A fair trade premium: what exactly is that?

When one speaks of fair trade, it is often mentioned that a higher price is paid to the producers of the raw materials which helps them to improve their living standards. Also the optional prefinancing for specific purchases is a key aspect of the system. Moreover, it means that the involved people receive a so-called fair trade premium. This is a special payment whose price is reviewed on a regular basis. Concerning our partner for fairly traded natural rubber – the Fair Rubber Association – the pricing of this extra sum is also regulated in their guidelines.

HOW THE FAIR TRADE PREMIUM IS USED

The recipients of the fair trade premium, the members of a producer cooperative or plantation workers, decide themselves how they want to spend the money. Thus new climbing frames and swings for the children’s day care centre or additional pension schemes for retired rubber workers may be financed. Regular audits guarantee that the money is spent according to fair trade criteria. All in all the fair trade premium is an excellent way to improve the living and working standards for the producers involved.