The cultivation of specialty coffee is a labor and cost-intensive process and thus has its price. For the producers, this price is made up of many factors such as energy costs, labor costs, equipment and fertilizer costs, as well as taxes in the cultivation area.
These production costs are completely independent to the value of green coffee, which is one of the most commonly traded commodities in the world. The market in which it is traded can be extremely volatile and for the farmer, these fluctuations in coffee price can have a direct impact on the survival of a coffee farm, its workers and the individual coffee producer.
For example if the value of coffee falls heavily below a farmer's production costs, they are unable to cover all expenses for the farm with their income. In many cases, farmers are forced to stop production and leave their coffee fields, sometimes this can even be during harvest where resources and energy have already been outlaid. Direct trade was introduced as a way of protecting the farmer against these unfavorable fluctuations in the commodities market.