Editing Fair trade (section)

==== Less money reaches farmers ====
The Fairtrade Foundation does not monitor how much of the extra money paid to the exporting cooperatives reaches the farmer. The cooperatives incur costs in reaching fair trade standards, and these are incurred on all production, even if only a small amount is sold at fair trade prices. The most successful cooperatives appear to spend a third of the extra price received on this: some less successful cooperatives spend more than they gain. While this appears to be agreed by proponents and critics of fair trade,<ref>e.g. Utting-Chamorro, K (2005). "Does Fairtrade make a difference? The case of small coffee producers in Nicaragua." ''Development in Practice'', Volume 15, Numbers 3 and 4, June 2005, Berndt, C.E. (2007). ''Is Fair Trade in coffee production fair and useful? Evidence from Costa Rica and Guatemala and implications for policy.'' Washington DC.: Mercatus 65 Policy Series, Policy Comment 11, Mercatus Centre, George Mason University.</ref> there is a dearth of economic studies setting out the actual revenues and what the money was spent on. FLO figures<ref name="Labelling">{{cite web |publisher=Fairtrade Labelling Organizations International |title=Annual Report 2009–2010 |year=2010 |access-date=May 27, 2011 |url=http://www.fairtrade.net/fileadmin/user_upload/content/2009/resources/FLO_Annual-Report-2009_komplett_double_web.pdf |archive-date=January 13, 2011 |archive-url=https://web.archive.org/web/20110113142003/http://www.fairtrade.net/fileadmin/user_upload/content/2009/resources/FLO_Annual-Report-2009_komplett_double_web.pdf |url-status=live }}</ref> are that 40% of the money reaching the [[developing world]] is spent on "business and production", which would include these costs as well as costs incurred by any inefficiency and corruption in the cooperative or the marketing system. The rest is spent on social projects, rather than being passed on to farmers.

Differing anecdotes state farmers are paid more or less by traders than by fair trade cooperatives. Few of these anecdotes address the problems of price reporting in developing world markets,<ref>See Bowbrick, P, "Are price reporting systems of any use?", ''British Food Journal''. 90(2) 65–69 March/April. 1988. Current international research on developing world market information systems is given at [http://www.sim2g.org/ sim2.org] {{Webarchive|url=https://web.archive.org/web/20110904205602/http://sim2g.org/ |date=2011-09-04 }}</ref> and few appreciate the complexity of the different price packages that may or may not include credit, harvesting, transport, processing, etc. Cooperatives typically average prices over the year, so they pay less than traders at some times, more at others. Bassett (2009)<ref>Bassett, T. (2009). "Slim pickings: Fairtrade cotton in West Africa." ''Geoforum''.</ref> compares prices only where Fairtrade and non-Fairtrade farmers have to sell cotton to the same monopsonistic ginneries which pay low prices. Prices would have to be higher to compensate farmers for the increased costs they incur to produce fair trade. For instance, fair trade encouraged Nicaraguan farmers to switch to organic coffee, which resulted in a higher price per pound, but a lower net income because of higher costs and lower yields.<ref name="valkila2009"/>{{Sfn | Kilian | Jones | Pratt | Villalobos | 2006}}<ref>Wilson, B. R. (2009). "Indebted to Fair Trade? Coffee and Crisis in Nicaragua." ''Geoforum''.</ref>