Salient Issue

Living Income

Roughly 432 million small-scale farms produce an estimated 46% of the world’s food. Despite their critical contribution, research suggests most struggle to earn enough to fulfil basic needs – food, housing, healthcare, education, transport and small savings.

The lack of a living income is particularly prevalent in coffee, cocoa, and sugar cane production, but small-scale farmers in many value chains struggle with insufficient income. Please see also the page on living wages for farm workers.

Poverty – Low prices, lack of viable alternative income sources, and weak public safety nets mire millions of farming households in poverty. Research suggests that among the ten largest coffee producing countries in 2018-2019, only farmers in Vietnam and Brazil were on average earning enough from coffee to escape poverty.

In the largest cocoa producing countries, Ghana and Côte d’Ivoire, between 30 and 58% of farming households live in extreme poverty. Sharecroppers are a particularly impoverished group often receiving less than half of their output for their livelihood. Among sugar cane farmers in Fiji and the Philippines, incomes are below the minimum wage. Among women rice farmers in Pakistan, more than 80% report being severely food insecure.

Insecurity - Price volatility is another major cause of the economic insecurity that many small-scale farmers face. Volatility is particularly strong in coffee, one of the world’s most traded commodities, which is heavily influenced by weather conditions and speculative futures trading on the New York and London stock exchanges. Another commodity that suffers from extreme price volatility is vanilla.

In addition to managing price risk, small-scale farmers also bear risks related to inflation in production costs and crop loss due to weather, pests or mistakes in transportation.

Indebtedness - Small-scale farmers often take on debt to cover family and farm needs. This can result in an inescapable cycle of deepening poverty. For instance, cocoa small-scale farmers in West Africa often must pre-sell their cocoa at a lower rate to finance the harvest and transport. In India, personal indebtedness is one of the explanations for the high level of suicides among small-scale farmers of many crops, including sugar cane, cotton and rice.

Low standard of living on farms is one of the reasons for youth leaving farming and moving to urban areas. This is causing serious loss of needed resources, know-how and labour in farming.

The situation can be aggravated by misguided carbon credit projects. For example, one project in Southwestern Ethiopia enclosed traditional grazing areas, pushing most local households to reduce livestock, but offered very limited employment or other benefits to local communities.

According to research

Fairtrade certification brings economic benefits for farmers and provides price security during periods of market crisis

Review of research on Fairtrade from 2015-2020, 2022, page 30.

Action

Fairtrade's response

Advancing living incomes is at the heart of Fairtrade’s mission. Living income is a human right. The right to just remuneration for work belongs to self-employed people as much as to waged workers.

Every organisation and actor in global value chains has a role to play in advancing living incomes, whether via higher prices, farm productivity and resilience, value addition at origin, or more equitable distribution of risk.

Fairtrade aims to advance living incomes through various measures, guided by our holistic Living Income Strategy. We offer training and support for farmer organisations, establish and promote Living Income Reference Prices, run development projects and advocate for fairer laws and purchasing practices.

Research has generated important insights into how the Fairtrade certification contributes to poverty reduction and rural development¹. Even for that effort, much remains to be achieved.

^{1: Mainlevel Consulting, 2022, Assessing the Impact of Fairtrade on Poverty Reduction and Economic Resilience through Rural Development; Dragusanu, E., et al., 2022, The Effects of Fair Trade Certification: Evidence from coffee farmers in Costa Rica,; Sadekin, M.N. et al., 2021, Contribution of Fair Trade in Sustainable Development.}

According to research

Fairtrade can make an authentic contribution to sustainable development by reducing poverty and sustaining development in the developing nations.

Sadekin, M.N. et al., Contribution of Fair Trade in Sustainable Development, 2021, page 12.

Fairtrade's response in detail

1. Preventive and mitigating measures

Fairtrade aims to bridge the gap² towards living income through a variety of tools and interventions. The Fairtrade Standards are one of those tools. The Standards include several requirements related to living incomes:

Fairtrade Minimum Prices provide farmers a safety net against market price fluctuations. Buying companies must pay producers at least the Fairtrade Minimum Price or the market price when it is higher. Minimum Prices aim to cover the costs of sustainable production and are reviewed regularly in consultation with producers and traders. For a few commodities – flowers, herbs, herbal teas, spices and sugar cane – setting a Minimum Price is practically impossible given the number of variables, qualities and production areas. In these cases, Fairtrade utilises requirements in product-specific Standards to ensure that producers benefit from other aspects of the Standard.
Fairtrade Premiums are paid on top of the Fairtrade Minimum Price and allow farmer organisations to invest in productivity, income resilience or projects related to community development. At each Fairtrade certified farmer organisation, farmers decide democratically each year how to use their Premium money. Find an overview of the use of Fairtrade Premium on the website of Fairtrade International.
Farmer organisation. Fairtrade requires that small-scale farmers form democratic organisations and supports them in doing so. Strong farmer organisations can create value for their members through negotiating power, service delivery, processing, and shared purchases that reduce the cost of seeds, transport and other inputs.
Democratic decision making. Fairtrade Standards also require that farmer organisations maintain democratic structures, transparent administration and sound financial reporting. These help members and the board to steer their organisations, so that it serves their needs and the benefits of Fairtrade reach the farmer members and workers.
Financing. Fairtrade Standards encourage traders to offer producer organisations pre-financing, which can help them obtain loans on more reasonable terms. Oftentimes lenders accept certification itself as a sign of reliability, which improves access to credit for certified organisations³.

Research suggests that Fairtrade improves income, wellbeing and resilience among farmer organisations⁴. Farming households who are part of Fairtrade certified organisations benefit from higher economic resilience than their peers⁵. To explore the full set of Fairtrade’s Standards on living income, please see the bottom of this page.

The impact of these Standards partially depends on the volume of Fairtrade sales, because demand lags behind the supply of Fairtrade certified commodities. For example, Fairtrade certified coffee associations and cooperatives are able to sell just one quarter of their production on Fairtrade terms, even though the full volume is certifiable. The story is similar in bananas (three fifths sold on Fairtrade terms), cocoa and sugar (one third), and tea (one tenth).

However, living incomes can seldom be reached through standards, auditing and corrective measures alone. Fairtrade’s additional interventions are guided by our Living Income Strategy (2017):

Living Income Reference Prices. We work to establish the farmgate price needed for productive, full-time farmers to earn a living income⁶. This allows us to call on and support buyers to pay sufficient prices and improve Minimum Price setting at Fairtrade. For example, we have calculated the Reference Prices for Colombian and Indonesian coffee, West African cocoa and vanilla from Madagascar and Uganda⁷.
Encouraging joint action by supply chain actors. Actors across the value chain need to take coordinated efforts for farmers to achieve a living income. In the example of cocoa, we participate actively in "ISCOs" - the Initiatives for Sustainable Cocoa in different European countries. Some chocolate brands and retailers have indeed committed to paying the Fairtrade Living Income Reference Price for all or some of their chocolate products.
Living income and income improvement projects. We work with commercial partners to implement holistic living income pilot projects. The Living Income Accelerator project in Côte d’Ivoire, for example, runs over the course of 2021-2023 and aims to improve the incomes of cocoa farmers and their communities through diversification and expanded entrepreneurial activities. The intervention targets women and youth, in particular. Direct beneficiaries are 5,000 farmers and their households – estimated to be an additional 30,000 people – across four cocoa cooperatives. For other living income projects, see Fairtrade’s project map.
Enhancing farm cost efficiency. Fairtrade is developing tools to help farmers track their actual production costs and revenues, equipping them to make informed business decisions and become more efficient farmers. For example, Fairtrade has developed record-keeping tools for coffee and cocoa farmers to record their farm expenditures and sales revenues. During 2019, such farm record books were rolled out across 37 Fairtrade farmer cooperatives and other organisations in seven countries and three continents⁸.
Training for farmer organisations. Fairtrade producer networks organise trainings, workshops and give advice, so that farmer organisations are able to improve their governance, administration and negotiating position. Stronger and more reliable organisations create greater value for their members and gain better access to markets.
Research. Shedding light on human rights risks and challenges is a key priority for Fairtrade. We regularly commission independent evaluations and research, such as the 2018 study on cocoa farmer income in Côte d’Ivoire. This study showed that the household income from cocoa farming in Côte d’Ivoire is less than half of a living income, and just 42% of farmers live above the extreme poverty line. This study created the foundation for Fairtrade's Living Income Strategy.
Advocacy in origin and consumer countries. Fairtrade advocates for HREDD policies and legislation that recognises living incomes and living wages as indispensable steps in human rights and environmental protection. Furthermore, we raise awareness around the need for a living income among the general public through campaigns featuring the need for sustainable pricing, such as the 67 cents campaign by Fairtrade Belgium, She deserves by the Fairtrade Foundation and the Impact diaries campaign by Fairtrade Germany.

^{2: Mitigating measures reduce the likelihood of an adverse impact (UNGP Interpretive Guide, p. 12).
3: Mainlevel Consulting, 2022, Assessing the Impact of Fairtrade on Poverty Reduction and Economic Resilience through Rural Development, p. 34-35.}
^4:^{Jodrell and Kaoukji, 2022, Review of research on Fairtrade from 2015-2020, p. 12.}
^{5: Mainlevel Consulting, 2022, Assessing the Impact of Fairtrade on Poverty Reduction and Economic Resilience through Rural Development, p. 28-29.}
^{6: Details on how we determine a living income can be found on the website of Fairtrade International.}
^{7: For further details, see the explanatory notes for Fairtrade’s Living Income Reference Prices for cocoa and vanilla.}
^{8: Fairtrade International, 2020, Living Income Progress Report, p. 4.}

2. Remediating measures

Out of the 736 million people living in extreme poverty worldwide, about 80% live in rural areas and depend on agriculture for survival. Their livelihoods are hampered by environmental and societal turbulence, limited sources of income, low and fluctuating prices for their produce, and weak public services. This is the context that shapes Fairtrade’s efforts to achieve living incomes for Fairtrade producers.

While Fairtrade interventions on average do improve farmers’ livelihoods, they are often insufficient for farmers to reach living incomes⁹. Poverty is so widespread in agricultural, mining and textile supply chains, that specific remediation¹⁰ measures for individuals are rare. Fairtrade’s continuous efforts to advance living incomes are discussed above.

Where FLOCERT, the Fairtrade auditing body, identifies a non-compliance with living income related requirements in Fairtrade Standards, it requires corrective measures to end the non-compliance and ensure that it is not repeated. The corrective measures must be implemented to avoid sanctions, which can include suspension and decertification¹¹.

Fairtrade has a global grievance mechanism - the allegations mechanism housed at FLOCERT - which is under reform to strengthen its alignment with the UN Guiding Principles on Business and Human Rights.

In addition, Fairtrade certified plantations are required to have a grievance mechanism in place which is communicated to workers. Grievance mechanisms are not yet required of farmer cooperatives or traders, but these organisations do need to address and document any human rights and environmental complaints related to Fairtrade Standards.

^{9: Van Baar and Knoote, forthcoming December 2022, A Fair Price for Human Rights Due Diligence, p. 68.}
^{10: Remediation refers to the process of counteracting or fixing a human rights violation through measures that can include apologies, restitution, rehabilitation, financial or non-financial compensation, and punitive sanctions, as well as preventing the repetition or further cases of harm (UNGP Interpretive Guide, p. 12).}
^{11: Details on the certification process can be found on FLOCERT’s website.}

According to research on coffee farmers in Ethiopia

Fairtrade Minimum Price and Premium have had clear impacts on income and farmers earning towards a decent standard of living.

A Fair Price for Human Rights Due Diligence, forthcoming December 2022, page 19.

Compliance criteria

Living income in Fairtrade Standards

Standard	Criteria	Type	Year
Small-scale producer organisation	You have set salaries for workers according to CBA regulations where they exist or at regional average wages or at official minimum wages for similar occupations, whichever is the highest. (Only applicable for organisations and/ or individual members with more than 10 workers that are present for one month or more during a year working more than 30 hours per week or equivalent, and own processing facilities of any size)	M	0
Small-scale producer organisation	You have specified wages for all employee functions. (Only applicable for organisations and/ or individual members with more than 10 workers that are present for one month or more during a year working more than 30 hours per week or equivalent)	C	0
Small-scale producer organisation	For work based on production, quotas and piece-work, during normal working hours, you pay the proportionate minimum wage or the relevant industry average, whichever is higher. (Only applicable for organisations and/ or individual members with more than 10 workers that are present for one month or more during a year working more than 30 hours per week or equivalent, and own processing facilities of any size)	M	0
Small-scale producer organisation	The pay rate for work based on production, quotas and piece-work is transparently calculated and workers and workers' organisations are informed of it. Workers agree that this rate is fair. (Only applicable for organisations and/ or individual members with more than 10 workers that are present for one month or more during a year working more than 30 hours per week or equivalent)	C	0
Small-scale producer organisation	Payment is made in legal tender; only when the worker explicitly agrees can payment be made in kind. (Only applicable for organisations and/ or individual members with more than 10 workers that are present for one month or more during a year working more than 30 hours per week or equivalent)	C	0
Small-scale producer organisation	You are gradually increasing salaries above the regional average and the official minimum wage. (Only applicable for organisations and/ or individual members with more than 10 workers that are present for one month or more during a year working more than 30 hours per week or equivalent)	D	3
Small-scale producer organisation (Cocoa)	Whenever you sell cocoa products as Fairtrade, you indicate in the sales contract the amount of Fairtrade Premium to be paid, and Fairtrade organic differential when applicable, separately from the agreed sales price of the Fairtrade cocoa products (i.e. cocoa beans, cocoa liquor/mass, cocoa butter, and cocoa powder).	M	0
Small-scale producer organisation (Coffee)	When market prices for coffee are higher than the Fairtrade Minimum Price, you agree with the traders on coffee prices using the Fairtrade reference for market prices as follows: NYC (Arabica) or London RC (Robusta) plus prevailing differential. The reference market price can never be below the Fairtrade Minimum Price. A negative differential cannot be applied to the Fairtrade Minimum Price. The organic differential and Fairtrade Premium can never be below the levels defined in the Fairtrade Minimum Price and Premium table. The Fairtrade Premium and organic differential (in the case of organic coffee) are to be added, clearly separated from the prevailing differential, and are not subject to negotiations. The Fairtrade coffee price is as follows: Reference market price (NYC (Arabic) or London RC (Robusta) plus prevailing differential) or Fairtrade minimum price (whichever is higher) plus Fairtrade organic differential (in case of organic coffee) plus Fairtrade premium.	C	0
Small-scale producer organisation (Fresh fruit)	You transfer the money for Fairtrade fruit sales to the accounts of the members to which the sale corresponds.	C	0
Organisation with hired labour	The Fairtrade Premium benefits workers, their families and their communities.	C	0
Organisation with hired labour	The company sets wages for workers and other conditions of employment according to legal or CBA regulations where they exist, or at regional average wages or at official minimum wages for similar occupations; whichever is the highest, with the intention of continually increasing salaries.	M	0
Organisation with hired labour	The company has specified wages for all employee functions and employment terms, such as piecework.	C	0
Organisation with hired labour	Deductions from salaries are only made if they are permitted by national laws, fixed by a collective bargaining agreement or the employee has given his/her written consent.	C	0
Organisation with hired labour	The deducted amounts are in line with the actual costs incurred by the company, and they are not used for disciplinary purposes. (Only applicable if deductions are made from salaries by the company for services it provides)	C	0
Organisation with hired labour	For work based on production, quotas and piecework, during normal working hours, the pay is the equivalent to average hourly waged work based on a manageable work load and is not below proportionate minimum wage or the relevant industry average, which ever is higher.	C	0
Organisation with hired labour	Information about this pay rate, including how it is calculated, is transparent and available for all workers and worker organisations.	C	0
Organisation with hired labour	The company ensures that real wages (wages that have been adjusted for inflation) are increased annually. (Does not apply if clauses that ensure periodical inflation adjustment in addition to nominal wage increases are agreed in the CBA covering the workers in the company)	C	1
Organisation with hired labour	In order to continuously close the gap with living wage benchmarks as approved by Fairtrade International, steps for remuneration increases and the time line towards achieving the applicable living wage are negotiated with trade union representatives or in their absence other elected worker representatives elected to defend the interests of workers. The living wage benchmarks approved by Fairtrade International are the “Living Wage Benchmarks and Reference Values” published by the Global Living Wage Coalition, published at www.globallivingwage.org. Where living wage benchmarks have not been established, you ensure that regular wages are increased in addition to increases for inflation. (Not applicable if sectoral CBA in place and in effect)	C	1
Organisation with hired labour	Payment is made in legal tender.	C	0
Organisation with hired labour	A time bound plan exists for covering all permanent workers with a provident fund or pension scheme and it is implemented.	D	3
Organisation with hired labour	The requirements of the national legislation for provident fund or pension scheme are implemented. (Only applicable if there is a national legislation for provident fund or pension scheme)	C	0
Organisation with hired labour	Records of contracted workers (from the contractor) that indicate the number of workers, their payment and their working hours are available. (Only applicable if workers are subcontracted)	C	1
Organisation with hired labour	The housing ensures structural safety and reasonable levels of decency, privacy, security and hygiene. (Only applicable if the company provides housing)	C	3
Organisation with hired labour	There is regular upkeep of housing and communal facilities. (Only applicable if the company provides housing)	C	3
Organisation with hired labour	If sanitary facilities are shared, a reasonable number of toilets and bathing facilities with clean water, per number of users, and according to regional practice, are available. (Only applicable if the company provides housing)	C	3
Organisation with hired labour	National or state regulations are complied with in all cases and regional norms are taken into consideration. (Only applicable if the company provides housing)	C	3
Organisation with hired labour	Rent for housing is in accordance with local averages. (Only applicable if the company provides housing and charges rent)	C	3
Organisation with hired labour	Workers who are not able to receive free housing are compensated with an allowance that enables them to afford to rent a house of the same standard. (Only applicable if the company provides the majority of general workers with basic housing for free)	C	3
Organisation with hired labour (Banana)	Your company ensures that no worker is paid a wage, in cash after taxes and mandatory deductions, lower than the Fairtrade Base Wage as defined at the level of 70 percent of the Cash Living Wage applicable for your country. Calculation is made according to the guidance 'Calculating wages in the Fresh Fruit Standard' (https://www.fairtrade.net/standard/hl-fresh-fruit; Guidance on requirement 3.1.2).	C	0
Organisation with hired labour (Banana)	You ensure that no remuneration is worsened/reduced after the introduction of this requirement except when formally agreed with a trade union that has the right to bargain.	C	0
Organisation with hired labour (Banana)	Up to 30 percent of the Fairtrade Premium generated from sales as of 2021 is equitably disbursed among all workers in accordance with time worked, as a Fairtrade Bonus. (Applicable as long as there is a gap between the Living Wage Benchmark and the lowest net cash wage received by workers)	C	0
Organisation with hired labour (Banana)	Payments [of Fairtrade Bonus] are made in cash. Premium vouchers of equal value to cash disbursements can be disbursed in those origins where payment in cash is not an advantageous option. Your company demonstrates the transparency and accuracy of the payments made by the Fairtrade Premium Committee according to the rules described in this requirement.	C	0
Organisation with hired labour (Banana)	You ensure that no remuneration is worsened or reduced by the introduction of this requirement, except if it is formally agreed with a union with the right to negotiate.	C	0
Organisation with hired labour (Flowers)	Workers receive housing or have access to transportation free of charge where housing and infrastructure are not available in sufficient quantity and quality. If transport is provided, vehicles used are roadworthy and suitable for passengers, the drivers are qualified and experienced, and vehicles are not overloaded. (For workers who live more than 5 kilometres each way from the plantation)	C	0
Organisation with hired labour (Flowers)	Housing provided is adequate regarding privacy, basic services, including potable water, sewage, road access and where locally available, electricity.	C	0
Organisation with hired labour (Flowers)	The transport allowance covers the real transportation cost in public transport. (Applicable if a transport allowance is paid as alternative to offering free transport)	C	3
Organisation with hired labour (Flowers)	The base wages you pay (in-kind and monetary benefits not included) do not fall below the global poverty line set by the World Bank of currently $1.90/day Purchasing Power Parity (PPP). Any adjustment done by the World Bank is considered. No benefits have been worsened /reduced after the introduction of this requirement except when formally agreed with a trade union.	C	0
Organisation with hired labour (Fresh fruit)	You pay wages that do not fall below the global extreme poverty line ($1.90/ day PPP) set by the World Bank.	C	0
Organisation with hired labour (Sports balls)	The sports ball company ensures that all workers within the value chain receive at least the minimum wage stipulated by the government or earn the relevant industry average (whichever is higher) for all balls produced (Fairtrade or otherwise).	M	0
Organisation with hired labour (Sports balls)	Piece-rate workers receive a rate that is calculated based on the minimum wage. The company ensures that at the end of the month/working day the worker receives at least the minimum wage on a normal working hour basis.	M	0
Organisation with hired labour (Sports balls)	No deductions for quality, disciplinary or other reasons bring the actual wage received below the minimum.	M	0
Organisation with hired labour (Sports balls)	If the money earned from piece-rate work is higher than the minimum wage, workers will get the higher amount.	C	0
Organisation with hired labour (Sports balls)	The management ensures that in factories, factory-owned stitching centres and subcontracted units, charts of piece-rates and a chart of the official minimum wage(s) are placed publicly. The charts are easily visible and printed in the local language. If the piece rates or the official minimum wage(s) change, the charts are updated.	C	0
Organisation with hired labour (Tea)	If your company provides housing for permanent, migrant, seasonal/temporary or former workers, you regularly maintain and improve the houses, you clearly mark the housing area to indicate what is in the scope of provision by your company, and the following is ensured: - houses are located in areas that are free of hazards and houses structure provides protection against typical (heat, cold, rain, wind, damp) and extreme weather conditions, as well as protection against vermin and insects, with permanent walls, sealed and dry floors; non-leaking roofs, windows and doors. - houses have natural and artificial light, - cooking facilities with smoke ventilation and access to water that is suitable for drinking and eating. - doors that can be locked, - marked fire exits and firefighting equipment or fire drills with instructions, - safe electric installations, - well-functioning sewage and garbage disposal systems (Only applicable if the company provides housing) (For organisations certified before 1 April 2022 only applicable as of 01 April 2023)	C	0
Organisation with hired labour (Tea)	If your company charges rent for housing it is according to local averages. (Only applicable if the company provides housing) (For organisations certified before 1 April 2022 only applicable as of 01 April 2023)	C	0
Organisation with hired labour (Tea)	If your company provides the majority of general workers with basic housing, for free, you compensate workers who are not able to receive free housing with an allowance that will enable them to afford to rent a house of the same standard. (Only applicable if the company provides housing) (For organisations certified before 1 April 2022 only applicable as of 01 April 2023)	C	0
Organisation with hired labour (Tea)	Workers have the freedom to be able to choose if they want to be housed on the farm or not. (Only applicable if the company provides housing) (For organisations certified before 1 April 2022 only applicable as of 01 April 2023)	C	0
Organisation with hired labour (Tea)	You comply with national or state regulation in all cases and regional norms should be considered if they exceed this requirement. (Only applicable if the company provides housing) (For organisations certified before 1 April 2022 only applicable as of 01 April 2023)	C	0
Organisation with hired labour (Tea)	If your company provides housing for permanent, migrant, seasonal/temporary or former workers, you ensure safe and hygienic washing and sanitary facilities. You provide usable sanitary facilities (toilets and bathrooms) with clean water and of a style that is in accordance with regional practices. You keep washing and sanitary facilities safe and regularly maintain them with well-functioning sewage. You comply with national or state regulation in all cases and regional norms should be considered if they exceed this requirement. (Only applicable if the company provides housing) (For organisations certified before 1 April 2022 only applicable as of 01 April 2023)	C	0
Organisation with hired labour (Tea)	You complete an annual assessment of quality of housing, washing and sanitary facilities to maintain adequate quality and put in place an improvement plan based on the results of the assessment. The assessment is in written format and is shared with the Fairtrade Compliance Committee. The assessment includes: - Date when assessment was carried out - Total number of houses that company is providing or responsible - A register of workers and their families living within the housing compounds - Number of houses that need to be built or repaired - List of items that need to be built or repaired - Timelines for implementation correspond to the needs and urgency, and do not exceed 6 years from the date of assessment - Responsible person to check the improvements - Records of complaints from residents and corresponding activities (For organisations certified before 1 April 2022 only applicable as of 01 April 2023)	C	1
Organisation with hired labour (Vegetables)	You pay at least the relevant market price or the Fairtrade Minimum Price (as defined in the Fairtrade pricing database) to the Small Producer organisation – whichever is higher. If the price you pay for the Fairtrade product significantly deviates from the relevant market price, you are able to provide a rationale/justification. (Applicable to companies in Africa except Northern Africa)	C	0
Trader	You set salaries for employees to legal and CBA regulations where they exist.	R	0
Trader	Deductions from salaries are only made if they are permitted by national laws or fixed by a collective bargaining agreement.	R	0
Trader	Payments are made in line with national regulations.	R	0
Trader	You comply with applicable legislation for provident fund or pension scheme.	R	0
Trader	You fulfil your role as Fairtrade price and/or Fairtrade Premium payer and/or conveyor as defined in Annex 1 of the Fairtrade Trader Standard or in the relevant product Standard or in an alternative arrangement (if this is allowed in Annex 1) that is agreed between all affected parties (including the producer), documented in writing and reported to the certification body. (Payer, conveyor)	M	0
Trader	You pay at least the relevant market price or the Fairtrade Minimum Price - whichever is higher - to the producer (or the conveyor) (as defined in the Fairtrade pricing database or the relevant product Standard). (Payer, conveyor)	M	0
Trader	You agree with the producer on the source of information for the market price. If available, you use the market price reference indicated in the product standard. (Payer, conveyor)	C	0
Trader	If the price you pay for the Fairtrade product significantly deviates from the relevant market price, you are able to provide a rationale/justification. (Payer, conveyor)	C	0
Trader	Discounts for quality cannot be made on the Fairtrade Minimum Price. The Fairtrade Minimum Price is an absolute minimum. (Payer) (Applicable to conveyors when calculating the differential)	M	0
Trader	In case the Fairtrade Minimum Price is set at a different level in the supply chain (different product form, different incoterm) than the one you are buying at, you adjust the Fairtrade Minimum Price accordingly. The calculations are transparent and reflect real costs. (Payer)(Applicable to conveyors when calculating the price difference)(Not applicable to cocoa purchases from Ghana or Ivory Coast and not to oranges for juice)	C	0
Trader	In case the producer is responsible for some additional costs that are NOT included in the Fairtrade Minimum Price (e.g. packing), you take these costs into account when calculating the Fairtrade Minimum Price. Then the applicable Fairtrade Minimum Price is the Fairtrade Minimum Price plus the costs that the producer is responsible for. (Payer) (Applicable to conveyors when calculating the differential)(Not applicable to cocoa purchases from Ghana or Ivory Coast)	C	0
Trader	You pay at least the Ex Works Fairtrade Minimum Price, if it exists. In case there is only a FOB Fairtrade Minimum Price available, you may deduct reasonable transport and export costs from the price to calculate the Fairtrade Minimum Price at the level at which the producer sells. (Payer)(Applicable if you buy Fairtrade products from producers for sale within the producer country)(Not applicable cocoa purchases from Ghana or Ivory Coast)	C	0
Trader	You take into account the producer’s processing costs and processing ratio in the calculation of the price of the processed product. This price covers at least the Fairtrade Minimum Price of all Fairtrade inputs and the processing costs. (Payer) (Applicable if you are buying a processed product from a producer and a Fairtrade Minimum Price only exists for the raw product but not for the processed product)	C	0
Trader	The Price at Ex Works level includes the Certification Costs (GBP 0.01 per kg of conventional produce and GBP 0.03 per kg of organic produce) which are paid to the Promoting Body. The Certification Costs are deducted from the Price paid to the individual producers, i.e. from the Fairtrade Minimum Price or the market Price, whichever is higher. (Payer) (Only applies to organic and conventional dried apricots and conventional dried wild apricots sourced from Contract Production set-ups)	C	0
Trader	The price at Ex Works level includes the Certification Costs (GBP 0.01 per kg of conventional produce and GBP 0.03 per kg of organic produce) which are paid to the Promoting Body. The Certification Costs are deducted from the price paid to the individual producers, i.e. from the Fairtrade Minimum Price or the market price, whichever is higher. (Payer) (Only applies to almonds, apricot seeds and walnuts sourced from Contract Production set-ups in Pakistan)	C	0
Trader	You pay at least the relevant market price to the producer. (Conveyor)	M	0
Trader	You pay at least the Fairtrade Minimum Price to the producer (or the conveyor) (as defined in the Fairtrade pricing database or the relevant product Standard). (Digital audit) (Payer, conveyor)	M	0
Trader	For products that do not have a defined Fairtrade Minimum Price, the market price has been paid. (Digital audit) (Payer, conveyor)	M	0
Trader	On top of the price for the Fairtrade product, you pay the relevant producer (or the conveyor, or Fairtrade Premium Committee, if applicable) a Fairtrade Premium as defined in the Fairtrade pricing table for the Fairtrade product bought. No discounts are made to the Fairtrade Premium. (Digital audit) (Payer)	M	0
Trader	You pay the Fairtrade Premium to the producer (or Fairtrade Premium Committee, if applicable), if the Fairtrade Premium is conveyed via your company. No discounts are made to the Fairtrade Premium payment. (Digital audit) (Conveyor)	M	0
Trader (Cane sugar)	You agree the price and payment terms with the producer. (Conveyor) (Not applicable if prices are defined by national authorities through mechanisms such as revenue sharing systems or if the price is set by the government)	C	0
Trader (Cashew Nuts from Africa)	You pay the Fairtrade Minimum Price for at least 80% of the nuts purchased. The remaining volume (maximum 20% of the total volume purchased as Fairtrade) may be sourced at market prices. If you sell more than 80% of the nuts (or the kernels derived thereof) as Fairtrade, you pay difference between Minimum and paid market price to the producers on the volume sold on as Fairtrade. (Payer) (First buyer in producing country) (Applicable if the Fairtrade Minimum Price is higher than the Market Price)	C	0
Trader (Cashew Nuts from Africa)	If you import Raw Cashew Nuts you pay the Fairtrade Minimum Price or market price, whichever is higher and the Premium on the whole raw cashew nut quantity purchased. In case corresponding FOB prices for kernel outputs sold as Fairtrade minus transportation and processing costs lead to a figure higher than the paid raw cashew nut Fairtrade Minimum Price, you pay the producers the difference. (Payer)	C	0
Trader (Cocoa)	You ensure that a reference on the market price, either New York (ICE FUTURES US) or London (ICE FUTURES EUROPE) is included in your contract with the producer (or the conveyor) unless official prices have been set by the national government. (Payer, conveyor)	C	0
Trader (Cocoa)	You clearly indicate the amount of Fairtrade organic differential to be paid, separately from the price, in the purchase contract with the producer organisation (or conveyor, if applicable). (Payer, conveyor) (Applicable only if you buy organic FT cocoa products from a producer organisation or conveyor)	C	0
Trader (Cocoa)	You pay the producer (or the conveyor, if applicable) the difference between the Fairtrade Minimum Price and the market price reference (for conveyors: received from the payer) in case the market reference price (as per the Cocobod or CCC) is below the Fairtrade Minimum Price. (Payer, conveyor) (Applicable for purchases from Ghana and Ivory Coast)	C	0
Trader (Coffee)	You ensure that the real costs of storage, interest and insurance are paid by you and are detailed in the contract. (Payer, conveyor) (Only applicable if you have requested an extension of shipping schedule beyond the timings of normal commercial practices, i.e. three months after the harvest)	C	0
Trader (Cocoa)	You negotiate the price of the semi-processed product with the producer. This negotiated price is based on, at least, the cocoa beans reference values of USD 2150/MT (for conventional) and USD 2450/MT (for organic) at producers’ level plus all relevant processing costs. The Fairtrade Minimum Price is calculated using the average processing yield calculated by the producer. It is only if this information is not available to the producer that the processing yields from beans in 4.2.6 (Cocoa product standard) apply. (Payer) (Applicable only if you are buying semi-processed cocoa products from producer organisations)	C	0
Trader (Coffee)	You, (who is requiring the services of the broker mentioned in the contract) have paid the broker’s commission. (Payer, conveyor) (Only applicable if a broker has been used)	C	0
Trader (Coffee)	You do not make any discount from the Fairtrade Premium. If deducting costs from the Fairtrade Minimum Price, you only consider the items included in the generic guidance document issued by Fairtrade International. (Payer, conveyor) (Applicable only if not buying green exportable coffee at FOB level)	C	0
Trader (Coffee)	When market prices for coffee are higher than the Fairtrade Minimum Price, traders and producers are to agree coffee prices using the Fairtrade reference for market prices as follows: NYC (Arabica) or London RC (Robusta) plus prevailing differential. The reference market price can never be below the Fairtrade Minimum Price. The ‘prevailing differential’ refers to the average differential or range valid in the mainstream market for conventional coffee of that country and grade at that moment. Producers and buyers agree upon a differential, using the differential that prevails in the mainstream market for non-Fairtrade coffee, as a baseline, and taking into account actual quality, shipment date, logistics, risk, and availability. A negative differential cannot be applied to the Fairtrade Minimum Price. The organic differential and Fairtrade Premium can never be below the levels defined in the Fairtrade Minimum Price and Premium table. The Fairtrade Premium and organic differential (in the case of organic coffee) are to be added, clearly separated from the prevailing differential, and are not subject to negotiations. The Fairtrade coffee price is as follows: Reference market price (NYC (Arabic) or London RC (Robusta) plus prevailing differential) or Fairtrade minimum price (whichever is higher) plus Fairtrade organic differential (in case of organic coffee) plus Fairtrade premium. (Payer, conveyor)	C	0
Trader (Coffee)	You do not demand payment terms to suppliers that result in additional financing costs being passed on to producer organisations and negatively impact the Fairtrade Minimum Price and Fairtrade Premium. (Payer, Conveyor)	C	0
Trader (Coffee)	You do not buy Fairtrade certified products from a producer organisation on the condition that the producer organisation sells a quantity of non-certified product at a discount. (Payer, conveyor)	C	0
Trader (Flowers and plants)	You pay the difference between the Fairtrade Minimum Price and the price at which you initially bought the product from the producer in case the Fairtrade Minimum Price is higher and/or the Fairtrade Premium to the producer no later than 30 calendar days after receipt of payment from the Fairtrade payer. (Conveyor)	C	0
Trader (Gold)	Transportation and insurance costs from point of export are paid by the importer (buyer), unless the ASMO (or the miner) and the importer agree on other arrangements that are not detrimental to the ASMO (or the miner). (Payer)	C	0
Trader (Oranges for juice)	You pay the producer the price difference between the Fairtrade Minimum Price and the price at which you initially bought the product from the producer in case the Fairtrade Minimum Price (or the adjusted price if set at a different level) is higher. (Oranges for juice) You pay the producer the differential if there is a difference between the price paid to producers for the oranges for juice based on the preliminary analysis report and the FOB orange juice price received when selling the orange juice. (Conveyor) (Not applicable to cocoa purchases from Ghana or Ivory Coast)	C	0
Trader (Oranges for juice)	You pay the producer the price for the equivalent quantity of juice that their oranges produce (FCOJ or NFC, depending on what is sold to the importer) according to the yield in the preliminary analysis report. The price paid to the producer for the oranges for juice is calculated using the percentages based on the FMP or market price, whichever is higher, as defined in 5.4.3 of the Fresh fruit (HL) standard and 4.2.3 of the Fresh fruit (SPO) standard. (Conveyor)	C	0
Trader (Oranges for juice)	You do not make any deductions from the indicated percentage of the FOB price, whether applied to the Fairtrade Minimum Price (FMP) or the market price. (Conveyor)	C	0
Trader (Orange juice; Coffee, applicable to green bean sales and purchases)	You do not sell or buy Fairtrade products below the Fairtrade minimum price, the Fairtrade premium and the organic differential (if applicable).	C	0
Trader (Sports balls)	You have paid a surcharge of up to 5% of the negotiated price as Compliance Costs Compensation if invoiced by the producer. (Payer)	C	0
Trader (Tea)	If the original invoice price for the Tea was below the applicable Fairtrade minimum price for that country/region you pay the difference along with the due Fairtrade Premium. (Payer, Conveyor) (Applicable in case of retro-certification)	C	0