Sugar
Sugar production is one of the most expensive crops with complex price setting mechanisms which put the producers at a disadvantage.
Sugar production is one of the most expensive crops with complex price setting mechanisms which put the producers at a disadvantage.
Fairtrade farmers produce cane sugar
metric tonnes of cane sugar are produced on Fairtrade terms
Fairtrade Premium is received by cane sugar producers
Sugar. You probably have some in your kitchen – after all, it’s a key ingredient in so many of the foods and drinks we enjoy. But it’s not all sweet; small-scale sugar cane farmers face intense pressure from large-scale producers, price swings and climate change.
About 175 million tonnes of sugar are produced each year. The majority of that comes from sugar cane, with sugar beets in second place. Global sugar markets fluctuate wildly, though prices have fallen consistently over the last few years. This has created immense pressure on the industry including reducing the capacity to pay sugarcane farmers a fair price in a timely manner.
Sugar cane farmers grapple not only with price volatility, but also with competition from other sources. When the European Union decided to end caps on its own sugar beet production in 2017, small-scale sugar cane farmers around the world faced the prospect of losing a major market for their goods.
Elsewhere, government subsidies to large-scale sugar producers in countries like Brazil, Mexico and Thailand further squeezed farmers in smaller states where governments cannot afford financial support to local production.
Beyond the markets, unpredictable droughts and heavy rains have hit sugar cane farmers hard. For farmers, very invested in a single crop, adapting to the new norms of a changing climate is very challenging.
Some of the revenues generated through Fairtrade have supported farmers to improve irrigation and drainage infrastructure as well as diversify their crops, providing an extra line of defence against tropical storms and droughts.
Unlike for other Fairtrade products, there is no Fairtrade Minimum Price for sugarcane, because price setting mechanisms in the sugar market are highly complex and often distorted. Small-scale farmers benefit from a Fairtrade Premium for all cane sold on Fairtrade terms. This premium is paid on top of the regular sales price. Producer organisations use this money to foster organisational, environmental and productivity progress, to make direct payments to their members, and to finance community projects.
This is just part of how Fairtrade empowers farmers to take more control of their own future.
Fairtrade works with farmers who’ve formed small producer organisations, as well as contract production organisations in the process of forming independent co-operatives. These farmer organisations create a local support mechanism that facilitate:
Access to markets
Access to finance
Knowledge sharing
Better resource management
Better risk management
