To gain a licence to use the FAIRTRADE mark, businesses need to apply for products to be certified by submitting information about their supply chain. Then they can have individual products certified depending on how these are sourced. Coffee packers in developed countries pay a fee to the Fairtrade Foundation for the right to use the brand and logo. Packers and retailers can charge as much as they want for the coffee. The coffee has to come from a certified fair trade cooperative, and there is a minimum price when the world market is oversupplied. Additionally, the cooperatives are paid an additional per pound premium by buyers for community development projects. The cooperatives can, on average, sell only a third of their output as fair trade, because of lack of demand, and sell the rest at world prices. The exporting cooperative can spend the money in several ways. Some go to meeting the costs of conformity and certification: as they have to meet fair trade standards on all their produce, they have to recover the costs from a small part of their turnover, sometimes as little as 8%, and may not make any profit. Some meet other costs. Some is spent on social projects such as building schools, health clinics and baseball pitches. Sometimes there is money left over for the farmers. The cooperatives sometimes pay farmers a higher price than farmers do, sometimes less, but on which is more common.
To gain a licence to use the FAIRTRADE mark businesses need to apply for products to be certified by submitting information about their supply chain Then they can have individual products certified depending on how these are sourced Coffee packers in developed countries pay a fee to the Fairtrade Foundation for the right to use the brand and logo Packers and retailers can charge as much as they want for the coffee The coffee has to come from a certified fair trade cooperative and there is a minimum price when the world market is oversupplied Additionally the cooperatives are paid an additional per pound premium by buyers for community development projects The cooperatives can on average sell only a third of their output as fair trade because of lack of demand and sell the rest at world prices The exporting cooperative can spend the money in several ways Some go to meeting the costs of conformity and certification as they have to meet fair trade standards on all their produce they have to recover the costs from a small part of their turnover sometimes as little as 8% and may not make any profit Some meet other costs Some is spent on social projects such as building schools health clinics and baseball pitches Sometimes there is money left over for the farmers The cooperatives sometimes pay farmers a higher price than farmers do sometimes less but on which is more common