What is the Fairtrade Premium?
The Fairtrade premium is a sum of money paid, on top of the agreed Fairtrade price, for investment in social, environmental or economic development projects, decided upon democratically by producers or workers at ground level in the organisation.
The premium is fixed by the FLO Standards Unit in the same way as the minimum price and remains the same, even if the producer is paid more than the minimum price for the product. For gold the premium is $2 per gram of gold imported.
The premium fund is typically invested in education, health & socialcare, improvements to increase yield and quality, or processing facilities to increase income.
The difference Fairtrade gold makes
We are very excited about the difference Fairtrade gold is making to small mining communities. It is consumers who ask for Fairtrade gold that are contributing to improving the lives of these people by demanding to know that the products they are buying are produced safely and ethically.
Since the launch of Fairtrade gold in February 2011 CRED has given over $250,000 in Fairtrade premiums to our mining communities in South America.
CRED imported over 90% of the total Fairtrade gold in the 12 months from the launch. 15kg of this came from the Sotrami community mine in Peru. This is the equivalent of 3,750 average sized wedding rings.
As well as providing them with steady and fair income, the real story is of the impact the 10% Fairtrade premium is making to the local community in Peru. The Fairtrade premium is a sum of money paid on top of the agreed Fairtrade price for all certified goods for investment in social, environmental or economic development projects, decided upon democratically by the workers at ground level.
At Sotrami the community invested their premium over the first 12 months in multiple social an economic areas. They have built a small extension to the primary school and bought computers for the senior school. They have opened a not for profit convenience store which means the 5000 strong community can buy food at reasonable prices. They are improving the water supply. They have invested in improved health and dental care. The community is very isolated at 70 miles from the nearest town.
In just one year this just proves what a great impact Fairtrade can have on a community and how it helps to improve the lives of the whole community. The workers who mine the gold at Sotrami live high up in the Andes mountains and have endured great hardships over the years. They live above the tree line where there is no vegetation in this barren mountainous region. It is like a desert on top of the world.
Thanks to Fairtrade the basic social fabric is changing for good. All this is made possible by consumers who want to know that their gold is sourced to the highest standards with regard to people and the environment.
So you can know that whenever you buy a piece of jewellery made from Fairtrade gold you are making these changes happen. By asking for a Fairtrade standard on your gold and other consumer goods you are contributing to improving the lives of these people and others across the world.
Read about the difference the premium made in 2014.