Fair trade means that the producer receives a guaranteed and fair price for their product regardless of the price on the world market. This means their quality of life should improve, as will long term prospects for their children.
On top of the fair trade minimum price, farmers receive a fairtrade premium.
This is an additional sum for investment in social, environmental and economic development projects to improve their businesses and their communities. In 2012, farmers and workers from some of the world's poorest countries received €80 million in fairtrade premiums.
In 2011 the Manduvirá Cooperative in Paraguay began building a producer-owned factory to process sugar grown on its plantations.
Now rather than paying transportation and rental costs to another factory over 100 km away, this processing plant, partly financed by the fairtrade premium, will significantly improve the lives of sugar farmers, workers and their communities.
Each year, members of the cooperative hold a General Fairtrade Assembly when they decide how to invest that year’s premium. Normally, 50 per cent goes to individuals to invest in their plantations, to buy organic fertiliser, or to invest and save for future costs, such as their children’s education.
The remaining 50 per cent is invested in community projects, such as medical and dental care, and donation of food, clothing or school equipment for low-income families.
For millions of workers on farms and in factories, access to living wages continues to be out of reach.
Fairtrade works inside this system, unlocking opportunities for farmers and workers which large scale businesses can offer, while also widening trade channels through the development of alternative supply chains.