Fairtrade is about better prices, decent working conditions, local sustainability, and fair terms of trade for farmers and workers in the developing world. By requiring companies to pay sustainable prices, Fairtrade addresses the injustices of conventional trade, which traditionally discriminates against the poorest, weakest producers. It enables them to improve their position and have more control over their lives.
Today, more than six million people – farmers, producers, workers and their families – in 70 countries benefit from the unique, independent Fairtrade system.
Fairtrade delivers a better deal for farmers and producers in the developing world through:
- A fair and stable price for their produce (Fairtrade Minimum Price
- Security of long-term contracts
- Investment in local community development
- Improved working conditions
- Environmentally sustainable farming methods
- Support in gaining the knowledge and skills needed to operate successfully in the global economy
The Fairtrade Minimum Price is the minimum price that a buyer of Fairtrade products has to pay. It is not a fixed price, but should be seen as the lowest possible starting point for price negotiations between producer and purchaser. It is set at a level which ensures that the price covers the cost of sustainable production. This means it also acts as a safety net for farmers at times when world markets fall below a sustainable level. However, when the market price is higher than the Fairtrade minimum, the buyer must pay the market price for example on the basis of quality.
The Fairtrade Premium is a sum of money paid on top of the agreed Fairtrade Price for investment in social, environmental or economic development projects, decided upon democratically by producers within the farmers’ organisation or by workers on a plantation. The Premium is fixed by the Fairtrade International Standards Unit in the same way as the minimum price and remains the same, even if the producer is paid more than the minimum price for the product. The Premium fund is typically invested in education and healthcare, farm improvements to increase yield and quality, or processing facilities to increase income.
For more information on Fairtrade, the Fairtrade Premium and Minimum Price, the Fairtrade Standards, Fairtrade International Licensing Initiatives across the globe and the Ten Principles of Fair Trade, please visit the Fairtrade International website.
To find out which brands offer Fairtrade Certified products in Australia, visit fairtrade.com.au