FLO Response to The Economist
SIR – You stated that Fairtrade is a subsidy that encourages overproduction. In fact, Fairtrade is a voluntary model of trade that brings consumers and companies together to offer organisations, that represent small farmers and hired labour, a price for their produce that covers the cost of sustainable production and provides a sustainable livelihood. Fairtrade is a market-responsive model of trade: the farmers receive the Fairtrade minimum prices and premiums only if they have a buyer willing to pay them and many producer groups also sell in the conventional market. Our experience is that producers ses their additional income from Fairtrade to improve their homes, send their children to school and improve the quality of their existing crop, rather than to increase production.
Fairtrade Labelling Organisations International