No abstract

While Fair Trade has promoted premiums for social development for participating producers and strengthened the institutional capacities of the cooperatives involved, its ability to enhance significantly the working conditions of hired coffee laborers remains limited.

coffee, consumers, cooperatives, Fair Trade, farmers, Finland, labor, Nicaragua, retail prices, value chain,

This article assesses the Fair Trade pricing model for coffee, investigating the ability of minimum prices and a social premium to reduce price risk and remedy inequalities. It highlights some of the challenges involved in controlling prices. Inequalities exist among Fair Trade‐certified farmers; some are poorer than others, and the poorer ones typically produce less coffee. If Fair Trade succeeds in its aim of raising the prices received by farmers, this will benefit more those farmers producing greater volumes of coffee and who are typically less vulnerable. In addressing inequalities, the Fair Trade social premium is superior to minimum prices.