Fairtrade International is an NGO, multi-stakeholder association including three producer networks and 25 local Fairtrade organizations. As brand influencers, they communicate the value of externalities to stakeholders and at retail and consumer level. Fairtrade International wanted measure farmer household income and living income of Fairtrade certified cocoa farmers to gain more insights into the living income gap and to inform their sustainable strategies and programs
The farmer household income method was applied by collecting data from over 3000 farmers. The analysis included insights in the distribution of farmer household income, the profitability of cocoa and the value added (profit + labour costs) per FTE. These results were compared to the living income benchmark. Moreover, we did a threshold analysis, in which we analysed under which conditions Fairtrade can help their farmers to earn above the poverty line – or even help them make a living income.
Benefits to the client
This study can be used to inform Fairtrade on its strategies and programs, including the Fairtrade Minimum Price setting and the Fairtrade Premium Projects. More specifically, it can help Fairtrade in developing their long-term strategy for reducing poverty amongst smallholders farmers. Moreover, insights from this study can be used as a starting point for future research on several subjects, such as farm management practice and productivity.
* The customer was working with the Impact Institute under its former name, True Price