Wednesday 5th June is World Environment Day. On this day all of us – from all walks of life – are asked to think about the everyday things many of us take for granted: the food we eat, the water we drink and bathe in, and the air we breathe. Seldom do we stop and contemplate the sheer beauty of our world or its abundant supplies.
The theme this year is Think.Eat.Save. Think.Eat.Save is an anti-food waste and food loss campaign that encourages us to reduce our “foodprint”. According to the UN Food and Agriculture Organization, every year 1.3 billion tonnes of food is wasted. This is the same amount produced in the whole of sub-Saharan Africa. At the same time, 1 in every 7 people in the world go to bed hungry and more than 20,000 children under the age of 5 die daily from hunger.
The children show us the way! To celebrate World Environment Day the team at Textile Exchange along with our members and friends asked schoolchildren from the organic cotton producing regions to come up with a piece of artwork to link their family’s food farming and cotton farming. We hoped to leverage the excitement and exposure of World Environment Day to promote the benefits of crop diversification (including preserving local and traditional crop varieties), and how diversification contributes to food and nutritional security. We were enormously impressed by the results, and appointed one of the children as our World Environment Day Ambassador. We think the beautiful artwork prepared by the children from the 12 participating schools (spanning 6 different countries) speak louder than words. We invite you to take the journey and delight in the beautiful visuals and profound messages provided by the children here.
Every participating child is an Ambassador for World Environment Day. However, there was one little girl Siddhi Kushwah aged 10 from the Swayam Academy in India, who stole the hearts of all of us and is awarded: Textile Exchange World Environment Day Ambassador for 2013. The Swayam Academy was kindly supported by Mahima and sponsored by the C&A Foundation. Siddhi’s passionate contribution to the theme, and spirit, of World Environment Day can be heard here.
Siddhi narrates the dream she holds in her mind... to see this wonderful world beautiful and free from any pollution. For she thinks that everyone should be made aware of keeping this land pollution free. We are born and survive in this land. This is our moral duty to save it. She also emphasizes on keeping its fertility by avoiding the use of chemicals in production. Organic production of agriculture will surely keep us healthy and wealthy, if we all go for that. She has laid emphasis on the major issue of Global Warming... Though it is a very difficult task, every step in doing good will be just like a mile walk.
We all depend upon the Earth’s diversity and resources – but none feel it more directly than the world’s small-scale farmers. The massive consumption of both renewable and non-renewable resources contributes to a massive loss of biodiversity – with current extinction rates of birds, mammals and amphibians estimated to be at least 100 times, but possibly over 1,000 times, higher than pre-industrial rates. The poorest populations are most affected by such changes given that they rely directly on natural resources - such as fishing, small-scale agriculture or forestry - for their livelihoods (United Nations).
Organic agriculture is a beacon of sustainable agriculture. What many people, living lives miles away from the countryside, do not realise is that organic cotton farmers do not only grow cotton. At the very least to grow cotton organically, farmers must undertake a certain amount of crop rotation. Rotating cotton with legumes (such as mung beans or peanuts) adds nitrogen to the soil. This is essential to replenish and maintain soil fertility. The “best” organic cotton farmers are using every trick in Mother Nature’s book to build soil organic matter (green manure, composting, intercropping, and so on) and to keep pests at bay (host crops such as bright yellow sunflowers, botanicals such as neem leaves). More and more people believe that working within nature and nutrient cycles to build soil fertility and keep pests under control, in a way that doesn’t harm other species (including ourselves), is pivotal to sustainable agriculture. In this respect “organic” provides a beacon of best practice.
Textile Exchange promotes biodiversity and food security alongside cotton production. We envision a global textile industry that protects and restores the environment and enhances lives. We promote cotton production that contributes to people’s wellbeing and makes sure the next generation after us has a healthy, safe, ecologically rich and bountiful environment in which to thrive. To achieve this vision, we are passionate about the biodiversity of organic cotton farming and the food and nutritional security this diversity can achieve for farming communities.
As we celebrate World Environment Day we would like to thank the following local champions for supporting the school activities: Agrocel (India), Appachi (India), Bio Farmer Co-operative (Kyrgyzstan), Bio Kishovarz Co-op (Tajikistan), bioRe Tanzania (Africa), Chetna (India), ESPAR (Brazil), Esquel (China), Mahima (India), Mecilla (China), Helvetas Benin (Africa), and Pratibha (India).
We also thank the following TE member companies for their sponsorship of the event: bgreen apparel, C&A Foundation, Dibella, Esquel, Inditex, Loomstate, Otto Group, Patagonia, Pants To Poverty, PUMA, and Quiksilver.
We could not have done this - or achieve so much progress in organic cotton - without you!
And finally we say a big thank you to all the wonderful girls and boys who thought long and hard about delivering us their special messages for today... and threw everything into their creations for World Environment Day.
To view all World Environment Day entries click here.
To find out more about our World Environment Day activities click here.
To view the excitement and creativity leading up to the event view our pinboard here.
To follow our World Environment Day activities on FaceBook please click here.
Image: The Story of Silk, from Eileen Fisher's "Ampersand"
Learning how to Differentiate
This month we launch the next topic in our Collaborative Learning Series. This topic introduces the idea of Holistic Value Chains and explores how to go from supply chain anonymity towards more transparency and visibility. We will look into the opportunities this sort of "knowledge" provides and how apparel / footwear brands and retailers can benefit.
Will Fiber follow Food?
Many of us in industrialised society are seeking a greater connection to the food we eat, and prioritising locally grown, organic, and fairtrade products. After decades of enjoying conveniently processed and packaged food we are starting to question the compromise we are making, our loss of knowledge about where our food comes from, and the diversity of varieties and flavours we once so much enjoyed. The odd scare along the way, such as the recent horse meat scandal in the UK, only adds to our conviction.
These days more of us want to know where our food comes from, who is growing it, and what is being done to protect the environment.
The big question is - will our clothing follow suit?
The origins of our textiles and improved livelihoods of farmers are definitely climbing higher up the agenda. Some companies are beginning to use these narratives as a mark of reputational differentiation. Think: the recent PUMA and Diesel/EDUN collections from Africa, Eileen Fisher's Ampersand insights from their sourcing countries around the world, Vega's partnerships built on solidarity with small scale organic cotton farmers and rubber tappers in Brazil, and Icebreaker's clever "baa" coding. To name but a few.
Whether or not the consumer makes the same connection with their clothes as they do with food is yet to be confirmed. However, in an age of globalisation, the internet, and wifi, there really is no excuse for brands and retailers to draw a line round their own operations and first tier suppliers. The scope of impact has got to be considered right back to the raw material production. If work to improve company sustainability is going to genuinely succeed all operators along the chain will need to be open to increased transparency, and shared responsibility.
"There is no doubt that companies need to know who they are working with and deepen their identity from the shop front to take in the entire chain including the farmers or raw material suppliers’ right back at the start." Simon Cooper, Chair, TE Europe
Ignorance Is Bliss - But Enlightenment Is Upon Us
As apparel and footwear brands and retailers, you are faced with a barrage of sustainability agendas and options. Until recently, companies were able to compartmentalise, and channel this part of their operations via some kind of social investment or CSR budget dedicated to good causes.
These days it’s nearly impossible to operate without some sort of sustainability policy for your entire business, and more increasingly these policies are being integrated into business strategy - successful sustainability means a successful business.
Further, corporate sustainability policies need to reach out deeper into the supply chain. It’s not only the garments you procure and sell, but what about the cattle and cotton you indirectly farm or the rubber you inadvertently tap? Following the threads back to the rainforest, grazing plains, or cotton fields of your finished products is certainly a tricky business - especially for big companies sourcing a myriad of products; and especially for those with no systems inplace to track their products through their supply chain. And let’s face it, this is still the norm.
There is of course an element of “ignorance is bliss” here but this won’t last forever. As the leaders already know, it’s not enough to talk about your sustainability credentials if 99 percent of your affairs are unknown to you. Neither will a brand or retailer be able to separate their practices from those of their supply chain operators.
“The idea that sustainability augurs a lesser world is true in the sense that it calls for less waste, pollution, harm, devastation, depleted soils, poisoned workers, dying bodies of water, etc. But it does not portend a monochromatic world of brown smocks and rice. Sustainability is the forerunner of greater diversity and choice, not less.” Paul Hawken, environmentalist, entrepreneur, and author
The Sustainable Apparel Coalition (SAC) and its new Higg Index that measures the environmental performance (later social will be included) of apparel products will provide a “north star” for companies from all links in the supply chain, and from any stage of their sustainability journey.
Aspire to be Differentiated
Ultimately, civil society, increasingly in the guise of the consumer, will be the voice of approval or that of distrust. It appears to me that there are three very broad positions or stages of progression:
- The Deniers Why? Sustainability is not overtly on your customer’s radar, and not affecting their product choice or your business profits. Action: Do nothing - Apart from complying with the rules, maybe supporting the odd good cause through philanthropy, there is no proactive attempt to look for the business opportunity. These companies keep their head down, don’t say too much, show just enough interest in addressing issues of sustainability in case it does start to impinge on business;
- The Undifferentiated Mainstream Why? Aware of your impact on the environment and supply chain concerns, and feel a sense of responsibility. You also sense your customer is beginning to show interest too. Action: Do something - This usually involves finding ways to address concerns about sustainability which do not radically impinge on ‘business as usual’ or appear too costly or risky to implement. You can certainly see a financial benefit in sustainability initiatives which use fewer natural resources, and the positive press this can attract. This group is open to innovation but tends to keep change within the current models of doing business;
- First-mover Differentiated Why? This group want to 'be' the change; boldly exploring the boundaries of a new business frontier. They are open to the potentiality of concepts such as economist Tim Jackson's "prosperity without growth". Action: Do everything - Early movers see the future as now and work actively to make it a reality. They take on significant risk but are calculated and intelligent in their actions. There are usually visionaries at the helm and they fully accept that business as usual cannot go on like it is. First-movers are radically changing the way their company operates, gearing to achieve radical business transformation.
Clearly positions 1 and 3 are the most risky. That’s why we are seeing the majority of businesses aspire to operate in the “Undifferentiated Mainstream”. This path will no doubt take us slowly in the right direction, and we will hopefully see some companies jump from position 2 to position 3.
Thankfully a growing number of companies are positioning themselves as 3 - “Differentiators”. Many of them are small to medium in size (arguably the most sustainable size to be), including the likes of Dibella, Nudie Jeans, and Loomstate, but others are our big multinationals such as PUMA, C&A, and H&M.
(Note: The above three positions have been defined to illustrate a point, and of course few companies fit neatly into just one position.)
It's a Journey not a Destination
Getting one’s own house in order takes time, getting the whole extended family on the same page even longer. Tracking supply chains right back to the producer of your raw materials may be unfathomable for many large companies – let alone influencing them. It will probably take many carrots and sticks, determination and patience... and a far-sighted unwavering commitment to our planet and its future generations of inhabitants.
Join the discussion – Share your story
This month we will be learning more about being a Differentiator through our Collaborative Learning Series Rethinking and Reshaping Sustainable Sourcing. We will take a look at holistic value chains; because it’s here where we can learn from the companies who have managed to connect to tier 4, work up and down their supply chain in an attempt to ensure each last farmer is part of the chain, that value is shared, and environmental standards are resulting in improved livelihoods and ecosystem protection. On top of that, the client and consumer is rewarded with a value-added product, in terms of sustainability and integrity.
If you are aspiring to work holistically, have an integrated supply chain/business, or otherwise working closely with supply chain partners – and have a sustainability story to tell - we want to hear from you! Simply write to firstname.lastname@example.org and tell us your story or post an abridged story directly here online (in the comments box below). Any advice you have for others would be a great contribution! At the end of the topic we will include your company / organisation story in the Collaborative Learning Series topic summary – distributed to CLS subscribers and all TE members, and featured at our conference in Istanbul later this year.
More about this month’s webinar
What can we learn about product traceability, stories of origin, and farmer livelihoods from integrated organic cotton value chain operators?
In our topic webinar we hear from two businessmen Shreyaskar Chaudhary from Pratibha Syntex, India and Orlando Rivera from Bergman Rivera, Peru – both undoubtedly pioneers in supply chain integration and embedding sustainability benefits in their businesses.
Help us make this Series truly interactive -send in your comments, questions, and any examples you have on this topic via this blog. Don’t forget to register for the webinar either the 13th May or 14th May depending on the time that suits you best.
We look forward to hearing from you!
Our Webinar Topic 2 Guest Speakers
Orlando Rivera, Bergman Rivera http://www.bergmanrivera.com/our_partners.php
Shreyaskar Chaudhary, Pratibha Syntex http://www.pratibhasyntex.com/vasudha.swf
Links to a few companies tracing products and telling stories of origin
Send in your story of origin or product identity and we will add to our collection!
Greetings! Welcome back to our Collaborative Learning Series and the launch of our next topic:
Measuring Sustainability: can measurement tools help guide sourcing decisions?
For the next few weeks we will be taking a closer look at indices and metrics and learning more about how these tools can help guide supply chain decision-making and investments.
Introducing our Thought Leaders
We are lucky to have two world class experts on the subject of sustainability measurement join us for our topic discussion and webinar: Laurence Smith, Senior Researcher at the Organic Research Centre in the UK, and Dr Sabine Deimling, Food & Agriculture expert at the sustainability and software consulting firm PE International.
Senior Researcher, Organic Research Centre, UK
Dr Sabine Deimling,
Food & Agriculture Sector LCA Expert, PE International
More about Laurence and Sabine can be found here.
Laurence and Sabine will be tasked with guiding us through the landscape of sustainability metrics; sharing their views on the pros and cons, opportunities and challenges, of applying numbers to impacts - and sharing their experiences within this expanding field of knowledge and application.
Meet Sabine and Laurence during our webinar on the 12th and 13th March. Register here.
There are various ways the textile industry can reduce its impact on the environment (and upon communities and society at large). One obvious way is to use less of what is known to be hazardous, scarce, and/or in dwindling supply.
Cotton growing: We know that cotton growers can use a lot of chemicals (such as pesticides, fertilisers containing nitrogen and phosphorous, defoliants such as paraquat) and water for irrigation on their farms – potentially resulting in a heavy carbon and water footprint.
Did you know? According to some researchers, Earth's phosphorus reserves are expected to be completely depleted in 50–100 years and peak phosphorus to be reached in approximately 2030..?
Textile dyeing: Many substances and processes used in the manufacturing of textiles are chemically-intensive. Some of the process and finishing chemicals used are known to have hazardous properties. For other chemicals we have little information available on their toxicology or other potential impacts. The amount of water consumed, and effluent generated, during processing can also effect water availability for other purposes, and of course the water quality.
These are two examples in the textile supply chain where reducing what we know to be hazardous, scarce, or in dwindling supply is necessary to improve impact on the environment.
“You cannot manage what you have not measured.”
Often it is difficult to appreciate the extent of an impact if we do not know “how much” we are dealing with and how this figure might compare with other practices or against industry benchmarks.
A number of tools have been developed in recent years which allow producers to assess specific impact areas and identify areas for improvement. The array of tools available can be confusing however as a result of differences in scope, the data sources used, and the time investment required. For example, some tools provide a quick overview of an entire farm and consider only carbon emissions within the farm gate, whereas others provide a product focussed assessment that accounts for emissions throughout an entire production life-cycle.
Recognising the impact at Tier 4
PUMA's pioneering work in Environmental Profit & Loss accounting revealed the significant impact of textile producion occurring at 'Tier 4' - raw material production.
PUMA - EP&L results
Over half (57% or € 83 million) of all PUMA's environmental impacts are associated with the production of raw materials (including leather, cotton and rubber) in Tier 4 of PUMA’s supply chain.
“The unprecedented PUMA Environmental Profit and Loss Account has been indispensible for us to realize the immense value of nature’s services that are currently being taken for granted but without which companies could not sustain themselves,” said Jochen Zeitz, Executive Chairman of PUMA and Chief Sustainability Officer of PPR.
A Question of Scope
As Laurence Smith points out, the limited scope of many of the tools currently available, whilst giving us some insight - particularly into one or two key impact areas such as water use and carbon emissions - can also be limited in their usefulness, leaving out more holistic considerations such as soil health, biodiversity, and food security.
Diagram: Soil & More – demonstrating the typical scope of the system boundaries of a carbon footprint
And of Applicability
There is also a question of applicability; a tool that only considers the effect of actions without taking account of site specific variables, such as soil type, water availability, and cost of resources, can lead to misleading results (for nitrous oxide emissions and soil carbon sequestration rates, for example).
Assessments could also be improved through encouraging a conversation between farmers, the assessor, and members of the supply chain, throughout the process. Such an approach could foster a truly effective approach to sustainability that moves beyond a simple ‘numbers game’ and identifies effective, tailor-made solutions. Sustainability tools should help build awareness and capacities on sustainability issues.
Another important consideration is...
“Not everything that can be measured matters – and not everything that matters can be measured.”
Numbers do indeed have their place. I don’t think anyone would dispute this. But just as important is the unpacking of these numbers – and what we do with them. They need to be meaningful to all stakeholders. They also need to be joined up to other numbers, and proportional.
Compost is a great example, explains Tobias Bandel of Soil & More. If not attended to properly, compost can be a significant contributor to methane gas production and create a negative “score” (methane has a carbon equivalence 25 times higher than C02). Yet, with good management, farmers are known to achieve carbon credits as a result.
A Common Consensus
Sustainability Assessment of Food and Agriculture Systems (SAFA)
We all know that the word “sustainable” is being increasingly used and abused; allowing impact areas to be “cherry picked” while neglecting others, or devaluing the term by calling something sustainable at the blink of an eye.
The Food and Agriculture Organisation of the United Nations (FAO) consulted with a wide range of stakeholders to reach an understanding of the “dimensions” of sustainability and produce a suite of indicators appropriate for measurement. The Sustainability Assessment on Food and Agriculture (SAFA) and Guidelines have recently been released and are now being piloted in a number of countries, products, and supply chains.
SAFA: A holistic framework
Nadia El-Hage Scialabba of the FAO explains that the SAFA Guidelines and Assessment tool are:
- Appropriate for all sizes of enterprises at all levels of the food/ agriculture/ livestock/ forestry/ fishery chain – it serves primary producers, processors/manufacturers and retailers
- An umbrella approach that builds on existing schemes - it does not replace existing certification or reporting schemes
- Provides analysis of successes in sustainability performance and target areas of improvement – it builds awareness and capacities on sustainability issues
- Intended for self-analysis, internal management, impact assessment or B2B communication - it offers a fair playing field
Commendably, the SAFA tool encourages us to view sustainability metrics holistically and to report actual performance rather than defaulting to the way more intangible reporting of a percentage improvement.
Sustainable Apparel Coalition - Higg Index
The Sustainable Apparel Coalition (SAC) is an industry-wide group of over 80 apparel and footwear brands, retailers, suppliers, nonprofits, and NGOs (early members included Nike, Gap Inc, H&M, Levi Strauss, Marks & Spencer, and Patagonia) who are working to lead the apparel industry towards developing improved sustainability strategies and tools to measure and evaluate sustainability performance.
The Coalition is developing a metrics-based tool that will assist companies in the measurement of their environmental and social impacts. Known as the Higg Index; evolving from Nike's Apparel Environmental Design Tool and the Outdoor Industry Association's Eco Index. The index will help companies assess usages of energy, water, and chemicals, and also evaluate products' entire life cycles. Companies will be able to measure their performance, compare them to their peers, and receive guidelines and resources for how they can improve their performance across all such metrics.
OIA: Eco-Index Flow Diagram- demonstrating the seven impact lenses
How do metrics support organic cotton as a product-of-choice?
We know that organic agriculture:
- Uses no toxic or synthetic chemicals in the production of cotton and other crops.
- In best practice situations, organic systems are "closed loop" meaning the system does not require external inputs or produce waste.
- Soils are built up using organic matter to increase the water-holding capacity. More often organic production is low - or no - till.
- Currently, most organic cotton production is rainfed (~80-85%) particularly in Africa, parts of India and Latin America, and Texas where water scarcity is an issue.
- Grey water is usually less contaminated - no chemical sprays to neutralise, or high NPK fertiliser runoff into waterways or ground water - or causing eutrophication.
- Harvesting is mostly by hand - since chemical defoliants are not used.
- Yields are sometimes higher and sometimes lower than other farming systems - however most importantly biodiversity is often high due to the use of botanic products, polyculture, and promotion of trap crops and vegetative borders.
It is clearly a huge opportunity for organic agriculture to be recognised as a viable option for companies wishing to shrink their environmental footprint - and research by Textile Exchange and many others will help position organic cotton well on the Higg Index.
So... this blog is intended to be a thought starter...
We would love to hear from you!
What is your view on the contribution measurement tools make to our understanding of sustainablity and how useful are metrics to your business when it comes to making business decisions?
Share your comments and experiences in the comments box below. We look forward to hearing from you!
How Can We Build A Sustainable Farming System For All http://www.guardian.co.uk/sustainable-business/blog/farming-system-principles-based-sustainable?intcmp=239
For list of further reading and references please click here.
SIGN UP TO THIS WEBINAR - OR OUR ENTIRE COLLABORATIVE LEARNING SERIES!
Find out more about the TE Collaborative Learning Series.
Between now and the next Round Table on Organic Cotton at our conference in Istanbul, Textile Exchange will be bringing you a unique opportunity to explore sustainable sourcing in a new and innovative way. Our exciting Collaborative Learning Series titled Rethinking and Reframing Sustainable Sourcing covers six related topics and consists of blogs, thought pieces, and live conversations. A new topic will be introduced every month. We see this program as potentially an incubator for rethinking and reframing sustainable sourcing of raw materials in the textile industry - your participation will be the key to its success!
Rethinking and Reframing Sustainable Sourcing will be a collective effort – a safe place and space to hear from peers and practitioners, peek into the value chains of other industries, and take away ideas and inspiration to help make business – and the world at large - a better place.
We will be inviting TE members and friends – from all walks of life - to share their expertise via our Q&A style webinars. It’s here that you will be privileged to join first-hand conversations with our guest presenters and knowledge experts... plus the chance to ask your questions directly. To register for our webinar conversations click here.
Rethinking and Reframing Sustainable Sourcing is centred on six webinars and each topic is introduced with a thought-provoking blog. The first in the series is about Creating Shared Value.
Over the course of the next six months we will explore:
- Creating Shared Value: how could this approach work for cotton?
- Impact Assessments, Footprints and Life Cycle Analyses: can these tools help guide sourcing decisions?
- Holistic value chains: moving from disconnection to integration.
- Three Dimensional Profit & Loss: will this be the next big thing?
- Role of Certification: how to make it more than a piece of paper.
- Telling the story: is communications the biggest missed opportunity yet?
to find out more about the six topics and to meet our webinar panellists.
Q&A style webinar
On the 23rd and 25th of January we will hold our first live conversation with two very knowledgeable and inspiring people:
Dr Helen Crowley, Conservation & Ecosystem Services Specialist, PPR and Alison Ward, Sustainability Consultant (formerly Associate Director Global Public Policy (Sustainability) at Kraft Foods and Head of Corporate Social Responsibility at Cadbury). Meet our panallists here.
Creating Shared Value
So what do we know about Creating Shared Value and why does it make an interesting topic under the banner of Rethinking and Reframing Sustainable Sourcing...? We encourage you to add your thoughts, opinions, and questions in the comments box. Links to particularly good articles online would be great to share here too!
Let’s get started...
The concept of Creating Shared Value (CSV) was coined by academic writers Michael Porter and Mark Kramer back in 2006. The basic premise of CSV is that there is mutual and tangible economic and social benefit to be gained through business that works within, and for the needs of, society. For example, trading partnerships between raw material producers and product retailers, based on CSV, can deliver benefits to producers by way of investment in raw material production, (training, inputs, yields, certification, etc), and by entering farmer friendly contracts. Other benefits include investment in the socio-economic and development needs of the supplier community, such as spin-off cottage industries, secondary processing, and local market development.
For the retailer partner, product quality and volumes, timely availability, and improved product preparation and packaging etc… all add value to the business and potentially give it a competitive advantage. Ultimately, for both partners, the security of business (committed supply and demand) underpins the relationship and reduces risk - it’s what is commonly known as a win-win.
Click here for more information on Collaborative Learning.
CSV and Sustainable Sourcing
Applying CSV is a logical step when it comes to securing high value/high demand or scarce raw materials with short supply chains. Cocoa is a perfect example. The short chain makes it relatively easy for the raw material producer and the end of chain retailer to know each other directly (unlike cotton supply chains). Furthermore, multinationals such as Nestlé and Cadbury (Kraft) are increasingly aware of the vulnerability of their business due to their dependency on the cocoa bean. They are feeling the impact of dwindling supplies, climate change, and other localised concerns. Further, the quality of the raw material (the cocoa) is massively important to the reputation of their company and the distinctive quality of their product in the marketplace.
SPOTLIGHT on Nestlé
The coffee and cocoa giant, Nestlé, is a great example of a large company deeply committed to the objectives of CSV and indeed they use this concept to help develop and drive their sustainable business strategy, secure their raw materials, and improve product (and production) quality. Along the way Nestlé has built closer relationships with raw material suppliers and is much more in tune with the needs of the community. In fact, for Nestlé, CSV has catapulted them out of the relentlessly bad reputation they held in the past (concerning the promotion of breast milk substitute, amongst other things) and built their perception as leaders in sustainable development and community investment within their sourcing countries.
Nestlé’s CSV pyramid (diagram) illustrates how the company’s commitment to sustainable development goes beyond compliance with international standards, laws, and codes to positively investing in their supplier communities, and potentially, contributing to country-wide sustainable development.
“The overall wellbeing of farmers, rural communities, small entrepreneurs and suppliers is intrinsic to the long-term success of our business, yet an estimated 70% of global poverty is concentrated in rural areas. We are working to support rural communities surrounding our operations in building a better future.” Nestlé (see Nestlé CSR overview).
What could CSV mean for cotton?
As yet, sourcing cotton fiber does not attract the same scarcity of supply concerns as cocoa. However, there are issues underlying general commodity sourcing that apply to cotton already, and a growing recognition among retailers, including textile companies, that they need to secure a sustainable supply of their raw materials. Related issues include the need to invest in the agro-ecological environment and the rural communities behind the production, and improve the sustainability credentials of their raw materials sourcing conduct. That’s if we want to see businesses go beyond more sustainable products and genuinely engage in sustainable development; to be part of the solution instead of being part of the problem. Applying the framework of CSV could be a worthy approach.
What about CSV and organic cotton value chains?
Generally speaking CSV does not promote investment in ‘special’ initiatives such as organic and Fairtrade which attempt to work outside mainstream commodity markets, and arguably create an artificial or niche product. Instead, proponents of CSV would argue that direct investment in farmers (training, capacity building, etc…) and discrete investment in community projects should be enough to build a stronger supply base, i.e. through improved product quality and productivity. This sounds good in theory, but it oftem means the retailer (the investor) has a great deal of control over the benefits delivered to farmers and their communities on the ground. Community programs often rely upon a charitable investment (a CSR fund or similar) being streamed into the social development side.
Perhaps CSV, coupled with a farmer-centric production system such as organic agriculture, can be a framework for shifting producers from dependency to autonomy; to enjoying interdependent business partnerships where risk and rewards are shared equally? Using pre-existing agro-ecological farming systems (which benefit small scale resource poor farmers) and certification schemes, such as organic and Fairtrade, can ultimately boost farmer-led development, help farmers organise and achieve scale, and can result in benefits being more independently – or interdependently – owned by the members of the community. These thoughts I have thrown in to start the debate... and will be picked up by our panellists later in the month!
Image: Bergman Rivera supporting livelihoods within the Amazonian rainforest, Peru. Credit: Bergman Rivera
This month’s webinar
In our live conversation we will be exploring how CSV works in practice, pros, cons and limitations, and how it might be a useful framework for more sustainable cotton sourcing.
Over the next few weeks we want you to share your thoughts with us here and start sending in your questions via the comments box below. If there is anything you particularly want us to cover in the webinar please do let us know! Early postings will give our speakers time to prepare their best answer.
We look forward to an energetic and dynamic month “creating shared value”! Please sign up to our webinar - or all six in the series here.
Textile Exchange webpages: Collaborative Learning Series, First topic of the series Creating Shared Value, and an introduction to collaborative learning.
For more information on the concept of Creating Shared Value see the FSG website.
Video: Creating Shared Value: It's the Future
FSG illuminates the potential of shared value in this short motion graphic.
See also Creating Shared Value at Nestlé.
Green Futures Magazine: Will Supply Rule the Food Chain?
Food retailers are waking up to the risk of crop shortages. This article explores the awakening of our recognition of raw material shortages and how this is effecting supply chain dynamics. Supply chains are now centre stage. And as they acknowledge their vulnerability as buyers, they're developing a new sense of responsibility for the supply.In the past, the motive for initiatives like Cadbury's may have been reputation. Not anymore. As Oscar Chemerinski, Director of Global Agribusiness at the International Finance Corportation, explains: "There is an increased realisation by global agribusiness that their success or failure in the medium and long term is tied to the success of the small farmer, both financially and environmentally." Read the full article here.
'Seed treatment' Image courtesy of Chetna Organic, India
Seed is where it all begins. Our food, our clothes, even the very air we breathe (if you consider plants as oxygen providers) starts off as seed. Perhaps this key role in sustaining life is the reason that seed is also the subject of much angst and debate these days. The other reason is that seed (access to it and varieties available) once viewed as a basic human right almost, is increasingly being controlled by seed companies, intent on pushing genetic modification (GM). If you are an organic farmer, or simply want more control over what you grow, eat, and wear, angst has amplified into outrage. So how can the new Green Economy model save our seed? ... and what does this mean for the textile industry?
The Seed Issue
It would be an understatement to say that The Seed Issue is a complex one. On the surface of it, seed is obviously an essential ingredient in agriculture and the origins of most of our food and fiber. But when one digs below the surface, the topic of seed is way more emotional and political than you would have ever imagined.
“He who controls the seed controls the food”
The Seed Issue is perhaps as much about ownership (and for some cultural identity) as it is about agriculture. And that goes for seed companies and individual farmers alike. Further, it is now creating two camps on the hot topic of food security – those who believe passionately that seed is a deep-seated part of their definition of themselves; and those who think that large-scale technical ‘fixes’ are the answer.
It is perhaps not surprising that the more concerned we are about feeding our expanding population the more precious we become about seed, and the rights to seed.
The Seed Issue spectrum
The Seed Issue is a political one (with a small ‘p’). Farmer organisations and advocates of seed freedom (such as the activist Vandana Shiva in India) are at one end of the spectrum, demanding seed ‘sovereignty’ (i.e. the right of individual farmers to save their own seed) and a call for open access to seed.
At the other end of the political spectrum we are seeing agribusiness companies, such as Monsanto, demanding Intellectual Property (IP) rights and patenting their seed. For crops such as cotton, corn, soy, and canola where genetic modification has been introduced into a country, the GM crop carries a patent making it illegal for farmers to save the seed. Monsanto will argue that controlling IP is a way for them to establish a competitive advantage and the best way to motivate progress in the industry. I heard Dr. Anju Gupta from Monsanto put forward this position at a recent ICAC conference in Interlaken. But it was clear that many of the delegates were not so convinced.
A balanced seed system
In an ideal world, there would be better harmony between the private sector and civil society.
Specialist seed companies would make a positive contribution to non-GM seed R&D, supply and distribution, and advances in sustainable farming, whilst respecting (even supporting) alternative seed production systems to operate alongside.
At the very least, some investment in non-GM seed breeding and alternative seed supply systems would be made by the private sector to continue a legacy of ground-level seed knowledge, biodiversity, and a commitment to the refuge areas required by law where GM crops are grown.
Civil Society would support initiatives that produce seed within / and for farmer organisations, promote local varieties suited to low input needs, and encourage farmer participation in breeding programs and grassroots seed bank schemes. Examples of this are growing in momentum in India and include the FiBL farmer participatory breeding program and the Chetna seed and food sovereignty agenda.
In the mix, governments and agricultural institutions have a critical role to play in enforcing equitable seed policy and building bridges between the private and public. Policy is needed to protect farmers’ rights (not to mention protect germplasm diversity), and investment is needed to build capacity on the ground in terms of seed banks and seed breeding schemes.
Governments can help secure access to seed for all, and agricultural institutions need to remain independent from seed companies [well at least some do!] to ensure a fair and balanced seed supply service is provided which is suitable to small, medium, and large holder farmers.
Biotechnology touted as the next Green Revolution
Since the Green Revolution in the 1950-70’s, the model for agriculture became more industrial. In developed countries in particular, farms have got larger in scale and more mechanised, there has been an increase in monoculture (the growing of only one crop over a large area of land), and the use of 'inputs'; artificial fertilisers, insecticides and herbicides have been encouraged to replace the utilization of natural products and ecosystem services to provide nutrients and control pests and weeds. This has become the dominant worldview of farming, and a push within agribusiness has been for modern farmers to aspire to this model.
Nowhere is this vision and desire for modern agribusiness more evident than in the biotechnology arena. During a recent trip to India I came across some intriguing examples of ‘positive-messaging’ for biotechnology at the local level – such as naming GM seed after the US President “Obama” or seductive Bollywood actresses! Poster adverts depicted prosperous farmers with motor bikes, happy wives, smiling kids, and large houses.
Biotechnology is now being heavily promoted as the key to a new Green Revolution, and it’s not just the agribusiness companies spreading the news. Advocates of biotechnology are also keen to show its green credentials, and some, such as Gordon Conway, professor of International Development, in his latest book One Billion Hungry, believe that the genetic engineering of seed is a necessary step to improving agriculture and securing food for the future i.e. by preventing pest damage, increasing drought resistance, and boosting protein or nutrient levels in certain crops.
Is the quest for Sustainability deepening the divide?
It almost appears as if the divide is deepening between those that believe biotechnology will bring a sustainable second Green Revolution and those that see biotechnology as yet another mechanism for multi-national agrichemical companies to maintain control of farm inputs and keep small scale farmers (of which there are literally billions, mostly in the developing world) as customers.
Some influential NGOs are taking a middle-ground, including Oxfam for example, and are keeping their minds open to the role biotechnology might play, yet recognise that food production is only one concern, and it sits alongside getting food and good nutrition to where it’s most needed, addressing environmental degradation, adapting to climate change, reducing waste and facing up to the unsustainable consumption patterns in affluent societies.
Lessons learnt from the Green Revolution
So what did we learn about the shortfalls of the Green Revolution, and just as importantly how do today’s environmental and global concerns differ from what we knew and understood 50 years ago?
For starters, as reported last week in a new UNEP Report: Preventing Future Famines, we can be sure the Green Revolution did increase food production and helped meet the nutritional needs of a huge number of people, as well as lift many out of poverty. But despite its accomplishments, the Green Revolution was not enough to fully ensure food security. Although food production has increased, many have been left behind, with some 925 million people still counted as undernourished in 2010 (FAO 2010; IFRC 2011).
Further, alongside increases in yield and production volumes we have experienced severe environmental degradation and the creation of ‘dead zones’ on our landscape as a result of high-input agriculture. Plus a dependency on fossil fuels and chemical inputs has locked farmers into believing successful farming can only be achieved if one has access to ‘modern’ inputs and technology... not that low-input farming is simplistic or free of technology, in fact to the contrary!
A new understanding calls for new approaches
The number of hungry people in the world and the alarming impact conventional farming has had on our environment suggest that we need to do things differently. Everyone agrees on this. Many argue that replacing agrichemicals (which is one of the objectives of biotechnology) with biotechnology will keep farmers dependent on a centralised farm input system (which is possibly one of the other objectives) and should not be the only approach to food security.
Many experts believe that any increase in yield, coinciding with the introduction of biotechnology, cannot be isolated from other seed improvements and improved farming practices generally. Crop yield improvements depend entirely on the starting position of the farmer and the farming system; meaning that any investment in farmer capacity building, soil fertility measures, and pest management will result in higher yields (than before the investment), irrespective of whether biotechnology is used or not.
All is all; genetic modification may suit some farming systems but is far from a proven technology, particularly for small scale farmers with limited access to inputs such as a reliable water source and herbicides to compliment the GM seed. Pests and weeds continue to evolve and breed in resistance or create niches for other – secondary - pests to flourish.
A Green Economy for the 21st Century
... which leads me back to the need for a better balance between players in the cotton industry when it comes to seed. Right now the dominance of GM cotton in some of our most significant organic cotton producing countries (including India, China, Burkina Faso, and Brazil) has tipped the balance for farmers. Access to non-GM cotton seed is increasingly difficult and the risk to livelihoods of organic (and Fairtrade) cotton farmers from contamination of their product, is alarming.
We don’t need another Green Revolution along the lines of the last one. What we need is a model of operating that is more deeply based within our natural ecology and economy. This model is more often referred to as a Green Economy.
According to the United Nations a Green Economy is a new way of thinking that breaks down the artificial barrier between economy and environment (UNEP 2011). Proponents of the Green Economy believe that what we usually call the environment can also be viewed as “natural capital” and an essential ingredient in providing wellbeing for people. According to Green Economy thinking we can have a vital economy, and one that provides good livelihoods in all sectors – including agriculture, fisheries, forestry, and energy – without drawing down our natural capital and undermining the ecological foundations of our activities.
We need a Green Economy that works for people and planet and follows some basic principles:
- Keeps the precautionary principle central to any decision making.
- Recognises the health of the environment as fundamental to food (and fiber) security.
- Considers agriculture as an holistic system; dependent upon the ecosystem in which it operates and ‘indebted to’ the ecosystem services nature provides.
- Supports the decentralisation of agricultural practices and farm input supply, and acknowledges the geographical and socio-economic context farmers operate within, thus giving farmers the choice to opt for local inputs and seed saving.
- Promotes crop diversity (polyculture) and prioritises local food supply, even if the primary cash crop is cotton.
- Puts people before commodities – acknowledging that robust and resilient communities are in a better position to look after their land, their people, and their product (food and fiber).
- Is knowledge-intensive not resource-intensive.
- Leverages the best that technology, science, tradition, and local knowledge can provide!
This blog was inspired by:
The new UNEP Report: Avoiding Future Famines: Strengthening the Ecological Basis of Food Security through Sustainable Food Systems http://www.unep.org/publications/ebooks/avoidingfamines/
Jo Confino (executive editor of the Guardian and chairman and editorial director of Guardian Sustainable Business) and his consideration of how technology can both help scale-up sustainable solutions and also push global systems further towards unsustainability http://www.guardian.co.uk/sustainable-business/blog/power-technology-scaling-up-sustainability
For more information on The Seed Issue and challenges for the organic cotton sector: http://farmhub.textileexchange.org/learning-zone/round-table-on-organic-cotton
Image: bioRe® Tanzania
Is ‘sustainability’ happening fast enough to protect our precious resources: our climate, our water, our soils, and indeed protect ourselves..? As we reel from one economic crisis to another, more ‘natural’ disasters and political unrest, and feel the force of a volatile commodity market and rising food prices... we simultaneously attempt to ‘manage sustainability’. These days there is a focus on ‘upscaling’ and how we can change a little in the right direction to maximise reach. In this blog I want to suggest that while increasing scale is a step in the right direction and fits nicely into our current business model, if we want to make radical change we should start thinking harder about depth of impact and economies of scope.
Hard and soft sustainability
After attending Textile Exchange’s 2012 Conference on Textile Sustainability in Hong Kong earlier this month, followed closely by the International Cotton Advisory Committee (ICAC) conference on Shaping Sustainability in the Cotton Value Chain, I am now more convinced than ever that we need to maintain diverse approaches to sustainability, and be flexible. ‘Managing sustainability’ will not be a one size fits all and there will be no technological magic bullets, the ‘softly softly’ approach will continue but it will be the breakthrough ‘harder’ version that will be needed to catapult us out of our comfort zone. Soft sustainability measures will allow us to feel our way and the harder versions will push us – perhaps kicking and screaming - into new territory.
All of us – whether we are acting within corporations, civil society, or as policy makers – need to be multi-faceted in our approaches to managing sustainability and recognise the different starting positions that inevitably exist within society. Yet, somehow we also need to acknowledge that tinkering around the edges, while a good start, will not be enough. Ultimately we need a business paradigm change.
To support my case, take climate change. We all know there are climate friendly choices within our grasp and many people, organisations, companies, and entire countries are working at reducing their respective carbon footprints. Yet last month we learned that the sea ice in the Arctic shrank 18% this year on the previous record set in 2007 to an all-time low. Lord Peter Melchett, from Soil Association UK, made this point eloquently in his keynote speech ‘Back to Basics’ in Hong Kong; setting the context for the conference and ‘why we were here’ for the next 2 days.
Commenting on the shrinkage, the US National Snow and Ice Data Centre director Mark Serreze said: "We are now in uncharted territory. While we've long known that as the planet warms up, changes would be seen first and be most pronounced in the Arctic, few of us were prepared for how rapidly the changes would actually occur."
Author and environmental campaigner Bill McKibben declared “Our response [so far] has not been alarm, or panic, or a sense of emergency. It has been: ‘Let’s go up there and drill for oil’. There is no more perfect indictment of our failure to get to grips with the greatest problem we’ve ever faced.”
How fast and effectively are we addressing sustainability in agriculture?
When it comes to improving sustainability in agriculture the dominant focus, particularly in the West, appears to be how to improve production practices across the largest scale, in the shortest amount of time – in other words a focus on achieving economies of scale. For ease of adoption, this approach requires finding ways to reduce negative impacts associated with mainstream practices, whilst maintaining most of the original business practices – and business relationships. This form of ‘more sustainable’ agriculture suits many companies who are interested in sustainability but don’t want to change the way their business fundamentally operates. The emphasis is on incremental change and as a result it should be possible to continuously expand and continuously improve, the challenge will be in accurately gauging impact and continuing to drive improvement.
For the cotton industry, the Better Cotton Initiative (BCI), is ‘the one to watch’ as it grows according to the goals of scale and speed of adoption, yet within the boundaries of mainstream commodity markets. Examples of this model in other sectors include initiatives for sustainable palm oil, sustainable sugar cane, and responsible soy. These sustainability initiatives, whilst encouraging change, avoid tackling complex issues such as biotechnology (and the use of genetically modified seed), or attempt to interfere with commodity pricing. Ironically, the current interest in BCI has driven the price up as would be expected in the commodity market when demand rises.
Another approach to achieving more sustainable agriculture lies in addressing economies of scope. This concept, discussed by Giles Hutchins in the guardian recently, may even have a speedier route towards achieving economies of scale, since the goal is to approach a solution holistically. In the case of agriculture, it is not only the product that requires the focus, but we need to create healthy and knowledge-intensive communities that can then go on to tackle issues of product sustainability, in a non-dependent way. The necessary shift, Hutchens explains, is to remind ourselves to consider the entirety of the system and not just pick away at parts of it.
For the cotton industry, cotton grown within organic, Fairtrade organic, biodynamic, and agro-ecological systems (i.e. production systems which depend upon closed loop nutrient cycles and not on artificial inputs or genetic modification) represent production systems that work within the laws of natural ecosystems and the advantage of economies of scope. This recognition of the benefits of working within natural systems has led to new areas of ‘biomimicry’ - to emulate or take inspiration from nature (its models, systems, processes, and elements) in order to solve human problems. (For a great introduction to this topic have a listen to Janine Benyus here). Organic agriculture draws on biodiversity and on-farm inputs (such as animal manure, organic matter, insects, etc) to maintain the natural order of the farm system. Nothing need leave the system or needs to be introduced from outside.
Organic cotton farming systems also tend to put local people in the centre of the production system and when operating effectively increase local food security, as well as produce the cotton cash crop for market. (See IFOAMs People before Commodities campaign here).
Recognition of this eco value-add and care of ecosystem services is rewarded to the farmer through trade agreements that incentivise the farmer to ‘go organic’ and is supported by ongoing investment and business security. At the same time, procurers and consumers of organic cotton are rewarded through an ecologically produced raw material which will undoubtedly score well on indices such as the EcoIndex and Higgs Index due to the reduced use of imported inputs and chemicals, high percentage of rainfed production, water retention capabilities, and closed-loop nutrient and organic material recycling. A brand new report by FiBL shows that organic agriculture provides environmental benefits through the sequestration of atmospheric carbon in soil organic matter. From a more holistic perspective research is finding that organic agriculture offers small scale farmers a low input mode of production, and some resilience to climate change. The big challenge right now is under-investment (see more about this and the first meeting of the Organic Cotton Round Table on our website).
In the longer term I’m sure we will see trade of organic cotton occur predominantly through dedicated contracts and not via the commodity market. Dedicated, integrated trade relations are more likely to occur within integrated value chains and less via merchants and middlemen. We have certainly seen this happen already with other important crops under stress, such as cocoa.
Business models for the future
Economies of scale were made famous by industrial business thinkers, intent on maximising productivity and reducing cost. Industrial business required companies to compartmentalise production to gain efficiencies, without evaluating the impact holistically. Today, many great business thinkers such as Michael Porter and Mark Kramer (creating shared value) and Giles Hutchins (the nature of business) encourage us to not only look beyond the ‘sum of the parts’ but to recognise the benefit – including the business benefit - of constructing a more socially and environmentally sound platform from which to conduct business. Progressive business models, these thinkers will argue, put people in the centre (not the product or the commodity), since relationships are the lifeblood of business. The ‘life’ underpinning the business and the inter-connected nature of the business system (with communities, with ecosystems, and natural resources) needs to be respected for businesses to flourish in the future.
Taking business models from commodities to communities
In today’s world there is a sound and logical argument for supporting initiatives focussing on bringing about a more sustainable product to market through addressing economies of scale. Just as certainly, we need to invest in sustainable development through people-centric approaches that focus on building more sustainable (resilient) communities and have a commitment to economies of scope. Both are equally worthy of our time and energy, and from a supply chain perspective, companies with an interest in sourcing more sustainable raw materials, should be able to work effectively by investing in both scale and scope.
In an attempt to move our businesses in the ‘right’ direction we probably need the easily adopted initiatives that will make small but incremental changes quickly to give ‘early wins’, but it’s clear, that the more progressive companies will keep their vision on the longer term sustainability agenda and work towards putting people (not the product) at the centre of their business model – right down the supply chain. These course-changing actions will require courage and a long-term view.
In conclusion I draw on the analysis of Giles Hutchins, who explains how the industrial-age gave us economies of scale and an approach to problem-solving based on looking at each issue or operating unit in isolation to find solutions or efficiencies. This approach gives us a solution in isolation which may not work effectively in the ‘living, emergent, volatile business environment’ that we now better understand, or at least better recognise.
Today we are reminded of the need to look at the inter-connectedness of business and society, and the intrinsic relationship we hold with our environment if we want to build business sustainably. We need to move through and past economies of scale to economies of scope. The risk is that we delude ourselves that the first is sufficient and get stuck there, missing out on the opportunity to go further and build a better more inclusive world where business contributes to the greater good.
As we count down to our conference and Round Table in Hong Kong next month I wanted to take a few minutes to reflect on the excitement and enthusiasm I sense brewing in anticipation. Not only are my colleagues at Textile Exchange, Fairtrade International, and CottonConnect starting to form a clearer picture of what we hope to do but requests and fresh ideas are already coming in from many different camps. As you can imagine, these early conversations are helping us shape and set the tone of the meeting – and most importantly help us understand what exactly people want.
We are hearing from a range of people that we need more transparency in supply chains. If brands and retailers are confused about where their money is going, how can they be expected to make clear commitments to sourcing organic? I am hearing more and more about the need to know farmers are getting a good deal at the farm gate. After that... what exactly are the extra expenses? People really need to know where their organic dollar is ending up. Why is an organic t-shirt costing so much more to produce than a non-organic one? If nothing else, if we can demystify the costs associated with processing organic cotton fiber (and there will obviously be some) and help brands avoid price escalation (and there are various ways to do this) we will have assisted many people who plan to be in that room with us on October 3rd.
Besides the need to demystify organic cotton supply chains and bring more transparency into costs/pricing post harvest, I’ve had profound – and I really do mean profound - discussions with people about how we (brands) can contribute to building robust and healthy communities through trade rather than simply focussing on procuring the product with a bit of social spending on the side. I’m hearing people wanting to find a much more holistic and sustainable way to embark on their investment and achieving impact. Sure, the point of contact between supply chain operators is the material (the cotton), and it’s fair to say that much of the goodness of organic agriculture is embedded in the fiber. But how does investment in organic cotton really pay off from a deeper business perspective, in terms of building healthy communities that can independently build better lives through security of business, security of food, and security of inputs? How can growers actively contribute to building better supply chains, share their ideas, collaborate in driving innovation, and help find market solutions? As we get closer to 2015 and the end of the first phase of the Millennium Development Goals (MDGs), we are told that three important targets on poverty, slums and water have been met, but there is an urgent need for a truly global partnership to achieve the remaining Goals by the 2015 deadline. How can our work in organic cotton contribute to meeting the MDGs?
All this and more is being added to the mix for our meeting next month. Please let us know what you have on your mind – and if you might like to join us – while there’s still time. We have had to look for a bigger room to accommodate the number of people wanting to join us in Hong Kong so there are still a few seats available!
In Hong Kong next month we will hold the first meeting of the Organic Cotton Round Table. And although the meeting has blossomed into more of an open introductory session than a tightly closed meeting in a darkened room I’m delighted to see such interest and enthusiasm coming from so many corners of the industry. I’ll even go as far as claiming that this will be the beginning of a new era for organic cotton... and indeed one we are in desperate need of.
As I reflect on the past 10 years – something I do quite often these days as Textile Exchange celebrates its tenth birthday - I think it’s fair to say that organic cotton is a fascinating case study of how the market can package and deliver ‘eco value-addition’ through market mechanisms. It’s certainly not a perfect system but it’s not a perfect world and I’m positive about the ‘next phase’ in the life and times of the organic cotton sector. I’ll attempt to explain why...
In the beginning we witnessed the rise and rise of organic cotton. Since day one the growth curve was almost vertical – with considerable growth in both production and consumption – and figures indicating a 500 percent increase between 2005 and 2010. In 2010, organic farmers produced 1.1 million bales of organic cotton fiber – and volumes grew from 0.01 percent of global production to over 1 percent.
Today there is a growing mis-match The demand and consumer expectations are merrily – and obliviously - humming along with increased recognition, respect, and desire for all fashion green and ethical... and in fact there is a general expectation ‘out there’ that the industry will just keep on growing. Textile Exchange’s early analysis on the subject found that there is an aggregated growth projection of around 7 percent. However, behind the scenes those of us with our ear to the ground know there are serious barriers to this kind of growth; hence the need for a nucleus to operate from – and the birth of the Round Table on Organic Cotton.
So what’s going wrong? Organic faces two big roadblocks.
The Big Issues
Roadblock 1: Accessing non genetically modified seed: As most of you know organic – and Fairtrade and CmiA certification for that matter – requires the use of non-genetically modified (non GMO) cotton. Those are the rules - and I’m not going to delve into the nitty gritty now – but needless to say ‘seed’ is one of those subjects that I’ve found the more you know the more you realise you don’t know and it’s all very very ... well ... complicated.
What I will say is that in a number of organic cotton producing countries we have seen the introduction and expansion of GMO seed literally change the landscape overnight. And this is before ‘we’ as a ‘community’ (including farmers, scientists, medics, consumers, and so on) have even had a chance to get our heads around the pros and cons of GMOs – let alone to the bottom of the more complex and murky socio-economic issues associated with seed supply facing the worlds farmers and our general [lack of] freedom of choice. Of course seed manipulation is nothing new –‘hybridization’ of seed has brought fundamental changes to the way many countries and corporations produce, disseminate, and control seed – but creating hybrids is not the same as manually inserting genetic material from one species into another that normally wouldn’t have anything to do with each other.
In Hong Kong we will have perhaps an unprecedented situation on our hands where Round Table invitees from retailers to farmers will rub shoulders with seed breeders, grass roots seed specialists, and commercial seed producers. What will come out of this session is anybody’s guess! All I know is that this meeting provides an extraordinary opportunity to begin something constructive for the greater good. I don’t think anyone would disagree that seed integrity and genetic biodiversity is integral to the fabric of life on earth – and we need to keep non genetically modified seed in the suite of offerings – at the very least to respect the precautionary principle.
Roadblock 2: The Quest for a Sound Business Model. Now this is going to be a ‘hot topic’ on the day and one I am really looking forward to with only a little trepidation! Not only do farmers have issues with access to the right seed but how do we attract them to continue – and new ones to take up – organic if the market is not supportive? Despite the proven benefits to health, soil fertility, and food security associated with organic, the business risk has become a deep concern and a risk farmers are feeling less inclined to undertake, alone. There are, of course, some well established value chain partnerships out there that offer a great deal of security to farmers but sadly most organic producer groups are still ‘going it alone’ on the strength of their convictions and the hope that their investment in organic will pay off financially. Either that or they are overly dependent on NGOs and donor funding.
The ‘beauty’ and I suspect the ‘downfall’ of organic is that it has been nudged into the mainstream market as a ‘market driven solution’ (with, as I said, a number of exemplary partnerships and development ‘projects’ showcasing principles and practices, some which are not entirely met financially by the price of the product). The expectation has always been that the market will pay for the embedded environmental and socio-economic sustainability and there has been a tendency to avoid too much proscriptive price setting. However, at the same time, there has been an expectation that the market will pay for the value-add. Worst case scenario is that no one really benefits but the middle men – farmers are under-paid and brands are charged exorbitant rates which taint their perception and ability to participate.
Over the past few years as the volumes of organic have grown this premium price and associated market advantage has eroded. Not because the eco value-add or the benefits of organic aren’t there – but because the market is reconsidering whether it should pay for it. This is where the disappointment lies and we have to take a cold hard look at how we define ‘sustainability’. Furthermore – these days - there are many other variables in the mix; economic contraction generally, and quite frankly other options that suggest sustainability doesn’t have a price tag by claiming not to interfere with the market (which by the way is almost impossible). This is our challenge – and I believe the discussion underlying this conundrum goes way beyond organic cotton.
The bit that intrigues me most is the basic principle that ‘organic’ is worth more in the market than ‘conventional’, but we have all shied away from setting prices. Instead there has been an acceptance of some kind of ‘price premium’ for the extra work and attention that goes into producing cotton organically, and an expectation that producers are taking care of one and all. Of course there are the star operators that are working in partnership with organic cotton farmers, often within integrated value chains, and are ethically transparent in the way they calculate a ‘fair price’ and keep up with progress on the ground. In these situations, I tend to think the security of business (farm investment, guaranteed trade, improved quality, etc) is just as important to those involved as the premium – but if you were a farmer living from one crop season to the next I imagine both the premium and the security of business would be equally important. What we haven’t properly considered or calculated is the benefit to the brand of this security of business. I’m hoping this subject pops up in Hong Kong.
Our Round Table reminds us that collaboration is stronger than competition It’s fitting that the Round Table is established during Textile Exchange’s tenth anniversary year, as we reflect on how far we have come, influencing progress and change within the textile industry. The mission of the Round Table harks back to why Organic Exchange was created in 2002 - to identify and eliminate barriers to growth and effectively change the world of agriculture. Ten years later, we’ve made tremendous progress. The organic cotton sector has grown from $240 million at retail in 2002 to $5.16 billion in 2010, with strong, stable growth anticipated by many brands and retailers. However 2012, sees the organic cotton sector having reached a point in its growth where we’re running into new barriers to growth, which can only be solved through whole value chain collaboration. Not to mention engaging the hearts and minds of committed individuals – both pioneers and new innovators.
Collaboration with Fairtrade International Organic' and 'Fairtrade' initiatives share very similar values, objectives, and principles, and many grower groups in developing countries (and brands/ retailers) choose to be both organic and Fairtrade certified. Both initiatives also share some of the challenges and barriers to growth such as ensuring farmers have access to non-GMO seed, and finding mutually beneficial ways for producers and brands/retailers to work together - in a way that provides long-term security for farmers, and from which farming communities can flourish. After all isn’t that what it’s all about?
With our shared interests Textile Exchange and Fairtrade International have continued to build stronger working relationships over time and have agreed to co-convene the Round Table in Hong Kong.
Agenda The Round Table will involve facilitated discussion, mostly led by the participants on the day. As a rough agenda we are dividing the meeting into three parts: a context-setting session followed by a deep dive into the most critical issues for the sector, and finishing with an open discussion about how participants want the Round Table to operate from this point forward. This will be a closed meeting, so we will need you to confirm your attendance at your earliest convenience.
See you there!
For more information on the Round Table click here
Find out what others are saying click here
Last week, we introduced you to our new Round Table on Organic Cotton live via webinar. Thanks to everyone who attended and has started following up with me. If you didn’t get hold of the recording and wish to please contact Donna Worley. To build on the momentum set by the webinar we thought we would keep the discussion active through the Farm Blog. Please feel free to write directly into the comments box at the end of this page or send your contribution to us at email@example.com and we will post it for you.
Our first blog comes from Dr. Monika Messmer, a plant breeding expert and organic specialist at FiBL in Switzerland. Monika is working closely with organic cotton growers in India and has experience in participatory seed programs. She has put forward the following comments about the issues we raised in the webinar - and I believe Monika's contribution makes a very good start to an open and active discussion on the challenges we face and how the Round Table holds so much promise for a truly multi-stakeholder approach to finding workable solutions.
Monika tells us her views on...
Expansion of organic cotton production should always be accompanied with forward contracting with a fair price agreement between farmer and processor that is reflecting the actual production cost instead of the volatile global cotton prices and adding a fixed premium. If cotton is short on market, the conventional cotton price will rise and a fixed premium will be less attractive, so the farmers might sell to the conventional market. On the other hand, if the global cotton price drops too deep, even with the fixed premium, farmers will not be able to produce economically. Therefore, a fair price should be agreed on to avoid the “pig cycles”. This needs strong commitment on both sides, the customer to take over the agreed quantity to the agreed price as well as on the farmer’s side to produce the agreed quantity with the best possible quality. This commitment should also last longer than just one production year as organic cotton needs to be cultivated in crop rotation and farmers need a certain perspective.
In India and Burkina Faso the seed issue is not just urgent but will be decisive about the future of organic cotton. It might be still possible to go back to find non-GM cotton germplasm and to conserve the more robust endemic cotton species, however this needs immediate action and involves not only time but needs also financial support. Until now, there is no secure and long-term commitment from any side to financially support the organic seed chain or the organic cotton breeding. The stakeholders need to become active in political lobbying to promote public research as well as to financially support private and public-private partnerships to install and enable participatory organic and low-input cotton cultivar testing, seed multiplication and breeding projects.
To avoid GMO contamination, a better understanding is needed between organic and conventional cotton farmers and the risks of crosspollination and physical contamination during storage and processing need to be clarified along the whole supply chain. Especially the non-GM cotton seed multiplication needs to be done in geographic isolation, thus GMO-free regions need to be installed and monitored in each country. This needs political support and enforcement.
Easier entry initiatives
In keeping with Textile Exchange findings, we too, noticed in India that many farmers were dropping out of organic cotton production as the regulation, tracing, and data assessment has become very cumbersome for them and they are not compensated by the premium prize. Other labels are a lot easier to enter, have fewer restrictions, and have less control mechanisms, therefore the impact of labels like BCI should be thoroughly assessed and compared with organic & fair trade labels according to internationally accepted standards that integrate all aspects of sustainability. (See FAO Guidelines for a sustainability assessment for food and agriculture). Otherwise it will be hard to convince the different brands and stakeholders but also the consumers to increase their commitment to organic cotton production and not just to BCI.
The opportunities presented by the Round Table
As there is already a general awareness that business as usual is no option for future agriculture, we need to promote the advantages of organic cotton more clearly. Organic cotton is not just serving the cotton industry but also conserves our most valuable resources like fertile soils and healthy water; it protects the farmers from intoxication of pesticides, and processers from toxic additives or colours.
We are ready to support the establishment of organic cotton seed chains and participatory breeding projects. We have started this already in India, however, not to the extent that would be needed due to limited funding. Stakeholders along the whole cotton market chain need to join forces and follow the organic road from the very beginning. This could be the big chance of this Round Table.
If we want to have sustainable agriculture that will also serve our future generations, we will need to pay for the ecosystem service like fertile soil, clean water, recycled nutrients.
I have great hopes, that the responsible stakeholders of this Round Table might finally pool enough funding to secure the organic non-GM cotton production which is severely threatened.
Dr. Monika Messmer
Plant Breeding for Organic Agriculture
Soil Science Division
Research Institute of Organic Agriculture
Forschungsinstitut für biologischen Landbau (FiBL)
In this guest blog, Jeff Wilson of Quiksilver explains how a holistic approach underlines all that they do – in parallel with organic’s philosophy. In their search for the best solution, Quiksilver takes all the evidence into account and maintains that all-important holistic view.
“As our company begins the journey to better understand and reduce our environmental and social impacts across our value chain, but most importantly in our supply chain, I believe it’s critical to take a holistic view. By that I mean we see the world, and our apparel and footwear industry in that world, as an ecosystem, where all things are intimately intertwined. That serves as a valuable thought process not only in addressing strategic direction, but also tactical execution and decision-making, including how we evaluate materials such as cotton.
I use cotton as an example only because of what appears to be an increasingly interesting and important debate around the various cotton farming systems and methods. No doubt the debate could be around most any “sustainable” fabric or material today. As I work with organizations such as Textile Exchange, Cotton, Inc, , suppliers, and various universities and institutes to become better informed, what I find myself trying to focus in on is staying true to the holistic approach. And to me in this debate what that means is cutting through ideology and bias and attempting to get at facts as best we can. Facts that can elucidate what the environmental, social and economic impacts are of the various approaches to cotton farming. Best I can understand it, there’s conventional, there’s GM/biotech, better cotton initiative, the SCP in California, transitional, and organic, and each has its own proponents and advocates.
What I would find beneficial is an open, honest and fact based dialog about the advantages and disadvantages of all these systems, with no specific commercial, ideological, or other agendas, that centers around a holistic framework of thought. This approach factors in all major environmental impacts such as water, chemicals, waste, energy, carbon dioxide/GHG, along with relevant farm owner/worker social measures, and financial impacts in the community and in the commercial sector…. a quantitative and qualitative approach. What I believe that we will naturally gravitate towards is an integrated system that takes advantage of the benefits of each system or methodology and minimizes the disadvantages. And who cares if that system is called biotech or transitional or organic or whatever. If it’s our best science, fact based solution, and it generates the best environmental, social and economic outcomes we are striving for, then why wouldn’t we pursue it and support it, regardless of what it’s called?
With 7 billion people on the planet, growing to 9 billion in half a lifetime, all needing to be fed and clothed mostly from an agricultural system presently under stress, we need to be focused on real, pragmatic solutions rather than narrow commercial, emotional or ideological interests.”
Director of Travel