From Kenya to Harvard: How financial stability transforms farmer livelihoods
Fairtrade's work isn't just about setting prices and labeling products. Fairtrade's work to improve farmer incomes through the Fairtrade Price and Premium drives measurable ripple effects across farming communities, like Linner Ruto's in Kenya.
Better farmer incomes are the foundation of sustainable livelihoods for farmers like Linner Ruto of Kenya.
It starts with fairer prices and the Fairtrade Premium. Fairtrade Minimum Prices and the Fairtrade Premium – the extra sum paid on top of the selling price that cooperatives invest in their businesses and communities - are shown to contribute to greater price stability for producers and more resources for cooperatives.
This can lead to greater income stability and production improvements. Farmers have more stable incomes in volatile markets, thanks to minimum prices and long-term contracts. The Fairtrade Premium supports community and organizational investments, funds production improvements and builds cooperatives’ resilience to weather times of crisis. In 2023, Fairtrade cooperatives used 20% of Fairtrade Premium funds for financial services for farmers.
Farmers and cooperatives that invest in better practices and infrastructure can see increased yields, higher dividends and greater income from sales. Farm productivity and product quality are the most important factors in realizing economic gains. Access to trade shows and other market linkages facilitated by Fairtrade increase sales opportunities. In a review of many studies conducted on Fairtrade's impact between 2021-2024, 10 found that Fairtrade farmers had higher incomes than their non-Fairtrade counterparts.