Fair Trade farmers aren’t afraid of investing

The farmers who belong to the Fair Trade cooperative Asoguabo invest more than their neighbour farmers in for example cableways, improved packing stations and environmentally sustainable production methods. This is thanks to the fair trade price, which is fixed. This means that the farmers can plan ahead because they always know how much they will earn, in contrast to their fellow farmers who are dependant on the fluctuating market price of banana.

The fair trade farmers also receive better technical assistance. They produce more banana with the same input of labour and land as their fellow non-fair trade farmers. This means more income for their families.

Other, less tangible benefits are for example the teachers and health centres paid for by the fair trade social premium the cooperative receives.

Source: Ruerd Ruben, Luud Clercx, Dario Cepeda ja Thomas de Hoop: Widening and Deepening Fair Trade Impact of Banana Production in El Guabo Association, Ecuador: a Production Function Analysis

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