How Does Fairtrade Fight Poverty?
Fairtrade is so much more than improving trading conditions. If you think about it, trade affects income, income affects what you do, how you navigate the world, how you live and how you support people in your life. That’s why we see the impact of trade ripple through the lives of farmers and their communities.
At its core, Fairtrade is about making sure that all people have enough to live and work sustainably. The pricing for the commodities we work in – coffee, cocoa, bananas to name a few – are not set by the farmers, they are set by the market. This means that farmers are subject to the whims of the market, regardless of how much they invest in their farming practices. In many commodities, farmers are just paid 1-2 times per year after their harvest. This requires loans and meticulous budgeting to ensure that not only the farmers and workers, but also their families, can live off of this budget. After all of that, there is no guaranteed price, so that amount could shift come harvest time.
This is unsustainable. That’s why Fairtrade addresses this problem at the source – the price. We do this through a unique pricing model that prioritizes both people and the planet. It has two big parts:
- Fairtrade sets a sustainable base price (the Fairtrade Minimum Price) that is based on the cost to farm sustainably. This acts as a safeguard when the market fluctuates. Fairtrade reviews these regularly to account for the challenging realities of farming.
- Farmers earn a Premium. These are flexible funds that producer groups get based on the volume of products they sell. Farmers democratically choose how to spend this money, often investing in solutions to hyper local challenges – like improving infrastructure or roads, building schools or purchasing farming equipment.
This unique pricing model has a big impact both on the financial stability of farms, and on the individual farmers themselves. Since 2016, Fairtrade farmers and workers have earned $1+ billion from the Premium! With millions of farmers living on less than $2 per day, Fairtrade is a game changer.
Having that financial stability means that farmers have a launchpad for their bigger business and personal goals. You can see this come to life in three West African cocoa farmers – Sarah, Eugénie and Assata, featured in a mural now at Wheatsville Food Co-op in Austin, Texas.
- Beyond being a cocoa farmer, Sarah Larweh is a board member of her cooperative in Ghana where she works to address and resolve instances of child labor, an injustice that is rooted in poverty.
- Eugénie is a cocoa farmer in Côte d'Ivoire where she also leads a women’s association that helps members diversify their crops to increase profits.
- Lastly, Assata Doumbia, cocoa farmer and president of her cocoa cooperative, has led her cooperative to become one of the top three in the Ivory Coast.
We are deeply inspired by the entrepreneurial spirit and community-centered commitment of Fairtrade farmers. That’s why Fairtrade America collaborated with the only National Co+op Grocers member in Texas – Wheatsville Food Co-op – and local Austin artist, J Muzacz, to create a mural honoring these incredible farmers. Our hope is that it will raise awareness on the importance of improving trading conditions and remind shoppers that each trip to the store is an opportunity to choose the world you want.
Learn more about how Fairtrade makes an impact at ChooseFairtrade.org.