Editing Fair trade (section)

== Effect on growers ==
Fair trade benefits workers in developing countries. The nature of fair trade makes it a global phenomenon; therefore, there are diverse motives for group formation related to fair trade. The social transformation caused by the fair trade movement also varies around the world.<ref name=":2">{{Cite book|title=Fair Trade from the Ground Up|last=Linton|first=April|publisher=University of Washington Press|year=2012|isbn=978-0-295-99172-6}}</ref>

[[File:Young women soil testing.jpg|thumb|Three young Nicaraguan women demonstrate to visiting U.S. buyers and consumers the use of organic soil testing methods.|alt=Teaching organic soil testing in Nicaragua.]]

A study of coffee growers in Guatemala illustrates the effect of fair trade practices on growers. In this study, thirty-four farmers were interviewed. Of those thirty-four growers, twenty-two had an understanding of fair trade based on internationally recognized definitions, for example, describing fair trade in market and economical terms or knowing what the social premium is and how their cooperative has used it. Three growers explained a deep understanding of fair trade, showing a knowledge of both fair market principles and how fair trade affects them socially. Nine growers had erroneous or no knowledge of Fair Trade.<ref name=":2" /> The three growers who had a deeper knowledge of the social implications of fair trade all had responsibilities within their cooperatives. One was a manager, one was in charge of the wet mill, and one was his group's treasurer. These farmers did not have {{clarify|text=a pattern|date=March 2022}} in terms of years of education, age, or years of membership in the cooperative; their answers to the questions, "Why did you join?" differentiate them from other members and explain why they have such an extensive knowledge of fair trade. These farmers cited switching to organic farming, wanting to raise money for social projects, and more training offered as reasons for joining the cooperative, other than receiving a better price for their coffee.<ref name=":2" />

Many farmers around the world are unaware of fair trade practices that they could be implementing to earn a higher wage. Coffee is one of the most highly traded commodities in the world, yet the farmers who grow it typically earn less than $2 a day.<ref name=":0">{{Cite journal|title = Fair Trade Awareness and Engagement: A Coffee Farmer's Perspective|last1 = Fergus|first1 = Andrew|date = 2014|journal = Journal of the Center of Business Ethics, Bentley University|doi = 10.1111/basr.12037|last2 = Gray |volume=119 |issue = 3|pages=359–384|s2cid = 153622303}}</ref> When surveyed, farmers from Cooperativa Agraria Cafetalera Pangoa (CAC Pangoa) in San Martín de Pangoa, Peru, could answer positively that they have heard about fair trade, but were not able to give a detailed description about what fair trade is. They could, however, identify fair trade based on some of its possible benefits to their community. When asked, farmers responded that fair trade has had a positive effect on their lives and communities. They also wanted consumers to know that fair trade is important for supporting their families and their [[cooperatives]]. Overall, the farmers studied were satisfied with the current fair trade system, but some of them, such as the Mazaronquiari group of the CAC, desire yet a higher price for their products in order to live a higher quality of life.<ref name=":0" />

Some producers also profit from the indirect benefits of fair trade practices. Fair trade cooperatives create a space of solidarity and promote an entrepreneurial spirit among growers. When growers feel like they have control over their own lives within the network of their cooperative, it can be empowering. Operating a profitable business allows growers to think about their future, rather than worrying about how they are going to survive in poverty.<ref name=":2" />

===Social premium ===
A component of fair trade is the extra money that buyers of fair trade goods pay to the producers or producer-groups, sometimes referred to as a "social premium." The producers or producer-groups decide where and how to spend the social premium.. These premiums usually go towards socioeconomic development, wherever the producers or producer-groups see fit. Within producer-groups, the decisions about how the social premium will be spent are handled democratically, with transparency and {{clarify|text=participation|date=March 2022}}.<ref name=":2" />

Producers and producer-groups spend this social premium to support socioeconomic development in a variety of ways. One common way to spend the social premium of fair trade is to privately invest in public goods that infrastructure and the government are lacking in. These include environmental initiatives, public schools, and water projects. At some point, all producer-groups re-invest their social premium back into their farms and businesses. They buy capital, like trucks and machinery, and education for their members, like organic farming education. Thirty-eight percent of producer-groups spend the social premium in its entirety on themselves, but the rest invest in public goods, like paying for teachers' salaries, providing a community health care clinic, and improving infrastructure, such as bringing in electricity and bettering roads.<ref name=":2" />

Farmers' organisations that use their social premium for public goods often finance educational scholarships. For example, Costa Rican coffee cooperative Coocafé has supported hundreds of children and youth at school and university through the financing of scholarships from funding from their fair trade social premium. In terms of education, the social premium can be used to build and furnish schools too.<ref>{{Cite book|title = 50 Reasons to Buy Fair Trade|last1 = Litvinoff|first1 = Miles|publisher = Pluto Press|year = 2007|isbn = 978-0-7453-2584-2|last2 = Madeley|first2 = John|url-access = registration|url = https://archive.org/details/50reasonstobuyfa0000litv}}</ref>