Islamabad

From roses given to each participant on arrival at the airport in Islamabad, along with assistance through immigration and customs, through a week of fashion shows, an elegant dinner with the President, receptions and lunches, to a final handshake at the airport on departure, the 75th Plenary Meeting of the International Cotton Advisory Committee (ICAC) since 1939 was a triumph of hospitality by Pakistan.

The agenda was substantive, and the meeting was well organized. Topics of discussion ranged from the threat of subsidized polyester production, reducing cotton’s water footprint, expanding the use of SEEP indicators to define sustainability, and an explicit acknowledgment that government measures for cotton must avoid distorting the market.

Those who missed the 75th ICAC Plenary Meeting, missed a good meeting.

A Triumph of Hospitality

From roses given to each participant on arrival at the airport in Islamabad, along with assistance through immigration and customs, through a week of fashion shows, an elegant dinner with the President, receptions and lunches, to a final handshake at the airport on departure, the 75th Plenary Meeting of the International Cotton Advisory Committee (ICAC) since 1939 was a triumph of hospitality by Pakistan.

The agenda was substantive, and the meeting was well organized. The purpose of a plenary meeting is to move forward through agreements to cooperate and through the identification of best practices appropriate for national adoption. The 75th Plenary Meeting accomplished this purpose in a number of subject areas. Topics of discussion ranged from the threat of subsidized polyester production, reducing cotton’s water footprint, expanding the use of SEEP indicators to define sustainability, and an explicit acknowledgment that government measures for cotton must avoid distorting the market.

The 76th Plenary Meeting will be held in Uzbekistan, presumably in conjunction with the annual Cotton Fair in Tashkent in October 2017.

Polyester Subsidies

Almost all the growth in world fiber use has been in polyester in recent years. It is self-evident that hundreds of millions of consumers are not clamoring for more polyester in their clothing and home furnishings. Rather polyester has gained market share because of low prices, and while lower oil prices have contributed, the overwhelming reason for low prices of polyester is subsidized production in China. By 2015, polyester production in China had grown to approximately 35 million tons, equal to 70% of the world total. The 35-fold increase in polyester production in China since 1990 is the single biggest factor reducing world demand for cotton today.

There are no comprehensive statistics on the number of polyester fiber production plants in China, their ownership, sources of financing or operating costs. However, the growth in polyester production in China has been so rapid, so enormous and so incongruous with investment patterns in other countries in Asia, that it is impossible to believe that industry expansion is a result of competitive, private sector investment. Based on discussions in Islamabad, the ICAC Secretariat will expand its studies of the polyester market to include government support for polyester that have stimulated overcapacity in polyester fiber.

Unless governments with an interest in the health of the world cotton industry unite in the WTO to oppose China’s subsidization of polyester production, in the same way that governments have waged a campaign in the WTO to reduce direct government measures that distort cotton production and trade, cotton’s loss of market share will continue, and the livelihoods of cotton producers will be further compromised.

Water Management

Globally, 71% of water withdrawals are used in agriculture, and cotton is often associated with water scarcity because it is a desert crop usually grown in arid and semi-arid conditions (annual rainfall below 900 mm). Issues of resource use optimization, including water management, have been a concern of the cotton industry since at least the 1960s.

Experts in water management noted at the ICAC Plenary that cotton is a water-efficient plant (a point often missed by the World Wildlife Fund, Greenpeace and other environmental NGOs). Free or nominal water prices do not encourage efficient water use, and water should be priced according to volume (quantity) applied and not area planted. Measurement of water use is key to management of water use.

Biotechnology in Cotton

Since commercial introduction in 1996, the use of biotechnology in all crops has increased by 3% per year. As of 2013, 18 million farmers in 27 countries planted crops with biotech traits on 175 million hectares. Therefore, it is not surprising that the use of biotechnology has begun to affect the pattern of insect infestations around the world.

Chart courtesy of Khalid Abdullah, 75th ICAC Plenary Meeting

India and Pakistan account for almost 50% of world cotton area, and the pink bollworm caused huge losses in yields in both countries during 2015. The situation is better in the current season, but this pest still requires vigilance. The pink bollworm has developed resistance to the first insect-resistant biotech gene. Consequently, farmers in some countries are returning to older pest control methods based on insecticides. In contrast, where the regulatory environment allows, farmers have access to second and third generation biotech events that remain effective against the pink bollworm.

Biotech cotton events providing resistant to the whitefly are at advanced stages of development. When commercialized, these new events will bring large benefits to growers. Similar progress on transgenic cotton resistant to the leaf curl disease is in development in Pakistan.

Adoption of biotechnology is a measureable indicator of overall technology adoption. A lack of biosafety protocols, high technology fees, a lack of incentives for public sector development of biotech events and inadequate public funding for research inhibit development of biotechnology in developing countries.

Contamination: Incentives Needed

The key to reducing contamination is to provide incentives. However, the marketing system in Pakistan and most other developing countries undermines efforts to provide incentives to growers. In Pakistan, farmers sell to intermediaries (middlemen or country merchants) who aggregate lots of seed cotton from multiple small holders for delivery to gins. Consequently, it is difficult to identify sources of contamination and reward delivery of clean seed cotton upon inspection at gins. In addition, picking costs are already relatively high, making the payment of additional incentives to pickers for cotton without contamination untenable. Machine-picking may be the ultimate solution to reducing contamination.

Reducing Corruption Through Electronic Documentation

Paperwork linked to the movement of cotton is associated with trade restrictions, including tariffs, quotas, import and export licenses, subsidies, local content requirements, and embargos. Many of these requirements are associated with conformity and pre-shipment requirements, plus inspection and certification procedures on arrival. Each exchange of papers, each required stamp or signature, each face-to-face interaction, creates the opportunity for corruption. There will always be individuals who will be willing to pay to speed or slow or to facilitate or block. By eliminating the involvement of the human hand, electronic documentation can enhance efficiency and lower costs, and make corruption more difficult.

road

Photo Courtesy of Peter Wakefield, 75th ICAC Plenary Meeting.

Eliminate Phytosanitary Documents from Shipment-to-Shipment

One document that is required for all cotton shipments is a phytosanitary certificate. On the recommendation of the Private Sector Advisory Panel, the ICAC has been urging countries to adopt the FAO model phytosanitary certificate for trade in cotton since 2009. However, an even more effective reform would be to recognize that phytosanitary practices in each exporting country do not vary from shipment to shipment. Accordingly, individual phytosanitary certificates for each shipment are unnecessary and could be replaced with a “confirmation of compliance” with harmonized standards for fumigation and phytosanitary practices. Thus any shipment originating from a country in compliance with such a harmonized standard would not need an individual piece of paper for each shipment.

Compliance Benefits

There are 16 separate trade agreements registered with the WTO that affect agriculture and textiles, ranging from the Agreement on Agriculture (AoA) negotiated during the Uruguay Round of GATT to the Information Technology Agreement. Cotton production and trade has increased since 1990 in developing countries that observe these agreements. The lesson is obvious, compliance with trade norms leads to increased trade.

Ginning for Profits, Rather than Ginning for Volume

Fiber length distribution is always damaged by ginning. Operational choices facing ginners include processing speed and fiber moisture content. Slower speeds result in better fiber properties but increase energy consumption and ginning costs per kilogram. Moisture affects fiber strength and elongation, but moisture management is expensive. Ginners with moisture management capabilities should increase the moisture percentage in seed cotton entering the gin stand, reduce moisture during pre-cleaning and ginning, and then increase moisture again as lint enters the bale press.

Small improvements in length distribution result in big improvements in yarn performance, but accurate and fast instruments to measure length distribution in gins is not available. Therefore, management of gin speeds and moisture are based on average or expected fiber quality results, combined with expected price premiums for improved quality. If the cotton marketing system does not reward improved fiber quality, ginners will have no incentive to optimize ginning speeds and moisture content. Cotton suffers in competition with manmade fibers because quality premiums are poorly communicated to farmers and ginners by most marketing systems.

Roller Ginning vs. Saw Ginning

There has historically been a tradeoff between saw ginning and roller ginning, with roller ginning being slower and more expensive but producing higher quality fiber. However, new high speed double-roller gins with capacities of 400-600 kilograms of lint per hour can bridge the difference with saw gins. The operating costs per kilogram of new high speed roller gins operating at 600 kilograms of lint per hour are half the cost of previous roller ginning systems. Rotary knife roller gins are suitable for use on Upland cotton and can be cost competitive with saw ginning while maintaining the traditional fiber quality advantages of roller gins. High speed roller ginning may begin to supplant saw ginning for medium staple Upland cotton varieties.

ginning

Photos provided courtesy of A. Engin Dirik, 75th ICAC Plenary Meeting

HVI Requires a System, not just an Instrument

The use of High Volume Instrument systems for testing cotton quality involve much more than just buying a machine. HVI systems must be part of national classing systems with 100% bale sampling. When national HVI systems are implemented, marketing systems must be revised to provide quality premiums to growers and ginners in accordance with market results. Such marketing systems necessarily involve permanent bale IDs and national bale numbering systems to enable bale quality to be assigned accurately to gins and producer groups. Reliable, high speed internet connectivity is a must.

Organic Cotton: Zero Comfort Advantage Over Conventional

Regarding textile and apparel products made from organic cotton fibers, a specialist in testing fabric for properties associated with comfort reported that there is absolutely zero physical difference between products made of conventional cotton, including biotech, and organic cotton.

Photo provided courtesy of Tanveer Hussain, 75th ICAC Plenary Meeting.

Conclusion

If you were not there, you missed a good one.

Pakistan proved a wonderful host country, the ICAC Secretariat did its customary good job supporting the meeting, and delegates not only learned a lot, they achieved a lot. I enjoyed myself.