Fairtrade provides a minimum baseline price for commodities, allowing farmers to hedge against market volatility. The co-operative system allows small farmers better access to global markets and encourages democratic representation. Each commodity price also includes a "social premium" which can be reinvested in social or development projects.


However, economist Paul Collier argues that Fairtrade effectively ensures that people "get charity as long as they stay producing the crops that have locked them into poverty". Fairtrade reduces the incentive to diversify crop production and encourages the utilisation of resources on marginal land that could be better employed for other produce. The organisation also appears wedded to an image of a notional anti-modernist rural idyll. Farm units must remain small and family run, while modern farming techniques (mechanisation, economies of scale, pesticides, genetic modification etc) are sidelined or even actively discouraged.

Fairtrade director of communications Barbara Cowther admitted in the documentary A Bitter Aftertaste that the organisation had no real policy on mechanisation – this despite the fact that it is central to agricultural development.

By guaranteeing a minimum price, Fairtrade also encourages market oversupply, which depresses global commodity prices. This locks Fairtrade farmers into greater Fairtrade dependency and further impoverishes farmers outside the Fairtrade umbrella. Economist Tyler Cowen describes this as the "parallel exploitation coffee sector".