Fairtrade Premium spending on the Sustainable Development Goals
Fairtrade producers decide democratically how to spend the Fairtrade Premium (the amount that producer organizations earn on top of selling price for each Fairtrade sale).
We analyse this Fairtrade Premium investment according to categories that we have defined. We have also started to map these categories to the UN Sustainable Development Goals (SDGs), in order to see how producers themselves are choosing to work towards these global targets.
Because the SDGs are so interconnected, calculating how the Fairtrade Premium is allocated among them is quite complex. We decided to associate only one SDG to each Premium project category in order to avoid double counting. Below is the Premium expenditure date for 2016-2017.
It is worth discussing why SDG 2 (Zero Hunger) features so prominently in the expenditure, although we typically associate Fairtrade with other SDGs areas such as No Poverty, Decent Work, and Sustainable Cities and Communities. This is due to the UN’s definition of SDG 2, which covers initiatives that support small-scale farmers, agricultural productivity and sustainable food systems.
So any Premium investment by farmer cooperatives into improving agricultural practices, purchasing equipment or inputs such as fertilizer, building facilities such as a warehouse, or strengthening their own organizations fall under this SDG. As these comprise the majority of Fairtrade Premium expenditure for small-scale producer organizations, SDG 2 features very prominently in this analysis.
The picture is quite different for plantations that hire a large workforce (known as hired labour organizations in our standards). Although achieving food security and promoting sustainable agriculture are highly relevant topics to plantation workers, their families and communities, Premium spending by plantation workers on SDG 2 appears significantly lower. Other SDGs on poverty elimination (SDG 1), education (SDG 4), and decent work (SDG 8) feature much more prominently.
A large proportion of Fairtrade Premium earned by hired labour organizations is invested in services to workers and their families, which we generally map to SDG 8. However, when projects fit specifically to areas covered by other SDGs, we map them there instead. For instance, projects to provide bursaries or scholarships to workers’ children is mapped to SDG 4.
Again, individual Premium investments are usually associated with more than one SDG – often many SDGs. For example, Fairtrade Premium to provide loans to workers and their families to develop their own side businesses is currently associated with SDG 8. However, it is also closely related to poverty elimination, zero hunger, sustainable communities (SDG 11) and more.
Read more about how Fairtrade’s work more broadly contributes to the SDGs, in addition to this analysis of Fairtrade Premium investment.
What is the Fairtrade premium?
The Fairtrade Premium is an extra sum of money paid on top of the selling price that farmers or workers invest in projects of their choice.
They decide together and democratically how to spend the Fairtrade Premium to reach their goals, such as improving their farming, businesses, or health and education in their community. Farmers and workers know best what their priorities and needs are.
Since 2014, Fairtrade farmers and workers have received well over half a billion euros in Fairtrade Premium.
This is a unique benefit enabled by your decision to buy Fairtrade products.