Why do Fairtrade products cost more?
Not all Fairtrade Certified Products cost more than conventional products. Where the Fairtrade Certified Products do cost more, there are many factors to be considered. The Fairtrade system guarantees a better deal to the disadvantaged producer by offering them two major monetary benefits that can both have an impact on the end price: the Fairtrade Minimum Price and the Fairtrade Premium. The Fairtrade Minimum Price is a guaranteed price that covers the cost of sustainable production. The set Fairtrade Price is always the Fairtrade Minimum Price paid but rises in line with market prices if they rise above it. In addition to the purchase price paid by importers, a separate payment, called the Fairtrade Premium, is made which is designated for social and economic development in the producing communities. The farmers and workers themselves decide how these funds are to be spent. As part of the Fairtrade Standards, Certified Producers are accountable to FLO-CERT for the use of this money.
