The FairShare rate indicates the percentage of the final price of a product that goes directly to the farm for the cultivation and production of the food. It shows the relationship between the production costs and the final price.
- The lower the FairShare ratethe more of the final price is spent on cultivation and production.
- The higher the rateThe more costs for transport, organization and packaging reduce the proportion that remains for agricultural production.
Influencing factors
An important factor influencing the TEIKEI FairShare rate is the Distance from the farm from the TEIKEI pick-up location. The further away the farm is, the higher the FairShare rate will beas longer transportation routes and additional logistical expenses have to be taken into account.
The Type of packaging plays a major role: reusable packaging or more complex packaging systems increase costs and therefore the fair share rate, as additional resources have to be used for packaging.
In addition, the Distribution channels a key factor: the FairShare rate is lowest when production takes place locally and the products are sold directly via TEIKEI pick-up locations be organized. In these cases, fewer transportation and distribution costs are incurred, which means that the share for agricultural production remains higher.
Example calculation for olive oil
Let's assume that the final price for a bottle of olive oil is 10 euros and the FairShare rate lies with 1,6. To calculate how much of this amount is spent directly on cultivation and production, the final price can simply be divided by the FairShare rate:
Amount for production = final price / FairShare rate = 10 euros / 1.6 = 6.25 euros
This means that of the final price of 10 euros 6,25 Euro directly into the production of olive oil.
Take a look at the implementation of the FairShare rate in our TEIKEI Online Marketplace to.
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