Role of organic cotton in the cotton Industry 1. Recent & future pressure factors on commodities and agricultural land Jens Soth 68 th ICAC Plenary Meeting Cape Town, South Africa 06 September 2009 Pressure on the agricultural land Future: transparency of commodity sourcing? Change of dietary habits Civil society organisations Soil loss and degradation Social responsible investment community Biofuels Environmental management actors and auditors (ISO 14000) Population increase -> drastic change of land per capita food scarcity Water scarcity Development Co-operation community Acceleration by climate change Retailers Banks financing trade capital 3 levers to address poverty of small-holders Simplified income model: Revenue = ( Yield Price ) Production costs 2. Organic cotton as pioneering sector for commodity initiatives Stabilized yields FT minimum price and organic premium Reduction of input costs + less financial and production risk, diversification + environmental benefits (soil, water, bio-diversity) + health benefits (no pesticides, more food security) 1
Understanding development priorities Planning certainty Poverty alleviation as overall goal Financial benefits to growers Non-financial benefits (occupational health, non-contamination of soil and water) Integration of women farmers Growers do not need to worry about marketing Byers do not need to worry about supply Volumes, qualities, timing, prices Combination organic and fair trade Minimum price approach Fair trade is immediately applicable helps to bridge conversion period Farmers groups decide about use of premium Building partnerships along the value chain You can t push a chain! but you can facilitate and strengthen the links between stakeholders, and you can promote demand (PR, buyers commitment, sensitise consumers) Non-involvement of implementors into value chain Global Organic Community Platform Artisanat Filature Acheteurs PRA (Emil Noël, ADI) Ecocert FLOcert Distributeurs (Switcher, Migros, M&S) Usines de transformation Négociants (Reinhart AG) SC (CMDT, OHVN) Mobiom SCPCBs Producteurs/-trices Bailleurs (SECO, Helvetas, LED, UE, Oxfam, ICCO, AFD, Rég. Bretagne) Helvetas Recherche (IER, IPR/ IFRA, ICRAF) Prestataires (AMS, SETADE, PGR etc.) Detailed information about organic cotton through links to existing resources Information gaps closed with additional topics and tools Provides an interactive virtual space and online discussion tool to communicate about organic cotton issues. coton payments accord production export / distribution prime équitable appui technique ICAC 68th Plenary transformation Meeting September 2009 locale Role of organic certification cotton for the cotton industry 2
Adaptation to and mitigation of climate change GHG Emissions Mineral fertilizer and pesticide production GHG Emissions CO2 Nitrous oxide From urea application - 1. No mineral fertilizers & pesticides Adaptation to climate change 1. Low external input approach Low risk of financial loss 2. Increase of soil organic matter Higher water retention 3. Diversification of crop rotation 2. Less emissions of N20 Soil organic matter + 3. Higher carbon sequestration 4. No emissions from urea EU regulative schemes addressing organic cotton Low risk of crop loss 1. Existing criteria give cost incentive for organic cotton no lab analysis 3. Status quo of projects 2. Environmental ministries of EU member states strongly interested to support organic cotton even more 3. Strong fights about inclusion of social criteria -> DG Environment not obliged to take care of social issues 4. Integrated Pollution Prevention and Control Directive will work on best available technology report for textile sector including sourcing practices Overview of Helvetas organic & fairtrade projects Mango (2003) (2004) Coffee Vegetables and fruits (2005) (2004) (2008) Pineapple (2005) Rice (2006) Helvetas organic & fairtrade cotton initiatives Projects in Mali, Burkina Faso, Senegal, Benin, Kyrgyzstan Approx. 16 000 smallholder farmers involved in 2008 Capacity development of farmer cooperatives and associations Partnerships with processors, traders and retailers established Development of associated crops (sesame, shea etc.) 3
Example of partners involved Multi-stakeholder campaign for cotton Posters in CH Point of sales promotion Impact assessment study in Burkina Faso 1. 20-40% lower yields, but 20% higher gross revenues 2. 40% lower input costs, 30% higher gross margin 3. Less need to take loans 4. Better health due to absence of pesticides 5. Improved nutritional situation (crop rotation enforced) 6. Improved soil fertility as perceived by farmers Challenges ahead Production management: Further improve production systems and yields Develop rotation crops Co-existence with GMO? Value chain management: Management of producer organisations Access to finance (trade, investment) Market fluctuations and aligning initiatives Initiatives that plug together 4. Concerted effort instead of cacophony Organic Web site with shop-map Media coverage Fair Trade Communication on product level (label) Better cotton Initiative, made in Africa, etc. Communication in CSR or sustainability report Undefined No Communication, No transparency 4
Suggested long term milestones for all initiatives World congress on organic cotton From Fashion to Sustainability Framework guidance manuals for all commodities Detailed guidance manuals for cotton Multi-standard flexibility as major element of projects Common communication events and campaigns Common monitoring and impact studies 21 25 September 2009 Casino Kursaal, Interlaken 400 international practitioners working on new business & partnership models in organic cotton value chains > 32 workshops > Marketplace: 40-50 exhibitors > Ethical fashion show > Company flash presentations > Gala dinner on the lake of Thun > Company & store visits Competition increases challenges Common goals Competition for market confusion of consumers Competition for donor funds Confusion of farmers regarding production technology Confusion of textile chain regarding standards Confusion of political stakeholders, thereby weakening the political leverage Matching of supply and demand (pig cycles) Transparency of value chains New look on commodity issues Coherent sourcing policies wished by retailers, sustainability investors, NGOs Poverty alleviation Conservation of natural resources (soil water) Common bottlenecks Comprehensible communication to consumers and textile companies Streamlining certification and verification Impact assessments and their methods (costs, reliability - > ISEAL approach) Access to Microfinance Capacity building of producer organizations Quality management within supply-chain Alignment with regulative and political agenda (WTO, IPPC) 5