What does it mean?
“Fairtrade is a strategy for poverty alleviation and sustainable development. Its purpose is to create opportunities for producers and workers who have been economically disadvantaged or marginalized by the conventional trading system."
Fairtrade is a tool for development that ensures disadvantaged farmers and workers in developing countries get a better deal through the use of the international FAIRTRADE Mark.
The FAIRTRADE Mark
The FAIRTRADE Mark is a registered certification label for products sourced from producers in developing countries.
For a product to display the FAIRTRADE Mark it must meet international Fairtrade standards which are set by the international certification body Fairtrade Labelling Organisations International(FLO). These standards are agreed through a process of research and consultation with key participants in the Fairtrade scheme, including producers themselves, traders, NGOs, academic institutions and labelling organisations such as the Fairtrade Foundation.
Minimum Price
The Fairtrade minimum price is the minimum price that a buyer of Fairtrade products has to pay to a Producer Organisation for their product. It is set at a level which ensures that Producer Organisations receive a price which covers the cost of sustainable production for their product. This means it also acts as a safety net for farmers at times when world markets fall below a sustainable level. Buyers enter into long-term trading relationships so that producers can predict their income and plan for the future.
For most products, including coffee, cocoa, tea and bananas, the standards set a Fairtrade minimum price that covers the costs of sustainable production.
The Fairtrade Premium
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 by producers within the farmers’ organisation or by workers on a plantation. The premium fund is typically invested in education and healthcare, farm improvements to increase yield and quality, or processing facilities to increase income.
By buying products that carry the Fairtrade label, you can rest assured that the grower has received a fair price and that his community may well be benefitting from the Fairtrade Premium.