Category Archives: Organic

Production of Identity Cottons Rising

Summary: World cotton production is increasingly identified in marketing channels by the program or initiative under which it is produced. Therefore, these programs or initiatives are called identity programs. World production of the four major identity cottons (Better Cotton Initiative (BCI), Cotton made in Africa (CmiA), Organic and Fairtrade) is estimated at 3.4 million tons in 2016/17, 15% of the world total.

Production of Identity Cottons Rising

World cotton production is increasingly dis-aggregated by the marketing program or initiative under which it is produced. There are many programs to collect data, encourage improvements in production practices or assure consumers of responsible production practices; some of the programs are organized by producers in a particular country, some are sponsored by input suppliers, and some are multinational initiatives facilitated by the private sector and governments. Because cotton is increasingly identified in marketing channels by the program under which it was produced, these are called “identity cottons.”

World production of the four major identity cottons (Better Cotton Initiative (BCI), Cotton made in Africa (CmiA), Organic and Fairtrade) is estimated at 3.4 million tons in 2016/17, up from 2.6 million tons in 2015/16 and 2.1 million in 2014/15. The proportion of world cotton production under various identity programs is likely to increase, and BCI has an objective of accounting for 30% of world production by 2020.

(As of July 2018, the most recent data available for BCI was for 2016/17 from the BCI 2017 annual report. For CmiA, the most recent data was for 2017/18, but the data was not dis-aggregated by country. For organic cotton, the most recent data published by the Textile Exchange was for 2015/16, and for Fair Trade the most recent data was for 2013/14 from a 2015 report. The lack of up-to-date statistics undermines market demand for the identity cottons, since merchants, textile producers and retailers are hesitant to enter into long term commitments when basic data on stocks, consumption, production and trade are lacking.)

Identitty_cotton_production

The four identity cotton programs accounted for 8% of world cotton production in 2014/15 (BCI and CmiA together were 7.6% of the total). The identity cottons accounted for about 12% of the world total in 2015/16 and 15% in 2016/17, with BCI and CmiA accounting for almost all.

BCI

By far the more significant of the identity cottons in terms of volume, BCI reports (http://bettercotton.org/harvest-reports/) that production in 2016/17 totaled 3.26 million tons, of which CmiA accounted for 320,000 tons. (By agreement, all cotton produced under CmiA is recognized as meeting BCI criteria.) 2016/17 BCI production net of CmiA was 2.94 million tons on 2.1 million hectares; the average BCI yield was 715 kilograms of lint per hectare, close to the world average for all cotton. 519,000 farmers were counted among BCI producers in 2016/17, meaning that average production was 6 tons per farmer.

production_of_bci

BCI says on its web site that it “aims to transform cotton production worldwide by developing Better Cotton as a sustainable mainstream commodity.” This implies that non-BCI cotton is not sustainable and not mainstream, and it implies that BCI cotton is somehow “better.” It is therefore ironic to note that 32% of cotton labeled as “Better” in 2016/17 came from Brazil, and Brazilian production is perhaps the least sustainable in the world because of heavy pesticide requirements in the Cerrado region.

The long-term outlook for cotton in Brazil, as well as in other South American countries, depends on an ability to manage the boll weevil without resorting to continued increases in insecticide applications. Brazil has not been able to implement an area-wide control program for the boll weevil, as has been done in the United States, and as many as 20 insecticide applications are made each season in Brazil for the boll weevil alone. Despite accounting for just 3% of world cotton area and 7% of world production, about one-third of all pesticides used on cotton in the world are used in Brazil.

Further, another 29% of 2016/17 BCI production was in China from the Xinjiang region in the Far West. This is also problematic because all cotton in Xinjiang is irrigated, and irrigation supplies are limited.

Nevertheless, a very simplistic comparison of yields achieved by BCI farmers in each country with farmers in the same country who are not in BCI seems to indicate that BCI farmers in many countries get higher yields.

yields

In 2016/17, farmers in Brazil, China, India, Pakistan, Tajikistan, Turkey and the USA who participated in BCI had higher yields than farmers who did not participate. The evidence of improvement is not conclusive because BCI farmers in Kazakhstan, Mozambique and South Africa did not get higher yields than their non-BCI counterparts. Further, this simplistic comparison ignores the impacts of farm size, variety selection, irrigated or non-irrigated production, differences in pest pressure, year-to-year variations in yields and other factors, but at least in a majority of countries, BCI farmers did better than their non-BCI counterparts in the most recent season.

In its 2018 Q1 quarterly report, BCI reported that brands and retailers increased their use of BCI cotton by 60% to 736,000 tons in 2017 over 2016 and that uptake increased a further 44% during the first quarter of 2018 compared with quarter 1 in 2017. Therefore, uptake of BCI cotton by brands and retailers accounts for around one-fourth of BCI production, with the other three-fourths still being sold as non-identity cotton. Therefore, after seven years of commercial activities by BCI, the quantity of cotton moving through the marketing channel from farm to retail as BCI cotton now accounts for about 3% of all cotton sold at retail. Increasing this uptake proportion will be the key to the long-term success of BCI.

Cotton Made in Africa

Production under CmiA totaled 320,000 tons in 2016/17 and a record 496,000 tons in 2017/18. Nine countries participated in CmiA in 2017/18: Burkina Faso, Cameroon, Cote d’Ivoire, Ethiopia, Ghana, Tanzania, Uganda, Zambia, and Zimbabwe. Across the nine countries, there were approximately one million African households involved in CmiA, and CmiA accounted for approximately 30% of production in Sub-Saharan Africa. The average yield among CmiA is approximately 300 kilograms of lint per hectare, broadly equal to the yields achieved by non-CmiA farmers in Sub-Saharan Africa.

sub-saharan

Yields achieved by farmers in Sub-Saharan Africa participating in CmiA were higher than yields achieved by other farmers in Sub-Saharan Africa during 2015/16 and 2017/18, but they were lower in 2016/17. The variances in relative yields may be due to inaccuracies in the statistics rather than actual differences in production outcomes. However, if available statistics are accurate, farmers participating in CmiA seem to do at least as well, and usually better, than non-CmiA farmers.

CmiA reports that 780,000 farmers participated in 2016/17, meaning that production per farmer was about 400 kilograms of lint. In 2017/18, the number of participating households rose to more than one million, and production per household was about 480 kilograms of lint.

Uptake of cotton produced within the CmiA program by brands and retailers rose to 80,000 tons in 2017, or one-fourth of the amount produced in 2016/17, and revenue from licensing fees rose to Euro 2 million. As with BCI, an impediment to increased uptake of CmiA cotton by brands and retailers is the lack of statistics on stocks, production, mill use, trade and prices by country.

Certified Organic Production

The most recent data reported by the Textile Exchange (http://textileexchange.org/publications/)is that production of certified organic cotton fell to 108,000 tons of lint on 302,000 hectares in 2015/16, indicating that the average organic yield was 357 kilograms of lint per hectare. As of 2015/16, 263,000 hectares were “in transition.” Assuming that 50,000 hectares of the transition hectares were brought into production in 2016/17 and yields remained unchanged, world production of organic cotton is estimated at about 125,000 tons in 2016/17. There were 220,000 farmers involved in organic cotton production in 2015/16, indicating that production per farmer was about 500 kilograms of lint.

An area of disappointment for organic cotton advocates has been Sub-Saharan Africa. A report from November 2017 published by the World Trade Organization shows that governments sponsored nine projects involving organic and/or Fairtrade cotton in Sub-Saharan Africa over the last decade. The projects totaled about $27 million.

Production of certified organic cotton in Sub-Saharan Africa totaled 4,542 tons in 2015/16, down from 8,922 tons five seasons earlier. Projects involving organic and/or Fairtrade cotton do not seem to be having discernable positive impacts.

organic_cotton

Fairtrade

The most recent data reported by Fairtrade is for 2014, when about 7,000 tons of lint were produced. (http://www.fairtrade.org.uk/).Fairtrade reports that there were approximately 55,000 farmers growing cotton on 61,000 hectares in 7 countries in 2014. The average yield among Fair Trade cotton farmers is less than 200 kilograms of lint per hectare. A problem common to all the identity cottons is that less than half of the cotton grown by farmers participating in the Fairtrade system was actually sold under Fairtrade terms, the rest being sold as regular cotton under commercial terms.

Conclusions

Cotton made in Africa and BCI are growing, while organic and Fairtrade cotton are shrinking. The major difference is that CmiA and BCI allow the use of modern agricultural technologies (CmiA does not accept biotechnology), while organic and Fairtrade require the use of labor intensive technologies from the early 20th Century. CmiA and BCI are initiatives that help farmers improve by providing training in the use of Best Management Practices, and farmers find such help useful.

Yields achieved by BCI and CmiA farmers seem to be higher than yields achieved by other farmers, indicating that the two programs are having beneficial impacts. However, the chief challenge for both initiatives is to increase the volume of cotton sold in the marketing channel under their respective labels.

Organic Cotton: Hard to Grow

Organic Cotton: Hard to Grow

Some consumers profess a preference for organic cotton, and advocates have been successful in cultivating positive connotations for organic cotton as being soft, healthy, and sustainable. If there is a market, you would think someone would be willing to supply it, but world production of certified organic cotton (cotton that has been certified to have been produced to USDA or EU organic standards by an accredited certification authority) has been falling.

World production of organic cotton grew from very small amounts in the early 1990s to a peak of 175,000 tons in 2008/09. The most recent data reported by the Textile Exchange (http://textileexchange.org/publications/)is that production fell to 108,000 tons of lint on 302,000 hectares in 2015/16, indicating that the average organic yield was 357 kilograms of lint per hectare, less than half the world average.

There are no published data on organic cotton for 2016/17 and 2017/18, but if production were rising, advocates would be quick to publicize that fact. Therefore, it is probable that production of organic cotton has not climbed, at least not very much, during the most recent two seasons.

cotton_hard

In 2015/16, India accounted for 60,000 tons of organic cotton production, 55% of the world total, followed by China, 15,000 tons, Kyrgyzstan and Turkey, 8,000 tons apiece, and Tajikistan, 6,000 tons. A big part of the reason for the decline in world organic cotton production is because production in India fell from 103,000 tons in 2011/12 to the current level.

Production of organic cotton in Turkey is falling as farmers shift to alternative crops and because of political unrest in the Southeastern portion of the country near Syria. Production is rising in Central Asia under the influence of programs supported by the Government of Switzerland, but much of the organic cotton produced is marketed simply as cotton without an organic premium. Worldwide, only about 70% of the cotton certified as organic is actually purchased as organic cotton; the rest is sold as conventional cotton because of weak demand.

Organic Cotton Techniques

All agriculture was organic for thousands of years until around the end of World War II, and today any farmer, anywhere, could grow organic cotton if he or she chose to. Just as weaving cloth using a traditional hand loom requires great skill and many hours of effort compared with using a modern loom, so does organic cotton require skill and effort compared with producing conventional cotton. Nevertheless, any farmer wanting to grow cotton organically could do so.

Organic cotton is grown and harvested without the use of chemical fertilizers, pesticides or herbicides, growth regulators or defoliants. Cultivation practices vary, but the use of seeds with biotech traits, synthetic pesticides, fertilizers and growth regulators are prohibited. Since organic cotton producers are denied the use of tools that conventional farmers use, it obviously takes more work to grow organic cotton.

Organic cotton production is a farming system that encourages the development of biological diversity to take care of crops needs.The foundations of organic cotton production include the use of locally-adapted varieties tolerant of pests, legume-based crop diversification, crop rotations, and intercropping to maintain soil health, the use of organic sources of fertilizer, and pest management based on prevention through the use of natural enemies and trap crops.

Fertile soil containing organic carbon is a prerequisite for all crop production, including cotton production. In organic systems, soil fertility is enhanced by implementing crop rotations with legumes, using cover crops to protect soil between the harvest of one crop and the planting of a succeeding crop, composting green plant material to produce organic fertilizer, and mulching. Fertilizer mined from natural sources can be used to improve fertility, but synthetic fertilizers must not be used.

On average, a farmer producing one hectare of organic cotton must collect between 15 tons and 50 tons of green material, including cotton stalksand farm yard manure, and compost that material for a year to produce between 3 tons and 8 tons of organic fertilizer. The 3-8 tons of organic fertilizer must then be spread over a field and incorporated into the soil.

In contrast, a conventional farmer will also employ crop rotations, cover crops, and mulches, but a conventional farmer will apply an average of 250 kilograms of fertilizer per hectare per year. The purchased fertilizer will contain labelled proportions of nitrogen (N), phosphorus (P) and potassium (K), while the NPK balance in organic fertilizer will vary with the green material from which it was produced.

Cotton plant nutrient requirements will vary each season depending on temperatures, rainfall and pest pressure, and conventional farmers can respond with additional fertilizer applications as plant needs are assessed. In contrast, organic cotton farmers have a much more difficult time applying additional dosages of tons of organic fertilizer across fields once plants are established.

In organic cotton systems, weed management is achieved through the selection of fields free of perennial weeds, use of clean seeds, crop rotations, cover crops, and mulches, and of course weeding using a hoe or mechanical cultivation. Organic cotton farmers can also expose top soil to direct sunlight to sterilize soil. Conventional cotton farmers are free to use each of these techniques of weed control, but they are also eligible to use herbicides.

Pest management in organic cotton is achieved through the use of pest-tolerant varieties, conservation of natural enemies and releases of predators, parasites and pathogens to attack pests. Organic cotton farmers are encouraged to intercrop with cowpea to serve as habitat for beneficial insects. Organic farmers use trap crops, such as castor, marigold and okra to attract pests or pest larvae for easier destruction. Light traps on timers, bird perches, and pheromone traps are additional techniques of pest management in organic cotton. Neem-based sprays are permitted, although the efficacy of such applications is questionable. After all, if neem-based sprays worked, all farmers would use them. Sprays containing Bacilusthuringensis (Bt) are also allowed. Organic cotton farmers are permitted to release parasites into fields. Early sowing, early picking and the cultivation of short-season varieties will also aid in pest management.

Conventional cotton producers are free to use all of these techniques, and they also have access to insecticides. However, the use of insecticides will kill beneficial insects as well as target pest, requiring judicious use.

Declining Organic Cotton Production in India

India is the largest producer of organic cotton because it has a large textile base for processing, and because it is easier to navigate the business environment in India than in China. However, production is declining in India for a multitude of reasons. The primary reason that more cotton is not produced under organic cotton standards in India is because it takes twice as much work. One hectare of organic cotton in India requires around 170 days of labor per year, compared with 90 days per year for conventional cotton.

Another reason for the decline in organic cotton production is that price premiums are falling. Almost all organic production around the world is sponsored by brands and retailers seeking differentiation in the market place or by governments wanting to encourage sustainable production practices and economic development. Prior to the world recession in 2008, most retailers were profitable, and some had budgets to support organic cotton as part of their corporate social responsibility efforts or for positive public relations. However, many of those retailers lost money during the recession, ending such expensive gestures.

As of 2018, there are still not enough brands and retailers willing to enter into contracts of at least three years (the period required to convert designated acreage from conventional to organic production) with growers at prices that would offset the cost of conversion from conventional cotton, increased labor requirements, greater year-to-year variability in organic yields and lower average fiber quality. Excellent growers with sound agronomic knowledge require premiums of about 20%, but average growers experience greater yield losses compared with conventional production, and they require correspondingly greater premiums. However, premiums paid in India for organic cotton have fallen from 15% to 5% over the last decade.

Organic cotton farmers face other barriers to increased production, including a lack of seed breeding efforts focused on non-biotech varieties with desirable fiber traits, the need for extensive documentation and the vestiges of scandals involving false documentation that undermine the credibility of Indian organic cotton certification, and a lack of markets for cowpea, okra and other crops used as rotation crops or intercrops with organic cotton.

The Future

Organic cotton takes a lot of work and a lot of knowledge, and without price premiums of 20% or more, organic cotton will not be grown in any volume.

World textile and clothing markets are highly competitive, and consumers base purchase decisions on style, color, fit, feel, price and other metrics. In inflation adjusted terms, prices of apparel at the retail level are declining, not rising, and consumers are spending a smaller share of their disposable incomes on commodity items such as clothing. Consequently, outside of niche brands with low volumes and high prices catering to an urban clientele ignorant of the realities of agriculture, no buyers of organic cotton are likely to emerge who are willing to pay such premiums. The chance that large retailers accounting for hundreds of thousands of tons of cotton per year will start paying premiums for organic cotton are remote.

Consequently, production of organic cotton worldwide is more likely to continue downward than to rise.