Typically, the financial benefits that coffee farmers receive for 'fair trade' - certified coffee is the same for all countries. Therefore, the real benefits will be higher for farmers in countries with lower labor and production costs than in others. Ideally, the price should, therefore, be adjusted to the cost of living and production.
Good question. It is too cumbersome and complex to go for such granular calculation.
Fair trade price focuses, in particular, on goods or products that are normally imported from developing countries. They include products such as coffee, handicraft, cocoa, banana, sugar, tea, wine, fresh fruit, chocolate, and flowers. Fair trade price is the minimum price that importer has to pay to producer of agricultural produce covering the market risk of the farmer and tries to improve their standard of living. Since the cost of production and cost of living differs from country to country and hence fair trade cost calculation must adjust these factors accordingly to support the , working conditions, and other economic factors related to produce. As long as the trade price is above the fair trade price, it allows traders and producers to negotiate higher prices depending on the quality and other attributes. Important reason of not getting fair price depends upon lack of morality in trading and lack of socio economic consideration by government while developing policies for farmers. following link may be more useful in getting subject insight
Article Fair trade: global problems and individual responsibilities
https://ssir.org/articles/entry/fair_trade_a_model_for_sustainable_development#
https://ssir.org/articles/entry/the_future_of_fair_tradeis_there_one
Fair trade price for coffee is a minimum support price at which farmers sell their coffee. When the world price goes up, the amount in excess of fair trade price is paid to the farmer as premium price. The price of coffee varies in different countries, and most of the it is being either exported or imported. So the price cannot be adjusted to the cost of living as it depends on the global market demand.
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