fold faq Does paying farmers a fair price encourage more production and create an oversupply problem?
Fairtrade is a voluntary model of trade that brings consumers and companies together to offer Small Farmers’ Organisations and Hired Labour a price for their produce that covers the cost of sustainable production and provides a sustainable livelihood. Fairtrade is a market-responsive model of trade: the farmers only receive the Fairtrade Minimum Prices and Premiums if they have a buyer willing to pay them, and many producer groups continue to also sell in the conventional market. Fairtrade Producers use their additional income from Fairtrade to for example improve their homes, send their children to school, and improve the quality of their existing crop, rather than to increase production. Farmers also invest Fairtrade Premiums in crop diversification in order to escape from their dependence on a single crop as their primary source of income. Because Fairtrade Certified Producers often choose to spend their social Premiums on projects such as improving local schools, health, water or s
