The Fairtrade Premium is paid directly to producer groups and can be invested as the producer group chooses.
Fairtrade supports 167,000 cocoa farmers in countries including Cote D'Ivoire, Ghana and the Dominican Republic. Most are small-scale farmers who live on very low incomes and Fairtrade enables them to choose their own path to development.
Contrary to some claims made at today’s World Chocolate Forum, the Fairtrade Premium is earned on top of the price farmers earn for their beans, is paid directly to the producer group (rather than to a middleman) and is fixed at a minimum level (rather than being negotiable – although of course businesses can pay more if they wish). It can be invested as the farmer-owned co-operative democratically chooses, in projects that will benefit their business or community. It cannot therefore be compared as if it is like-for-like with the ‘premiums’ offered by other certification schemes.
Producers are encouraged to spend at least 25% of their Fairtrade Premium on increasing their productivity, but in some cases they spend more than this – a recent report on Fairtrade cocoa farmers in West Africa found that they chose to invest 36% of their Fairtrade Premiums to increase their productivity and quality of their cocoa.
Importantly, the Fairtrade Premium is also used for social projects, such as rebuilding schools, building wells for drinking water, and supporting diversification in order to increase income, for example through making soap and palm oil, and milling corn.
Fairtrade can and does offer full physical traceability through the supply chain, back to the producer group, when the brand or retailer chooses.
The Fairtrade movement is the only certification scheme to be 50% owned by producers, while the FAIRTRADE Mark independently certifies that products meet economic, social and environmental standards. As such, it is the most widely recognised ethical mark worldwide.