknowledges that producers have benefited from attempts to “mitigate the negative

impact of neoliberalism” (Fridell, 2007, p. 99) but argues that this is the extent of what the

current Fairtrade network is capable of attaining. Fridell concludes that as long as Fairtrade

remains within the bounds of a neoliberal market it will not address the needs of producers:

[T]he global economy cannot and will not bring developmental benefits to the world’s poor unless strategies are pursued which seek to counter or combat neoliberal policies and place the enhancement of human life, not merely economic growth, at the centre of development. (2007, p. 277)

This, however, is not the direction that Fairtrade is currently headed.

The recent upsurge in transnational corporate interest and involvement in Fairtrade

has brought this issue to the fore and highlighted Fairtrade’s increasing commitment to

operating within the conventional market (Murray, et al., 2006, p. 187). Fridell explains

the danger in the continued operation of Fairtrade as a niche within the conventional market

that embraces corporate involvement:

There are limits to the potential size of fair trade niche markets, and these markets are on the verge of being flooded with corporate-friendly alternatives… Fair traders have made their impact on conventional markets, but are unlikely to be the direct, long-term beneficiaries of their work as corporations move in to ‘free ride’ off their initiatives. Under these conditions, fair traders can either maintain their current course, serving as moral leaders in ethical markets dominated by corporations, or they can begin to move the network forward by looking backward and recapturing key aspects of the fair trade vision of the past. (Fridell, 2007, p. 288)

  22  

Fridell argues that if Fair Trade is to achieve its goals, it must return to the ideological

foundation of the Fair Trade movement and create alternative trading organizations that

promote fair exchanges. This perspective calls for Fairtrade to operate outside the

conventional market economy, rather than attempting to mitigate its effect.

The shaped advantage perspective hinges on the belief that the “main concern for the

producers remains with accessing markets and a fair wage,” (Jaffee, 2007, p. 27) rather than

with overhauling the system of global trade. Fairtrade is considered an exercise in helping

“poor producers to enter the global market under more favourable conditions by taking

advantage of a socially conscious ‘market niche’” (Fridell, 2007, p. 85). The majority of

criticism considers Fairtrade from a shaped advantage perspective and considers how the

current framework can be improved while working within the constraints of the current

market system. While both the alternative globalization and shaped advantage criticisms

are valid, they criticize Fairtrade on different levels: the former on a macro, ideological

plane and the latter on a pragmatic level. However, it is important to understand both of

these arguments in order to better understand the purpose and direction behind Fairtrade.

The shaped advantage perspective maintains that Fairtrade must broaden its influence

in the market and educate consumers in order to reach and impact more farmers. It is

argued that by increasing demand and absorbing the supply of products, Fairtrade will be

able to expand and further its social and economic objectives (Murray, et al., 2006, p. 185).

This embraces the free market and acknowledges the importance of building consumer

demand. Fairtrade reported last year that coffee sales represented only 30 percent of total

certifiable production and that “coffee sales as a percentage of the total appear to have

dropped significantly compared with the previous report, probably reflecting the fact that

high prices for coffee have made alternatives to Fairtrade more attractive during this time

  23  

period” (FLO, 2011, p. 56). This statement reflects the current challenges facing Fairtrade

in operating on the international commodity market. The current strategic emphasis on

increasing its market share demonstrates the extent of this challenge to the efficacy of the

Fairtrade framework. When Fairtrade prices and premiums are only a small portion of a

farmer’s income, the impact that they have on producers’ incomes and lives is diminished.

Fairtrade struggles to strike a balance in the minds of consumers, critics and

proponents between pragmatism and idealism. The current Fairtrade network has embraced

the neoliberal market but struggles to balance its ideological roots and values with the

demands of the market. On the one hand, “the blanket classification of Fair Trade as a

neoliberal project would miss the social movement history and diversity of current

practices” (Bacon, 2010, p. 135). On the other hand, neoliberal economists argue that this

model subsidizes commodity prices and relieves free market pressures for small farmers,

dampening the ability of the free market to control commodity prices. The Fairtrade

network aims to establish a compromise between its founding ideals, the imperatives of a

commodity market, the demands of consumers and roasters, and the needs of producers. It

is worth considering, then, who decides what these compromises entail.

Le Mare suggests that these two perspectives are driven by different motivations: the

‘alternative’ agenda of Fair Trade is an ideological agenda driven by ‘Northern’

organizations and consumers while ‘Southern’ organizations and producers simply want to

take advantage of the benefits of a better price, a social premium and stability (2008).

Doane also considers the different meanings that Fairtrade has for roasters, consumers and

producers. She finds that where roasters see Fairtrade as a way to promote agency and

choice, consumers see their choices as having social justice outcomes, while producers

emphasize the benefits of a higher price and the impact of the cooperative structure and the

  24  

demands that standards have on their labour (2010). These are very different perspectives

and Doane argues that the differences are too vast to allow for any meaningful negotiation.

Although there have been more than a few grassroots movements that have shaped the

Fairtrade network we know today, Fairtrade has been defined and promoted by the

‘Northern’ interests of ideologues, consumers and roasters. When compromises need to be

made, they are made from the perspectives of consumers and roasters. Although these

decisions are made with the best intentions, this process challenges the concept of Fairtrade

as a movement that first and foremost serves the interests of the producer.

Murray et al. look at the impact of some of these compromises and consider how

Fairtrade’s decision to embrace markets and corporations to grow market share has affected

the producer. They pose the question: “will significantly broadening the Fair Trade coffee

market in the North come at the expense of some of Fair Trade’s traditional beneficiaries?”

(2006, p. 186) They argue that a “broadening” of the Fairtrade market and participants has

taken precedence over efforts to “deepen” impacts and strengthen core social and

environmental values (Murray, et al., 2006, p. 188). In another study, these authors

highlight the potential for Fairtrade to effectively complement and build on the capacities

and networks in communities but acknowledge “a lack of complementary strategies for

Fairtrade to engage rural development” and the need for Fair Trade to be sensitive to local

conditions (Murray, Raynolds & Taylor, 2003, p. 20-28).

These studies highlight the difficulties inherent in efforts to broaden the impact of

Fairtrade without losing sight of the importance of effective local development. The

authors take a nuanced approach that acknowledges the severity of this “fragmentation,”

but also sees the potential for this debate to “[fuel] the next wave of social movement

reformulation of Fair Trade ideas and practices” (Raynolds & Murray, 2007, p. 233). The

  25  

authors aptly frame the issues facing Fairtrade and summarize what seems to be a

consensus in the literature that, in an effort to broaden the economic impact by expanding

the market, Fairtrade has lost sight of the needs of the producers and is ill-equipped to

provide ‘deep’ and effective solutions to producers. This criticism challenges Fairtrade to

strike a balance between maintaining its standards, operating efficiently in the international

market economy and remaining responsive to producer needs.

3.1.2 Can direct trade provide an alternative trading model?

Direct trade is structured to work alongside the commodity market, providing an

alternative to the market that accounts for commodity prices but is primarily linked to

quality. The intent behind such a model is to “build a durable, long-term way to sell great

coffee” (quoted from interview with Counter Culture's Peter Guiliano, Weissman, 2008, p.

215). While the market for direct trade coffee is limited by a higher price and competes

with Fairtrade and other certification programs for ethically-minded customers, direct trade

is in a better position to provide contextually effective development. (Fridell, 2007; Jaffee,

2007; Lyon, 2011; Raynolds, Murray & Wilkinson, 2007)

This structure enables direct trade to provide unique programs that are specifically

catered to the needs of the roaster and producer. These relationships are accessible only to

those who are hand picked by the roasters. Sarah Lyon acknowledges the potential of

direct trade relationships in her analysis of Fairtrade in Guatemala:

Ironically I have more faith in the future ability of producer/roaster relationships to empower smallholders in the global economy than I do in the fair-trade certification process. However, FLO and fair-trade certification itself could be transformed into a useful tool for producers if it were more participatory and helped groups identify problems and areas for future growth. (2011, p. 178)

  26  

Lyon argues that direct trade relationships have the potential to empower producers and

provide local and contextually specific solutions. However, she also acknowledges the

regulatory benefits of Fairtrade and the potential that it holds for broadened impacts. Lyon

addresses some of the key strengths of both the direct trade and Fairtrade models but fails

to recognize the potential for direct trade to fit within the Fair Trade framework. A critical

consideration of the relationship between these two models suggests that while they may

seem to compete in a similar market they also share similar values and have the potential to

work in a complementary fashion.

The regulatory system and worldwide influence of the Fairtrade network is well

suited to provide broad solutions to a growing number of producers, while the

standardization of the framework makes it difficult to address local concerns and individual

producers. The personal and selective nature of direct trade is better suited to provide

context specific solutions that cater to producer needs, but it is not conducive to providing

broader solutions, as no external structures exist to expand or regulate the relationship.

Several studies have pointed out that these strengths and weaknesses can work in a

complementary fashion; theoretically, producers can gain exposure to the market and take

advantage of the increased stability of the Fairtrade framework to invest in building quality

and developing the capacity to establish and capitalize on direct relationships (Boersma,

2002; Lyon, 2011; Smith, 2010). This could help existing Fairtrade producers to develop

quality and engage roasters in a direct relationship, while allowing other producers to gain

(better) access to the Fairtrade market, as more established producers engage in direct

relationships. This complementary relationship is predicated on literature suggesting that

Fairtrade has more potential for broad impacts, while direct trade is more suited to

providing assistance that is tailored to producers. In order to further explore this, this

  27  

review will look to the literature for a better understanding of the impacts of Fairtrade and

direct trade.

3.2 Impacts: power and structure

This section will discuss literature dealing with the impacts of Fairtrade and direct

trade, asking whether either model fulfils the aims of the Fair Trade movement “to see

trade as a mutual beneficial partnership based on dialogue, transparency and respect”

(FINE, 2001, p. 2). The structure of each model will be evaluated alongside studies

looking at actual impacts in order to better understand the power dynamics and nature of

the partnership. This will help to understand the external circumstances around a producer’s

decision to engage in a direct trade relationship.

Mark Moberg and Sarah Lyon, in their introduction to Fair Trade and Social Justice:

Global Ethnographies, state that there is a disconnect between the “profound social

transformations that fair trade promotes in its public advocacy and the modest (or, in some

instances, nonexistent) material improvements that it has attained for certified producers”

(Moberg & Lyon, 2010, p. 15-16). Mark Moberg tells the story of disenchanted producers

who see Fairtrade’s standards as externally imposed, impractical requirements. He is clear

that the social premium has had positive impacts on producers’ lives but his study reveals

that producers have an incomplete understanding of the purpose, intent and applications of

the Fairtrade framework. Furthermore, producers feel that they do not have a say in the

policies or direction of Fairtrade standards and goals. While the benefits of the social

premium are welcomed, the extra and seemingly impractical requirements on the

producers’ time and labour are seen as an inconsiderate imposition (Moberg, 2010).

In her analysis of Fairtrade and gender inequality in a Mayan community, Sarah Lyon

  28  

highlights the need for an approach that accommodates local contexts. Lyon emphasizes

the need for dialogue and states that any solution must come from the community and not

be a projection of the concerns or goals of the Fairtrade network (2010). Catherine Dolan,

in her study of Fairtrade in Kenya, asserts that generic standards only help to the extent that

the social identities and local politics of the community allow. Dolan echoes Lyon’s call

for producer input and argues for moderation in embracing business as a steward of

development (2010). Beji-Becheur, Pedregal and Ozcaglar-Toulouse (2008) study the case

of Laotian farmers and suggest that a Fairtrade, or direct trade, relationship must produce

solutions through consensus, consultation and feedback. They argue that without this

dialogue the producer will lose his ‘equity’ and be forced to make compromises that are not

‘fair.’ In these studies, the structure and generic standards of Fairtrade are seen to neglect

(and at times aggravate) local inequalities in the communities and fail the most

marginalized people.

The structure of the Fairtrade certification bodies, the FLO and FLO-CERT,

demonstrate the rigidity of the framework that has been created. The FLO is the body

responsible for creating the standards that producers have to achieve in order to be certified.

These standards are then implemented by the producer and monitored by FLO-CERT, an

independent organization. The FLO has a strong ethical base on paper but in practice it is

often occupied with framing rules and regulations (Fridell, 2007, p. 99).

The standards that producers must meet to be certified are determined by the

Standards Unit in the FLO. The Standards Unit is made up of producers, traders, labeling

initiatives and external experts (Kratz, 2006). When stakeholders in Fair Trade request a

change in the standards, the proposed change must go through an extended review process

where the proposal is first evaluated against fair-trade standards and is then filtered through

  29  

the planning, research and consultation stages (Kratz, 2006). A variety of stakeholders are

consulted during standards review but the ultimate decision resides with the Standards Unit.

Many researchers have raised questions about where the decision-making power lies and

the transparency of this process (Bacon, 2010).

Despite the FLO’s highly regarded mandate and its efforts to meet the needs of the

communities of coffee producers, the FLO has faced significant challenges to its standards

policy. Bacon contends that the process by which the FLO determines pricing lacks

transparency; he points out that the FLO has not conducted any research to objectively

verify the true costs of sustainable production and its impact on producers (2010, p. 128).

For example, it took the coordinated action of hundreds of cooperatives under the

organization of CLAC (or Coordinadora Latinoamericana y del Caribe de Pequenos

Productores de Comercio Justo) to compel the FLO to do something about the price of

Fairtrade coffee. CLAC conducted a study that showed what was needed to cover the costs

of production, accounting for education, healthcare, food and housing, in addition to the

costs of producing ecologically-friendly coffee of superior quality (Bacon, 2010, p. 131).

With the backing of this study, the cooperatives lobbied the FLO for a price increase and

eventually succeeded. In 2007, the price of fair trade coffee was increased by 7% for

conventional coffee and 11% for organic coffee, much less than what was requested, but a

welcome compromise for the producers who had been voicing their concerns individually

for ten years (Bacon, 2010). Bacon contends that the “standards revisions and price

adjustments are highly contested socially embedded processes” (2010, p. 135). These

processes “depend on the balance of power, convictions, and capabilities among those who

govern the strategies and standards” (Bacon, 2010, p. 137).

  30  

Raynolds, Murray and Heller continue this argument and point out that certification

reflects Northern based ideas, standards and procedures and that this is a barrier to

successful entry and engagement for producers (2007, p. 159). The authors assert that if

these certification initiatives are to advance sustainable development they must take an

integrated approach, consulting communities to ensure buy-in, as well as consumers, and

make the process more transparent and accountable (Raynolds, Murray & Heller, 2007, p.

160). As the example of CLAC shows, in the current system communities are not

consulted until they fight to be heard. Sarah Lyon chalks this up to bureaucratic rigidity:

“certification standards developed in the North often lack the flexibility necessary to

accommodate local livelihood needs” (2011, p. 210). This inability to initiate dialogue not

only impacts the relevance of these standards but also fails to live up to the promise of a

partnership based on dialogue, transparency and respect.

This lack of dialogue signals deeper issues with the Fairtrade framework. The

network is well equipped to provide transparency, with published standards, accounting

requirements for commercial exchanges, and certified compliance. However, without open

and continued dialogue with producers Fairtrade will be limited in its efficacy:

Because of the transparency built into the certification process, it is easy to assume that everything is above board. Nevertheless, the stringent, sometimes arcane nature of the rules for compliance can disqualify otherwise qualified participants, and even small errors in documentation can lead to decertification. (Hartmann, 2011, p. 174)

Producers are often unaware of precisely what Fairtrade standards entail and most small

producers lack knowledge of the foundational principles that drive the operation of

Fairtrade (Getz & Shreck, 2006). This reflects a lack of communication through the full

chain of actors (Murray, et al., 2003). Pirotte, Pleyers and Poncelet stress that the success

of Fairtrade cannot rest solely on a project defined and assessed by northern Fairtrade

  31  

organizations but has to take into account the context in which it is implemented. They

argue that this is demonstrated by the application of universal standards that have widely

ranging impacts for different producers (2006, p. 442). This suggests that in order for

Fairtrade to accomplish its stated objectives it must acknowledge local contexts and tailor

the program to suit those needs. This requires the producers to be involved at a strategic

level and “have a level of international institutional participation in fair-trade networks that

mirrors their practical engagement” (Lyon, 2011, p. 212)

This lack of communication often extends to the feedback provided to producers in

order to help them understand and comply with standards. FLO-CERT has mechanisms

that deal with non-compliance, but it is barred from giving advice regarding how to deal

with barriers to certification (Mutersbaugh, 2008, p. 267). Corrective feedback is often

lacking and communities are given little warning or assistance before being de-certified or

suspended (Boersma, 2002). This opacity and lack of meaningful dialogue is symptomatic

of a deeply rooted imbalance of power.

3.2.1 Power and equality

Power and equality are issues of fundamental importance to Fairtrade; however, the

Fairtrade framework is criticized for not treating producers as equals in the process. Franz

VanderHoff Boersma, a Dutch priest who helped establish the Max Havelaar, the first Fair

Trade seal, looks at the overall involvement of the producers in Fairtrade: “in general the

Fair Trade system has not been very democratic, and for part of the history of this

movement the producers did not participate in the important decision making processes”

(Boersma, 2002, p. 12). This lack of involvement in decision-making and development of

standards is compounded by “differential access to knowledge”:

  32  

[T]hrough the certification process cooperatives can become vulnerable to surveillance and the power of external administrators who command discursive procedures and institutions. They also lend support to the argument that the differential access to knowledge enjoyed by fair-trade administrators and producers creates a system of inequality and neocolonialism. (Lyon, 2011, p. 159)

This lack of dialogue is linked to a systemic power imbalance, an imbalance that Fridell

associated with the operation of Fairtrade within the neoliberal market (Fridell, 2007, p.

11). This imbalance has manifested itself in unilateral decision-making and interference

with cooperatives. Nigh states that “there seems to be a definite tendency of fair trade

involvement to exercise undue influence on the internal politics and functioning of local

organizations, with dire consequences for smallholder coffee growers” (2002, p. 11).

On the other hand, many farmers and organizations need assistance and guidance,

but there is a thin line between education and interference. Education is essential to the

success of Fairtrade: “[k]eeping farmers informed about their market, the process, and the

finances can support their empowerment and foster better decisions… this educational step

[is] crucial to engaging the farmers in a more egalitarian trade network” (Jaffe & Bacon,

2008, p. 325). However, when education oversteps its bounds and begins to interfere with

cooperatives and the social fabric and institutions that support them, it hinders the very

development it seeks to promote.

3.2.2 Cooperative values and market values

This interference can be seen in studies of the discrepancy between cooperative

principles and the influences and necessities of the market on the cooperative organization.

Sarah Lyon found that what was required of the cooperative to operate efficiently in the

market and effectively as a certified organization could conflict with what the community

valued in the cooperative. Her study found that certification requirements had a

  33  

transformative impact on the “[o]uter and inner life of society” as members of the

cooperative were forced to relinquish a portion of the independence traditionally

characterizing smallholder agricultural production to succeed in the certified coffee market

(2011, p. 140). Service on the board of directors involved “regular contact with foreign

buyers and certifiers, a mastery of Spanish, an understanding of contractual obligations, and

a familiarity with financial accounting” precluded the participation of many indigenous

farmers and undereducated campesinos (Lyon, 2011, p. 88). ‘Democratically’ organized

cooperatives require that there is universal participation and that decision-making be done

by the community rather than a select few individuals. This model can damage the

cooperative’s business relationships in a competitive market that involves buyers who

prefer stable relationships with suppliers (Mare, 2008, p. 1931). While this model can

develop the capacity of individuals by putting them in roles of responsibility, it can

sometimes force a cooperative to choose between a model that respects the democratic

nature of the cooperative and the power relations in the community and a strategic model

that operates efficiently in the free market. Constantly changing positions and leadership

can make it difficult to have a coherent and consistent strategy and long-term relationships,

while holding static positions creates a situation with less and less accountability and

disrupts a delicate power balance (Lyon, 2011, p. 89-91). Sarah Lyon succinctly

summarizes this compromise in her study of the La Voz cooperative in Guatemala:

To successfully compete in the international fair-trade coffee market and fulfill certification and quality requirements, the cooperative steadily increased the responsibilities and power of the manager and the board of directors. In addition to contributing to emerging stratification within the group, the emergence of a managerial elite potentially threatens the cooperative practices and participatory democracy that collectively form the groundwork for the group’s success. (2011, p. 121)

  34  

Often what may be a strategy for the successful development of a community may not be a

strategy of success on the world market (Gallagher, 2008). Communities are often left to

find a way to make the cooperative work and, at times, what they settle on may not be

democratic at all but may simply be what works for them.

According to the definition of Fairtrade provided by FINE, the “strategic intent” of

Fairtrade is to “work with marginalized producers and workers in order to help them move

from a position of vulnerability to security and economic sufficiency” and to “play a wider

role in the global arena to achieve greater equity in international trade” (FINE, 2001, p. 1).

According to the literature, these goals have not yet been substantiated and it would be

difficult for Fairtrade to claim that it can, in its current form, foster “a trading partnership,

based on dialogue, transparency and respect” (FINE 2001, p. 1). Partnership is a term that

implies that each party is empowered, invested and has an equal role. The literature

suggests that Fairtrade may have begun with the objectives of dialogue, transparency and

respect but failed to implement these principles along the way. Producers do not have a

voice in the strategy and implementation of Fairtrade and lack knowledge of the

fundamental principles behind certification. Producers and producer organizations are

subject to external surveillance without the power to affect change to standards or their

implementation. This is symptomatic of a power inequality and suggests that if the

distribution of power is not acknowledged and addressed, the structures and hierarchies that

preceded Fairtrade will interfere with the implementation of a well-intentioned model.

3.2.3 Direct partnerships based on unequal power

Direct trade, on the other hand, is based on dynamic partnerships; each agreement is

negotiated separately according to the needs of the producer and the mandate of the

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company. Theoretically, direct trade is in an ideal position to provide solutions based on

consultation and community buy-in. However, there is a fundamental inequality in direct

trade because the roaster takes the initiative to find the farmer, decides what they are

willing to pay for the coffee, determines how much the coffee is worth and sets ground

rules for the relationship that they are willing to establish. “The purchaser holds all the

cards in the relationship, setting terms and conditions, etc” (Hartmann, 2011, p. 175). This

allows the roaster to dictate what is required of the producer and the producer has the

choice of whether or not to accept these terms. This arrangement leaves a permanent mark

on the dynamics of the relationship, leaving no doubt as to where the power lies in the

relationship.

However, the focus on quality in direct trade has the potential to shift the balance of

power. When good quality coffee drives purchasing decisions, farmers that have an

excellent and unique product are in a superior bargaining position. The limited supply of

good quality coffee and the growing demand for excellence has created a new breed of

coffee producer. With growing exposure and knowledge of the specialty coffee industry,

these producers have been able to leverage the demand for their product to gain a position

of power. These elite producers are able to be selective about the relationships that they

engage in and harness demand to increase the prices that they receive. It is worthwhile to

consider some examples of these farms in order to understand what it takes to achieve this

position of power.

Two of the most famous farms in the specialty coffee world are Hacienda La

Esmeralda and Finca El Injerto. These farms are agricultural innovators and have been able

to offer coffees that continue to astound coffee professionals and set record prices. On June

19th, 2012, El Injerto set a new record for green coffee, selling eight pounds for $500.50 per

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pound.6 Meanwhile, La Esmeralda held a private auction in May 2012 for over 20 000

pounds of its best coffee, which sold for an average of $40.11 per pound.7 These record

prices are being achieved at a time of decline in the commodity market price for coffee.

Indicative of this decline, Colombian Mild Arabica (the most expensive commodity

market) fell from a high of $3.14 per pound in April 2011 to $1.84 in June 2012.8 These

farms can accomplish this because they not only produce outstanding coffee but they have

learnt how to play the specialty coffee game: they innovate production processes and

research varietals, they work ceaselessly to improve quality and set up independent

auctions to harness demand to increase the prices their coffees can fetch.

These farms, however, are the exception. They were able to produce an unparalleled

product, launch it at the right time and to the right audience and were astute enough to

embrace the specialty coffee world. The majority of coffee producers engaged in a direct

trade relationship do not have the reputation or clout that La Esmeralda or El Injerto enjoy.

Most producers are happy to be noticed by a specialty buyer and get a small premium for

their best coffee. So, while quality can change the dynamics of power in the specialty

coffee industry, this shift can only benefit a select few producers who produce the best of

the best coffees. The power that these farms wield over the specialty coffee world is

dependent on their exclusivity; if more farms could produce coffee of this caliber, the

power to set the terms of a relationship, as well as the price, would revert to the specialty

roaster.

For this reason, direct trade must address the distribution of power in the specialty                                                                                                                6 http://fincaelinjerto.com/en/articulos/ver/mocca_variety_sold_at_50050_per_pound_in_el_injerto_reserva_del_comendador 7 http://auction.stoneworks.com/ES2012/final_results.html 8 http://www.ico.org/prices/p2.htm

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coffee industry. Otherwise, direct trade will perpetuate the structures and hierarchies that

they are claiming to transcend. Can direct trade challenge power structures and be held

accountable by a set of standards?

Direct trade companies often do have a defined set of standards, however, there is

very little to ensure that companies that claim direct trade relationships are compliant with

their own standards; unless you engage a third-party certification agency, certification

becomes a matter of faith. As Smith finds in looking at Intelligentsia’s model of trade,

many roasters attempt to equate a happy and satisfied farmer with a good cup of coffee,

stating that “the proof is in the cup” (2010).

While there is no reason to doubt Intelligentsia’s claims as to how it deals with coffee producers (in 2007, it was reported by Sudo 2007 that the company had hired an independent auditor, though no reports seem to have been made publicly available), it is difficult for an uninformed consumer to distinguish between the variety of claims made by sellers. (Smith, 2010, p. 41)

This highlights the reliance of direct trade on the trust of the consumer and the lack of

requirements or restraints on the roaster. Roasters can choose what to display, advertise or

write about, giving them power over the transfer of information and further solidifying their

position of power. This is not to say that roasters intentionally hide this information or

purposefully harm producers, but it creates a power structure that can slowly erode good

intentions in the interests of efficiency and efficacy (as Fairtrade has shown). It also leaves

direct trade vulnerable to companies leveraging the direct trade name for their own

purposes, while eroding consumer confidence in the long run.

In a recent article entitled Creating Shared Value, Porter and Kramer present Nestlé’s

procurement program in a similar way as many specialty coffee roasters might describe

their program:

[Nestlé] worked intensively with its growers, providing advice on farming practices,

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guaranteeing bank loans, and helping secure inputs such as plant stock, pesticides, and fertilizers. Nestlé established local facilities to measure the quality of the coffee at the point of purchase, which allowed it to pay a premium for better beans directly to the growers and thus improve their incentives. Greater yield per hectare and higher production quality increased growers’ incomes, and the environmental impact of farms shrank. (Porter & Kramer, 2011, p. 10)

How can specialty roasters differentiate themselves from Nestlé when the basic tenets are

so similar? The quality differences are stark, but how can roasters prove to consumers that

they are doing more for their partners than Nestlé? Standards are a possibility but can

standards properly convey the nature of individual relationships? Not only would it be

difficult for standards to capture the dynamic of each relationship, but also a predetermined

standard would hamper direct trade’s ability to cater to individual needs and adapt to

changing circumstances. At the same time, the lack of accountability can allow room for

interpretation, provide a fig leaf for the ill intentioned, and gradually erode consumer

confidence in the model. In order for direct trade to retain its identity and integrity, any

concept of accountability must extend beyond simple standards or verbose stories of shared

values and successful transactions; direct trade relationships must create the structures to

encourage a more equal balance of power.

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3.3 Socially sensitive, sustainable development

The importance of human lives, experiences and realizations cannot be supplanted by information about institutions that exist and the rules that operate. Institutions and rules are, of course, very important in influencing what happens, and they are part and parcel of the actual world as well, but the realized actuality goes well beyond the organizational picture, and includes the lives that people manage – or do not manage – to live. (Sen, 2009, p. 18)

To evaluate the impact that Fairtrade has had on producers, it is necessary to look past the

institutions and rules to consider the “realized actuality” of community and individual life.

This thesis will use the concept of social capital to frame the consideration of the lives that

Fairtrade and direct trade producers manage to live.

Social capital is the sum of the resources, actual or virtual, that accrue to an individual or a group by virtue of possessing a durable network of more or less institutionalized relationships of mutual acquaintance and recognition. (Wacquant & Bourdieu, 1992, p. 119)

Bourdieu’s definition of social capital allows for the interaction between institutional

structures, communities of people and individuals. The literature discussed in this section

deals with the impacts and requirements of the Fairtrade and direct trade frameworks on

social capital. This section aims to use the concept of social capital and the surrounding

discussions to elaborate on the lived experiences and motivations of producers in Fairtrade

and direct trade.

The literature considered in this section will include studies done on both Fairtrade

and organic certification. Organic certification is included in this analysis because studies

of the social impacts of Fairtrade requirements often include organic certified producers

because there is significant overlap between the certification systems- approximately 65%

of Fairtrade producers are also organically certified (FLO, 2011, p. 43). Fairtrade

encourages producers to use the economic advantages provided by Fairtrade certification as

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a stepping-stone for gaining organic certification.9 This is reinforced by an oversupply of

Fairtrade coffee that has made double certification a pathway for producers to gain a

competitive advantage in a saturated market: “When Fair Trade coffee is not organically

certified, there is a structural mismatch of supply and demand. As a result, certified

producer organizations typically sell only a small percentage of their non-organic coffee to

Fair Trade markets” (Valkila, 2009, p. 2). In addition, producers that are organically

certified are motivated to seek Fairtrade certification in order to take advantage of the

minimum price and more defined market offered under the Fairtrade umbrella. All of these

factors have contributed to the significant overlap between these two certification systems

and have led many studies to consider both of the certification systems in their research on

impacts.

3.3.1 The relationship between Fairtrade and social capital

The articles reviewed in this section consider two main questions: whether social

capital is a precondition for entry and success in the Fairtrade market and whether, once

entry is secured, Fairtrade contributes to building capacity and developing social capital.

These questions consider the interface between international networks and social

organizations and shed light on how effectively the Fairtrade network can help

marginalized producers.

There seems to be a consensus in the literature that social capital is a prerequisite to

the success and efficacy of certification programs. Martinez-Torres asserts the importance

of social capital in navigating and capitalizing on certification frameworks:

                                                                                                               9 http://www.fairtrade.net/single_view1.html?&cHash=3d7408059d0144274c6685b526817bf7&tx_ttnews%5Btt_news%5D=124

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The level of community organization and the degree of development of local institutions play a key role in the success of development efforts… Rural people are able to take advantage of networks, associations, and broader forms of social organization within their livelihood strategies, in order to access services, reduce risks, acquire information, and protect themselves against predatory practices… only the formation of significant social capital allowed these coffee farmers to navigate the changing terrain of the national and global [organic] coffee market. (Martinez-Torres, 2006, p. 2-4)

Her book, focusing on sustainable benefits of organic certification, discusses how social

capital is essential to success in both the Fairtrade and organic markets (Martinez-Torres,

2006, p. 131-132). Aranda and Morales state that a successful Fairtrade cooperative

requires strong organization to fulfill contracts and obligations, as well as to obtain

community buy-in (Aranda & Morales, 2002). Martinez-Torres (2006, p. 134-138), Gavin

Fridell (2007, p. 220), and David Bray et al. (2008, p. 238-243) all argue that most

successful Fairtrade cooperatives had already developed into committed well-organized,

socially coherent organizations prior to entrance into the Fairtrade network and that this

was necessary for their success in the market. These studies all assert that social capital is a

precondition for communities navigating the Fairtrade market; however, does participation

in Fairtrade strengthen this social capital?

Many studies suggest that Fairtrade exhibits a great capacity for building on

preexistent social capital within communities: “Social benefits appear to be the major

achievements of the Fairtrade project. It creates a learning environment for producers;

nurtures farmers’ confidence and self-esteem, and encourages cooperation” (Dooren, 2005,

p. 122). Simpson and Rapone argue that the cooperative structures facilitate group

interaction and solidarity and encourage the development of social capital (2000, p. 46).

Raynolds, Murray and Taylor demonstrate that the most positive impact of Fair Trade is the

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effect on individual and collective empowerment and capacity building (2004, p. 1116).

These impacts are small but effective in holding a community together:

Some of the most important community level benefits from Fair Trade are the least tangible. The stability of Fair Trade prices and markets has bolstered the economic security of poor communities battered by deteriorating conditions in export and peasant agriculture. Fair Trade environmental specifications and the encouragement of organic farming have health benefits for communities and ecological benefits that extend even further. Since improving coffee quality and gaining organic certification requires significantly increasing the amount of labor devoted to coffee production, employment opportunities are enhanced for community members needing paid work. (Raynolds, et al., 2004, p. 1117)

Poncelet, Defourney and Pelsmaker (2005) agree that the true contribution of Fairtrade is

its impact on social capital: “the capacity building component is a fair trade benefit that is

much more visible than income growth. It is best seen as an improvement in production

abilities but also in an increase in small producers' self-confidence” (p. 111). They qualify

this conclusion by saying that there are certain factors that contribute to the success of a

Fairtrade cooperative, such as cooperative size and management and a ‘snowball effect,’

where successful cooperatives attract NGOs (p. 123). It is also important to note that the

benefits of cooperatives cannot always be attributed to Fairtrade: “some of these benefits

accrue to organizations because they are organized; they are unavailable to independent,

individual farmers, yet exist whether or not the organizations seek certification” (Heller,

2010, p. 119).

3.3.2 Certification standards and social capital

Reports of positive impacts on social capital are tempered by some compelling

research that investigates what Fairtrade requires of certified cooperatives and communities

and how that impacts social capital.

Although in theory fair-trade coffee networks are marked by mutual dependence, cooperation, and trust, in practice, the members of La Voz are subjected to high

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levels of governance and external surveillance as a result of their hierarchical relationships with northern buyers and certifying agencies. This external governance contributes to emerging tensions between the cooperative’s currents of solidarity and equality and market demands. (Lyon, 2011, p. 9-10)

These external controls often create unnatural divisions and dependencies within

community organizations that can prove detrimental, creating situations where the

cooperative is beholden to individual leaders instead of the community. In the case of the

this particular cooperative, the distribution of power in the cooperative and the lack of

internal controls and accountability led to the manager stealing funds and the cooperative

falling into debt and being decertified.

Jaffee (2007) and Mutersbaugh (2002), in separate studies of Fairtrade and Organic

certified cooperatives in Mexico, respectively, present a comprehensive analyses of the

impact of certification requirements on social capital, arguing that certification can alter the

logic and practice of economic management and governance by introducing unfamiliar

bureaucracy and monitoring systems (Mutersbaugh, 2002, p. 1166). Although they

consider the requirements of both Organic and Fairtrade certification, the issues that they

uncover remain pertinent to this analysis of Fairtrade and it is worth considering these case

studies in a little more detail.

3.3.3 Case Study: Oaxaca, Mexico

The governance structure of these traditional communities in Oaxaca consists of two

parallel systems: a traditional and civil authority. The traditional “communal” authority

deals with community issues and works to maintain a sense of identity in the community.

The civil authorities represent the community on the municipal, state and federal level.

Both of these bodies are elected by the communal assembly, made up of the heads of each

household, which have the final say on important matters (Jaffee, 2007, p. 58-63). The

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survival of these institutions depends on the ability of these bodies to manage common

property, land and government liaisons. This is accomplished through the traditional

institution of cargos and tequios, which are, in a sense, labour taxes paid to the village.

Cargos involve administrative tasks and tequios are manual labour jobs that are used to

build and maintain common infrastructure. These positions are mandatory, unpaid and

appointed on a rotating basis. To fulfill this obligation is considered an honour and lends

prestige and influence to the individual. At the community level, this institution helps to

build the networks of influence and trust that are the basis of social capital (Jaffee, 2007, p.

62-63; Mutersbaugh, 2002, p. 1176).

These cooperatives fulfill the requirements of the Fairtrade and Organic certifications

using the traditional institutions of cargos and tequios. This becomes a labour burden on

members of the community, cutting into the producer’s income as they divert time to fulfill

the requirements of certification. When other social and economic factors are added into

the mix, such as migration and the resulting decrease in people that can then fulfill these

‘shared’ tasks, the situation becomes burdensome. Confronted with a tough choice, the

producer must look after his family and livelihood and it is the fulfillment of the cargos and

tequois that suffer. Traditional governance structures that cannot manage the stress of these

requirements often result in communities getting de-certified, as paper work is not done or

crucial information is not communicated. This can also damage the governance structures

of the cargos and tequois, as overworked individuals are not able to fulfill all the demands

of the community in addition to sustaining a livelihood for their family (Jaffee, 2007, p.

102-106; Mutersbaugh, 2002, p. 1176-1177).

The selection of people suitable for serving in these traditional roles is further limited

by the requirements of the job; candidates must be literate in writing, math and Spanish.

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This leads to the exclusion of members who are either illiterate, have not received enough

math education or are not fluent in Spanish. This over-taxes the educated and excludes less

educated community members, undermining the traditional governance structures and

inhibiting its ability to build social capital (Mutersbaugh, 2008, p. 273-274). As the

fulfillment of cargos and tequois decline, it becomes more difficult to build networks and

the trust that is so important in the building of social capital.

These case studies provide insight into the impact of external requirements on the

traditional structures and social capital of communities. While the governance structures

are particular to the communities studied, the requirements of certification are

responsibilities that every community must fulfill. Human resources and the availability of

(qualified) individuals to fulfill these roles are issues that most Fairtrade cooperatives

struggle with. How these challenges are approached and the assistance that these

cooperatives receive can make the difference between a Fairtrade that nurtures “farmers’

confidence and self-esteem, and encourages cooperation” (Dooren, 2005, p. 122), and a

Fairtrade that taxes the traditional structures that uphold community networks.

Heller argues that the strength of Fairtrade lies in the strengthening of already strong

organizations by encouraging organizations to provide wide-ranging services to members.

This strengthens organizations that were formed to combat a low commodity price,

garnering loyalty by providing benefits to members once prices recover: “organizations that

have the ability to provide a wide range of services to their members and to advocate on

behalf of their members’ interests will be stronger and longer-lasting; certification allows

organizations to form these characteristics” (Heller, 2010, p. 120). By encouraging (and

requiring) other services for members, Fairtrade does strengthen social capital; however, it

requires a level of organizational strength that not every cooperative may have.

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A key feature that leads to the continuing success of certified organizations is a well functioning internal control system (ICS). In small producer organizations, an ICS can have a positive role in strengthening the organizational capacities of the cooperatives. Or, it can be seen as a burden implemented merely to meet externally imposed certification systems. High levels of ownership and buy-in by the certified members is necessary for the ICS to contribute to the goal of improving the quality of the coffee produced by the organization. (Heller, 2010, p. 192)

The internal control systems that Heller refers to are the organizational mechanisms

required by Fairtrade to facilitate certification – the same requirements that Mutersbaugh

and Jaffee criticize. That success is tied so closely to organizational capacity and, in turn,

social capital is problematic for Fairtrade. While the Fairtrade mandate promises to reach

marginalized producers, the requirements that make up the framework make entry difficult

for the marginalized.

The literature reviewed seems to suggest that the success of cooperatives in the

Fairtrade network is contingent on their ability to leverage extant social capital. While

involvement in Fairtrade can benefit cooperatives, communities and producers, the success

of Fairtrade often relies on preexistent social capital and provides too few opportunities for

the development and capacity building of less established organizations. The cooperatives

that have the organizational capacity and networks of support to capitalize on opportunities

provided by Fairtrade exhibit tangible benefits from their involvement in the network.

Marginalized communities and producers, however, are less able to engage and benefit

from the Fairtrade network. They lack the internal organization and external support to

fulfill the requirements of certification and gain a foothold in the Fairtrade market. In

discussing the future of Fairtrade, Jaffe and Bacon (2008) argue that “empowerment

depends on exchange of ideas, building understanding and developing long-term

relationships that transform ideas and practice” (p. 330). Fairtrade’s impact will only ever

be marginal if it does not strive to empower producers and build social capital.

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3.3.4 Direct trade: Communities and Cooperatives

The impact of direct trade on social capital is just as complex as that of Fairtrade.

The structure of direct trade provides the opportunity to directly address the social,

economic and environmental needs of producers. However, the obligations of the

relationship and the development of quality can also tax the individuals and local forms of

authority and organization. Like external regulatory requirements on traditional

governance, direct trade can put stress on communities and organizations by requiring more

work from select individuals, making them less available to contribute to the community.

It is also important to understand how cooperatives fit into the lives of producers.

While direct trade may be more than willing to develop unique solutions for individual

farmers, roasters are often much less willing to work with cooperatives. Cooperatives can

make it difficult to work with just one farmer and can sometimes make separating

particular harvests and quality processing even more complicated by adding layers of

bureaucracy.

[Dave] recognizes that the co-ops can be difficult to work with: “No one wants a story that has tones of gray,” he says ruefully. Still, he believes the co-ops must be supported, rather than circumvented or eliminated, because they provide twelve months of services to farmers in the areas of health, education, coffee agronomy, milling, and more… when farmers operate as individuals and sell to private buyers who may or may not pay well, they do not have access to social benefits. (Interview with David Griswold, founder of Sustainable Harvest, in Weissman, 2008, p. 170)

This isolates farmers and can have negative impacts on their position within the community

and affect their social capital. So, while forcing a democratic structure on a community of

producers may put a strain on the organization, setting a producer apart from the rest of a

community can be even more damaging to the individual producer. The producer must

now rely on the relationship to provide him or her with the means to survive. If there is too

much rain to dry the coffee properly and that crop scores below the standards of the roaster,

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what happens? Some roasters may provide a safety net, while others may cut and run. If

there is any guarantee, that could quickly disappear if the roaster went out of business.

Consequently, “what protection do the farmers have when times get tough?” (Weissman,

2008, p. 170)

This question highlights the importance of accountability in direct trade relationships.

The structure of direct trade implies that relationships are able to cater to the needs of the

roaster and producer. There is the potential for direct trade to provide local solutions for

producers in a contextually appropriate way – taking individual situations, social networks

and power structures into account. However, what kind of protection do the farmers have

against fickle roasters? A producer may be counting on a certain price for a harvest; they

may have made commitments or investments that count on a handshake with a roaster.

But, if the roaster decides that that producer’s coffee does not meet expectations, the

producer must find another buyer. Conversely, when times are good, what guarantees do

roasters have that the producer will remain in the relationship? The vastly different social,

economic and political fields in which these actors operate effectively rule out most legally

binding contracts. However, there have been exclusivity contracts signed, but these are

only as good as the purchasing power of the roaster and are meant to protect the roasters’

investment in the farm, not protect the best interests of the producer. If a producer breaches

a contract, there is little that the roaster can do except for not work with the farm anymore

or attack the reputation of that farm. The reaction of the roaster will depend on quality of

that producers’ coffee and how sought after it is. Most often, the farmer gets a slight

reprimand and the relationship will carry on, but perhaps in a more transactional way that

precludes a trusting partnership. The most effective safeguards for both the roaster and

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producer are trust and loyalty. Effective relationships build trust over time and are not

easily duplicated, designed or defined.

The dynamic nature of direct relationships requires respect for each other and a

different culture, something that requires patience and an open mind. Some buyers

recognize that: “‘you have to accept, and not just on a theoretical level, that each person

and group has their own worldview that is legitimate.’ And then you have to find a way

into their system that is both respectful and effective” (Weissman, 2008, p. 143). Other

buyers may “have their hearts in the right place, but they don’t always fully comprehend

the historical and economic context at origin” (Weissman, 2008, p. 170). More

experienced buyers understand that developing relationships and understanding a

producers’ perspective can aid the development of quality coffee.

To help a farmer grow better coffee and earn a better living, you need to understand how he understands the past, how he perceives himself, and how he perceives you as an outsider. Without that comprehension, you can’t impact his behaviour. (Weissman, 2008, p. 144)

This is something that takes “time, patience, and wisdom” (Weissman, 2008, p. 74); it is an

exercise that requires open dialogue and trust. This dialogue and trust is required to create

consistent quality.

If the farmer is not invested and educated in developing quality – if the farmer does

not understand why quality is important, how it can help, and how to develop and evaluate

quality – it is difficult for the farmer to follow through on every step and detail of what is

required to produce an extraordinary coffee. This investment in quality is not natural to

most farmers and must be nurtured through developing a shared understanding between the

farmer and roaster. Just telling a farmer to pick ripe cherries everyday during the peak of

harvest won’t cut it; the farmer has to understand why this (seemingly redundant and

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expensive process) makes financial sense, how it helps develop quality and benefit their

farm. This is what Intelligentsia means by “the proof is in the cup” (2010).

The way that a direct trade relationship is approached can result in a variety of

different results for the roaster and producer. Two contrasting scenarios can define this

spectrum. In the first scenario, the roaster and producer engage in a respectful dialogue and

transparent partnership that builds capacity and develops social capital. In the second

scenario, a roaster approaches the relationship with a cavalier attitude and uses the

relationship to make unilateral demands, while the producer is required to draw on his/her

social capital to satisfy the demands of the roaster. These two approaches can create starkly

different outcomes that hold very different promises for producers. The power inequality

between roaster and producer, the lack of standards and regulations, and the dynamic and

varied nature of these relationships create the need for transparency. This is understandably

difficult because there is no measure to assess trust in a relationship, especially when the

story is one-sided. This is why it is important to understand the point-of-view of the

producer and gain insight into the circumstances and motivations behind their consideration

of direct trade.

3.4 Sustainable agriculture

Achieving sustainability in coffee farming systems is more than just focusing on the economic activities designed to produce a crop or making as large a profit as possible on the coffee that is produced. A coffee farmer can no longer only pay attention to the economic objectives and goals for his or her coffee farm and expect to adequately deal with concerns of long-term sustainability… A sustainable coffee agroecosystem must be viewed as part of a much larger system with many interacting parts, including environmental, economic and social components. (Gliessman, 2008, p. 27)

Gliessman attempts to describe the complexity of sustainable farming and emphasizes the

need to consider this as part of a complete understanding of a sustainable model. When

assessing impacts on the lives of producers, it is essential to consider issues concerning the

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environment and agriculture. Sustainable agricultural practices have a direct impact on the

quality of life and the current and future ability of that farmer to make a living. Any

discussion of the intent or efficacy of Fairtrade and direct trade would be incomplete

without consideration for their approach to and impact on the physical environment of the

farmer.

While Fairtrade environmental standards are generally acknowledged to set

minimum safeguards against environmental abuses, they are not ground-breaking or geared

towards the betterment of the environment (Raynolds, Murray & Heller, 2007, p. 154).

Fairtrade standards do require a “reduction in agrochemical use, reduction and composting

of wastes, promotion of soil fertility, prevention of fires and avoidance of [Genetically

Modified Organism] GMOs” (Raynolds, Murray & Heller, 2007, p. 155). However, these

criteria are often overshadowed by the requirements for Organic certification (Jaffee, 2007,

p. 147).

These certifications have often been combined due to market demands and the

complimentary nature of social and environmental activism. “Fair Trade standards cover

only basic environmental criteria. Yet roughly half of Fair Trade coffee satisfies organic

requirements and is double certified” (Raynolds, Murray & Heller, 2007, p. 154). This

market for double certified coffee is possible because of an oversupply of Fairtrade

certified coffee that has created incentives for farmers who are looking to increase the

amount of coffee they sell on the Fairtrade market. This carries with it extra requirements

for the farmer: “organic certification has adverse effects arising from its bureaucratic and

industrial conventions, the Northern bias of certification standards, burdensome record-

keeping requirements, the expenses associated with certification and insufficient

compensation” (Lyon, 2009, p. 233). Farmers that can afford to achieve this dual

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certification are able to increase their access to Fairtrade market and benefit from a secure

minimum price and small organic premium.

The general consensus in the literature finds that Fairtrade environmental standards

are minimal and the main benefits rest with the minimum price that Fairtrade provides.

The minimum price plays an important role in supporting organic certification when the

commodity price is low (Jaffee, 2007, p. 160). The economic advantages of Fairtrade have

also encouraged farmers to continue farming coffee, instead of abandoning the land or

replacing coffee with more environmentally destructive crops (Jaffee, 2007, p. 163). In

these two ways, Fairtrade has encouraged a more sustainable coffee industry that enriches

the social, economic and environmental lives of farmers. However, Fairtrade still has a

long way to go until it can claim to raise the bar on environmental sustainability.

3.4.1 Direct trade: environment

While generic standards impose rules that are generally acknowledged to be effective,

they are often not the best solution for any individual farm (Lyon, 2009). Once again, the

individual and dynamic structure of direct trade lends an advantage in accommodating local

circumstance. In addition, the quality-centric nature of direct trade is well suited to

promote sustainable interaction with the environment. The quality focus ensures that the

interests of both the farmer and the buyer are focused on farming in the most beneficial and

sustainable manner. In doing so, the producer can receive a better price and can increase

the long-term production value of his land, while the buyer receives greater quality coffee

that only gets better over time.

Environmental sustainability is a complex concept and requires expertise and detailed

attention.

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Sustainable agriculture: this overused, under-comprehended term refers to agricultural, social and economic practices that allow farm families to protect their land as a precious resource, continue farming their land, and prosper over generations. Sustainable is not another word for organic: sustainable agriculture may include organic practices, but it is not limited to them. Dumping vast amounts of poisonous chemicals on the land certainly is not sustainable, but employing moderate amounts of safer chemical fertilizers may well be. (Weissman, 2008, p. 107)

Rigid standards make it difficult to address the intricacies of individual farms and

ecosystems. Direct trade roasters and farmers are interested in optimizing each farm to

sustainably produce the best quality coffee and improve it season over season. This

endeavour can often involve hiring agronomists to work with the farmer to improve

farming practices, tools and infrastructure. Direct trade holds promise for developing

sustainable agricultural solutions that benefit both the farm environment and the farmer.

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3.5 Reasons and questions for direct trade

A review of the literature has revealed many of the issues and highlighted the

strengths and weaknesses of the Fairtrade and direct trade frameworks. Through a

consideration of these prospects and pitfalls, this review has attempted to provide insight

into the current circumstances and motivations of coffee producers. This research project

aims to augment and elucidate this understanding.

It is clear from the definition of direct trade that it shares the driving principles

behind Fair Trade, such as building “a trading partnership, based on dialogue, transparency

and respect”(FINE, 2001). From a consideration of the criticisms of Fairtrade, it becomes

clear that there is room for direct trade to not only co-exist with Fairtrade but also

complement the network. Fairtrade provides a broad framework that is standardized and

regulated, and provides a stable price and predictable benefits for the producers. The

market for Fairtrade products is well developed and widespread, although supply still

outstrips demand.

Direct trade has the potential to pay more and provide technical support and

recognition for the producer. However, direct trade currently lacks the mechanisms to

ensure accountability to farmers and consumers. It relies on relationships of trust to sell to

consumers, and producers rely on the good intentions of the roaster when they enter into a

relationship. Both models provide promises and pitfalls for producers and it is worthwhile

to consider what producers want from a trade relationship and which framework a farmer

would choose, if they had a choice.

Fairtrade is evolving to satisfy the demand from producers and that is good. But that

does leave a gap for farmers who want more. Direct trade is an avenue where farmers who

want more can get more. Direct trade can provide financial, social and technical depth but

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it is a program for the elite buyers and producers, requiring higher prices from the buyer

and intensive work and dedication from the producer. Direct trade has its place and has

proven to be a successful business model that is here to stay, but is direct trade something

that producers want?

In the following, I will consider the circumstances and motivations that influence a

producers’ engagement with direct trade. My analysis will focus on the lived experience of

producers, the structural frameworks in which the farmers exist, and how the farmers

interact and relate to these structures.

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Chapter 4: Methods, Methodology and Theory

4.1 Methodology

[H]ow artificial the ordinary oppositions between theory and research, between quantitative and qualitative methods, between statistical recording and ethnographic observation, between the grasping of structures and the construction of individuals can be. These alternatives have no function other than to provide a justification for the vacuous and resounding abstractions of theoreticism and for the falsely rigorous observations of positivism, or, as the divisions between economists, anthropologists, historians and sociologists, to legitimize the limits of competency: this is to say that they function in the manner of a social censorship, liable to forbid us to grasp a truth which resides precisely in the relations between realms of practice thus arbitrarily separated. (Bourdieu & Martin, 1978, quoted in Wacquant & Bourdieu 1992, p. 27-28)

This thesis uses interviews as a research method to gain insight into the interactions

between farmers and the structures surrounding them in the coffee industry, with the

intention of grasping the “truth which resides precisely in the relations between realms”

(Wacquant & Bourdieu, 1992, p. 28). The use of interviews enabled exploration into the

perceptions and attitudes of various actors in the coffee industry and allowed for a more

nuanced understanding of exchanges that are too often explained in terms of necessity. The

choice of interviewing, as opposed to a more in-depth ethnography, was necessitated by the

number of unique individuals and organizations that are involved in the Fairtrade and direct

trade industries and the amount of time and funding that were available for this study.

The number of participants was dictated by an understanding of the structures and

individual perspectives that developed as the research project was underway. Provided the

resources, this research project would have benefited from a more in-depth understanding

of the reality of the farmer. However, for the purposes of this research, it was necessary to

understand how various actors interacted and engaged with the structures surrounding

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them. This was best accomplished through a broad range of interviews that investigated

each stage and structure in the direct trade framework.

This choice of research method was grounded in a belief that reality and knowledge

are constructed through interaction with and interpretation of the world (Crotty, 1998, p.

42-43). The interview was understood as an ‘active’ process, where the interaction

between the interviewer and the interviewee created a mutual story (Frey, 2005, p. 696). In

this approach to interviewing, data is generated by the researcher, who is the co-producer

of a shared reality and helps to produce the data that is being recorded (Byrne, 2004, p.

181).

This approach to data generation acknowledges that there is a power imbalance and

dynamic in an interview, which is strongly affected by the histories and social roles of the

participant. This dimension of power is always present and affects both the interview itself

and the outcomes (Wengraf, 2006, p. 42). This will influence the responses of the

interviewee: “Both the powerful and the powerless may be forced to give accounts that

justify or excuse their actions. People describe their motives in vocabularies in situated

social, cultural, historical, and economic contexts” (Charmaz, 2005, p. 525). This

asymmetrical power balance is somewhat realigned by the position bestowed on the

interviewee: “the power of the interviewer rests in his or her authority as a seeker of

knowledge and methodological expertise, and that of the interviewee as a more or less

privileged knower” (Nunkoosing, 2005, p 699). The interviews were generally held on the

producers’ farms, in cooperatives’ facilities or in the office of the organization being

interviewed. This physical location helped to shift the power balance and lend authority

and confidence to the interviewees.

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These contextual responses are often amplified in a group interview, with the

emergence of ‘groupthink’ and the dominance of certain members in a group (Frey, 2005,

p. 704-705). Group interviews can also be stimulating, “cumulative and elaborative” (Frey,

2005, p. 705). Group interviews were used when more than one person from an

organization was available to aid our understanding of the structure and influence of the

organization. The dominance of certain members was often palpable; however, the

research team often tried to direct questions to the individual most qualified to speak to the

particular topic.

This approach to reality and knowledge generation informed the structure and

analysis of the interviews conducted for this thesis. The positions and intentions of the

researchers were clearly laid out at the beginning of each interview and an effort was made

to put the interviewee in a position of comfort and authority. The semi-structured format of

the interview promoted these efforts and allowed for further exploration into areas of

shared interest between the interviewers and interviewee. While this helped to balance the

power dynamic of the interview, the positions of the researchers inevitably impacted the

responses of the interviewees. The research team included an accounting professor and a

coffee professional and this lent an often undeserved authority to the questions and may

have impacted the answers received.

The consideration of a contextually-bound, ‘active’ and generative interview led to

the adoption of a Bourdieuian concept of reflexivity that not only acknowledges the social

and personal investments in the research, but also considers societal hierarchies and the

influences of theory (Wacquant & Bourdieu, 1992, p. 36-44). This approach to reflexivity

gives this research the tools to uncover “the social at the heart of the individual, the

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impersonal beneath the intimate, the universal buried deep within the most particular”

(Wacquant & Bourdieu, 1992, p. 44).

4.2 Theoretical perspective

Bourdieu’s social praxeology informs my theoretical perspective and my

methodology, grounding its logic and criteria. This enables me to “bring the micro

subjective world of social actors together with the macro world of objective structures”

(Prasad, 2005, p. 203). In order to better understand the circumstances and motivations that

influence a producers’ desire for or entry into a direct trade relationship, I needed a

theoretical tool that was able to consider both the power structures (circumstances), in

which this system of trade is embedded, and the intensely social nature of how this system

impacts, influences and motivates the lives of roasters and producers.

Bourdieu’s social praxeology presents a theoretical perspective that is able to

consider the relational complexity between the power structures and everyday reality of the

farmer (Wacquant & Bourdieu, 1992, p. 11). This approach allows for an understanding of

the external structures that guide “interactions and representations,” while still accounting

for the “lived experience” of actors and “perception and appreciation” that provide the

internal structure to their actions (Wacquant & Bourdieu, 1992, p. 11). It considers both

the generative and structuring effects of social interaction with power structures and reflects

a belief that investigating this relationship is a means to acquiring “total social facts”

(Wacquant & Bourdieu, 1992, p. 26-28). Bourdieu aims to transcend the categories of

qualitative and quantitative methodology and focuses on the interactions and relationships

between societal structures and individuals.

Bourdieu’s social praxeology is based on the dialectical relations between a

phenomenological knowledge, that “sets out to make explicit the truth of primary

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experience of the social world,” (Bourdieu, 2010, p. 3) and objectivist knowledge, that

“constructs the objective relations (e.g. economic or linguistic) which structure practice”

(Bourdieu, 2010, p. 3).

A total science of society must jettison both the mechanical structuralism which puts agents “on vacation” and the teleological individualism which recognizes people only in the truncated form of an “oversocialized ‘cultural dope’” or in the guise of more or less sophisticated reincarnations of homo œconomicus. (Wacquant & Bourdieu, 1992, p. 10)

Bourdieu’s Theory of Practice provides a framework for establishing “an experimental

science of the dialectic of the internalization of externality and the externalization of

internality” (Bourdieu, 2010, p. 72, italics in original). This requires a “praxeological

double reading” that first considers the “social physics” of power and relationships and

second considers the “social phenomenology of society” (Everett, 2002, p. 70).

The first reading can be approached on two levels: power analysis and relationship

mapping (Everett, 2002). In evaluating power, the researcher is attempting to determine the

specific fields in play and the relation that these fields have to the field where power is most

concentrated. This leads to a mapping of the pertinent relationships to assist in describing

how forms of capital are distributed and perpetuated among individuals and groups

(Everett, 2002). This, at once, informs and requires knowledge of the logic of the field

(Wacquant & Bourdieu, 1992, p. 108) and provides insight into the dominated or

dominating position of the actors (Everett, 2002, p. 70).

The second reading “involves coming to terms with that which cannot so easily be

measured, namely, the symbolic templates of practical activities, mundane knowledge,

subjective meaning, and practical competency” (Everett, 2002, p. 70). This involves

analyzing the habitus of individuals to “explicate the categories of perception and

appreciation (dispositions) that structure their action from inside” (Wacquant & Bourdieu,

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1992, p. 11). Drummond makes a “novel suggestion that habitus should be seen as

composed of ‘narratives.’ This is because narratives, or stories, are things of culture” (1998,

quoted in Everett 2002, p. 71).

Taken together, these two readings can capture the “intrinsically double reality of

the social world” (Wacquant & Bourdieu, 1992, p. 11). Bourdieu’s emphasis on this

double reading “alerts us to the importance of situating all social phenomena (objective and

subjective) in the wider sociocultural milieu with a special emphasis on the frameworks of

stratification” (Prasad, 2005, p. 205). The researcher, then, studies the relationship between

structure and agent, and does not focus on just one or the other.

Against all forms of methodological monism that purport to assert the ontological priority of structure or agent, system or actor, the collective or the individual, Bourdieu affirms the primacy of relations… such dualistic alternatives reflect a commonsensical perception of social reality… embedded in the very language we use, which is ‘better suited to express things than relations, states than processes’… that in effect prevent us from grasping the logic of social interweaving. (Wacquant & Bourdieu, 1992, p. 15) Bourdieu’s theory of practice calls for the use of both objectivist and practical

knowledge:

[It] does not cancel out the gains from objectivist knowledge but conserves and transcends them by integrating the truth of practical experience and of the practical mode of knowledge which is learned knowledge had to be constructed against, that is to say, inseparably, the truth of all learned knowledge. (Bourdieu, 2010, p. 4) In my research I have attempted to put into practice this dual approach with the hope

that it might meet the requirements of Bourdieu’s theory of practice. My analysis of

literature and organizational structures have attempted to build on the objectivist

knowledge of the economic impacts and conditions of the supply chain that construct “the

objective relations (e.g. economic or linguistic) which structure practice” (Bourdieu, 2010,

p. 3). I have also conducted my interviews in order to present a practical knowledge of the

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relationship between structure and agency and in an attempt to understand the “bundles of

relations” (Wacquant & Bourdieu, 1992, p. 16) between field and habitus, and forms of

capital involved in these relationships.

The questions posed by the literature, and my resultant research question, consider

the interplay between social agents (roaster, consumer, producer) and the structures of

Fairtrade and direct trade. I will use social praxeology as a tool to grasp the logic and

complexity of this social interweaving and the impacts of this interaction on individuals,

communities and structures.

4.3 Analytical Framework

Pierre Bourdieu’s theory of practice requires the researcher to situate himself or

herself in “practical relation to the world” and consider the dialectic between the structures

and the habitus, without objectifying the structures or subjectifying the habitus (Bourdieu,

1990, p. 52).

The theory of practice as practice insists, contrary to positivist materialism, that the objects of knowledge are constructed, not passively recorded, and, contrary to intellectualist idealism, that the principle of this construction is the system of structured, structuring dispositions, the habitus, which is constituted in practice and is always oriented towards practical functions. (Bourdieu, 1990, p. 52)

This dialectic relationship is characterized by the ontological complicity “between habitus,

as the socially constituted principle of perception and appreciation, and the world which

determines it” (Wacquant & Bourdieu, 1992, p. 20). This thesis will use some of

Bourdieu’s fundamental concepts and terms to explore the social praxeology of the coffee

industry. However, a brief consideration of these concepts is necessary.

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4.3.1 Capital

Bourdieu asserts that in order to account for the social world, there must be forms of

capital that go beyond the purely economic:

It is in fact impossible to account for the structure and functioning of the social world unless one reintroduces capital in all its forms and not solely in the one form recognized by economic theory. Economic theory has allowed to be foisted upon it a definition of the economy of practices which is the historical invention of capitalism; and by reducing the universe of exchanges to mercantile exchange, which is objectively and subjectively oriented toward the maximization of profit, i.e., (economically) self-interested, it has implicitly defined the other forms of exchange as noneconomic, and therefore disinterested. In particular, it defines as disinterested those forms of exchange which ensure the transubstantiation whereby the most material types of capital - those which are economic in the restricted sense - can present themselves in the immaterial form of cultural capital or social capital and vice versa. (Bourdieu, 1986, p. 46)

Bourdieu asserts that the social world cannot be explained in strict economic terms of

profits and self-interested exchanges. He argues that any account of this world must

include other forms of capital that play an equal, albeit more subtle, role in the structure

and function of the social world. These forms of capital are effective because they can

ultimately be transubstantiated into economic capital; however, economic terms and tools

of analysis alone are not capable of fully explaining social phenomena.

Bourdieu elaborates on the transubstantiation of noneconomic exchanges in his

studies of the traditional “pre-capitalist” Kabyle society (Bourdieu, 2000). In his study he

criticizes the inadequacy of a purely economic analysis to describe social actions in a pre-

capitalist economy. An economic analysis, he argues, applies categories, methods and

concepts that are a historical product of capitalism to pre-capitalist economies, in which

these concepts are unfamiliar. This “mismatch” of economic dispositions “tacitly

condemns in moral terms those who have already been condemned in reality to the fate of

economic ‘misfits’ by the economic system whose presuppositions it records” (Bourdieu,

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2000, p. 28). While this example contrasts two very different societies and understandings

of capital, it helps to stress the importance of considering forms of capital other than

economic.

Bourdieu uses this demonstration to call for a more comprehensive understanding of

capital to understand the social considerations and impacts behind an economic logic

(Bourdieu, 1990, p. 112-122). Bourdieu argues that understanding this exchange of capital,

as it is misrecognized and recognized, is essential to gaining insight into the reality of the

social world: “the acts of cognition that are implied in misrecognition and recognition are

part of social reality and [the] socially constituted subjectivity that produces them belongs

to objective reality” (Bourdieu, 1990, p. 122).

For Bourdieu, understanding the distribution and make-up of capital is fundamental

to understanding the social world:

[T]he structure of the distribution of the different types and subtypes of capital at a given moment in time represents the immanent structure of the social world, i.e., the set of constraints, inscribed in the very reality of that world, which govern its functioning in a durable way, determining the chances of success for practices. (Bourdieu, 1986, p. 242)

In order to better understand the structure of the social world, Bourdieu identifies many

forms of capital but presents three main forms of capital: “capital presents itself under three

fundamental species, namely, economic capital, cultural capital, and social capital”

(Wacquant & Bourdieu, 1992, p. 119). These forms of capital are manifested and

perpetuated in different ways and subsets of capital emerge according to the structure of the

field:

This suggests an empirical and historical orientation, which can certainly be found in Bourdieu’s work, where only research can determine the key forms of capital and their interrelationships in a specific social order. One consequence of this orientation is that capitals tend to proliferate. (Swartz, 1997, p. 78-79)

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The main forms of capital that Bourdieu identifies will be drawn on as conceptual tools to

structure and interpret some of the research.

Economic capital is the most recognizable form of capital and can be described as

material interest, or more simply as physical things (such as an inventory of green coffee).

This form of capital is the most transparent, recognized and easily transferable. Economic

capital can grant quick and easy access to many goods and services, while gaining access to

additional goods and services requires the investment of time and relationships.

In contrast to the cynical but also economical transparency of economic exchange, in which equivalents change hands in the same instant, the essential ambiguity of social exchange, which presupposes misrecognition, in other words, a form of faith and of bad faith (in the sense of self-deception), presupposes a much more subtle economy of time. (Bourdieu, 1986p. 252)

This economy of time is invested in other forms of capital that cultivate qualifications,

skills, knowledge, networks, et cetera, and facilitate this social exchange.

Bourdieu sees economic capital as the root of all forms of capital but does not believe

that all capital is reducible to economic capital. Other forms of capital are effective only

because they conceal their economic roots. This implies convertibility between the forms

of capital; exchanges which cost time, effort and, often, capital. “From a narrowly

economic standpoint, this effort is bound to be seen as pure wastage, but in terms of the

logic of social exchanges, it is a solid investment, the profits of which will appear, in the

long run, in monetary or other form” (Bourdieu, 1986, p. 253). These exchanges come

with a risk of ingratitude or the inability to transfer or negotiate the acquired capital, but

exist as strategies to reproduce capital and social position (Bourdieu, 1986, p. 252-255).

Cultural capital includes what could be referred to as culture or cultivation and which

can extend to such things as knowledge, skill, taste, lifestyle and qualifications (Everett,

2002, p. 62; Moore, 2011, p. 110). The accumulation of this capital “presupposes a process

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of embodiment, incorporation, which… costs time, time which must be invested personally

by the investor” (Bourdieu, 1986, p. 244). The skills and knowledge acquired – depending

on their scarcity – lend the individual authority and legitimacy in society, which can be

used to obtain economic or social capital. Bourdieu refers to this as embodied cultural

capital, one of three types of cultural capital that he identifies.

Embodied cultural capital can be applied to this analysis as a tool to consider the

different levels of knowledge and technical skills required to operate a coffee farm and how

these interact with the other structures and forms of capital. In this case, someone can own

a coffee farm, but if he is to use it “in accordance with [its] specific purpose (defined by the

cultural capital, of scientific or technical type, incorporated in them), he must have access

to embodied cultural capital, either in person or by proxy” (Bourdieu, 1986, p. 247).

Through interaction with the market, certification agencies, aid agencies and roasters,

farmers acquire knowledge and skills that enable them to meet the requirements of the

industry. The accumulation of this knowledge and skill can be institutionalized through

Fairtrade certification but can also be instrumental in a successful direct trade relationship.

Embodied cultural capital is especially pertinent for quality, as the production of consistent

quality requires high levels of technical skill and knowledge. This knowledge and skill

grants producers influence in the coffee industry, especially in the direct trade field, and can

be readily exchanged for economic and social capital.

Social capital is defined as the “sum of the resources, actual or virtual, that accrue to

an individual or a group by virtue of possessing a durable network of more or less

institutionalized relationships of mutual acquaintance and recognition” (Wacquant &

Bourdieu, 1992, p. 119). Social capital can be viewed as an economic, cultural or symbolic

credit that is extended to an individual because of her connections and relationships. In this

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form of capital, value is placed on associations with well-placed people or institutions,

because this can grant an individual “‘credential’ which entitles them to credit” (Bourdieu,

1986, p. 249).

These relationships may exist only in the practical state, in material and/or symbolic exchanges which help to maintain them. They may also be socially instituted and guaranteed by the application of a common name (the name of a family, a class, or a tribe or of a school, a party, etc.) and by a whole set of instituting acts designed simultaneously to form and inform those who undergo them; in this case, they are more or less really enacted and so maintained and reinforced, in exchanges. Being based on indissolubly material and symbolic exchanges, the establishment and maintenance of which presuppose reacknowledgment of proximity, they are also partially irreducible to objective relations of proximity in physical (geographical) space or even in economic and social space. (Bourdieu, 1986, p. 249)

Bourdieu’s social capital is not focused only on a community or neighbourhood, but is

applicable to global networks of people and institutions. This conception of social capital

can be used to analyze the networking benefits – certification credentials, recognition of

quality, access to and knowledge of markets, impacts on local community networks – that

Fairtrade and direct trade bring to producers.

Symbolic capital is a fourth form of capital that provides the theoretical basis for the

transubstantiation of capital. Symbolic capital is a composite form of capital, made up of

other forms of capital as they are deemed legitimate (Everett, 2002, p. 63).

To [economic, social and cultural capital] we must add symbolic capital, which is the form that one or another of these species takes when it is grasped through categories of perception that recognize its specific logic or, if you prefer, misrecognize the arbitrariness of its possession and accumulation. (Wacquant & Bourdieu, 1992, p. 119)

Symbolic capital defines what is valued by the logic and perceptions within a certain field.

It legitimates and promotes certain forms of capital by recognizing or misrecognizing the

value of that capital. Symbolic capital represents the forms of capital that are valued by

members in a given field.

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Symbolic capital operates on an unconscious level to hide self-interest and disguise

“the underlying interested relations as disinterested pursuits” (Swartz, 1997, p. 90). A

transfer of capital facilitated through symbolic capital requires misrecognition of the true

nature of that capital (Everett, 2002, p. 64): “symbolic capital is this denied capital,

recognized as legitimate, that is, misrecognized as capital” (Bourdieu, 1990, p. 118). This

misrecognition is necessary in order for social or cultural capital to deny “naked self-

interest” and gain social legitimacy, even though the actions are “very directly material”

(Bourdieu, 2010, p. 181). This concept of the misrecognition of capital leads Bourdieu to

describe symbolic capital as the “legitimation of the arbitrary” (Bourdieu, 1990, p.123).

This process of legitimation is based on the idea that all the forms of capital are

exchangeable and “never cease to comply with an economic logic” (Bourdieu, 1990, p.

122). Bourdieu holds that each form of capital is convertible, with varying difficulty, back

into “the universal equivalent, the measure of all equivalences… labor-time” (Bourdieu,

1986, p. 54).

In contrast to the cynical but also economical transparency of economic exchange, in which equivalents change hands in the same instant, the essential ambiguity of social exchange, which presupposes misrecognition, in other words, a form of faith and of bad faith (in the sense of self-deception), presupposes a much more subtle economy of time. So it has to be posited simultaneously that economic capital is at the root of all the other types of capital and that these transformed, disguised forms of economic capital, never entirely reducible to that definition, produce their most specific effects only to the extent that they conceal (not least from their possessors) the fact that economic capital is at their root, in other words – but only in the last analysis – at the root of their effects. (Bourdieu, 1986, p. 54)

The ease with which you can convert a form of capital into economic capital depends on

the strategies employed within the field to perpetuate and reproduce capital. As a general

rule, “everything which helps to disguise the economic aspect also tends to increase the risk

of loss” (Bourdieu, 1986, p. 55). These strategies are determined by the distribution of

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power in a field and tend to perpetuate the forms of capital that are least costly to convert

(Bourdieu, 1986, p. 54).

These exchanges mean that the accumulation of symbolic capital takes time and,

often, material resources. This presents a situation where economic capital (time and

money) is converted into symbolic capital, which is then converted back into economic

capital. This seemingly redundant process, Bourdieu argues, is completely necessary and

“is perhaps the most valuable form of accumulation” (Bourdieu, 2010, p. 179, italics in

original). Symbolic capital can be seen as a credit that is granted to those who provide

material and symbolic guarantees and which facilitates the generation and exchange of

capital (Bourdieu, 2010, p. 181).

This credit translates into power with a field: “Symbolic capital is a credit; it is the

power granted to those who have obtained sufficient recognition to be in a position to

impose recognition” (Bourdieu, 1989, p. 23). This power is not drawn from symbolic

capital itself but from the relation between symbolic capital and the social structures of the

field: “Power is not in words or symbols per se but in the ‘belief in the legitimacy of the

words and of him who utters them’; for Bourdieu, symbolic power resides not in the force

of ideas but in their relation to social structure... all forms of power require legitimation”

(Swartz, 1997, p. 88). The interaction of capital and symbolic capital with social structures

and the individual habitus defines fields and the distribution of power.

For Bourdieu, the distribution and consistency of capital determine and are

determined by the hierarchy of the field. These values determine what is important to the

members of a field, shaping their priorities and the choices that they make. Actions that

may seem to be “objectively inscribed in the regularities of the (in the broadest sense)

economic order” (Bourdieu, 2010, p. 182) or just arbitrary, are actually carefully negotiated

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value systems that balance power, reinforce hierarchy and emphasize particular forms of

capital. In order to explore this relationship that determines values and power distribution

in social structures, the concepts of field and habitus must be considered.

4.3.2 Fields and Habitus

“[H]is key concepts of habitus and field designate bundles of relations. A field consists of a set of objective, historical relations between positions anchored in certain forms of power (or capital), while habitus consists of a set of historical relations “deposited” within individual bodies in the form of mental and corporeal schemata of perception, appreciation, and action. (Wacquant & Bourdieu, 1992, p. 16)

For Bourdieu, society cannot be described by overarching concepts or logic, but is

constructed through the interaction of the field with the habitus. The field comprises the

structure of the game, it “is a patterned system of objective forces, a relational

configuration endowed with a specific gravity which it imposes on all the objects and

agents which enter in it” (Wacquant & Bourdieu, 1992, p. 17, orginal emphasis). This

specific gravity is made up of the particular forms of capital that are valued by the field,

creating a dynamic structure that is constantly changing as participants compete for access

to capital and in a struggle to tweak the forms of capital that are most valuable within that

field (Wacquant & Bourdieu, 1992, p. 17-18). This dynamic process creates multiple fields

that value different forms of capital and actors that are active participants in multiple fields

at once. These fields exist is a social space where the compete for power through a struggle

to legitimate certain forms of capital over others (Swartz, 1997, p. 136-139). The field

itself, through its relation with habitus, determines what capital is worth struggling for.

Bourdieu has likened a field to a board game; the field is the board and defines the rules of

the game and what is at stake in the game (Bourdieu, 1990, p. 67). This “space of play”

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only exists “to the extent that players enter into it who believe in and actively pursue the

prizes it offers” (Wacquant & Bourdieu, 1992, p. 19). This is where habitus comes in.

Habitus provides a structuring mechanism that interacts with fields in a systematic

fashion and creates patterns of action (Wacquant & Bourdieu, 1992, p. 18).

Habitus, systems of durable, transposable dispositions, structured structures predisposed to function as structuring structures, that is, as principles which generate and organize practices and representations that can be objectively adapted to their outcomes without presupposing a conscious aiming at ends or an express mastery of the operations necessary in order to attain them. (Bourdieu, 1990, p. 53)

Habitus is both shaped by experience and shapes the perception and appreciation of

experience (Bourdieu, 1990, p. 54). The habitus has an infinite capacity to produce

thoughts and actions within the limits set by the conditions of its production (Bourdieu,

1990, p. 55). These conditions are born of the actors’ participation in the various fields and

social structures that surround them.

The concepts of habitus and field only function fully “in relation to one another”

(Wacquant & Bourdieu, 1992, p. 19). Bourdieu describes the successful interaction

between habitus and field as the ‘feel for the game.’

This phrase gives a fairly accurate idea of the almost miraculous encounter between the habitus and a field, between incorporated history and an objectified history, which makes possible the near-perfect anticipation of the future inscribed in all the concrete configurations on the pitch or board. Produced by experience of the game, and therefore of the objective structures within which it is played out, the ‘feel for the game’ is what gives the game a subjective sense – a meaning and a raison d’être, but also a direction, an orientation, an impending outcome, for those who take part and therefore acknowledge what is at stake” (Bourdieu, 1990, p. 66).

The rules and rewards that exist in any given field are developed and shaped by interaction

with the habitus of the participants in that field, while the field helps to shape the habitus.

These interactions develop a sense of investment in the game and its rewards, what

Bourdieu terms illusio, and a commitment to the “fundamental presuppositions of the field”

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or the rules of the game, what Bourdieu terms doxa (Bourdieu, 1990, p. 66-68). Illusio and

doxa work together to create, within the habitus, a feel for the game.

With these terms (and others), Bourdieu depicts a complex web of social

relationships and interactions that create a dynamic reality. The changing relationships

between forms of capital drive the dynamic nature of the field: “it exists in and through

time (diachronically) in the trajectories of position-takings and strategies… Capital can be

understood as the ‘energy’ that drives the development of a field through time” (Moore,

2011, p. 105). The interaction between the field and habitus, in turn, determines what

constitutes symbolic capital and defines the forms of capital that are valued and sought

after.

[R]elationships within fields and their hierarchies of value are in reality purely arbitrary rather than being grounded in intrinsically worthwhile and superior principles radically detached from the this-worldly instrumentalism and materialism of mercantile exchange. The legitimations of the system of social domination and subordination constituted within and through these symbolic relations are ultimately based on “interest.” (Moore, 2011, p. 104)

These interests are structured and held in place by a negotiation between the habitus and

field. These mechanisms generate adherence to a certain hierarchy of capital within a field,

which helps to shape the priorities of the participants.

Bourdieu argues that the adherence that is generated by the interaction of habitus,

field and the distribution of forms of capital can be used to create more efficient modes of

domination. He calls this symbolic violence:

The ‘choice’ between overt violence and gentle violence depends on the state of the power relations between the two parties… So long as overt violence, that of the usurer or the ruthless master, is collectively disapproved of… symbolic violence, gentle, invisible violence, unrecognized as such, chosen as much as undergone, that of trust, obligation, personal loyalty, hospitality, gifts, debts, piety, in a word, of all the virtues honoured by the ethic of honour, presents itself as the most economical mode of domination because it best corresponds to the economy of the system. (Bourdieu, 1990, p. 127)

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Symbolic violence stems from the unequal distribution of capital and the legitimation of

this production by common sense or doxa (Everett, 2002, p. 66). The role of the field in

creating a “compliant” habitus and the role that habitus plays in “setting up and

perpetuating durable relations of domination” is particularly important in the perpetuation

of symbolic violence (Bourdieu, 1990, p. 130). Bourdieu calls this the “doxic mode,”

whereby schemes of thought and perception are produced that create “immediate

adherence” because the world of tradition is taken for granted (Bourdieu, 2010, p. 164).

This disguises the form of domination and “through complicity and interior defeat” the

dominated “commit isolated treasons against themselves” (Everett, 2002, p. 66-67).

I will use Bourdieu’s conception of the forms of capital, field, habitus and symbolic

violence to discuss issues of power and domination. These concepts have informed my

approach and analysis of Fair Trade and direct trade and will aid my analysis of the

circumstances and motivations that influence a producers’ interaction with direct trade.

Through understanding the structure and distribution of capital within a field, this

framework can be used to obtain certain insights into the various interests and priorities of

farmers and shed some light on the circumstances and motivations that drive their

decisions.

4.3.3 Bourdieu’s concepts in this thesis

Bourdieu’s theoretical perspective has informed the approach and analysis of this

research and shaped the perceived role of the researcher. Bourdieu’s concepts will be

treated as thinking tools in the analysis of this research. This analysis will not attempt to

find these concepts in reality, or define a producers’ habitus or any field in depth, but it will

utilize these concepts to help visualize and analyze the relationships and structures that

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were encountered in the research. This analytical framework will help focus the analysis

on the relationships between structure and agency, rather than on one or the other, and how

this shapes the circumstances and motivations of producers entering into the direct trade

field.

The role of the researcher, according to Bourdieu, is to acknowledge the “primacy

of relations” (Wacquant & Bourdieu, 1992, p. 15) and understand its implications without

forcing coherence on it. “Practice has a logic which is not that of the logician. This has to

be acknowledged in order to avoid asking of it more logic than it can give, thereby

condemning oneself either to wring incoherencies out of it or to thrust a forced coherence

upon it” (Bourdieu, 1990, p. 86). This often creates an “imprecise, fuzzy, wooly reality,”

but allows the researcher to sidestep the agency versus structure debate and focus on the

dialectical relationship that occurs between the two. This research has attempted to

understand the reality of coffee producers in their relationships with the coffee industry.

The analysis of this research has attempted to avoid forcing coherence on this complex

topic and cannot claim to fully understand the circumstances or know the motivations of

farmers; instead, the analysis attempts to present the wooly reality of a few farmers and the

system that they work in with the hopes that this will shed insight on the perceived and real

benefits of a direct trade relationship.

Bourdieu’s framework will be used to obtain certain insights into the various

interests and priorities of farmers and shed some light on the circumstances and motivations

that drive their decisions. The analysis of this research will attempt to understand the

impacts of the structures and distribution of capital within the various fields and how this

impacts the choices available to the farmer.

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Bourdieu’s view of labour and time as the underlying logic behind capital will be

utilized to gain insight into the forms of legitimate capital and how this affects the

distribution of power. Bourdieu’s concept of symbolic capital, as a veil that obscures

economic interest and legitimates other forms of capital, will be used to consider how and

what forms of capital are at play and factor into the lives of farmers. An approach to social

capital that is based on a balance between other forms of capital allows for a nuanced

understanding of the resources that networks provide and the distribution of power that

maintains these benefits, an understanding that includes the influences of culture, power

and social obligation. A consideration of the interactions between fields, habitus and

capital will also help to clearly present issues of power and symbolic violence.

The analysis will attempt to use these concepts to position the coffee farmer in

relation to the fields that they participate in and the forms of capital that they find

legitimate. Bourdieu’s theory is well suited to provide the tools for an analysis of the

interactions between structures and individuals and provides a framework that connects

these relationships to the distribution of capital and power. This also allows for insight into

the motivations and decisions of an individual. In this way, Bourdieu provides a theoretical

perspective that is well suited to analyze the circumstances and motivations of coffee

producers.

4.4 Methods

The ontology and epistemology outlined in the above sections have guided the

choice of research methods for this thesis. The research consisted of interviewing active

participants in the relevant fields and analyzing attitudes, perceptions and interactions with

the structures of the market, Fairtrade and direct trade fields. These frameworks are

outlined through a combination of accepted definitions and common issues, identified in

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the literature review. The methodology is also reflected in the design of the interviews that

were conducted for this thesis.

4.4.1 Interview design

The research for this thesis consisted of 12 semi-structured individual and group

interviews. The 23 participants had varied roles in the coffee industry and included

producers, producer organizations, government organizations, aid organizations, and coffee

buyers. The interviews aimed to gain insight into the circumstances of coffee producers

and understand factors that could motivate a farmer to engage in a direct trade relationship.

The design of each interview varied according to the participants’ position and involvement

in the industry.

The interviews were conducted, with the exception of one, in Colombia and

Guatemala. These countries were chosen partly because of the available travel

opportunities and funding, but mainly because Colombia and Guatemala have large

populations of small, quality-focused producers who are involved in Fairtrade and direct

trade. These two countries are similar in that they both have strong government sponsored

support for coffee producers, they are well regarded in the specialty coffee industry and are

largely composed of small producers who face similar challenges in their engagement of

the international coffee market.

In Colombia, the interviews were not prearranged and were conducted when an

appropriate interviewee was available. Interviews were conducted with producers who

were engaged in the specialty coffee industry and, in particular, producers who had

experience with direct trade. The questions focused on the producers’ experiences with the

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specialty industry and with direct trade. The requirements of these arrangements were

explored, as well as the producers’ understanding and attitude towards the requirements.

In Guatemala, the interviews were more formal and focused. Each interview was

arranged for in advance by our translator, through our networks or through formal

introductions, and was chosen with purpose to shed light on a specific area of the

Guatemalan coffee industry. In choosing interviewees, we aimed to understand the

national and regional structures of the coffee industry, as well as the internal structures and

benefits of cooperatives and associations. The interviews of government and private

organizations focused on their role in the market, the assistance that they provided to

producers, and the demands that were placed on producers and producer organizations.

The interviews of producers and producer organizations focused on the perceptions of

market and certification structures, the requirements of the industry and the impact of these

requirements on the producer and organization, and the hopes and ideals of the producer.

The questions that were asked in the interviews aimed to understand the

circumstances of producers by considering how each individual perceived and engaged

with the structures surrounding them. The intent was to better understand the complexities

of the farmers’ position in the industry by considering the interactions between producers

and market forces, government organizations, certification requirements, cooperative

structures, and trade relationships. The questions also considered the needs and wants of

producers, ideal arrangements and perceptions of fairness. These questions aimed to

provide insight into the motivations of producers who engage in direct trade relationships.

Three themes are explored in the analysis of these interviews: the lived experience

of the producer, the distribution of power and the institutional structures that surround

them, and the relations between the producer and these structures. The analysis is guided

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by Bourdieu’s social praxeology and uses the concepts of Bourdieu, such as field and

capital, as thinking tools to understand and make sense of the reality encountered in the

interviews. This theoretical lens was well suited to provide the tools to analyze the

complexities of relationships between individuals, market forces and industry structures,

relationships that are subject to the interaction of cultures and traditions, structural

interdependencies and power dynamics.

The questions surrounding lived experience attempt to construct a narrative of the

producers’ lives and through this narrative give a sliver of insight into the habitus of the

producer (Everett, 2002, p. 71). To construct a full picture of a Bourdieuan habitus would

require a much more in-depth investigation into the lives, customs and perspectives of

producers that is beyond the scope of this study. These questions examine the lives, hopes

and traditions of producers and how these are impacted by involvement in the coffee

industry.

The questions that consider power and institutional structure revolve around the

external structures, limitations, and advantages that surround the producers, exporters and

roasters. These structures are analyzed using Bourdieu’s concept of fields; the analysis

considers the make up of these fields and how power and capital are distributed within and

between these fields. Emphasis is placed on the interdependencies and interactions

between market mechanisms, certification, organizational assistance and producers.

Particular attention was paid to the priorities of each organization (such as accountability

and adherence, quality or technical and social assistance) and how this, often singular,

focus interacted with the lives and goals of producers.

In investigating the relationships and interactions between individual agency and

institutional structure, the questions explore the benefits and disadvantages of organization,

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the operations and support role of cooperatives, direct trade and Fairtrade relationships,

middlemen and government institutions. The interviews attempt to assess producer

perceptions of the role of institutions and organizations and the distribution of power in the

applicable fields. The impact of the distribution of capital on the circumstances of

producers is also considered in order to gain insight into the motivations behind producer

choices.

4.4.2 Reflection on interview selection and limitations

The interviews that I conducted were intended to investigate both the objective

structures and limitations placed on coffee farmers and the reality of farmers’ daily lives

and their interaction with these external structures. This led me to conduct interviews with

representatives from national organizations, not-for-profit organizations (NPOs) working

with farmers, executive board members of national producer-run organizations, members of

cooperatives and individual farmers and green coffee buyers. This allowed me to gain

insight into the legal and bureaucratic challenges of being a coffee farmer, the external and

internal organizational structures created to cope with these challenges, the lived experience

of farmers and their interaction with these structures, and how this interaction is

experienced and perceived by green buyers and NPOs.

My research took place over the span of two trips: one to Colombia and the other to

Guatemala. The former was a business trip where I managed to conduct some interviews

as we travelled across the Huila region of Colombia in search of good coffees. This

restricted the research that I was able to conduct in three ways:

a) The business orientation of my trip produced a conflict of interest and power

dynamic that limited the selection of interviewees.

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b) My time was limited and split between business and research, with emphasis on the

former.

c) We travelled with our exporter who, being our liaison with the farmers, had an

interest in making a good impression.

This trip allowed me to meet many coffee farmers, visit their farms and spend some time

with their families. However, my opportunities to conduct interviews were not so plentiful,

as I could not interview farmers whom we were possibly conducting business with because

there existed an obvious conflict of interest and created a power imbalance that would

obscure my interaction with the interviewees and, consequently, the responses that I

received. This limitation was compounded by a rigid schedule and lack of time, as we

travelled to a new town every couple days and were required to taste and evaluate 20 to 80

coffees in each town.

Travelling with the company that exports our coffee out of Colombia and deals

directly with all the producers that we were meeting was perhaps the largest obstacle to

obtaining an interview that could reliably reflect the lived experience of the farmer. These

farmers relied on this company for access to the specialty coffee market and prices that

were consistently higher than market prices or Fairtrade prices. Conducting interviews

outside of the figurative and literal space of this company required significant tact and

logistical coordination, restricting my opportunities to very few.

As a result of these three limitations, I was only able to conduct two interviews with

individual farmers, one in Brusselas and the other in San Augustine (both are towns in the

Huila region of Colombia). These interviews provided insight into the lives of two farmers

who have had very different experiences with direct trade but welcomed the opportunity to

share their challenges and successes.

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My trip to Guatemala was a research trip taken with my supervisor and a translator.

My supervisor and our translator arranged for many of the interviews over email and

phone, especially the interviews with national organizations, where titles of authority (such

as professor) help to get an audience. I was involved in many of the decisions regarding

whom to interview and I provided the logistical coordination for interviews with a not-for-

profit organization and a coffee mill in Antigua. This proved to be much more effective as

a research trip but presented its own challenges and limitations to my research.

I was limited by my professor’s research itinerary and goals, which, although

complementary, were not the same as mine. This meant that some interviews were more

focused on organizational accountability than on issues surrounding the farmer, direct trade

and Fairtrade. This also meant that, when time was restricted, pride of place went to my

supervisor. These limitations were mitigated because my supervisor was also interested

and concerned with the issues presented by my research questions and he gave me the

space to inquire and pursue my questions in these interviews. This was done in a way that

made me feel included and, I think, enabled me to accomplish my research objectives. It

also provided much needed support and guidance that helped me avoid some of the pitfalls

of the novice researcher. However, I cannot help but admit that the interviews that I would

have conducted on my own would have differed dramatically in both content and structure

(for better or, more likely, for worse), and for this reason this arrangement must be

acknowledged and preface my analysis of these interviews.

Each interview was conducted differently and depended on the person being

interviewed and the position that they occupied. Interviews generally began with an

introduction of what we were researching and ourselves. Our questions were open-ended

and the course of discussion often followed the lead of the interviewee(s), only being re-

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directed when necessary due to the variety of topics that we wanted to cover or the time

restraints of the interview.

Group interviews were conducted when it was necessary to gain multiple

perspectives, mostly on the roles and influence of an organization. We found that group

dynamics played a large role in how effective and informative our interview was. In most

group interviews, a hierarchy quickly emerged and one or two of the interviewees answered

the majority of questions.

All but two of my interviews were limited by my inability to speak Spanish. These

interviews were conducted in Spanish with the assistance of a translator. This, combined

with the cultural differences, limited my rapport with the interviewee(s) and created an

additional barrier to communication and understanding for both the interviewee(s) and

myself.

The interviews that we conducted in Guatemala covered a wide gamut of actors

involved in the coffee industry and provided both a macro and micro picture of the realities

of coffee production in Guatemala. We interviewed two representatives from major

government-run organizations, the director of a not-for-profit organization, two producer-

run organizations with national scope, an association of farmers, two cooperatives, and a

large coffee mill that facilitates the processing and distribution of coffee for hundreds of

farmers. These people were selected for either their involvement with the structures of the

coffee industry or their experience as farmers.

While the participants covered a wide range of actors, it would be difficult to extend

the applicability of the responses of individual interviewees to the entire coffee industry, or

even the industries of Guatemala. The interviews reflect the opinions of individuals in an

industry with incredible diversity and differentiation. The interviews that explore the

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structures that exist are more applicable to the coffee industry. However, the focus of these

interviews and analysis consider the interaction between structure and agency and, as a

result, only represent instances of relationships and not universal experiences.

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4.5 Reflexivity

I am convinced that one knows the world better and better as one knows oneself better, that scientific knowledge and knowledge of oneself and of one's own social unconscious advance hand in hand, and that primary experience transformed in and through scientific practice transforms scientific practice and conversely. (Bourdieu, 2003, p. 289)

In an attempt to better understand myself and in holding with my Bourdieuian

analysis, I will attempt to address the three types of biases that make up Bourdieu’s

conception of reflexivity. These three biases are neatly summed up by Wacquant as social,

academic and intellectualist (Wacquant & Bourdieu, 1992, p. 39). These are “key filters

that alter sociological perception” (Wacquant & Bourdieu, 1992, p. 38-39) and need to be

acknowledged so that the researcher can inform his own ‘scientific practice.’ This

consideration of my biases and filters will also help to frame and elucidate some of the

considerations and limitations of my research.

The first of these biases that I need to address is concerned with my social origins

and coordinates and the perspective that it defines:

The social world embraces me like a point. But this point is a point of view, the principle of a view adopted from a point located in social space, a perspective which is defined, in its form and contents, by the objective position from which it is adopted. The social space is indeed the first and last reality, since it still commands the representations that the social agents can have of it. (Bourdieu, 1998, p. 13)

Reflection on my point of view requires that I consider my social space, where I stand in

relation to the society in which I live. In order to aid this inward looking analysis of my

perceptions and unconscious assumptions, I have used Bourdieu’s three-dimensional space

that considers volume of capital, composition of capital, and change in these two properties

over time (Bourdieu, 2007, p. 114).

In order to consider my own cultural and economic capital I look to the social

conditions of my upbringing. I come from two generations of academics and was brought

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up to appreciate ideas, fine arts and refined foods. This was coupled with a moderate

economic position that was adequate to maintain a distance from necessity as well as

extravagance. According to Bourdieu, this might put me somewhere in the league of the

“wage-earning petite bourgeoisie, whose ascetic virtues and cultural good intentions… very

clearly express the aspiration to rise to the higher position” (Bourdieu, 2007, p. 123).

How does this impact my research? My somewhat privileged upbringing has

inculcated a sort of “doxic mode” of acceptance for the natural order of things. If this is

coupled with my relative lack of material means and influence, I would fall among the

ranks of the “dominated.” However, while this may be the case, I am reluctant to challenge

the status quo because of my potential trajectory, as I work to increase my economic,

cultural and social capital. This acceptance of the established order has, at times, hindered

my understanding of the need for change in, for example, the global commodity market and

has presented a professional and academic conflict of interest for me in my consideration of

the improvement of the social and economic position of farmers. This is a challenge that I

recognize and resist because deeper than these inculcated perceptions is a sense of morality

and justice that tells me that these farmers deserve more. This has allowed me to

overpower, not overcome, my desire for personal advancement. It has shaped the trajectory

of my research and has motivated me to study direct trade coffee, as an alternative that can

benefit both the coffee producer and roaster.

The second bias that Bourdieu considers is the academic bias. This bias refers to

the position of the researcher in the academic field and the associated field of power. As a

Masters student, I am barely in the academic field and will have no position in the

academic field after this project. In that sense, I do not have to worry about competition or

the field of power within the academic field. However, my position in the academic field

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has presented some challenges, the most prominent being my lack of experience. This has

presented a challenge in setting up and conducting of interviews, as well as attaining

funding to do so. It was my good fortune that my research could be done with the

financial, academic and logistic assistance of my supervisor.

However, this “academic” bias has also been referred to as the field bias (Prasad,

2005, p. 197) and, in my case, is applicable to the position that I hold outside of academia

with a coffee roaster. I currently work with Phil & Sebastian Coffee Roasters and am

deeply involved in the specialty coffee industry as a coffee professional. This has had a

significant impact on the direction of my research and my approach and attitude to the

questions that I ask. My experience in the specialty coffee industry has provided me with

important insight into the relationship between the roaster and the producer. It has also

created a conflict of interest in my analysis of this relationship. In the interviews that I

conducted, this position also interfered and impacted the power dynamic between myself

and the producer, cooperative or organization. It is for this reason that I decided to be

completely honest in my introductions, but also make it clear, both to myself and to the

interviewee, that the sole intent and use for these interviews was to fulfill the research

requirements of my thesis. I acknowledge that this did not do anything to dispel the power

inequality but the impact of this will be taken into account in my analysis of the research.

This led me to choose the producers that I interviewed carefully in order to minimize the

conflict of interest and power differential. I did not interview any producers that Phil &

Sebastian buys from, with the exception of a coffee mill that we spoke with that handles

hundreds of thousands of pounds of coffee. Nor did I evaluate or use the policies or

standards of Phil & Sebastian in my consideration of the model of direct trade.

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Do these academic and field biases reduce my discretion and efficacy as a

researcher (Everett, 2002, p. 72)? I think that they do and I hope that, by acknowledging

these biases, I can mitigate their effect. My position as a Masters student researching with

my supervisor created a dynamic that unavoidably led to a situation where I often deferred

to my supervisor’s superior grasp of theory and research methods. This led me to take

some things for granted but also provided me with excellent guidance that was necessary

given my inexperience. The effect of this dynamic was partially balanced by my position

as a coffee professional. This put me in a position of authority on certain issues that

pertained to coffee. This, however, led me to make assumptions and (perhaps arrogantly)

dismiss certain responses or reactions of interviewees. Luckily, my supervisor was there to

inquire after the questions raised, and I have attempted to learn from these questions,

withhold my judgment and approach the analysis of the interviews with an open mind.

The third bias Bourdieu calls intellectualist: “The intellectualist bias [entices] us to

construe the world as a spectacle, as a set of significations to be interpreted rather than as

concrete problems to be solved practically” (Wacquant & Bourdieu, 1992, p. 39). My

professional involvement with direct trade gives me an advantage in tackling this bias. My

involvement in the industry first exposed me to the problems faced by farmers and these

concrete problems motivated me to enter my program and conduct this research.

Why I chose to turn this problem into a thesis, however, has more to do with my

social origins than professional interest. One could argue that if I just wanted to solve this

problem I should devote all my attention to my profession. However, Bourdieu would

explain my choice to do a Masters’ as a way of institutionalizing my cultural capital. I was

really just looking for an excuse to do a Masters’ degree. I resisted the urge to enter a

Masters’ program directly after my first degree because I did not want to do it for the sake

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of completion but, rather, for the sake of interest and applicability to my life and

profession.

I discovered the intricate world of specialty coffee through my introduction to some

very isolated communities in Colombia that wanted help with marketing their own coffee in

Canada. It was through working with these communities that I came to realize the very real

impact that the coffee industry can have on small producers. The desire to study the

concrete problems of direct trade led me to enter the Interdisciplinary Graduate program,

and I hope that this research will help me develop some very real solutions for roasters and

producers that I can implement in my work. While this helps to prevent my research from

becoming an academic spectacle, I must still be careful to avoid generalized or simplistic

solutions to a very complex problem.

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Chapter 5: Analysis

The interviews conducted for this thesis will be analyzed to gain insight into the

structures and incentives that shape the decisions of coffee producers who are drawn to

direct trade. Using Bourdieu’s theoretical concepts, this analysis considers the structure of

four fields and identifies the predominant forms of capital in each of these fields. The

fields are constructed from the experiences, interactions and opinions of the interviewees

and how these interface with external structures and rules. This analysis will consider the

relationships between habitus and forms of capital that structure producer priorities to

provide insight into producer motivations.

By identifying predominant forms of capital, this analysis hopes to shed light on

where time and energy are most efficiently invested and how this shapes producer

priorities. Insight into producer experiences, hopes and goals will assist to clarify the

motivations producers. This analysis uses a relational framework to better understand the

context of producer decisions and the factors that may motivate producers.

5.1 Economic

The economic field refers to the commodity chain and consists of a variety of actors

with a wide range of capital and power, such as: futures brokers, transnational corporations,

roasters, importers, associations, cooperatives and farmers. This analysis will focus on the

interactions of producer organizations and producers with the market. The interviews

explore how producers understand and experience the market, what knowledge and

assistance producer organizations need for success in the market, and how involvement in

the market has shaped their perspectives on power and capital.

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5.1.1 Lack of access

The majority of coffee producers are isolated from the locus of power and lack

influence in the commodity market. Some producers never have direct contact with the

commodity market and sell to middlemen who provide convenience and processing

capacity:

A farmer tends to have access to a different market. In this area it is a coffee fruit market; Huehuetenango is a pergamino market so they tend to know those markets as supposed to green coffee. Green coffee is obscure to them, as they get involved they begin to understand. (NPO, 1101-1103)

These different markets refer to various stages of processing that coffee must undergo

before it can be called “green” coffee. Many farmers who lack the infrastructure or

expertise to wash, ferment, and/or dry their coffee cherries end up selling to intermediary

markets. These middlemen process the coffee and sell it to the pergamino or green

markets. This can also be done by a cooperative or producer organization, but the farmer

will still only be paid for the coffee cherry.

The price for coffee cherry is considerably less that the price of green coffee on the

commodity market. The pergamino stage refers to coffee beans that have been processed

but still have a thin, hard parchment surrounding the bean. The beans at this stage have to

rest and stabilize, ideally in a temperature and humidity controlled warehouse, for

approximately 30 days before they are stripped of their parchment and exported as green

coffee.

The price for green coffee on the commodity market is constantly changing and is

determined by the quality classification and the supply and demand for that category of

coffee. Spot and indicator prices are determined by averaging the export price of a pound

of green coffee in large categories of the coffee industry. These categories – Colombian

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milds, Other milds, Brazilian naturals, and Robustas – are so broad that they have very little

relevance to a farmer of a 3 hectare coffee farm that produces Caturra at high elevation10.

These prices do not include any of the costs for storage, transportation to port, processing

and packaging; these costs are siphoned by intermediaries along the way and are taken off

the price that the farmer receives. The many degrees of separation between the logic of the

market and the producers’ understanding of that logic create barriers for producers who

want to profitably engage this market.

In order to capture a greater share of the value added at origin, the producer must

invest in learning the processes and buying the infrastructure necessary to process coffee.

This requires economic capital to purchase equipment and cultural capital in order to

acquire that knowledge.

One of the difficulties we have as small producers is processing. We need tools to be able to transform the coffee. We don’t have those tools to be able to trade our coffee ourselves. Each producer would have to have his own infrastructure and to install that, it is costly. (Producer Organization #1, 500-503)

These practical barriers constrict access to the market and increase dependence on

middlemen. This limits the opportunities available to producers, who have very little

money, time and energy to devote to purchasing new equipment and learning new

processes.

Producers, who want better terms, first need the tools and networks to access the

market directly so that they can negotiate directly with a buyer. Direct access to the

market, however, is restricted by the size of most small producer farms.

The opportunity is to standardize the product and to have the chance to fill up a container to complete a contract. The problem is that a small producer produces less

                                                                                                               10 This denotes slower maturation of the coffee cherry on the tree and often leads to better quality.

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than 100 quintals pergamino a year. A container needs 500 quintals. (Producer Organization #2, 270-272)

The production capacity of the average small producer is well below what is needed to fill a

container of coffee, which is the unit of transport. This requires either a concerted effort

with the buyer to group several purchases together (and adding costs) or cooperation with

other producers or organizations. Producer organizations and cooperatives often exist to

provide small producers with access to opportunities on the market: "you see the

opportunities available at the level of the market. The part of belonging to the group

helped" (Producer #2, 159-160). This type of social organization allows producers to

negotiate on the price and terms of contracts: "We associate in order to negotiate"

(Producer #2, 51). However, without proper support and assistance, these organizations

often lack an understanding of market mechanisms. This can lead to speculation or poor

negotiation; in these cases, direct access to the market can prove harmful for organization

and producer:

Members only see the short term, they want to make a choice, a decision. We tell them that during the harvest cycle, which could be 4 months, they should do 4 sales so they get an average. That average is not the best, but not the worst. We have proved using calculations that when they sell their coffee to us, they sell better. Speculation has started once again, the prices are falling, but in the local market they are increasing. It is a terrible speculation. (Producer Organization #2, 178-182)

These miscalculations can be especially harmful when dealing with a perishable product,

such as coffee.

5.1.2 Power and Influence

Buyers can use the cyclical nature of coffee to take advantage of producers and

organizations. Since coffee is a seasonal plant that flowers and produces fruit at various

times throughout the harvest season, the time that a bean takes to ripen can drastically

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affect the quality and physical hardness of the bean. The peak of the harvest generally

produces the best quality coffee and buyers can take advantage of this by offering higher

than average prices at the peak of harvest and not buying the remainder of the crop.

The large companies enter to buy [at the peak of harvest], not [at the beginning or end of harvest] – here they don’t show up. So that is the difficult part for us to communicate effectively to the farmers. That they should be loyal because their organization is receiving their coffee at the beginning and at the end [of harvest], not only when the harvest is good and the bean is at its optimal state. (Producer Organization #1, 144-147)

While a high price for a fraction of the crop can be tempting for the producer, it may

actually harm the overall value of the crop if the farmer is unable to obtain a good price for

the remainder of the crop. More importantly, when the best coffee circumvents the

cooperative or organization that exists to provide producers with access to the market and a

stable price throughout the harvest, it weakens these institutions. They have access to less

coffee of lower quality, which may result in an inability to fulfill contracts or obligations to

buyers. This has a long-term impact on the efficacy of the organization, the benefits that it

is able to provide to members, and, as a result, the loyalty of members within the

organization.

Direct access to markets can also expose the power inequalities inherent in a field.

Farmers are subject to economic necessity and are often tempted to sell their coffee quickly

or prematurely because they need the money right away:

If you wait and sell it [at the cooperative], contribute to the big lot and we sell it to some big company for a good price and the payout is going to be a lot more. It is sometimes really hard to wait if there are situations, if someone gets hurt or sick, and the family needs money right now, it is hard not to. That is how they have organized, try to keep one under the same page, hold on and sell it when it is all ready, instead of daily as these trucks come by and try to get people. (Cooperative #1, 28-33)

These trucks are operated by ‘coyotes,’ or middlemen who come directly to the farmer and

offer immediate cash for coffee and then resell it at a higher price in town. They are

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convenient for the farmer who would have to transport his coffee somehow and the offer of

immediate cash is tempting to a farmer who may not see his money from a cooperative for

a couple of months. This economic necessity puts farmers in a poor bargaining position

and hurts their ability to organize and work together to get better prices.

Back in 2004 most coffee coops produced in Guatemala were broken and there was a very concerted effort of plantation owners all over Guatemala. They offered very high prices for coffee fruits, higher than what the coffee farmer could get once it was processed through the cooperative. All the farmers said ‘yeah’… and they made relatively a lot of money and, what happened, they had no coffee and [the cooperatives] defaulted on a lot of their contracts. No one wanted to do business with them. (NPO, 1441-1446)

While this is an extreme example, it is not unlike when corporations only purchase the peak

of the harvest from a farm. These examples highlight how economic capital can be used to

undermine cooperatives and the social capital of producers. These large organizations have

the ability to leverage their volume and economic capital to get a better deal, often at the

expense of the producer.

These examples suggest that the producer is in a poor position in relation to the

market. They lack the money to invest in the infrastructure (economic capital), the

knowledge to improve their chances of engaging the market (cultural capital), and the

networks that may allow them the credit and knowledge required to take advantage of an

opportunity (social capital). These factors hamper their success in the market and their

ability to achieve a fair deal: “in the work we do, even though we speak of justice, the

economic, social, cultural and religious factors limit that development” (Producer

Organization #2, 461-462). There are opportunities in the economic field; however, they

are generally reserved for those with the necessary capital to take advantage of the

opportunities.

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The structure of the economic field and its interactions with producers suggest that

economic capital is heavily weighted and grants power and influence.

The sacrifice of the people is not recognized, they work harder to have a high quality coffee. But for the market, that doesn’t matter. They don’t care about the sacrifice of the small coffee producer. They are interested in money, and not in improving the living standards of the people. (Cooperative #2, 1004-1007)

Social capital and the right connections can grant a producer more direct access to the

market and the opportunity to negotiate better terms of engagement. However, producers

and organizations often lack the cultural capital – knowledge and skills – to take advantage

of this opportunity.

This distribution of capital suggests a structure that disadvantages the producer and

perpetuates the hierarchies of power by focusing on economic capital. Social and cultural

capital are necessary for producers to escape this cycle of symbolic violence but many do

not have the economic capital or the universal currency of time and energy to acquire these

capitals. These are the interactions and structures that have spurred calls for a better system

of trade, a system that is fairer for the farmer.

5.2 Government

In most coffee producing countries, the government is involved in the regulation,

production and marketing of the coffee industry. Both Colombia and Guatemala have

semi-autonomous agencies that control export licenses, regulate quality, provide technical

and financial assistance to farmers, have strong marketing abroad and receive the majority

of their funding from coffee exports. These agencies are run as separate organizations but

are closely tied to the political interests of the government and play a crucial role in

protecting the country’s interests in a global commodity market. However, these interests

do not always align with the interests of the thousands of small producers that they

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represent. The government, and the agencies that are associated with it, play a crucial role

in determining the structural advantages and limitations that mediate the relationships of

producers with the market, Fairtrade and roasters.

The research on government structure was largely conducted in Guatemala and was

focused on the political constructs that have an impact on producers. The interviews

focused on the roles of two organizations, ANACAFE and INACOP, and the political

experiences of producers. The interactions with these organizations shape producer

engagement with the market and can provide insight into the structural limitations that

producers face.

5.2.1 Lack of resources: INACOP

INACOP is government funded and focused on helping cooperatives survive and

succeed in the market. The technical assistance provided includes administrative capacity

building, internal control systems and organizational assistance, which are essential for

cooperatives that hope to meet Fairtrade standards.

We support them in what they need the most. In legal areas, the organizing of the assembly. We provide training. So they know what the directors do. We provide workshops to the internal controls so they know how they are spending their money, what they are doing. So all those workshops are given to them. We would like to give more, but we can’t. Three years ago they reduced our budget. (Government Organization #2, 340-344)

This assistance can be important for cooperatives that hope to succeed on the international

commodity market, compete within a Fairtrade market or negotiate direct trade

relationships. These resources help to develop the necessary human resources,

organizational structures and accounting practices that enable a cooperative to operate

effectively and transparently. They are essential for cooperatives to serve members that

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depend on the benefits of organization to engage the market, receive assistance from the

government and negotiate with buyers.

However, INACOP is chronically underfunded and lacks the resources to effectively

fulfill its mandate.

We have no resources, INACOP has at the national level four vehicles to work with and 18 motor bikes. Some equipment has been donated for institutions. The situation is serious, we cannot get out of this until the government tells us to get out of there. That was the budget. It is difficult. The technician does everything possible. He works eight hours. Sometimes he eats, sometimes he doesn’t. (Government Organization #2, 331-335)

This lack of resources makes it very difficult for INACOP to reach the marginalized

communities that most need its services and makes its national mandate nearly impossible

to achieve. Cooperatives that need assistance must compete for the attention of an

overstretched organization. This requires leveraging the networks and connections of the

cooperative to gain the attention and assistance of INACOP. Cooperatives that have

preexisting social and political capital are better able to obtain assistance; they are better

able to communicate their needs and get their case heard by the right people at INACOP.

Volume is another factor in the consideration for government assistance. Individual

producers do not qualify for assistance unless they organize and collectively produce

enough coffee to warrant assistance.

In the Naranjo group, we have received training, a lot… This opportunity is provided to associations only. We have some programs for a warehouse. Help is provided for associations and mainly the quantity of coffee. We need to get together and ship together. (Producer #2, 137-141)

In this case, the organization of producer associations was essential for producers to receive

training and assistance from the government. Associations provide producers with the

quantity of coffee to gain the attention of government organizations. The training and

support that they received helped them to access different markets and obtain better prices.

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However, this further disadvantages marginalized producers who often lack both the

volume and connections to access assistance. These producers are often forced to look

elsewhere for assistance.

Marginalized producers often find assistance in collaboration with non-governmental

organizations (NGOs), NPOs, roasters and other alternative organizations, rather than the

government.

We [INACOP] are the ones who supervise, train, everything. We have lost some spaces because only INACOP would do reforms, constitutions, everything to do with coops. Now, that is done by NGOs, institutions outside INACOP, they provide workshops, before it was only INACOP. (Government Organization #2, 360-363)

These organizations have varied interests and motivations for helping producers. This

shapes the nature and focus of the assistance but often does not reflect the needs of

producers. NGOs and charities are often driven by their own mandates, budgets and

deadlines.

That whole assistance came in through [an NGO]… So we have about US$20,000 worth of top environmentally sound coffee processing that we can’t use because we don’t have electricity. That happens all the time… People with great intentions, a lot of money or they have a lot of money that they have to use, and that might have been the situation. They don’t have electricity, but one day they will, let’s put this thing in because it is September and we have to close it up, if we don’t spend this money, we are not going to have it. Maybe 5 years down the road, they can use it. (Cooperative #1, 512-528)

Roasters and alternatives such as Fairtrade also provide assistance for producers and these

will be considered in more detail in the following sections. These forms of assistance,

however, distance the producer from government agencies and shift the balance of power

and influence in the favour of the assistance organizations.

This shift has an impact on the scope and resources of INACOP, as it loses funding

and staff to other organizations. The proliferation of aid organizations creates a demand for

technicians trained to work with cooperatives:

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Other institutions enter and form coops using the people who were working here… They carry with them all the knowledge they got from here. When they have a job offer, they go to other places, they don’t ask INACOP. That is how we have lost space. Our personnel has left because they have had other opportunities, better ones. They have this knowledge. They can open up a consultancy company about coops. (Government Organization #2, 363-368)

Since the knowledge and expertise required are in short supply, technicians are often

tempted by offers from other organizations that value their skills. This suggests that

INACOP ends up using a disproportionate amount of the limited funding that it does have

on hiring and training technicians. In addition, a lack of resources limits INACOP’s ability

to incentivize technicians to stay. This struggle for resources detracts from INACOP’s

ability to focus on building the capacity of cooperatives and producers. This impacts the

efficacy of the organization and, in turn, affects the funding and support that Inacop

receives from the government.

5.2.2 Political influence: ANACAFE

ANACAFE is an independent organization that is closely aligned with government

interests and policy making. This organization controls the exporting process in

Guatemala. It is funded by a tax on every pound of exported coffee and controls access to

export licenses. ANACAFE is also responsible for the marketing of Guatemalan coffee

and provides technical assistance to farms. It is controlled by entrenched interests in the

coffee industry and focuses on quantity and generic quality that promotes the national

brand of Guatemala. Although this organization is independent of the government,

ANACAFE falls under the government field because political interests and policies drive

its funding and orientation. Political capital, in this case, has driven the flow of economic

capital and the distribution of power.

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The first manifestation of the effects of political capital can be seen in the

organization of ANACAFE’s board. ANACAFE purports to represent all the coffee

producers in the country, however the structure of the board hardly reflects this claim:

The problem is that the decisions of the board of directors (of Anacafe). They are 20 directors. Two named for the government, two for the Ministry of Agriculture, six for coops, and 12 for the fincas (large fincas). The problem in here is the fincas. So they have the control, generally when you look, when you ask how are those $107 million Quetzals spent, generally, it goes to this part. They go overseas to promote, to fairs, in the US, Europe, Japan. They do business. (Producer Organization #2, 236-240)

The majority of the board is made up of large farms and cooperatives that are closely linked

to political interests. These representatives use this economic capital and political influence

to “do business” and promote Guatemalan coffee, making personal connections and

increasing their own influence and power. Only a small proportion of the budget goes

towards helping farmers build capacity: "we are 15 technicians working (capacity building)

for the whole country. So, it is a big area, we are not able to cover everyone" (Government

Organization #1, 429-430). They admit that this is insufficient, however the volition to

fund and address this issue is not there. Money is spent on the promotion of Guatemalan

coffee and not on assisting producers to build capacity and improve their lot.

ANACAFE also controls the export licenses, which allows it to determine which

farms, cooperative or companies can export coffee on their own. This allows ANACAFE

to act as gatekeeper to the international coffee market.

It is complicated because they (ANACAFE) argue that they cannot give licenses too much because they want to protect the name of the Guatemalan coffee overseas. So, they put some conditions, they need to have certain capital, they need to keep records, reports of external auditors, a lot of requirements. Many have problems meeting these requirements. (Producer Organization #2, 262-266)

This is done in the name of national interest, but also acts to limit competition and increase

the power of those already exporting.

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These requirements limit what kind of producer or cooperative can access the market.

It requires capital, quantity and organization. These could be interpreted as healthy screens

to protect the reputation of Guatemalan coffee, but the experiences and attitudes of some

producers tell a different story:

To [get a license to] sell coffee, I think it took 6 years. And then you have the rules. They would say we have put a 500 dollars bond. You can only export one kind of coffee per container. You can’t have different kinds of coffee per container and maybe you know, not everyone has 7,300 pounds of their coffee. So, that is a problem. (NPO, 102-105)

These restrictions foster dependence on established channels: national organizations and

cooperatives that are paid to facilitate the export of coffee, large corporations and exporters.

This has led some to believe that "[ANACAFE] is not managed for the greater good of

Guatemala, but for a selective group of large farmers" (NPO, 1955-1957).

This concentration of power in the hands of a few and the accounts of producers and

organizations that deal with ANACAFE is an example of Bourdieu’s symbolic violence.

This government sanctioned organization is supposed to represent all of the producers of

Guatemala, but instead allows for a “gentle, invisible violence… chosen as much as

undergone” (Bourdieu, 1990, p. 127) that affirms existing hierarchies of political and

economic power. The reports of producer discontent with this process suggest that this

form of symbolic violence will soon become harder to enforce without a more concerted

effort by ANACAFE. Already, the interviewees that voiced these opinions requested

anonymity and were fearful of reprisal.

5.2.3 Policy and Corruption

The structures and operations of these two organizations tell a story of an

underserved and underrepresented producer. These farmers are left to produce a

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commodity with little political, economic or technical assistance. The government and

political power is far removed from their reality and many feel like they are ignored: “We

have done some public workshops, we asked people for their views, we have about 54

public requests and none of them were accepted. There are always strategies not to listen to

us” (Producer Organization #1, 34-36). Other organizations barely have the resources and

capacity to survive and do not consider government assistance to be an option. These

producers and organizations lack the political capital to effectively operate in the

government field and are marginalized from the locus of power and capital.

The distribution of power and capital also impact the efficacy of government laws

and regulations. Corruption in many coffee-producing countries is a problem and

Guatemala is no exception:

Here in Guatemala, we have had laws where businessmen need to improve the wages of his employees, but businessmen do things to avoid paying, they impose strategies… There is a lot of corruption. They are really good at getting around laws and paying people out. (Cooperative #1, 486-500)

These circumstances corrode the faith that many producers have in the traditional forms of

assistance and official channels of access to the market.

The political situation in a country can also impact the circumstances shaping

producer experiences and the motivations of cooperatives. Access to land, exposure to

conflict and corrupt administration can hinder chances for producers to succeed but can

also motivate organization:

We started working because we defend human rights. We now have 30 years of fight. Peace is far away especially those changes internationally. There is energy, economic, climate, and food crises that influence our people. We need some peace. Something else is the lack of rural assistance. In Guatemala, to access land is what generated war. The land conditions are critical. Now, we don’t have access to it. The new forms of development has created a situation where the production was concentrated. Large and powerful companies can benefit. Those things in this framework, place people in a difficult situation. (Producer Organization #1, 706-712)

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These factors have created cooperatives and organizations that are politically charged and

seek justice. This organization has, as a part of its mandate, taken aim at the political

inequalities and structural constraints faced by coffee producers. However, they have

received little response from the government and have chosen to look for direct

relationships to fill this need for empowerment.

This analysis suggests that in the national government there are cloisters of political

power that benefit a few farmers and organizations. This political capital is readily

convertible to economic and cultural capital in the form of access to markets, technical

assistance, international marketing and influence on policy and regulation. Producers who

are further removed from political influence are unable to capitalize on the benefits

provided to producers by the government. It is these marginalized producers that are the

individuals, communities and cooperatives that are targeted by the Fairtrade framework and

attracted to direct trade relationships.

5.3 Fairtrade

Fairtrade aims to help producers through the regulation of trade conditions and the

implementation of standards. The requirements of Fairtrade and the benefits that it

provides shape the distribution of capital. Fairtrade certification allows a producer to

access a market that was not available before, providing a marketing advantage for roasters

and producers and better terms of exchange for producers. These advantages can be

interpreted as a reconfiguration of the forms of capital that are readily exchangeable into

economic benefits.

Fairtrade promotes social capital to provide producers with the connections and

credit (in the form of the Fairtrade label) to access a more exclusive market. This access to

the Fairtrade name and market requires an investment of time and labour to acquire the

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social and cultural capital needed to satisfy the Fairtrade requirements and succeed in the

Fairtrade market. Cultural capital involves the development of the technical and

organizational skills that producers need to succeed. The accumulation of cultural capital

allows for the accumulation of social capital and provides access to economic capital, in the

form of a stable Fairtrade price and market.

5.3.1 Impact of requirements on capital

Access to these benefits has created a demand for Fairtrade. The promises of

Fairtrade are elusive but producer organizations are often attracted to Fairtrade when they

see the success of other organizations: "Here the coops that do fair trade, they do well.

They have gone up. They now want to fill out the requirements to be certified. There is a

lot of interest from coops for fair trade" (Government Organization #2, 412-414). This

interest is checked by the costs and requirements of Fairtrade certification.

The economic barrier is not insignificant but is not the main limiting factor. The

cost can be prohibitive for some producer organizations and the decision often depends on

the other options that are open to them: "[Fairtrade] is another certifying body which is part

of FLO I think. We don’t have that label. It is a little bit expensive" (Producer #2, 55-56).

This producer was part of an association that was certified by Utz Kapeh and Rainforest

Alliance, two certifications that have less stringent standards, lower social goals and protect

producers by reinforcing existing regulations (Raynolds, Murray & Heller, 2007, p. 159).

This decision was based on the farmers’ needs and the entry requirements of Fairtrade.

Since the producers had established a market for themselves, it was not worth it for them to

invest the money, time and energy to satisfy the Fairtrade requirements. This calculation is

different for every producer and depends on whether they are able to find a stable market

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that pays well for their coffee. Cost is usually the first barrier to entry for producers and

ensures that applicants are motivated, committed, and can benefit from Fairtrade: "For

coops that want to get certified, the cost if high, but it is worth it. They can get back the

cost they pay for certification" (Government Organization, 429-430).

The main challenges that producers face have to do with the Fairtrade requirements

that structure how producers organize and operate: "Organic and fair trade. They all ask a

number of requirements to be involved in the market. They ask for organization, equality,

justice" (Association #1, 353-354). This individual was referring to the democratic

requirements of Fairtrade, a requirement that entails certain levels of social and cultural

capital. This requires producers to invest time and energy to develop the organizational

skills, human resources and cultural values that allow for the effective democratic operation

of a cooperative. This often involves changing culturally ingrained approaches to

organization and a complex cost-benefit analysis that the majority of community members

need to buy into:

At the start, we saw a problem because it was almost a culture – habits – we have to change here in the community. But, at the end, we are seeing that yes, by exporting our products we see some profits. We are fighting, working hard to maintain the certification, it is difficult. The situation makes us have to adapt to those processes. (Cooperative #1, 321-324)

The time and effort that cooperatives invest in certification varies according to the situation

and capabilities of the community. The interviews identified a few of these challenges,

highlighting the cultural capital required to access the Fairtrade market.

A common challenge that emerged from many of the interviews was the capacity of

a cooperative to operate both efficiently and democratically while fulfilling the

requirements of certification. The capacity of a cooperative is limited by the capabilities of

its members. Cooperative members are most often farmers who have traditionally only

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grown coffee and often lack the education required for the administration of a business

organization: "the lack of education of the members of coops. This has caused the coops to

fail. They can’t manage them and suddenly someone smart comes and takes advantage of

the coop" (Government Organization #2, 236-238). In this particular instance, the

cooperative was defrauded by the manager and, as a result, was decertified. Although this

is an extreme example, it underscores the importance of developing human resources for

the successful operation of a cooperative.

Fairtrade requirements that call for financial competency and literacy make

education essential for the success of cooperatives. The lack of education among farmers

has often required cooperatives to bring in external professional assistance. This has

impacted traditional governance structures and created hierarchical divisions in the

cooperative between the administration and the farmers:

When I implemented the policy that a committee needs to approve credit, that we need to have a lawyer, some members didn’t like that. Why? Because we had a traditional system where they wanted their credit and the same manager would sign it and give it to them – without a contract, a record. And that is the problem; we had defaults and other problems. Since 2008, everything is legal. They didn’t like it [but] I said to them – those who want credit need to follow this rule. (Cooperative #2, 552-558)

This cooperative had to bring in external assistance and implement internal control systems

to improve the accountability and transparency of its operations. These systems were

necessary for building the cultural capital of the cooperative but were contrary to the wishes

of several cooperative members. These measures strained the social capital of the

community and the networks that relied on the smooth operation of the cooperative. This

highlights a difficult balance that many cooperatives have to strike between the

requirements of Fairtrade and the cultural and social capital required to fulfill the

requirements. Cultural capital and the development of human resources are required for the

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proper administration and operation of a democratic organization. However, the

implementation of these structures can take a toll on the traditional structures and social

capital of the community.

Developing human resources requires an investment of money, time and energy in

individuals. This creates hierarchy within the community and dependencies on individuals

for the fulfillment of specialized tasks. This can deteriorate trust within the community and

requires mechanisms for transparency in order to ensure accountability to members of the

cooperative:

Trust between a partner and another one. That is what we lost for mismanagement internally. How have I gained some of that trust? By talking, showing results, and formalize some internal strategies to make sure there is trust. When we lose trust, it is hard to get it back. There are some trusts I haven’t been able to maintain because of some reasons. Credits are part of it, differences, political, those are situations. But, since the population is increasing, we are talking to young people so they can join the coop. And they understand better. (Cooperative #2, 853-859)

This cooperative manager understands the importance of developing the networks of trust

within the cooperative in order for the cooperative to operate effectively on the market. A

successful cooperative needs the loyalty and trust of its members in order to confidently

commit to fulfilling contracts with buyers, initiate infrastructure projects for the community

that need large capital outlays, or invest in the necessary cultural capital.

This demonstrates the importance of social capital in the success of cooperatives:

building relationships within the community, developing a reputation for quality and

punctuality, and networking with the right buyers. These factors work to provide the

cooperative with credit (economic, cultural, social or symbolic) that can be used for future

projects, maintaining a level of service for its members and promoting future infrastructure

and relationships. This is essential for a cooperative to succeed, as it provides the

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cooperative with confidence in its membership, financial security and the ability to grow

and invest with the flexibility afforded by credit.

5.3.2 Need for social capital to facilitate assistance

In order to develop the necessary cultural and social capital, cooperatives often

require external assistance to fund, guide and build capacity:

The coops in Guatemala are very much interested in working hard and making things right. We need technical assistance, financial resources to pay a good accountant and we need financial resources to improve our administration processes. (Government Association #1, 312-315)

In order to meet Fairtrade standards, producer cooperatives require several levels of

investment. They need the economic capital to develop or acquire the technical capital that

allows for proper accounting, agricultural practices and administration. This is closely tied

to the development of social capital. Cooperatives require a certain level of cohesiveness

and need to develop connections in the right places in order to find and maintain a market

for their coffee. These forms of capital allow cooperatives and producers to take advantage

of the Fairtrade framework:

The success was due to the organization. After [building] the school, we didn’t have electricity. We worked a lot and got electricity. We did that through the organization. There are communities that don’t have what we have. It is because of lack of organization. That is why many communities don’t experience development. (Association #1, 137-141)

This organization attributes its success to its ability to harness the social capital of the

community to build cultural capital and increase its social capital. This enabled them to

adapt to the accounting requirements of Fairtrade and focus on what was important for the

community: “Yes, we have adapted to accounting systems. It hasn’t been that difficult. It

was easy to adapt. We are focused on how to improve the economic and social conditions

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of the families and to create economic resources to pay for the land" (Association #1, 635-

637).

The successes that stem from organization suggest that cooperatives that possess or

develop the necessary social and cultural capital not only benefit from Fairtrade but also

benefit from their organization in other aspects of community life. Social and cultural

capital has allowed some cooperatives to harness their networks to improve the standard of

living for the entire community:

When we started the finca, we starting working with the education of the kids. It was low, we were only able to cover to pay the salary of one teacher. She had 50 students in school. And it wasn’t enough. But as we organize ourselves, we obtained the support of the Department of Education and now we have six teachers and now we have primary and secondary education. We can give them all the education here. (Cooperative #1, 233-237)

This cooperative is an example of how social capital has helped to make the organization

an effective tool for development. By leveraging social capital this cooperative was able to

harness community resources and obtain government assistance. This community has also

succeeded in finding good prices for their coffee and in obtaining an export license from

the government.

Successful organizations are often essential in the assistance of other cooperatives.

These organizations have realized the importance of social capital in their own success and

take the time to extend a hand to organizations that are less fortunate:

I think all people here think of the social aspect. We work for all members, for their development. That their kids have education. We obviously need the economic, because without we cannot have social development. I think both things. If we work, it is to bring development for all, and eventually bring the same development to other communities. In fact, some organizations come here to see how we operate; we have one project in agriculture, they don’t have. We teach them. (Association #1, 606-611)

This quote acknowledges the importance of social capital in two regards. Firstly, the focus

on social development and community building reflects the priorities of this community.

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These priorities suggest a unified community vision that has facilitated the development of

the necessary social capital to accomplish social projects, as well as achieve the economic

and technical goals of the community. This community commitment has allowed the

association management to confidently take risks and build relationships: “Because of the

organization. We have worked a lot. Our members are committed. Like any other group, we

have had our own internal challenges, but we have success” (Association #1, 235-236).

Secondly, this association realizes that they could not have accomplished this without

external assistance and thus tries to help other communities develop the social and cultural

capital that have enabled them to succeed.

5.3.3 Insufficient market and power dynamics

The experience of producers in the market underscores the importance of knowing

the right people in the Fairtrade field. One of the cooperatives interviewed had an export

license but did not use it because the buyer had always taken care of the paperwork. This

created a dependency and prevented the development of the administrative capacity to

execute an independent export. The relationship between this cooperative and the

American, ethically-oriented company was tested last year when the commodity market

price exceeded the Fairtrade price that the two parties had agreed on at the beginning of the

harvest. The buyer refused to pay more for the coffee and the farmers were faced with

selling it below market price or ditching the contract and selling on the open market (NPO,

1523-1593). This exchange led this cooperative to reevaluate both the relationship and

whether Fairtrade was right for them. At the time of the interview, this cooperative was

looking for new buyers to work with in a direct trade relationship. This is illustrative of

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larger issues in the Fairtrade network, encountered in the literature and reaffirmed in these

interviews – the lack of sufficient market and an unequal distribution of power.

The Fairtrade market has attracted more producers than its market share can handle.

In Guatemala, "Fair trade only buys 23%. For the rest we need the other labels. That is the

problem we have. We do promote fair trade. But the market hasn’t grown much to meet our

production" (Producer Organization #2, 128-130). This has created a situation where

producers have to compete for Fairtrade market share, putting buyers in a superior

bargaining position:

We consider that fair trade is a good alternative, what we are concerned with is that it has not grown a lot to be able to absorb all the coffee small producers produce. That is why it becomes competitive. We compete among ourselves to be able to access that market. This is determined by two things: one, quality, and two, fulfilling the contracts. (Producer Organization #2, 350-353)

This competition creates a power dynamic that disadvantages the producer. The buyer is

able to place demands on quality and expect contracts to be respected, while the producer is

considered lucky to have a Fairtrade buyer. Often, producers are left with little choice but

to sell to the first buyer that comes along:

Fair trade has raised market share for fair trade certified roasters but they have not been effective for raising that for the farmer and in the places where you go. In this example, the opportunity cost for that farmer was so low he had no other option, that, really, it didn’t matter that it was a fair trade market. It was a guy who would buy coffee – that is all he cares about. He had to find some customers. (NPO, 1002-1006)

This situation allows the buyer to set the terms and conditions of the purchase. And,

without a secure buyer, producers hesitate to voice opinions or attempt to negotiate a better

deal. They are more likely to be thankful for the arrangements that they have: "Perhaps,

one of the best achievements we have accomplished is to access the fair trade market"

(Association #1, 209-210).

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The limited Fairtrade market has placed added emphasis on social and cultural

capital. The networks and connections that producers are able to build matter increasingly

more as they compete on the Fairtrade market and a good relationship becomes

indispensable:

We realized that fair trade as it is, is a chain of middlemen who favour justice. The first experience is that we needed to have the FLO certification and we didn’t have one. It is not easy to get the certification. We need to coordinate with other organizations. (Producer Organization, 240-242)

Demand for quality also places a premium on cultural capital and the technical knowledge

to grow and process better coffee. These factors change the distribution of capital in the

Fairtrade field and, as more producers enter the fray, more time and energy must be

committed to developing social and cultural capital, while economic capital becomes less

important.

5.3.4 The desire for something more

The inadequacy of the Fairtrade market and the impact it has on the power

dynamics between a roaster and producer has spurred many producers to search for an

alternative:

So we were aware of fair trade but here are the ideal conditions for us. The first requirement is that the people who purchase fair trade coffee are aware really that that product comes from the small producers. Just because a product says fair trade, we still don’t know the origins. We want to have our name as well, that goes back to our political work. We want to do a network in Canada… To go further than the product itself. We also want to add some value to the coffee. In this process we are in right now. Those who buy from us, they know us and those who sell also know us. We want to do community work in education, seminars from other people from Canada, they buy coffee, they sometimes get involved…we think that fair trade is born to help small coffee producers and to change the reality of the small producer. We start that by trading coffee, and the products. One of the conditions that is that they help me in the community area. (Producer Organization #1, 252-264)

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This organization is not Fairtrade certified but has used social capital to acquire

partnerships that have allowed them to achieve many of its goals. They call this

arrangement “Fair Trade Plus” (Producer Organization #1, 238). This organization has

been successful in finding buyers and partners because they are extraordinarily apt at

leveraging social capital. This organization has built networks through the political work

that they do and are able to fund visits to trade shows and marketing events.

Many other producers and organizations do not have the social and political

advantages of this particular group and face a harder road to establishing an alternative to

Fairtrade. Organizations often identify an issue or ideal scenario but do not have the

necessary social, cultural or economic capital to affect change:

Honestly, the word fair trade sounds as if they pay a good price, but because of our experience, we would hope that they would pay much more at the international level for our products. We respect fair trade, but we see it leaves some questions because based on all the process we need to do, we need to pay for the costs and do investments. That is a problem. We depend on the international price set in New York; we cannot force those countries to pay us more. (Cooperative #1, 364-369)

This cooperative has instead looked towards alternative sources of income, shifting its

focus away from coffee towards macadamia nuts and eco-tourism. Other organizations

have moved towards targeting quality minded buyers, Fairtrade or not: “What has helped

me to sell the coffee with high premium is because of its quality” (Cooperative #2, 231-

232). Both of these alternatives require the investment of time and energy into the

development of new forms of capital required by fields outside of the Fairtrade network.

This includes new sets of technical skills, operational knowledge and different networks

and connections.

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Restricted access to the Fairtrade market and the difficulty of satisfying the

requirements of certification has tempered enthusiasm about Fairtrade. Most producers and

organizations interviewed felt that Fairtrade only partly addressed their needs:

[The ideal arrangement is] not free trade because it is the opportunities of the market that define the price of the factors. There isn’t justice there. Only the capacity of the people who take advantage of the situation. Fair trade tries to bring some form of justice, but there are some unforeseen situations that the market is very big and the big companies don’t allow others to be part of it, so more justice could take place. (Producer Organization #2, 442-446)

This belief that something more than Fairtrade is possible was a theme that ran throughout

the interviews. Whether this belief was founded on an ideal or issue, the interviewees

implied that they could and should expect more from the sale of their coffee. In the above

quotes, producers expressed the desire for more control over the conditions of trade, better

prices that are more reflective of the market and their needs, more communication and

interaction with the buyer, and assistance in developing their coffee and market. These are

some of the circumstances and motivations that have led producers to seek out direct trade

relationships.

5.4 Direct trade

Direct trade is an alternative to Fairtrade for those producers that can and are willing

to focus on the quality production of coffee. In the direct trade field, symbolic capital

legitimates and places value on quality coffee. This refocuses the distribution of power in

the direct trade field in favour of the forms of capital that promote quality. Cultural capital,

and the knowledge and skills that produce quality, is a dominant form of capital in the

direct trade field. Economic capital enables a quality-focused producer to develop

infrastructure and quality, but high prices also act as an incentive for a producer to improve.

Social capital provides the networks and opportunities for discovery and interaction and

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can be essential in the development of cultural capital or the sourcing of economic capital.

Social capital is often strengthened and promoted by involvement with direct trade through

the establishment of dynamic, involved relationships. While the prices paid for quality

coffee can significantly exceed commodity or Fairtrade prices, producers are attracted to

the prospect of better terms of trade. However, these benefits can only be accessed through

significant investment in money, time and energy. Producers need to find ways to develop

the appropriate cultural capital, build the physical infrastructure and leverage social capital

to establish and maintain a healthy relationship.

5.4.1 Focus on quality

Roasters that engage in direct trade are generally committed to first finding quality

and, once that potential is established, developing relationships to promote that quality.

This unabashed focus on quality is what makes direct trade tenable:

The idea is to get the best coffee into the hands of our customers because that is going to create… customers seeking out the quality; then we can pay for the quality. That is a life style and an approach they can depend on and that it is not going to fluctuate. Basically, a sustainable cycle has depended on getting the great quality for your customers, consistent great quality. (Direct trade buyer, 259-263)

A culture of quality engenders higher prices, which filter back to producers and sustain the

continued production of quality coffee. This cycle connects a discerning customer with an

enlightened producer.

On a theoretical level, this focus on quality has created a form of symbolic capital

that has legitimated the pursuit of excellence. The direct trade field values and rewards

time and energy spent on developing knowledge and technical skills. This allows

producers to access exclusive markets that pay high prices and value trust and relationships.

Cultural capital, then, is readily convertible into economic capital because consumers and

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roasters pay more for good quality coffee. However, producers that are successful in this

field understand that better quality will not only demand better prices but also build a

reputation for the farm and provide a secure and profitable alternative to the market.

Furthermore, roasters seek producers that can offer the highest levels of quality with

consistency. This shifts the balance of power, creating favourable conditions for the

producer, and allows the farmer to gain power and influence in this field.

While these prospects are very attractive to producers, the initial draw to direct trade

is often the better prices and the chance to have direct contact with the buyer:

For direct trade, there is no middleman. We only deal with a company that will import or we can try to get a license to export ourselves. But, it is better, when this coffee arrives at the hands of the buyer directly. It pays more and we receive more. (Cooperative #2, 116-118)

Direct trade provides the producer an opportunity to capture more of the final price but also

associate a face with a commercial interaction. This is a comforting prospect for a farmer

that has historically had no connection to the market or the buyers of his coffee: “when we

started with Roaster C, we did exchanges so they can know who they are and how they can

start a relationship and we wanted to have no middle man” (Producer Organization #1, 475-

476). These exchanges allow for dialogue and mutual understanding.

The emphasis placed on quality in direct trade also provides the producer with an

opportunity for control and stability. While the producer does not control terroir, climate

and other aspects of quality, much of quality relies on factors within the control of the

producer. The producer has control over the harvesting, processing and storage of the

coffee. This allows producers who possess the cultural capital to facilitate quality the

ability to better control the price they receive and the relationships that they engage in.

Consistent quality can provide the farmer with stability, predictability and control over the

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terms of trade: “we have to improve quality because we know some buyers will always

look for that, so we never go below a line of quality” (Producer #2, 204-205). However,

this opportunity requires commitment, consistency and diligence from the farmer.

5.4.2 Feedback through relationships

The ability of the farmer to correct and improve practices that produce quality

coffee rests on their capacity to receive and integrate feedback. Often, this requires regular

feedback from a roaster:

Sometimes they did the test and said yes this is a quality coffee but because of its process, it has some issues. We started to see how we could separate the different coffees that come from different places. How to process them, each one separately. (Producer Organization #1, 368-371)

This feedback is essential for producers who want to improve; the will to improve is not

enough, the producer needs to be able to identify the issue in order to deal with it. Most

producers do not have access to the proper facilities to properly evaluate their own coffee.

These facilities are expensive and often located in a centralized location and operated by

importers or large organizations far removed from the farmer. In fact, many producers

have never even tasted their own coffee in the way that a buyer would taste it. As a result,

most of the feedback that producers receive requires the roaster or importer to take the time

to explain what they taste and what they think can be improved. This communication is the

cornerstone of direct trade relationships. The potential for improvement through feedback

and partnership is what makes the investment in time, energy and money worthwhile for

the roaster and producer.

While the importance of this feedback loop may suggest that the direct trade model

is primarily concerned with the establishment of a relationship to improve quality, this

would neglect the difficulty of establishing a relationship. Establishing a relationship

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involves finding a producer willing to commit to the development of quality, a roaster

willing to invest in a particular farm with no guaranteed outcome, and the development of

the necessary trust and understanding for those investments to yield results. As a result of

these challenges, successful and fruitful direct trade relationships are not very common.

They require hard work and commitment from both the farmer and roaster, not to mention

the alignment of a variety of other circumstances. A producer must first get a coffee

noticed and this is often facilitated through exporters and auctions. Roasters receive a

selection of samples put together by a third-party panel or organization. This is a

convenient way for roasters to sample what is available and helps discover new coffees and

farms to work with. The shape that a relationship may take will also depend on the

attitudes of the roaster and producer.

Many roasters never take the risks associated with establishing a relationship,

relying on samples from importers and only selecting the best of each harvest. As a result,

many farmers are never given the opportunity to establish a relationship. However, the

incentive to establish relationships lies in the potential to improve quality and obtain the

first choice from a farm’s harvest. This is often enough to lead many roasters to establish

some sort of a relationship with a producer.

Once a roaster discovers the potential of a farm, it is up to the producer to prove that

they are committed to sustaining and improving quality: “[the roaster is] looking for

producers who are focused on having that relationship based on quality and… those

producers that are doing their diligence” (Direct trade buyer, 18-19). Once a farmer has

proved that they can consistently produce quality, their diligence and commitment is

rewarded through the investment of a roaster and the promise of increased stability and

control.

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However, a relationship can mean a variety of things, depending on the intentions of

the roaster. For some roasters, a relationship means that they will continue to buy a

farmer’s coffee as long as it meets their quality standards and the price remains worthwhile.

It would be difficult to differentiate this from an impersonal purchasing arrangement on an

open, high-end market. Other roasters visit the farmer every season, try their coffee and

ensure that it meets their standards and that the farmer is on track to improving quality.

This approach is still fickle and dependent on crop-to-crop quality but adds a token

handshake to the exchange. A picture of this visit lends authenticity to a roaster’s claim to

direct relationships but does not lend credence to claims of sustainability or ethical

sourcing. Select roasters will work with producers to improve their understanding of the

importance of picking, proper processing, drying and storage and might, if the return on

investment makes sense, contribute to improving some of the farm’s infrastructure. Some

roasters will support producers through tough times and make the odd exception for coffees

that are below standard. This, however, is rare and difficult to sustain in a quality-focused

model.

The form that a relationship takes is determined by the agenda of the roaster:

My entire system [at Roaster A] was based on not ever allowing us to purchase a bad coffee and the system at [Roaster B] is not allowing a good coffee to filter through our hands. And the reason for that is the fact that [Roaster B is] 10 times the size of [Roaster A] and it tends to purchase so much coffee. In looking back I feel that my standards were sort of unreasonable and I don’t feel that my system was entirely sustainable. (Direct trade buyer, 38-42)

The model of Roaster A has no room for the compromise required in a relationship; they

just simply will not buy a coffee that is sub-par. Roaster B is in a position to buy more

coffee and buy coffee that is not necessarily the absolute best. This allows them to

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approach relationships as long-term investments and invest in the producers that they buy

from:

Relationships are relationships. We are willing to take a bullet one time for somebody and fortunately, we have blends that we can work things out and that is fine but if that happens a couple of years in a row... That is the other reason we strongly promote the culture of clean and sweet, one thing is the producer can’t control things such as natural disasters, obviously we can’t pay for coffee if there is no coffee. (Direct trade buyer, 240-244)

This roaster is willing and able to take risks to maintain and build relationships. They have

invested in developing relationships that promote proper processing through a “culture of

clean and sweet.” This is more than a mantra, it is a tangible goal that producers can aim

for and maintain:

Our criteria on the [cupping] table is basically, sweet and clean over acidity. We feel that it is an ethical approach, because acidity has a lot to do with the way you are working, there are ways you can manipulate that, let’s say it is the easiest way. We feel strongly that a producer that produces a sweet cup of coffee and a clean coffee is doing as much as they can do. (Direct trade buyer, 19-23)

This approach is sustainable because it gives the producer the power to take control over

the future of the relationship. If they do everything they can to pick and process the coffee

well, there should be no surprises for them when this roaster comes to buy the coffee.

These two models are just two examples of the varied approaches to relationships in the

direct trade field.

5.4.3 Potential impacts of relationships

The varied approaches to a direct trade relationship should evoke a healthy

skepticism in any producer when considering a relationship with a roaster. The benefits of

a long term, investment oriented relationship are exceptional; the producer stands to gain

technical knowledge, financial stability, valuable networks and a reputation for consistent

quality. This kind of relationship gives the producer the cultural and economic capital to

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succeed in the direct trade field, providing development opportunities and strengthening

social capital networks at home and abroad.

The interviewees involved in successful direct trade relationships exuded

confidence and exhibited tangible benefits associated with the relationship. One farmer

who had been in a direct relationship with a specialty roaster for four years was able to

expand his operations and improve the coffee quality. Every harvest, he received feedback

from the roaster, “[The roaster] always calls and tells me, well, this is good or not”

(Producer #2, 64). This allowed him to improve his quality by changing a number of

practices, “[the roaster] suggested about storage and other items, regarding the ripe harvest

and drying” (Producer #2, 68-69). This relationship allowed him to get higher prices, “the

price they offer is higher than the cooperative price standard and in the market” (Producer

#2, 78-80), and the feedback that he received allowed him to increase the proportion of his

harvest that was sold to this roaster: “last year it was 100%... I think it has been 4 years. It

was at 50%” (Producer #2, 93-101). He attributed this success to the priorities of the

roaster and importer and the fact that they cared more for quality than standards of practice:

“this is because [the roaster and exporter] are independent from the certifications…they just

don’t care, they only want good quality” (Producer #2, 101-110).

This producer was confident that his relationship with this roaster and the importer

that they used was helping him improve his coffee. The price that he was receiving was

good and the proportion of coffee that he was selling through this channel was also

increasing. This dramatically impacted his income and, in the past four years, he was able

to pay for a new home, drying patio and motorbike.

Another producer was able to establish a relationship, through a local NPO, with a

contract roaster in the United States. This coffee is sold under a private brand and roasted

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and distributed by this roaster. The NPO helped this producer to develop the cultural,

economic and social capital to establish this relationship. This arrangement allowed for

him to receive significantly more for his coffee and establish his own market:

I have seen the development. I used to live in a finca with little comforts. Now I have two rooms all made out of cement. I am preparing the roof. I have water services and electricity. I didn’t have these before. I would borrow it from him. I can see that as an achievement. That is important for a home. My kids are going to school. My goal is that they become professional people, well educated. (NPO, 1776-1780)

This relationship has opened up a new realm of possibility for this producer. He is

confident in the future and in his ability to provide for his children. He has plans to expand

his farm and is in the process of helping others in the community achieve similar

arrangements.

However, direct trade relationships can also be shortsighted and fickle. These

relationships flourish while the quality is high but quickly disintegrate when quality

expectations are not met. This could be the result of a lack of feedback, an agricultural

pest, processing error or even the weather. These relationships have the potential to do

more harm than good because it inculcates in the producer a misplaced sense of security

and trust. In addition, producers rarely gain the technical knowledge and cultural capital

that gives them an advantage in the field because the roaster does not invest time, energy or

money into the farm.

These circumstances can lead producers to make poor decisions and investments that

impact the future of the farm but can also damage the trust that the producer may have had

in direct relationships:

Direct trade can have its problems because in the case of the small producer it is difficult for them to meet the contract expectations. Because we have been betrayed in various occasions, when the Spaniards came… So it remained in the minds of many people. When someone says to someone else, I will purchase your product at this price, and the market changes. (Producer Organization #2, 336-341)

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These producers lacked trust in the buyer and did not understand what was required of

them. The buyer was offering them a better price for quality coffee, but when the market

surpassed that price the producers reverted to the market rather than the negotiating table,

breaking the contract. The producers lacked faith that the buyer would increase the price

and were afraid that they would be held to the lower price in the contract. These situations

are detrimental for both roaster and producer. They leave producers vulnerable to market

swings and affect the ability of roasters to reliably source good quality coffee.

5.4.4 The beginnings of a relationship

Fortunately, the decision to begin a relationship is rarely made in haste and there are

usually a few seasons of purchasing and interaction before either side is ready. In this time,

the roaster looks for consistent quality and the potential for improvement:

I think we approach every relationship very cautiously in terms, I am not trying to jump into; basically anyone we buy coffee from, we want to turn that into a relationship. Everything begins in the cup and table. That is like the first date. And the second or third month of a conventional relationship is getting to know the producer, getting to know the farm. Getting to see what they are doing is repeatable, is to see that they did was that is. To see what they do is something they want to keep doing. (Direct trade buyer, 94-99)

During this courting period, the roaster is looking for potential. The roaster has already

seen something they like but need to ascertain whether that what they tasted was a fluke or

the result of concerted effort by the farmer. Most importantly, the roaster wants to know

whether the producer has the volition and capacity to consistently meet or exceed that level

of quality.

The producer, on the other hand, is at a slight disadvantage because they often lack

leverage. The pressure is on the producer to impress and convince. However, it behooves

the producer to gauge the intentions of the roaster and determine what kind of relationship

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is possible. The producer must also determine whether it is worth following the advice of

the roaster. To implement these suggestions would require time, energy and/or money and

the producer must consider whether the promises of working with this roaster are worth the

investment that they have to make. Often, this decision is made on faith and hinges on

whether the producer trusts the roaster to treat them well.

For the roaster, this leap of faith is often the first test of a relationship. They want to

see that the producer is willing to invest in quality and in them:

I believe that it is up to them, especially if they produce great coffee. This is a fair price. You can make this happen and when they choose to invest in technical advice, they are investing in themselves not in us. When they sell their coffee to us, they are investing in that relationship. Any producer can sell their coffee to anybody any year regardless of what contract you think you have. The international aspect makes it pretty much impossible to ever do anything about that. (Direct trade buyer, 115-120)

Direct trade gives producers the opportunity to invest in themselves. Producers are given

technical advice and exposure to a new market that values quality over commodity prices.

For producers who have the potential and volition to produce quality coffee, this gives them

the opportunity to take control of their future. "[Our guarantee to the farmer is that] we

always buy whatever they can get us at that quality” (Direct trade buyer, 255). This places

the onus on the farmer to produce quality. Producers that possess the cultural capital to

produce quality are able to take advantage of this guarantee and are rich in cultural and

symbolic capital, the forms of capital that grant power and influence to producers in the

direct trade field. Producers who lack the knowledge and skills are in a more precarious

position and need assistance to improve and build capital.

Quality is the main source of producer success in this field; it provides a producer

with bargaining power, higher and secure income, and the opportunity for a relationship.

This power and security cannot come from contracts, which are nearly impossible to

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enforce across borders and in communities that are often at the edge of national and even

local jurisdiction. Most importantly, quality coffee makes a fruitful relationship with a

roaster feasible. A successful direct trade relationship requires a mutual understanding of

purpose and a foundation of trust. Trust is the only other guarantor for roasters and

producers who hope to have a mutually beneficial long-term relationship:

Sometimes we have roasters coming to visit us from other countries. Also ANACAFE has brought roasters as well and sometimes we have some agreements with them. It is not easy to have a long-term relationship with someone. It is difficult. You need knowledge, trust. (Cooperative #2, 987-990)

Developing the communication skills that breed knowledge and trust takes time and effort.

However, these investments in social and cultural capital are worthwhile when the benefits

of a successful direct trade relationship are considered.

The first step towards developing a trusting relationship is to have open

communication that facilitates understanding of what both sides need:

[A relationship] means opening up the communication so they understand what we need and we understand their needs. What we need in terms of quality and exclusivity with their coffee, and we understand what they need in terms of money and payment. What they are after. And what they need in terms of feedback for their coffee. (Direct trade buyer, 104-107)

This requires regular and sustained contact between the two parties. This is why roasters

often try to visit each farm that they have a relationship with several times a year. This

necessitates grueling travel schedules and significant monetary investment from the roaster

but represents the first gesture of goodwill and investment in the producer.

Building understanding and trust requires the roaster to invest the time to give

feedback and convey knowledge, as well as take financial risks. This may involve, when

times are good, a small piece of machinery as a gift or a trip to visit the roaster. These

gestures works to increase trust, understanding and goodwill between the producer and

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roaster. However, the roaster must also be willing to help out when the producer is in

trouble:

[Exporter A] pre-financed me to get out on bankruptcy at an internal accord with Alejandro, so I could get my farm back. Otherwise I could be out on the streets. That unites me emotionally more to [Exporter A] than to the association. (Producer #1, 118-121)

This particular producer left the association that he was involved with because he felt

restricted by the scope of vision that other members had and saw more opportunity in direct

trade. He was able to do this because he had previously done well at the Cup of Excellence

auctions, a national level competition and auction, and had spent years getting to know the

exporter and the buyers of his coffee. The exporter decided to take a risk and invest in him

because they saw his potential. This investment solidified this producer’s loyalty and

emotional attachment to the exporter. In this case, the exporter had a direct relationship

with the farmer and bought his coffee directly and sold it to roasters that were not willing to

start relationships but wanted to buy good coffee.

An exporter can often fill an important gap for producers who are not involved in

relationships with roasters. Because the exporter wants quality coffee to offer roasters, they

have an interest in establishing relationships and building quality. While this adds a

middleman, the exporter can play an important role in the direct trade model. The exporter

is often the gateway for producers who enter the direct trade field. They are on the ground

and are usually the ones who discover a producer’s potential. They provide technical

assistance, financial credit and play an important role in connecting roasters with

producers. In this way, they are often instrumental in building the social and technical

capital of producers and are often the gateway to the establishment of successful direct

trade relationships.

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5.4.5 The power of quality

The opportunities offered in the direct trade field are largely instigated by the roaster

– the roaster makes the purchasing decisions, decides whether to offer assistance, and

decides with which producers it is they want to engage. This suggests that, despite a

redistribution of capital that lends authority and power to producers through the distribution

of cultural capital, there is still a power imbalance in this field. Roasters hold a

disproportionate share of economic capital and shape the form that cultural capital takes.

They have the power to start and end relationships, change production processes and decide

on the quality standard. This gives the roaster the ability to define what is valued in the

field and the symbolic capital to determine what forms of capital shape the distribution of

power.

The producer must play this game in order to succeed in the direct trade field.

However, the quality requirements in direct trade are objective standards that, when

properly understood, can be leveraged by the producer to accumulate symbolic capital and

improve his position in the field:

What we hope for when we work with a group of people and especially when we reward them for their quality is, I would say, that people would see some people are getting better prices for better quality. Well, we want better prices, so let’s improve our coffee. I have seen that work a lot of times, in many place that are capitalist, but what you get a lot of time when you pay more money is the feeling that they are cheated or that there is something corrupted. Many times it looks not right. (Direct trade buyer, 230-235)

This quote suggests that a simple incentive is not enough to help farmers produce quality.

While price can motivate some, if the incentive is not properly understood it can create

mistrust in the relationship and within the community. This makes developing a

relationship and producer knowledge and trust essential to the proper functioning of direct

trade. If a producer does not understand the quality standards and the associated rewards

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associated to them, this has the potential to engender mistrust and drive producers to look

for other options.

Producers who have a ‘feel for the game’ and understand the rules are able to gain

control over the terms and conditions of their trading relationships: “The relationships that

succeed are those where the producers see the value in our long term relationship” (Direct

trade buyer, 23-24). The examples of Hacienda La Esmeralda and Finca El Injerto11 exhibit

what can be accomplished when outstanding coffee is coupled with a ‘feel’ for the specialty

coffee game. However, these farms are innovators and risk takers and not many producers

will be able to obtain a similar level of power and influence. The high level of cultural,

social and economic capital that is required to achieve this level of quality form significant

obstacles for the average small farmer.

Producers that understand what this kind of success entails are better equipped to

navigate the direct trade field. Through interaction, the successful producer develops a

habitus that is aligned with the logic of the field. They understand that, in order to enhance

their position in the field, they must develop the necessary capital to produce consistent

quality and establish a relationship that will secure external investment. They appreciate

that an investment in quality can offer them the opportunity to develop their knowledge and

skills and provide them with a product that demands attention. The producers whose

habitus is best aligned with direct trade’s ‘rules of the game’ are able to gain influence in

the direct trade field and control the terms of trade.

A well-tuned habitus can facilitate a shift in the direct trade field that empowers

producers and equalizes the playing field. As producers understand what is required of

them, and invest in the knowledge and tools that create and maintain quality, they can begin                                                                                                                11 Discussed earlier in this thesis, in section 3.2.3, p. 36

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to determine the shape of the relationship. Roasters are likely to welcome this transition

because when the producers understand the stakes they become increasingly open to

feedback and committed to improving quality. This suggests that the structure of direct

trade provides an opportunity for producers but also creates an incentive for roasters to

empower producers.

Direct trade relationships offer a unique opportunity to producers because they are

based on improving quality and the capacity of producers. This transfer of capital from the

roaster to the producer develops the technical, economic and social capital necessary for the

production of quality coffee. The development of this capital facilitates the empowerment

of producers. This structure suggests that a good direct trade relationship provides the

roaster with consistent quality and the producer with the opportunity to develop social,

cultural and economic capital and increased control over the terms of exchange.

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Chapter 6: Discussion

This analysis attempts to use the theoretical tools of field, capital and habitus to gain

insight into producer circumstances and motivations. The circumstances that structure

producer experiences can be better understood through the construction of fields and

insight into dominant forms of capital. These forms of capital have been legitimated and

thus converted into symbolic capital, increasing the convertibility of the legitimated forms

of capital into economic capital. The distribution and exchange of capital in these fields

can inform an initial understanding of the factors that motivate the choices of producers and

shape their habitus.

Producers who are engaged in a particular field have bought into the rules of that

‘game’ and are invested in the forms of capital that it promotes. Involvement in a field

shapes the habitus of the individual and those who have the best ‘feel for the game’ are in

the best position to accumulate capital. These theoretical constructs provide insight into the

internal motivations of individuals by determining what qualifies as a good investment in

time and energy. The values embedded in these fields can represent generalized

motivations that are internalized in the habitus of actors, legitimated through symbolic

capital and rewarded with power and influence in the field.

This theoretical lens helps to provide insight into the real problems of coffee

producers. The producers interviewed operate in a market economy and struggle with the

uncertainty of a fluctuating and unpredictable market. They are far removed from the

center of power and lack the resources and support to advance their farms and families.

The government often regulates this interaction by providing technical assistance and

marketing but is unable (or unwilling) to reach the small and marginalized producers that

are most insecure and threatened by the market. These circumstances accentuate the appeal

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of Fairtrade and direct trade for many small producers; these producers are often quick to

express a desire for opportunities that provide them with stability, support and control.

Fairtrade provides farmers with a stable minimum price and the opportunity to

capitalize on the Fairtrade brand. This social credit and the social capital that the

community builds through cooperatives help farmers establish markets and relationships

that provide assistance. Fairtrade, however, lacks the mechanisms to give producers

control over the direction and policies of the framework. Producers who are unable to

establish a market for themselves, who want more control over the terms of trade, or who

are unable to meet some of the many regulations for Fairtrade certification, are tempted to

look for other solutions.

Direct trade offers the chance for producers to receive better prices and establish a

direct relationship with a roaster. Through investment in quality, the roaster can access

consistent quality and the producer has an opportunity to develop the technical knowledge

and networks that can bring them influence and power. A successful relationship promises

the producer more control over the terms of trade, stability and tailored assistance. These

promises motivate farmers to pursue quality and look for roasters willing to establish

relationships. These are the circumstances and motivations that drive producers to enter

into direct trade relationships.

This section discusses the circumstances and motivations found in the analysis and

uses Bourdieu’s theoretical constructs to guide the conclusions. The interactions of the

various fields and forms of capital identified in the analysis are considered in relation to

each other. The impact of these interactions and the distribution of power are noted as

existing strategies of suppression. The limitations of the direct trade model are also

considered to provide insight into whether this model could sustain the hopes and

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livelihoods of producers. This section hopes to contextualize the issues that emerged in the

analysis in a discussion of the promises and pitfalls of direct trade.

6.1 Fields and capital

The fields that structure this analysis cannot be considered in isolation; they overlap

and coffee producers must navigate a complex web of capital that is constantly in flux.12

The experiences of producers are structured by the distribution of capital and power in the

fields in which they are engaged. They are motivated to pursue the forms of capital that

will enable them to consolidate power or gain influence in one of the fields in which they

are involved. Any producer that sells his coffee interacts on some level with the

commodity market; whether it is directly or simply as a reference for the price that they

receive from Fairtrade or direct trade. Most producers are impacted by the policies and

political conditions of the national government of the country in which they reside. These

structures shape agricultural practices, the farmers’ relationship to the market, as well as

fundamental social conditions such as security and education. Fairtrade and direct trade

exist within the economic field and are subject to the rules and conditions of the

government. However, these models aim to provide an alternative to producers, allowing

for a redistribution of capital and better trading conditions for farmers. This challenges the

relationships of capital and the distribution of power in the economic and government

fields.

Fairtrade aims to promote the welfare of producers through regulations and standards

that work to develop an exclusive market that values ethical products. Successful

participation in Fairtrade requires the development of social capital to access the market

and cultural capital to satisfy the requirements of certification. Direct trade attempts to                                                                                                                12 See Appendix B and C for a visual representation of these theoretical constructs

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change the consumer and producers’ perception of coffee and build a quality based market

that allows producers to receive more for their coffee and roasters to provide consumers

with a better beverage. In order for a producer to be successful in this field, cultural capital

must be developed to allow for the production of quality and social capital must be

leveraged to gain and maintain access to relationships. Fairtrade and direct trade interact

with the market and government to determine the distribution of capital and the power

within each respective field; shaping the forms of capital that individuals value and pursue.

6.1.1 Distribution of capital

The market encompasses all fields related to the coffee trade; it provides a benchmark

and represents either the reality for producers or a point of comparison for a producer who

is invested in another field. The economic field is shaped and driven by economic capital;

social capital can provide access to the market and be converted to economic capital but, in

this field, price is the bottom line. Volume provides the greatest advantage to producers

and small producers are marginalized and excluded from the hierarchies of power,

influence and capital.

The jurisdiction of the government impacts all producers from a single country; the

politics, policies and regulations affect every farmer and shape the opportunities that

producers have. The government often acts as a small barrier of protection from the

market, promoting volume and a standard level of quality that maintains the national brand

and image. This involves marketing and technical assistance for farmers but largely helps

those producers that already have the economic and social capital to influence policy and

marketing strategies. Small producers that do not have the social and symbolic capital to

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access government assistance and influence policy are often further marginalized from the

benefits of this field.

Fairtrade attempts to reshape the conditions of trade and provide an alternative to

these marginalized producers. The Fairtrade framework has very clear boundaries and

reserves access for participants who pursue certification and meet its standards. The entry

and regulatory process requires producers to play by the rigid rules of Fairtrade and acquire

the forms of capital that allow for engagement. Producers must invest time and energy into

building the knowledge and skills that allow for successful certification and developing the

networks that facilitate successful participation. The limited market for Fairtrade products

and stringent certification standards require the producer to invest in the development of

social and cultural capital in order to access the Fairtrade field. Certification allows

producers to institutionalize cultural capital and prove to buyers that they have a certain set

of skills. Access to Fairtrade allows the producer to leverage the Fairtrade brand to access

an ethical market that pays a higher, more stable price. The requirements can promote

organization and community development but can also stress existing social capital.

Direct trade lacks the clear standards and boundaries of Fairtrade but is reserved for

producers with a capacity for quality. Quality defines access and can grant influence and

control to the producer. This places value on cultural capital and the pursuit of the

knowledge and skills that create and maintain quality. Acquiring this knowledge often

requires assistance from the same buyers that define quality. Producers must first be able

to differentiate themselves as a quality producer and then develop networks with the right

people so that they can sell the coffee at a good price and get feedback to improve. A

successful producer must be able to develop the necessary cultural capital, obtain economic

investment and leverage networks. These investments work to improve the quality of

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coffee and, ultimately, increase the symbolic capital that can bring them prestige and power

in the direct trade field.

The value placed on quality is beneficial for producers, but can also be problematic.

Exceptional quality gives producers unprecedented power over buyers and amplifies

economic returns. However, the onus is on the producer to create quality, while roasters

control the majority of the economic, cultural and social capital. Roasters create and define

‘the game’ and invest when and where they see fit. Producers that have the ability to play

this game and that have developed the right habitus are able to capitalize on the

opportunities of this field. A ‘feel for the game’ allows the producer to assume a position

of power and have the ability to influence and control their circumstances. However, this

requires high levels of cultural, social and often economic capital, not to mention the right

terroir. These requirements limit the ability of direct trade to impact many small and

marginalized producers.

Many producers involved in direct trade relationships do not have a full

understanding of what the roaster wants and the opportunities that exceptional quality

coffee could provide them. This lack of ‘feel for the game’ represents a misalignment of

habitus that can preclude a producer’s success in the field. A producer that lacks the

cultural capital that enables them to produce consistent quality must acknowledge the

importance of the feedback and assistance of roasters. They must be willing to invest the

time and energy into developing these relationships and improving their own production

processes. Without this understanding, direct trade relationships can lack balance; where

roasters set the terms and producers either fall in line or they must find another channel

through which to sell their coffee.

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The long term success of direct trade relationships often involve a change in habitus;

the producer develops an understanding of quality and what it requires, while the roaster

begins to invest and take interest in the producer. This shift in values, priorities and

attitudes requires the commitment of both the roaster and producer and works to facilitate

the development of trust, respect and understanding. This not only improves the quality of

the coffee but also builds the infrastructure, economic security and networks of the

producer. This shifts the distribution of capital and places more control in the hands of the

producer. Direct trade relationships that involve mutual investment and trust have the

potential to be sustainable and empower producers to take control of their own future.

6.2 Symbolic Violence

Symbolic violence depends on the consciousness of the dominated; it is “chosen as

much as undergone” (Bourdieu, 1990, p. 127). Some coffee producers choose to sell their

coffee on the free market believing that the price and treatment they receive is fair.

However, most producers and consumers have largely rejected the belief that the

commodity market is fair for farmers. This has made it increasingly difficult for companies

to exercise this gentle form of domination. While most producers remain active

participants in the commodity market, it is not usually their choice to do so. This situation

can embitter producers and lead them to search for alternatives, stop producing coffee or

just stop caring about what they produce. These circumstances have led many farmers to

search for better terms and conditions in the Fairtrade and direct trade frameworks.

However, can these frameworks protect farmers from companies that aim to disguise a

subtler form of symbolic violence?

Fairtrade provides farmers with a regulated system of trade that attempts to ensure the

ethical treatment of farmers. However, the lack of demand for Fairtrade coffee has led to

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abuses of the framework; corporations have been able to influence the terms their

involvement, tweaking policies and regulations, and purchasing contracts that better suit

their purposes. Fairtrade contracts arranged in advance of the harvest have even enabled

companies to pay farmers less than the market price. These companies have used Fairtrade

as a cover to continue their dominance and symbolic violence. These select instances,

coupled with a pervasive lack of access to the Fairtrade market, have altered the perception

that some producers have of Fairtrade. Many of these producers have begun to look

elsewhere for opportunities and see promise in direct trade relationships.

Direct trade offers the promise of a relationship of mutual respect and trust. This

model has the potential to shift the distribution of power and break the cycle of domination.

In order to change the dynamics of power and domination, a roaster must approach

relationships as partnerships and invest in farmers to improve the quality of coffee. This

provides the farmer with the economic, social and cultural capital to take control of the

lives that they manage to live. It empowers the producer and makes a relationship of

mutual respect and trust possible. The structure of direct trade provides incentive for

relationships built on trust and investment and has the potential to break the cycle of

symbolic violence.

The experiences of successful farmers affect a shift in the expectations of other

farmers, who begin to expect and search for similar relationships of mutual respect, trust

and investment. The roasters that work to build true partnerships will slowly gain a

reputation for what they do and attract farmers. This gives these roasters a slight advantage

in a competitive field and will give them the opportunity to source better quality coffee by

attracting the best producers. The understanding that these partnerships foster can also

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create better quality, as producers gain the knowledge, infrastructure and skills to improve

quality.

The incentive to build partnerships and quality makes corporate co-option of the

direct trade framework both more difficult and less desirable. Companies will still try to

circumvent relationships and simply buy the quality coffee. However, this can often

restrict access to consistent quality and can also mean that they do not get the chance to buy

the very best coffees. The structure of direct trade provides the producer with an

opportunity to reward a roaster with their best coffee. These premium lots can often be

reserved, before they are picked, for the roasters that have invested in relationships with the

producer.

Roasters that approach relationships as another chance for domination or symbolic

violence will be less successful in the long run. Given the opportunity, producers will

choose to work with roasters that treat them with respect and invest in them. As producers

become aware of how different roasters approach relationships, they will likely avoid

working with roasters who have suppressed opinions and failed to advance the capabilities

of other producers. Producers that develop consistent quality can easily take their coffee

elsewhere. In this way, the symbolic capital of quality has the potential to slowly make

symbolic violence less efficient and increasingly difficult for roasters committed to quality.

Successful direct trade relationships work towards developing a commitment to

quality. This involves developing a producer’s knowledge and infrastructure to produce

quality and creating relationships based on trust and understanding. This creates an

incentive to empower producers and has the potential to shift the balance of power in the

direct trade field. By helping to develop the tools that create quality, the roaster is building

the symbolic capital of the producer. Producers who develop a ‘feel for the game’ are able

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to gain power and influence in the direct trade field and develop the capacity to control the

terms of trade. This makes symbolic violence, as well as more overt forms of domination,

increasingly less effective in productive direct trade relationships.

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6.3 Accountability

While a cursory consideration of direct trade might suggest that complete

transparency may be a quick and assured way to hold roasters accountable and achieve

fairness for farmers, it would be difficult to implement without violating the spirit and

efficacy of direct trade. Third-party certifications can be manipulated, marketing tactics

can obscure the truth and bombard the consumer, and intrusive regulation or independent

auditing carry the potential to violate the trust and respect that make a relationship

beneficial to the farmer and roaster. These options have the potential to detract from many

of the benefits that make direct trade attractive to producers.

6.3.1 Dynamic sourcing

Direct trade requires a framework that allows roasters to create unique arrangements

and solutions for each farmer. Quality is dynamic and depends on so many moving targets

that it is very difficult to pigeonhole into grades or standards. Some roasters have specific

preferences regarding processing methods and ideas about best practices to preserve

quality. Each farm does things differently and needs customized assistance to achieve

better quality. Each season brings a unique set of challenges that determine what needs to

be done to promote and preserve quality. Too much sunshine and higher temperatures can

lead to premature ripening, early harvests, and fast drying timeframes, which can lead to

green coffee with a lower sugar content and unstable moisture levels. Too much rain can

impact the efficacy of fertilizers, delay harvests, and create drying problems. Low

temperatures can stunt the growth of coffee trees and retard the blossoming of the coffee

cherry. While these conditions are beyond the control of the farmer, proper response to

these issues can save entire crops and ensure quality is maintained.

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The location and design of infrastructure and storage facilities can also cause issues

for quality. High humidity and temperatures in storage facilities can cause mold and

destabilize the moisture levels of green coffee. Transportation can contaminate coffee

through exposure to other crops and organic material. Machinery that is not maintained or

calibrated properly can chip and crack coffee during the processing stages, causing faster

deterioration and the development of mildew. These conditions vary in each community

and country and need to be controlled in order to produce and promote quality. The unique

situation of each farmer makes it very difficult to standardize processes to maximize

quality.

Direct trade celebrates what makes a particular farmer and coffee special, unique or

exclusive. Each coffee is selected for a reason and each relationship is initiated in the hope

that working together will help to unlock the potential of a coffee. The producer and

roaster enter into a direct relationship with different motivations and objectives; however,

the success of a relationship hinges on developing quality. This is accomplished through

the development of trust between the parties and the ability of each party to communicate

their objectives effectively.

6.3.2 Importance of trust in aligning habitus

In order to improve quality, each party must trust that the other is working in the best

interests of the relationship and not just themselves. A trusting relationship generates

respect and rapport and allows for better communication across the cultural and linguistic

barriers that often separate roasters and producers. Proper communication and trust are

essential if either party is to invest the time and energy into improving processes and

quality. If the roaster understands the challenges facing the producer, he is more likely to

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deal with the cause rather than the manifestation of the problem. On the other hand, if a

farmer understands the logic behind a request, he is more likely to effectively implement

changes that address the problem. This alignment of interests depends on each party

understanding the rules of the game and developing a ‘feel for the game.’ The

development of a suitable habitus facilitates the accumulation of capital in this field and

promotes a self-regulated form of accountability.

For example, a roaster can identify an issue with picking but if it is not properly

communicated to the farmer it is unlikely to be rectified in the next harvest. This is

because the seemingly simple suggestion requires the farmer to hire more labour and inflate

costs. However, the producer is more likely to follow the advice, if the roaster can properly

convey that by picking only ripe coffee cherries, the producer will not only improve the

quality and receive a better price but will also decrease the rate of coffee pests and disease,

increase the amount of specialty coffee they produce and make processing more consistent

and easier to regulate, the producer is more likely to follow the advice. Proper

communication can demonstrate that the roaster has the best interests of the producer in

mind and not only his own interests. This can build trust in the producer and work to create

a sustainable and productive relationship.

This simplified example demonstrates the importance of communication and trust,

but it can also demonstrate the difficulty of standardization or regulation. Trust, mutual

respect, rapport and effective communication are difficult to demonstrate to a third party.

The unique circumstances and initiatives make regulation of any one variable difficult. It is

also challenging to measure the impact that a relationship is having on the development of

an individual’s habitus. While it may be possible to get a sense for an individual’s grasp of

the terms and conditions of a relationship, the subtle changes in disposition, attitude and

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perception that are affected by a change in habitus are difficult to ascertain without intimate

knowledge of each actor. This highlights the difficulty of implementing a transparent and

accountable system without compromising the efficacy and value of a direct trade

relationship.

Proprietary information can also prevent roasters from disclosing more information

and setting up systems for accountability. While some roasters have certain ideas on how

to improve a farm’s operation, storage facilities and transportation, these are not trade

secrets. However, many roasters are guarded about the relationships that they have with

farmers. This secrecy is often motivated by a desire to protect the investment that they

have made as opposed to hiding untoward actions. The time and energy invested in

improving the quality of coffee on a farm is something that roasters hope to benefit from

and not pass on to competitors. If the roaster attempts to lock in producers with contracts it

can change the nature of the relationship from that of trust and mutual understanding to a

more forced and formal relationship that can hurt goodwill and impact volition:

If we are liars and cheats, the contract didn’t help. If you and I are honest, we didn’t break the contract in the first place. On this side of the contract as it relates to the farmer, you very consciously do not create contracts. ‘Hey, great, sign this contract and agreement’– I am saying, I don’t trust you, I think you are going to break our agreement and your words are not worth anything. So I don’t want a worthless paper that it is a front to your honor. (NPO, 1188-1193)

The impact that contracts have on relationships combined with the difficulty of

enforcement suggests that contracts are rare in direct trade relationships. Because it is

nearly impossible to exert exclusivity in a direct trade relationship, the importance of

building trust, respect and loyalty is paramount and these arrangements are often guarded to

preserve their integrity and shelter them from competition.

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The impact of formal systems of accountability on the production of quality coffee

and the development of trusting relationships is based on the dynamics and structure of the

direct trade model explored in this thesis. This section acknowledges both the practical

issues and theoretical objections to a system of accountability in direct trade. The practical

issues are based on the dynamics of direct trade relationships explored in the interview

process. This considers investment in the development of quality, the dynamic nature of

coffee and farms, the influence of competition and the difficulty of communicating across

cultural and linguistic barriers. The transcendental objections consider the impact that

systems of accountability have on the development of trust, respect and long-term

sustainability. These two perspectives provide insight into why there is no formal system

of accountability and explain why implementing such a system may not be advisable for

direct trade.

6.3.3 A built-in alternative

While a formal system of accountability may be a hindrance to the direct trade

model, the structure and balance of power in direct trade have the potential to form an

alternative. The symbolic capital endowed to quality coffee makes the development of

quality a strategy for long-term sustainability. A producer that can consistently produce

quality coffee is endowed with symbolic capital that can readily be converted into

economic capital and enable the producer to take control of the terms of trade and his

future. A relationship that begins with a roaster taking interest in a producer and investing

time and energy, even money, into helping that producer develop quality can conceivably

shift in the balance of power. Whereas, in the beginning, the roaster has effective control

over the price and conditions of the purchase, if the producer can develop quality and

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produce something that is truly exceptional he gains symbolic capital and the power to

determine the conditions of the sale of coffee. This accentuates the importance of roasters

putting the time, energy and money into developing the trust and loyalty of the producer:

We purchased him some drying tables and we didn’t ask anything in return but he decided that he wanted to maintain that relationship that he has been a coffee direct with him, as opposed enter into COE, which was how we entered him. (Direct trade coffee buyer, 134-137)

Gestures like this, which are seemingly disinterested, act to build social capital and cement

relationships. The mutual benefit of building a trusting relationship and the symbolic

capital that quality generates has facilitated a shift in the balance of power and distribution

of capital. This shift and the issues that arise with transparency and accountability suggest

that direct trade relationships could thrive without a regulated or systematic approach to

accountability.

Transparency can endanger the willingness of roasters to invest in producers and can

also undermine the sincerity of relationships and the foundations of trust. Building trust

and loyalty, then, is a strategy to secure an investment for the roaster and eases uncertainty

for the producer, enabling a producer to make investments knowing that they will be able to

receive higher prices and secure a buyer for the future. Accountability, then, is best

accomplished through sincere relationships regulated by a market that values ‘clean and

sweet’ quality coffee. This is not to say that regulation is impossible; however, there are no

obvious solutions that make accountability and transparency feasible. Future research into

potential methods for transparency and accountability that do not violate the spirit or

efficacy of direct trade is needed.

Meanwhile, consumers can take comfort in a direct trade model that incentivizes

relationships of trust and respect. The shift in producer habitus changes the strategies that

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are rewarded. Producers take a risk when they engage in a relationship with a roaster –

investing time and energy to adapt processes and build trust. The outcome often depends

on the intentions of the roaster and how much the roaster is willing to invest in the

relationship. However, roasters that take advantage of this position of power will, in the

long-term, not be as successful. These are less sustainable practices that will lack appeal

for farmers and lead to a smaller pool of quality coffee to choose from. Meanwhile, that

small pool of quality coffee will not improve significantly without the kind of investment

that a relationship facilitates. This makes sourcing quality coffee less efficient and these

roasters will be at a competitive disadvantage.

The value that direct trade places on quality creates a market incentive for partnership

and long-term investment in farms. Well-intentioned roasters will have a competitive

advantage in sourcing from the best producers and will also benefit from partners that are

building quality season to season. These roasters have the potential to get better returns on

their investments in farms and create more efficient sourcing models. This is a sustainable

model that will, in the long run, lead to the success of both the roaster and producer. This

offers an informal, market-regulated system of accountability that, although far from

perfect, builds on the strengths of the direct trade model.

6.4 Reflection

This research process began with a simpler understanding of direct trade and the

producers that are involved in these relationships. The research conducted for this thesis

has facilitated an increasingly complex understanding of the structures that shape producer

experiences and the opportunities available to them. This has allowed for a better

understanding of the prospects and pitfalls of the direct trade model.

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The interview process and review of the Fairtrade literature helped to develop a more

dynamic understanding of the options and decisions facing producers. At the outset of this

research process, the price premium and stability provided by direct trade relationships

were assumed to motivate producers to seek out roasters with whom to work. While these

are still very important factors, the review of the Fairtrade literature suggested that

Fairtrade also provides these benefits. This forced further inquiry into whether and how

direct trade was different. Through a detailed analysis of the benefits and drawbacks of

Fairtrade, this thesis suggested that direct trade was indeed different and has the potential to

fulfill some of the shortcomings of Fairtrade.

The value placed on quality allows direct trade to provide an alternative to the

commodity market that, while not independent, operates on its own terms. Direct trade is

also structured to provide unique solutions to individual farmers, providing deep and

effective impacts that are sensitive to local needs, concerns and the environment. However,

there is the potential for these impacts to be stymied by the model’s incompatibility with

cooperatives and lack of accountability.

While involvement with cooperatives did not seem to factor into individual producer

decisions and several cooperatives were interviewed that were seeking out direct trade

relationships, cooperatives were often represented in a negative manner by roasters. The

difficulty of establishing a relationship with a group of producers that effectively promotes

the development of quality is a disincentive for many roasters. This is a structural

limitation of direct trade that, along with the stringent quality requirements, excludes many

producers from participation in this model.

Initial consideration of the direct trade model in comparison with Fairtrade suggested

that there was a lack of regulation and accountability and that a simple model for

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transparency might be of great benefit to producers. The interviews conducted with buyers

and producers have challenged this hypothesis and suggest that direct trade exists in a

delicate balance between quality, competition and trust. Simple approaches to transparency

are often easily manipulated or provide token accountability. More comprehensive

approaches to accountability have the potential to threaten the balance of the relationship.

The distribution of capital in direct trade provided some important insight in the

motivations of producers who engage in direct trade relationships and challenged some of

the presumptions behind the research. While producers are attracted to higher prices, they

are more attracted by the possibility of gaining control over the terms of trade and security

in the future. The commodity market is beyond the control and, often, comprehension of

most producers. Fairtrade certification offers an alternative but is bogged down by

regulations and a limited market. Direct trade offers the possibility of dealing directly with

a buyer and building a personal relationship of trust.

These relationships and the trust that is built between the two parties are integral to

the success of a direct trade relationship. Roasters who want to invest and improve a coffee

must believe that the farmer is dedicated and that they can have access to the coffee in the

future. Producers, on the other hand, must understand how to consistently produce quality

and why it is important for their future and the roaster. The most effective and sustainable

way to accomplish these objectives is to work towards a trusting relationship. The trust

that is developed mitigates some of the risk of defaulting on contracts and operating on an

open market but also makes this arrangement sustainable.

The emphasis on quality suggests a shift in the distribution of capital and balance of

power. This challenges the initial presumption that the roaster has better access to

economic, cultural and social capital. Quality creates a form of symbolic capital that

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presents producers with the opportunity – given the right circumstances, knowledge and

volition – to gain power. A farmer that can produce exceptional coffee has the ability to

gain control over the terms of trade, including the price they receive, the assistance and

credit to which they have access and the future commitments that they can secure from

buyers. These quality requirements, however, also exclude producers that cannot meet the

quality requirements.

The power that quality can bestow on producers and the importance of developing a

trusting relationship were two themes that emerged from this research that challenged the

initial presumptions with which this project began. The comparison of direct trade with

Fairtrade allowed for a better understanding of the prospects and pitfalls of direct trade and

where the model is situated in relation to other fields. The structure of direct trade and the

importance placed on quality suggests that this model can change the dynamics of power

and create a situation that empowers producers. The interviews that were conducted

provided insight into a more dynamic model that benefits and relies on trusting

relationships rather than monitored ones. These findings challenged my original

presumptions and resulted in a more nuanced view of direct trade. The hope is that this

leads to further analysis regarding the future direction, potential and possible

responsibilities of direct trade.

6.4.1 Bourdieu

Bourdieu’s theoretical framework enabled a consideration of structure and agency in

relation to each other, providing a complex and balanced snapshot of reality. Bourdieu’s

concepts of field and capital provided a framework to consider the power structures that

shape the circumstances of producers, while also providing insight into individual

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perspectives and social relations. The emphasis placed on relational mapping in this

framework encouraged a focus on the interactions between individuals and the surrounding

structures. This dynamic relationship was seen to influence the motivations of producers.

The concept of field allowed for an analysis of the concurrent influence of several

bundles of relations on producers. Consideration of the composition of the forms of capital

was integral to the analysis and led to the conceptualization of quality as a form of capital

that can shift the balance of power and empower producers. The complex interactions

between fields and capital allowed for the representation of factors that influence the

values, decisions and attitudes of actors.

The impacts on the balance of power in the direct trade field were especially

illuminating and provided a key insight into the potential benefits of this model and its

attraction for producers. The relational analysis also led to a reevaluation of the feasibility

of accountability and highlighted some of the challenges that it posed to the effective

operation of direct trade.

Bourdieu’s framework was instrumental in the conceptualization of the circumstances

and motivations of producers that engage in direct trade relationships. It challenged both

the research and analysis to look beyond direct correlations and consider some of the other

factors that shape certain fields and actors. Bourdieu’s analytical framework encouraged a

more nuanced conception of direct trade and in-depth understanding of the considerations

and challenges faced by producers engaged in this field.

6.4.2 Future research

This thesis has attempted to provide insight into the circumstances and motivations of

producers who engage in direct trade relationships. The research process has led to some

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interesting conclusions and has helped to inform a more nuanced view of direct trade. This

process and the resultant insights also aided in the identification of certain gaps in the

current research and areas for further inquiry.

The most relevant topic for future research relates to the conclusions regarding

accountability and power dynamics in direct trade. The analysis of direct trade and the

distribution of capital in this field has led to the suggestion that quality, as a form of capital,

has the potential to shift the balance of power in direct relationships. This requires a

relationship of trust between the roaster and producer that allows for and encourages social,

technical and financial investment. The complexity of these relationships and the difficulty

involved in building and maintaining trust and investment suggests that accountability

would be difficult to implement without damaging some of the most promising aspects of a

direct trade relationship. The potential for producers to gain increased power and influence

with the development of quality implies that accountability may not be as necessary as it is

in the Fairtrade framework or the commodity market. Further research needs to be

conducted into the efficacy of this theoretical model for empowering producers and

regulating relationships. Such research was beyond the scope of this thesis, which aimed to

gain insight into the prospects and pitfalls of direct trade and the perceptions of producers

regarding why they were attracted to direct trade. While the structure and distribution of

capital in the direct trade field was relevant to producer considerations of direct trade, this

thesis did not set out to explain the impact of direct trade on producers and did not attempt

to research impacts in depth.

Connected to this issue is the concept of symbolic violence. This thesis has

suggested that direct trade has changed the habitus of producers and opened up new

avenues of possibility for them. It is argued that this change in habitus makes it

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increasingly difficult for roasters to structure and operate a direct trade relationship in a

way that perpetuates or exerts dominance. Future research focusing on the implications of

direct trade relationships on forms of domination would complement research into the

structure of power in direct trade. This would also provide an informed perspective on how

expectations and consciousness can work with shifting capital to change relationships of

dominance.

One of the issues identified in this thesis dealt with the compatibility of direct trade

with cooperatives. Although many cooperatives wanted to engage a roaster in a direct

relationship, many of the quality-focused roasters tried to avoid dealing with cooperatives

because they lacked transparency and were harder to work with to achieve quality

improvements. The Fairtrade literature suggests that there are wide ranging social benefits

to well-run cooperatives, although the costs can often be high, which makes this issue

worth looking into. Research into some of the possible benefits and drawbacks of direct

relationships with cooperatives would allow for a better understanding of the issue and

possible strategies for convergence and cooperation between roasters and cooperatives.

Lastly, this research focused on a model of direct trade that is exclusively focused on

quality coffee. The concept of a direct relationship between a roaster and producer can

extend beyond that to ethically-motivated relationships or even large commercial

relationships with large corporations. Both of these models would be interesting to

consider as an alternative to the commodity market. Future research could examine

whether this model has the potential to provide producers with a fair and just alternative.

  153  

Chapter 7: Conclusion

Coffee farmers often sell a commodity to a detached market that has no interest in the

success of individual farms or the sustainability of smallholder quality coffee. These

producers have no power over the terms and conditions of trade and are subject to volatile

prices that make planning for the future and investing in growth very difficult. Farmers are

often so removed from the market that they are forced to sell to coyotes, and other

middlemen, for prices far below the market price. Some farmers only know a market that

pays a lower price for unprocessed coffee cherry. For many farmers, these circumstances

offer little return on investment and create cycles of dependency where farmers have to

borrow money each season to survive. These farmers lack the social, cultural and

economic capital to break out of this cycle of poverty and are tempted by promises that

give them a greater share of the profit.

Fairtrade has provided a framework that changes the producers’ relationship to the

market. It provides a stable price and access to a market built on ethical principles.

Producers are required to meet certain procedural, agricultural and social standards in order

to attain certification. This requires a certain amount of social capital to obtain the

necessary community organization and the connections that gain them access to the

Fairtrade market. The networks that producers can harness are increasingly important in a

Fairtrade market that does not have the consumer demand to support the producers’ supply.

Cultural capital is required to build the administrative and agricultural knowledge necessary

for continued access and success in the Fairtrade framework. There are also economic

costs paid to the FLO, an international administrative body, but producers have little say in

the rules and regulations the FLO creates. These requirements, coupled with limited access

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to a heavily over-supplied market, have motivated many producers to search for direct trade

relationships that can provide them more support, a better price and a more secure future.

Direct trade offers select producers the opportunity to build on the quality coffee that

they produce. These relationships often offer high, predictable prices linked to quality and

technical assistance to improve the existing potential. Successful relationships are based on

trust and investment and provide the producer with an opportunity to develop and

accumulate symbolic, cultural, social and economic capital. Farmers that are able to

consistently produce exceptional quality coffee are able to build on the knowledge and

skills that they have, create a reputation for themselves and obtain a position of influence in

the direct trade field. These promises motivate producers to seek out direct trade

relationships.

Direct trade relationships have been criticized for a lack of transparency and

accountability. The research conducted into the circumstances and motivations of

producers that enter into direct trade relationships has suggested that accountability in

direct trade relationships may not be that straightforward. Producers are attracted to more

than quantifiable impacts; many producers want to be a part of something, they want to

build a trusting relationship with a partner that will invest in them and help them develop

their potential. Relationships built on trust, mutual respect, and common interests have

built in regulation mechanisms and can be damaged by transparency requirements. It is

difficult to determine standards that quantify trust and empowerment and contracts can

compromise the dynamic between the roaster and producer. Allowing full access to

producers and the conditions of trade that shape a relationship can also hurt incentives for

the roaster to invest in producers by exposing details to competitors. Lastly, transparency

requirements on the internal affairs of a relationship can interfere with the establishment of

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trust and respect by exposing the members to suggestive criticism that can undermine faith

in the relationship. These factors, coupled with the appeal of direct trade relationships and

the structure of capital and power in direct trade, suggest that direct trade can provide

effective solutions for producers without rigid accountability measures.

The symbolic capital of quality has the potential to shift the dynamic of power in

direct trade relationships and provide the producer with an opportunity to establish

favourable terms of exchange. In addition, the circumstances and motivations that attract

producers to direct trade build up expectations of relationships and facilitate a change in

producer habitus. This shift in the distribution of power and producer expectations has

created an incentive structure within direct trade that promotes constructive, fair and

sustainable relationships and mitigates opportunities for symbolic violence. Roasters have

sacrificed a degree of control over the terms of trade in order to promote and build

consistent quality. Increased control over dominant forms of capital and the bolstering of

producer expectations have empowered producers and given them the tools to succeed in

the direct trade field.

This thesis argues that direct trade coffee can provide an appealing alternative to

producers. The commodity market does little to promote producer interests and leaves

many producers disconnected and powerless. Fairtrade provides an ethical framework but

onerous standards and a limited market have diminished its appeal and impact. Direct trade

promises producers a better price and control over the terms of trade. Quality coffee

facilitates these opportunities through a redistribution of capital and power but also limits

the applicability of the direct trade framework to producers that have the capacity to

produce quality. The lack of accountability in direct trade is a recognized risk that is

mitigated by the structure of direct trade that requires a delicate balance of quality,

  156  

competition and trust. This structure provides incentive to build relationships of trust and

gives producers the opportunity to build capital and take control of the terms of trade. This

suggests that direct trade is not simply appealing but has the potential to provide a fair

alternative to producers that challenges the predominant form of globalization and creates a

shaped advantage for farmers.

  157  

Appendix A: Interview Question Reference Set

These are questions that were explored in the interviews.

Narrative

1. What is life like now (for producers)?

2. What can you/they learn from the past?

3. What would things be like if they were good (ie. in a healthy, balanced future)?

4. What has to happen and what do you have to do to get from where you are now to

where you want to go? (Bopp & Bopp, 2000, p. 1)

Power and Structure

5. What role does the cooperative play in social and technical assistance?

6. Does the cooperative receive organizational assistance to access markets, technical

assistance to develop or improve quality, or social assistance to assist members?

7. What role do government agencies (i.e. FNC, ANACAFE, INACOP, etc) play in

social and technical assistance?

8. Are there any rules or regulations that prevent farmers from accomplishing their

organizational or personal goals?

9. What are some of the internal organizational/social/technical challenges that

farmers face?

10. How would you characterize your relationship with the buyer of your coffee?

Relations

11. Do you consider the current arrangement ‘fair’ for farmers?

12. Do farmers deserve more for their coffee?

13. Have farmers benefited from interactions with the buyer?

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14. Would you say that the organizational structure of the cooperative/association/group

has benefited its members’ livelihood?

15. Is there transparency within the cooperative?

16. Is there transparency in relationships between farmers and government agencies,

Fairtrade certifiers and/or direct trade partners?

17. Would farmers like more control over the conditions of the relationship with their

buyer – price, sales, marketing, etc?

18. Do you feel like the farmers are partners in the process or simply suppliers of a

commodity?

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Appendix B: Fields

 Figure  2:  A  visual  representation  of  the  approximate  positions  of  fields  in  relation  to  each  other  

  160  

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