Fair Price & Wages

Towards an integrated approach for project analysis for small farmers: the Living Income / Fair Price method

The paper provides a basis for an integrated approach of agricultural project analysis with special attention to small farmers by expanding...

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'Fair' Prices : Peasants and the possibilities of a Living Income (including a case study of Burkina Faso)

InfoBridge published a study paper: 'Fair' Prices : Peasants and the possibilities of a Living Income (including a case study of Burkina Faso)

After a brief discussion of the main approaches to the concept of the ‘Living Wage’ (LW), a methodology is developed how to apply this concept to the case of peasants. Since peasants do not receive a wage, the Living Wage definition is adapted to that of a ‘Living Income’ (LI). 

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A peasant should earn sufficient to pay seasonal workers and family members a Living Wage for the time they work, while himself earning a Living Income. The Living Income is the sum of the Living Wages for all workers involved, plus an additional percentage to enable investments to raise production in time. Instead of taking market prices as point of reference, the Living Income approach for peasants is a method to calculate what producer prices should be, given the size of the area and existing production methods, in order to be able to earn a Living Income. These prices may be different from market prices that often are not equilibrium prices, because of food aid, subsidies on imports, power positions of market parties etc. Comparison of the prices needed for a Living Income with actual market prices may lead to a further reflection on the prevailing price system for food crops, and to questions about the long-term food security and development prospects of the country, and of peasants especially. A calculation of prices needed to achieve a Living Income and the differences with market prices is worked out for a case in Burkina Faso. 

The study paper can be found here