What is Direct Trade?
Direct Trade is an ethical, responsible and social connection between farmers and manufacturing companies without any intermediaries, in a way that the created value is shared between both parties equally. Hence, both parties work in a symbiotic relationship, outputting labor and effort in order to maximize the value of the raw material and finished goods, and become dependent on each other´s success.
Greater communication, long term relationships and shared business goals are not the only benefits. The intermediaries’ traditional fees, which are generally paid by both the farmers and the manufacturing companies, are partially retained for reinvestment, I+D and technical support programs. In that way, both parts can effectively use their resources to increase the products quality, whilst at the same time striving for the social and economic development of rural communities.
HOW IT WORKS
Good companies can Create Value. By doing Direct Trade they Share that Value creation with farmers in their supply chain. A Shared Value approach reconnects company success with social progress. To read more about Michael Porter´s concept on Value Creation click here.
A company produces potato chips and buys the fresh potatoes from intermediaries. The company currently pays $10 for a sack of potatoes to an intermediary, and in turn, the intermediary buys that same sack at $6 from small farmers. This model leaves $4 being charged by the intermediary, and it also leaves the company without any access to traceability or standardization. If the same company uses Direct Trade, it could pay $8 directly to the small farmer saving $2 to be invested in assuring that the potatoes are harvested in an ecological way and the raw materials comply with certain standards. In order to assure quality standards and small farm development, the company will have to invest some or all of the savings, equal to $2, back into its agricultural program. Using the $2, a Direct Trade company can then provide its suppliers with technical support, education, seeds, technology, direct financing and more.
We are helping manufacturing businesses of all sizes to create greater product value based on a socially responsible business model and enabling farmer communities worldwide to have greater living conditions achieved through greater technical and social development. Each day hundreds of agricultural farmers and workers worldwide are working for the creation of better living conditions for their families, as more businesses join our cause.
The economic development that we are intent on for rural communities is far from charity, rather it is based on education and training in order to create wealth in a sustainable, long term, independent way through their own effort and means.
Gender equality on agriculture
Recent studies have shown that in between 60-80 percent of the world’s farmers are women, being key to the social and economical development. Sadly, the women in developing countries face greater difficulties and constraints than their male counterparts, regarding land ownership, education, technology, credit access and other services. These disparities must be corrected as it is estimated that women produce the majority of the world’s food. Read More
Direct Trade aims to create a better reality for the hardworking women worldwide, by adopting policies to ensure equal benefits and opportunities within agricultural organizations.