Does Fair Trade cost more?
Fairly traded crafts and products generally do not cost more than conventionally traded goods. This is because there are only 1 to 2 middlemen between the end-customer and the producer/farmer. In the fair trade product lifecycle, many middlemen are cut, since wholesalers and even some retailers work directly with the producers. This enables the cost of the product to stay the same, while re-distributing the amount of money that goes to the producer.
When it comes to coffee or cocoa, the social premium that is paid is not too high. According to Fairtrade Labeling Organization, on average, fair trade coffee farmers are paid:
- 10 cents on top of the per kilo price for fair trade certified coffee
- 20 cents on top of the per kilo price for organic and fair trade certified
In the end, fair trade is not about setting mindless or irresponsible price floors. A fair price for goods is calculated based on the effort put into making a product or growing produce, and based on other factors such as the estimated living wage in different regions of the world. Nevertheless, you shouldn’t expect to pay much more for fair trade products.
According to the Fair Trade Resource Network:
“Generally, fairly traded crafts don’t cost more than other goods because the large percentage taken by middle people is removed from the equation. The cost remains the same as traditionally traded goods; however, the distribution of the cost of the product is different.”