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ECONOMIC DEVELOPMENT For all products Fairtrade standards require the buyers to pay a Fairtrade Minimum Price and/or a Fairtrade Premium to the producers.Fairtrade standards also require buyers to give a financial advance on contracts, called pre-financing, if producers request it. This is to help producers to have access to capital and thus overcome what can be one of the biggest obstacles to their development.This promotes entrepreneurship and can assist the economic development of entire rural communities.
ECONOMIC DEVELOPMENT
For all products Fairtrade standards require the buyers to pay a Fairtrade Minimum Price and/or a Fairtrade Premium to the producers. The Fairtrade Minimum Price aims to help producers cover the costs of sustainable production. The Fairtrade Premium is money for the producers or for the workers on a plantation to invest in improving the quality of their lives. Premium money in this sense is meant to improve the situation of workers, farmers and local communities in health, education, environment, economy, and other areas. The farmers or workers decide the most important priorities for themselves and manage the use of the Fairtrade Premium.
Fairtrade standards also require buyers to give a financial advance on contracts, called pre-financing, if producers request it. This is to help producers to have access to capital and thus overcome what can be one of the biggest obstacles to their development. This promotes entrepreneurship and can assist the economic development of entire rural communities.
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