CIPS L5M5 Exam - Topic 3 Question 9 Discussion

Actual exam question for CIPS's L5M5 exam

Question #: 9
Topic #: 3

[All L5M5 Questions]

A leading coffee retailer advocates buying beans directly from farmers rather than using intermediaries such as exporters. By partnering with farmers and investing locally, what is this practice called?

AFair Trade

BDirect Trade

CGreenwashing

DTrade Initiative

Show Suggested Answer

Suggested Answer: B

Comprehensive and Detailed Explanation From Exact Extract of Documents:

The practice described is known as Direct Trade. Unlike Fair Trade, which follows certification standards set by external bodies, Direct Trade involves companies directly sourcing from producers, often providing higher prices and more investment in local communities. The L5M5 study guide (p.309) explains that Direct Trade is particularly common in coffee and cocoa supply chains, where companies wish to build stronger, transparent, and ethical relationships with producers. It differs from Fair Trade in that it avoids third-party certification costs and focuses on building trust through long-term partnerships. Procurement professionals must understand both models when sourcing ethically in international markets.

Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.309

by Gennie at Jan 05, 2026, 05:16 AM

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Louann

3 days ago

C) Greenwashing? Really? That's just trying to make the company look good without actually doing anything meaningful.

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Bulah

8 days ago

I agree, B) Direct Trade is the way to go. Cutting out the middlemen means more money for the farmers and better quality for the consumers.

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Odelia

13 days ago

B) Direct Trade is the correct answer. This practice allows the coffee retailer to work directly with farmers, ensuring fair prices and supporting local communities.

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Serina

18 days ago

Greenwashing seems off for this context, but I’m not confident about the other options.

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Tegan

23 days ago

I feel like I've seen a question like this before, but I can't remember if it was about Fair Trade or Direct Trade.

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Thad

29 days ago

I remember studying about Direct Trade in class, and it sounds like what they're describing here.

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Jacquelyne

1 month ago

I think this might be related to Fair Trade, but I'm not entirely sure if that's the right term for buying directly from farmers.

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Winfred

1 month ago

Hmm, I'm a little unsure on this one. I know Fair Trade is a common term, but I'm not sure if that's the right answer here. Direct Trade does sound like it could be the correct term for this specific practice. I'll give that a try.

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Noemi

1 month ago

This seems like a straightforward question about terminology. The practice of a coffee retailer partnering with and investing in local farmers is most likely called Direct Trade. I'll go with that answer.

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Tamra

2 months ago

Okay, let me think this through. The key details are that the retailer is buying beans directly from farmers, rather than using intermediaries. So the practice is likely called Direct Trade. I feel pretty confident about that one.

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Yan

2 months ago

Hmm, I'm a bit confused on this one. Is it asking about a specific term for the practice, or just the general concept of buying directly from farmers? I'm not sure if Fair Trade or Greenwashing would apply here.

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Xochitl

2 months ago

I think this is asking about a specific term for a coffee retailer's practice. I'm pretty sure the answer is Direct Trade, since that involves buying directly from farmers.

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