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Spending term of the day: minimum pricing

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The minimum price is, quite simply, the minimum price that a buyer of a Fairtrade-certified product has to pay to a Fairtrade certified producer. Minimum prices apply to most Fairtrade products, including coffee, tea and bananas. 

It is not a fixed price, but provides the lowest possible starting point for negotiations between producer and purchaser. It is set to ensure that the producer receive a price that covers the cost of the sustainable production of whatever they are selling. This is done also to protect farmers at times when world markets fall below a sustainable level.

Fairtrade minimum prices are set based on research into producers’ costs of sustainable production and consultation with traders and other stakeholders.

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