Millennium Development Goals and Better Cotton: UNA publication

05.08.13 Forum for the Future
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As international efforts are proving, sustainable cotton production doesn’t just benefit the environment – it also improves the lives of the farmers and their families. Katherine Rowland reports.

Cotton has a battered reputation as a thirsty crop, and one demanding high levels of pesticide and insecticide. But innovations in recent years reveal that these traits belong to agricultural practices, and are not inherent to the crop itself. Indeed, international efforts from the likes of the Better Cotton Initiative (BCI) are steadily proving, not only that cotton production can be made more sustainable, but that decreasing the crop’s ecological toll can improve the lives and livelihoods of farmers.

Around 90% of the world’s 100 million cotton farmers live in developing countries, raising the crop on less than two hectares. These smallholders are especially vulnerable to market shifts and climate flux, and the performance of a single growing season can make or break a household. But global businesses are also tethered to the fate of these small plots. Smallholders comprise the basis of diversified and geographically dispersed supply chains that offer greater resilience than relying on the performance of a single crop. To ensure future supply, several leading companies are intervening on the ground to safeguard the resources on which cotton cultivation depends.

The John Lewis Foundation, a charitable trust set up by the UK retailer, has invested in a three-year programme to train 1,500 farmers in Gujarat, India, in sustainable production techniques. Through a combination of field and classroom based sessions, the trainings address issues such as soil health and water conservation, pest management, reduced chemical use and decent labour standards.

The retailer is working with CottonConnect, a social purpose enterprise set up in 2009 by the Textile Exchange, C&A, and the Shell Foundation, which helps companies map sustainable strategies throughout the supply chain, from ground to garment. The organisation does not set standards for sustainability, but rather works with retailers to meet sourcing objectives, such as Fair Trade and Better Cotton. With the goal of cultivating one million acres of sustainable cotton by 2015, CottonConnect works with up to 80,000 farmers annually, predominantly in India and China.

According to Anna Karlsson, Sustainable Development Manager at CottonConnect: ”Economic benefit will keep farmers interested in continuing the training and implementing the practices. Environmental gains are secondary for most farmers. In the short term, using fewer pesticides will save them money, and using them in the right way will have health benefits. In the long term, [better practice] improves the soil, reduces leaching of chemicals into water, and encourages biodiversity.”While the economic gains come chiefly from spending less on inputs, which in some countries can make up 60% of cotton production costs, better land management strategies also play a prominent role. Techniques such as soil assessments, which let farmers know how much and what type of fertiliser to apply, manure composting, intercropping and crop rotations help to preserve soil health; rainwater harvesting saves on irrigation, and pheromone traps to catch insects reduce dependence on chemicals.

These approaches – already used in the US, Australia and Brazil – comprise part of a larger toolkit developed by the BCI, a non-profit multi-stakeholder initiative that aims to elevate sustainable cotton production around the world, and established the Better Cotton standard in 2009 to do so. BCI seeks to counter the threats to the industry posed by soil erosion, water depletion, and unsafe working conditions, its principles are based on mainstreaming prudent agrochemical use, environmentally efficient production methods and improved labour conditions. Participating companies include H&M, Marks & Spencer, IKEA and adidas, alongside non-profit partners including WWF and Solidaridad. Collectively, they want 30% of the world’s cotton production to comply with BCI standards by 2020.

The 2010-11 growing seasons saw the first harvests of Better Cotton in India, Pakistan, Brazil and Mali, and Better Cotton is now grown in China, Turkey and Mozambique. Although the programme is in its infancy, it currently involves more than half a million farmers, and has had significant results.

In India, where BCI workedin nine states in 2011,the 35,000 Better Cottonfarmers used 40% lesscommercial pesticides

and 20% less water than conventional farmers, while at the same time having on average a 20% greater productivity and 50% higher profits. In Pakistan, 44,000 Better Cotton farmers similarly used 20% less water and 33% less commercial fertiliser than conventional cotton farmers while having on average a 8% greater productivity and 35% higher profits.

These efforts and advancements echo those of more developed cotton-growing countries. In the US, for example, national and local government organisations strictly regulate pesticide and irrigated water applications. Cotton growers and importers also contribute to a collective research and educational outreach program. Over the last three decades, this combination of oversight and outreach has enabled US cotton growers to reduce pesticide applications by 50% and irrigated water applications by 45%.

In addition to technical training, many of these international programmes also incorporate literacy training, women’s skill building, health and safety courses, and commitments to end child labour. Peter Salcedo, a trader for Plexus Cotton, the sixth largest cotton supplier in the world, says that retailers are responding to consumer interest in the welfare of producers, and are increasingly invested in issues like gender parity and community development. Consumers want to be able to trace where their goods are coming from, he says, and so brands need to be able to explain that their products have a ”respectable provenance”.

In East Africa, Plexus Cotton sources its stock from BCI, and works with social business development organisations, such as Cotton made in Africa and the Competitive African Cotton Initiative, to offer supply chain traceability starting with raw materials and labour conditions. Chimala Walusa, a farmer from the Balaka region of Malawi, is one of the 65,000 smallholders that Plexus is working with in the country. Walusa says, ”My life style has changed since I became a lead farmer [in the training programme]. Before, I used to harvest less, like seven bales, but now I am harvesting more. This season I have harvested 60 bales of 90kg each. I managed to harvest all this because I followed the basic production techniques I was taught by extension agents [university employees who develop and deliver educational programmes].”

Increased yields result in direct gains for his wife and four children, Walsusa explains.”From last year’s sales, I managed to build a good house, and I bought four cattle and oxen.From this year’s [which totaled MK1,575 million / US$4,800], I am planning to buy a plot in town and build a house for rent.”These gains resonate across the supply chain. For the US-based retailer Levi Strauss & Co., on-the-ground efforts to improve cotton production also serve to protect its business from some of the effects of climate change. Of the 100 countries in which cotton production takes place, many are already feeling the impact of weather shifts in the form of water scarcity and constraints to arable land. As a result, they also recognise the need to implement adaptation strategies, says Sarah Young, Levi’s Manager of Corporate Communications. For a company that depends on cotton for 95% of its products, addressing these challenges at the grower level is a necessary part of sustaining their business.

In the US, increasing weather variability, alongside growing demand, is similarly ”cause for concern for cotton farmers and is generating strategies to adapt”, says Ed Barnes, Senior Director of agricultural and environmental research at Cotton Incorporated, a not-for-profit organisation whose work helps US cotton farmers manage input efficiencies and reduce environmental impact. In the past, he says, ”if the field didn’t look like a clean construction site, you weren’t going to plant”. But now, 70% of US cotton farmers have adopted conservation tillage practices, a modern farming technique that allows the soil to hold more moisture and nutrients, thereby decreasing dependence on irrigation
and fertilisers.

The beauty of these conservation techniques, says Barnes, is that farmers still reap the same, if not higher, financial benefits. With the price of fertiliser and water rising globally, ”farmers are interested in using resources as efficiently as possible”, he says. ”They are adopting more sustainable practices because they see the economic return, and that what’s good for the land is good for growers.”

Katherine Rowland is a freelance journalist specialising in health and the environment.
This article was published by Forum for the Future in their Green Futures magazine special: “The Cotton Conundrum’, available to purchase or download for free byclicking here.

31.07.13 Forum for the Future
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By engaging with local farmers, major retailers and national governments, the Better Cotton Initiative aims to bring a third of the cotton market to a more sustainable footing by 2020, saysTim Smedley.

In 2010, the total production of sustainable cotton – certified as organic or Fairtrade – accounted for just 1.4% of the global cotton market (discounting those countries with federal oversight, such as the US and Australia). Over the next two years, this proportion grew to over 3%, more than half of it produced under the wing of the Better Cotton Initiative (BCI), and verified as Better Cotton. The founders of BCI did not set out to add another niche sustainability standard to the mix. Rather, their market-friendly approach is to encourage continuous improvement at a local level. By engaging major retailers as members, they hope to shape the mainstream.

Currently, BCI is aiming for more than 8 million tonnes of Better Cotton Lint produced by 2020, bringing a third of the cotton market to a more sustainable footing. Those backing Better Cotton, including the Sustainable Trade Initiative IDH and the non-governmental organisation Solidaridad, believe this will be the tipping point that sees more sustainable cotton become standard across the industry. Solidaridad advocates a more inclusive market: one which meets demand by recognising the full potential of smallholder farmers, and women in particular.

Of course, regulation also has a part to play in driving better practice. Kim Kitchings, Vice-President of the Corporate Strategic Planning and Program Metrics Department for Cotton Incorporated, points to the regulatory oversight of agriculture in countries such as the US and Australia, and the sustainable gains made by modern cotton production as a result. She explains that there may be a greater supply of relatively sustainable cotton than people realise:

”There are many definitions and criteria for what is sustainable. At the heart of them are three basic points: reducing the environmental impact; ensuring the system is both economical and profitable; and enhancing the quality of life of all workers. Cotton grown in developed markets like the US and Australia, which together represent approximately 20% of the global cotton supply, certainly meets these criteria.”

Nonetheless, increasing the supply of more sustainable cotton across the rest of the world – in line with BCI’s targets – requires an unprecedented expansion. And many challenges lie ahead.

So far, says Joost Oorthuizen, Executive Director of IDH, ”we have rightly been focusing on supply, on farmers. And we have done pretty well on that.” The farming practices promoted through Better Cotton have, on average, been found to help farmers increase yields and maintain cotton quality without increasing their financial inputs. Few farmers are going to turn that down. ”But now we have to shift our attention much more strongly to the demand side”, continues Oorthuizen. If brand procurement signals to major suppliers are saying strongly that sustainable cotton is the future, then this could be successful – but we have to be able to meet the demand, he argues. ”The flipside is that if we’re not able to do so, then you run the risk of momentum being lost”, he adds.

Lise Melvin, CEO at BCI, agrees: ”It’s ok to generate demand but if you aren’t able to satisfy it fast enough then retailers tend to get impatient.” However, there remain some issues on the supply side too. The strategy consultants Steward Redqueen stressed the challenges of ”balancing procurement and production at competitive market prices” in a report for IDH on the impact of BCI, published in February 2013.

Ultimately, those linking procurement and production will play a vital role, and must be convinced of the worth of more sustainable cotton if it is to reach scale. ”It’s not just about three or four different stages of garment factory, spinner, ginner, farmer”, explains Anita Chester, senior program manager for cotton at IDH, and former South Asia CEO of CottonConnect: ”It’s about multiple layers of traders, middle men, permission agents, across countries, across states. Everyone needs to work to make these connections.”

This has been the main focus of the Better Cotton Fast Track Program (BCFTP). Led by IDH and BCI, it brings together an elite group of BCI members – IKEA, Marks & Spencer, Levi Strauss & Co, H&M, adidas, WalMart, Olam, Nike and, most recently, Tesco. ”The front runners, if you like”, says Oorthuizen. ”They want to learn how to do this, and learn from each other. Clearly, a very active and proactive procurement strategy internally in those brands and in their long-term contracts with suppliers is key.”

The crucial role of the retailers is also recognised by Nico Roozen, Director of Solidaridad Network. The founding father of the Fairtrade movement in the 1980s, he now argues that a market-based approach is the only way to reach the mainstream: ”Around 10-15 years ago, we started with NGO projects helping farmers. After this, we tried to link these farmers to the market. But now we are working the other way around: we start with the supply chain, producers and brands … Real change can only be made when businesses integrate more sustainable cotton in their regular business and supply chain.”

A retailer that understands this well is John Lewis. It aims to use sustainable cotton wherever possible in its products. The John Lewis Foundation has developed a three-year cotton farmer training programme in India, with CottonConnect, to help reduce input costs and improve livelihoods for 1,500 farmers. John Lewis also participates in the Sustainable Clothing Action Plan (SCAP) led by WRAP, a multi-stakeholder group with the goal of improving the sustainability of clothing across its life cycle.

BCI retailer members work with local implementing partners that deliver training programmes in India, China, Pakistan, Mali and Mozambique that help reduce input cost and improve livelihoods for 165,000 farmers, by producing Better Cotton.

”This only works if brands really dig into their supply chain, map it and get to know their spinners better”, says Melvin. ”They need to have a strategy and local procurement teams, in-country if it’s a big retailer, who are briefed and trained.” Such an approach, she says, can drive wholesale change throughout the chain without lapsing into the temptation to spot-buy.

China, India and the US contributed 60% of the world’s cotton harvest in 2012.

The final piece in the jigsaw is convincing governments to incorporate sustainability into national standards. With cotton produced in more than 110 countries, it seems a Herculean task. However, 60% of the world’s harvested cotton in 2012 came from just three countries: China, India and the US. BCI recently revealed its expansion strategy for 2013-15, working with local implementing partners in China, India and Pakistan, and with national and global partners in Africa, Australia, Brazil, Turkey and the US to embed Better Cotton production locally through individual farm verifications. Through these collaborations, BCI aims to account for 75% of global cotton production.

”BCI is doing a great job helping farmers in developing countries achieve the same kinds of environmental gains already made by US growers at a national level”, explains Kater Hake of Cotton Incorporated, adding that the US is the world’s third largest producer and the largest exporter of cotton.

Suddenly, the target of a third of the global market by 2020 seems eminently achievable. Janet Reed, Director for sustainability, agricultural and environmental research at the US cotton association Cotton Incorporated, explains that because of federal, state and regional oversight, the US system is among the most transparent in the world. Additionally, buyers are able to track the credentials of a cotton bale via High Volume Instrument (HVI) data. ”For over 30 years, HVI data has provided a government-backed statement about the quality of each bale of US lint”, says Reed. ”The owner of any bale of US cotton can access HVI data on that bale from US websites, making it easy to trace the journey of the cotton from individual field to gin.”

Meanwhile in Turkey, the world’s eighth largest cotton producer, a multi-stakeholder workshop held by BCI in Istanbul in January saw participants support the development of Better Cotton in the country. They agreed an ambitious production target of 100,000 metric tonnes of Better Cotton lint by 2015.

For all this to happen, however, the future expansion of Better Cotton capacity, establishing mainstream recognition and ensuring financial resilience for BCI needs to be reached. Currently funded by a ratio of 1:1 public and private funding, the Steward Redqueen report warns that, ”The current market for Better Cotton, active for only three years, is not yet self-sustaining. This issue has been recognised by BCI and IDH who have established a new business model for Better Cotton. The new model includes BCI charging retailer and brand members a Volume Based Fee on their Better Cotton procurement. The fees will be invested in the production and delivery of Better Cotton. This investment by BCI’s Retailer and Brand Members is complementary to on-going investments by other stakeholders, and key to the success of mainstreaming Better Cotton and ensuring supply in the future. Ultimately, it will enable financial stability and economies-of-scale to be realised.”

And perhaps there is one final ally that will help Better Cotton become mainstream, the silent majority of the cotton trade: the consumer. ”There are some very interesting developments”, agrees Oorthuizen. ”Chinese young people and middle classes are very interested in sustainability, for example, perhaps more so than in the West. First, though, we need the systems: the Volume Based Fees and expanded capacity. Once all these things are in place, and the market picks it up, we’ll see how fast this can go.”

Tim Smedley writes about sustainable business for titles including the Guardian and the Financial Times.
This article was published by Forum for the Future in their Green Futures magazine special: “The Cotton Conundrum’, available to purchase or download for free byclicking here.