What is Fairtrade
Many farmers and workers in developing countries struggle to provide for their families. Poor market access and unfair trade rules often mean that the price they get for their crop does not cover the cost of production. Fairtrade is a rapidly growing international movement which seeks to guarantee a better deal for farmers and workers in the developing world.
Fairtrade Certified Cotton
At the start of the supply chain, small-scale cotton farmers find themselves at the sharp end of injustice within the global trading system. The Certified Cotton FAIRTRADE Mark gives these farmers the power to improve their livelihoods by ensuring they receive a fair and stable price for their cotton and the additional Fairtrade Premium. The Mark also guarantees two things in particular:
1. A fair and stable 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 not a fixed price, but should be seen as the lowest possible starting point for price negotiations between producers and purchasers. 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. However, when the market price is higher than the Fairtrade minimum, the buyer must pay the market price.
2. A 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 democratically by producers within the farmers’ organisation. The premium is fixed by the FLO 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.
1. A fair and stable 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 not a fixed price, but should be seen as the lowest possible starting point for price negotiations between producers and purchasers. 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. However, when the market price is higher than the Fairtrade minimum, the buyer must pay the market price.
2. A 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 democratically by producers within the farmers’ organisation. The premium is fixed by the FLO 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.
