In terms of production, during 2015–16 cocoa saw the largest increase among the main Fairtrade products (16 percent); bananas rose by three percent, but coffee fell by 3.5 percent. These changes are due to a combination of factors, including changes in the certifications of producer organizations as well as changes in number of farmers in the system.

Flower production increased by 21 percent; tea by 24 percent, and seed cotton by 10 percent, while cane sugar saw a decrease of nine percent.

Infographic about Fairtrade production capacity

Fairtrade sales volumes

For producers to benefit most effectively from Fairtrade, they need to sell a substantial proportion of their certified products on Fairtrade terms, including receiving the Fairtrade Minimum Price (where applicable) and the Fairtrade Premium.

Year-on-year changes in producers’ sales volumes on Fairtrade terms are indicated in Table 4.1 (below). The table indicates moderate growth in 2015-16 in most products: cane sugar grew 7.2 percent (mainly in Belize, Jamaica and Swaziland); bananas (mainly Peru, Mexico and St. Lucia); flowers (mainly Ethiopia) and tea (India) each grew approximately five percent; and coffee 3.4 percent.

The exception to this moderate growth was cocoa, where sales volumes grew by 34 percent. Most of this is attributable to a 65 percent increase in Fairtrade certified cocoa sales from Côte d’Ivoire.

Many producers also have organic certification, which is a useful mechanism to ensure a wider market for their products, meet export standards and reduce risk. Organic sales volumes constituted 59 percent of Fairtrade banana sales, 57 percent of coffee, 24 percent of cane sugar, 23 percent of tea and 17 percent of cocoa.

Fairtrade Premium

Premium infographic for 7 productsThe Fairtrade Premium is an extra sum of money, on top of the selling price, that producer organizations receive with every sale made on Fairtrade terms. Farmers and workers democratically decide how to invest these funds in projects of their choice.

In 2016, more than €158 million of Fairtrade Premium was generated through Fairtrade sales – a nine percent increase on the previous year. Cocoa, in particular, saw a remarkable jump of 33 percent, equivalent to more than €6 million.

The global growth was also driven by the other two high-selling Fairtrade products: coffee with a €2.8 million increase (four percent), and bananas with a €1.3 million increase (five percent).

70 percent of Fairtrade Premium was received by producer organizations in only ten countries. Fifty-four percent of all Fairtrade producer organizations are located in these ten countries. Three of the top ten countries are in Africa and rest are in Latin America and the Caribbean.

Premium distribution graphic

Note: Data including all the products

 

Fairtrade Premium and sustainable development

The Fairtrade Premium enables investments in income-boosting and production-enhancing activities. Premium-funded services for farmers in cooperatives can also reduce production costs for individual farmers. One recent study found that Fairtrade certified farmers perceived the Fairtrade Premium and group cohesion as some of the main benefits of Fairtrade certification.[1] The findings indicate that Fairtrade Premium investments in health, education, and essential local services[2], as well as in projects benefitting women and girls, are having a positive impact[3].

Download the PDF to read more about the Fairtrade Premium’s impact on sustainable development, including examples of how producers use the Premium to progress on the Sustainable Development Goals.

 

Top image: Varsha teaching her class in the Vasudha Vidya Vihar school in Madhya Pradesh, India. The school was built using the Fairtrade Premium. Image © Suzanne Lee

[1] Aid Environment (2015), ‘Baseline study of Fairtrade Cotton in West Africa’, Amsterdam: Aidenvironment.

[2] Boscher, C. et al (2016), ‘The dark side of chocolate: An analysis of the conventional, sustainable and Fair Trade cocoa chains’, Basic (Bureau for the Appraisal of Societal Impacts and Costs), Available at: http://www.commercequitable.org/images/pdf/agriculture_paysanne/synthse%20pour%20diffusion%20etude%20agriculture%20contractuelle%20ce%20-%20version%20en%20anglais.pdf

[3] Fairtrade Foundation (2015), ‘Equal harvest: Removing the barriers to women’s participation in smallholder agriculture’, Available at: https://www.fairtrade.org.uk/~/media/fairtradeuk/what%20is%20fairtrade/documents/policy%20and%20research%20documents/policy%20reports/equal%20harvest_exec%20summary.ashx