Editing Fair trade (section)

===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>