"An independent guarantee of a better deal for people in developing countries," is how Peter Gaynor of Fairtrade Ireland (FI) defines fairtrade. "It guarantees sustainable prices and ensures that money they make gets back to local communities."
For most products, FI requires the industry to pay a fairtrade minimum price and a premium to the producers. The minimum price is supposed to cover the costs of sustainable production, while the premium is money for the small farmers or the workers on a plantation to invest in improving their livelihood.
In practice, that means an extra $1 (€0.76) on a box of bananas costing $20, which goes back to the local producers. For coffee, the fairtrade premium amounts to $5 per hundred pounds of beans. FI guarantees its coffee producers a price of $1.21 per pound, which is paid, regardless of how low the world price sinks (Gaynor says it currently stands at $1 per pound).
"Our price stays at the floor of $1.21, but if the market prices exceed that we go up with it," he says.
In the past, that meant that fairtrade products cost significantly more than regular brands - in the case of coffee, for example, about 1-€1.50 per bag. Buying fairtrade was an act of faith by consumers prepared to pay more for their beliefs.
But as demand has grown and more suppliers and retailers have become involved, the price differential has dropped. Gaynor says fairtrade coffee is often less than 10c dearer than regular brands these days and in some cases it's actually cheaper. Feeling good about yourself in the supermarket aisle never came so cheaply.
