Fairtrade consumer price premium- how much goes to the farmer?

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Black Gold Forums / THE FAIR TRADE DEBATE & other Certifications / Fairtrade consumer price premium- how much goes to the farmer?

Author	Message
mtl1969 Member	# Posted: 24 Jul 2007 14:32 Reply It is well known that in supermarkets consumers generally pay more for fairtrade certified coffee. This is in line with the schemes intentions as the idea is consumers pay more so that farmers will receive more money. However, it seems that when farmers sell coffee as FT certified they get a minimum price + a $ 0,10 premium per pound. Given the fact that the current market price is close to the FT minimum price you could conclude that right now, farmers are getting 10, maybe 20c per pound more. That's great. However, as a consumer i am often charged between 1 and 2 $ more for FR coffee compared to regular coffee. So yes, I am paying a premium to teh farmer but also to a few other people- including the retailer probably. Can somebody provide me with an accurate breakdown and perhaps an accurate average consumer price premium charged for FT cofee? many thanks
Caitlin Member	# Posted: 21 Mar 2009 01:20 Reply Honestly, it depends. It depends on the coffee you're buying, and where you're buying it. If you're purchasing from a retailer who imports the coffee themselves, you have a shorter supply chain, and therefore more of the premium you pay goes to the farmers. If you're buying from a retailer who has to get the coffee wholesale from an importer ... probably less. There are some interesting papers on consumer willingness to pay for Fair Trade. Two that are worth a look are: De Pelsmacker, Patrick et al. Do Consumers Care about Ethics? Willingness to Pay for Fair-Trade Coffee. Journal of Consumer Affairs 39:2 (2005) 363-385. and Arnot, Chris et al. Do Ethical Consumers Care About Price? A Revealed Preference Analysis of Fair Trade Coffee Purchases. Canadian Journal of Agricultural Economics 54 (2006) 555-565. Best, Caitlin
mambomedia Member	# Posted: 15 Jul 2009 07:53 Reply In reference to the supply chain: When we talk about farmers are we talking about Ethiopian farmers with a tiny plot of land, or huge plantation owners with major machinery, industrial fertilizers and insecticides, etc? Additionally, even in Ethiopia, the pickers are usually not the land owners. Another key point early in the chain are the beneficiados, or processing plants. The vast majority of coffee is not washed and dried.which sounds a lot easier than it is, by the farmer. It is bought by the processor in berry form, pulped, washed and dried with heavy machinery, and double the price paid to the farmer. All this to say, where does the fair trade benefit go? Regards, A.

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