Forgive me if the following post is controversial or sounds in any way smug, in an "I'm all right so what's all the fuss about" way. But I don't understand the problem with authors being offered peanuts, or in some cases nothing at all, for appearing at literary festivals. If it's such a problem, the solution is perfectly simple. Don't go. No author is forced to attend a literary festival. If the festival is not offering a fee, you are under no obligation to accept. Not many books are sold at festivals, unless you are already a big name already selling millions elsewhere, in which case the number you will sign at the festival is going to be insignificant.
Publishers may be prepared to pay for their authors' travel and accommodation, but this is a financial consideration and will understandably depend on how well the individual author's books are selling. Your publisher will obviously be happy to cover these expenses if the amount is insignificant compared to the revenue they derive from your books. Otherwise, it would be unreasonable to expect them to pay. (I hope my publisher never feels the need to remind me I said that... )
To claim that authors depend on income from such appearances is a contradiction in terms. Fortunate enough to earn a living from writing fiction, these days I call myself a 'full-time writer'. Before I could afford to give up my day job, I called myself a teacher who wrote books. If you rely on teaching or public appearances to pay your bills, you are a teacher, or a public speaker, who writes books. You are not a full-time writer. I do appreciate the terrible irony of the situation. When you earn enough from your writing to easily fund trips to festivals yourself, someone else will pay for you to be there. While you are struggling with the finances, you are on your own.
It seems to me that authors benefit hugely from literary festivals. That is why many writers attend even if they are not participating on panels, or giving interviews. Apart from the opportunity to catch up with fellow authors, network with industry professionals, and meet readers, festivals are interesting and enjoyable. And if you are contributing, not only is it fun, but you have the added bonus of seeing your name in the programme, which is free promotion to a target audience.
I happen to think literary festivals are an important cultural phenomenon, allowing us to meet our readers face to face, in a world where so much of our life is acted out online. If you don't buy into the ethos of literary festivals, stay at home and spend the time writing. Vote with your feet, and stop bleating.