Insider Views on Organic Cotton Trade and Market (Part 1)
We are delighted to welcome our first ‘guest blogger,’ Graham Burden, to the Farm Blog. Graham gives a Cotton Specialists perspective on the triggers behind the cotton market and how the whole value chain needs to better understand what’s required to support organic cotton production.
Cotton agriculture is a vital cash crop for many millions of farmers worldwide. The small holder farmer may grow cotton on no more than two hectares and income from cotton is an essential contributor to the livelihoods of farmers and their families.
It is these smallholder farmers and the larger farms in more developed countries that turn cotton into the largest single textile fibre and the largest non food crop commodity in the world.
As a commodity, fibre pricing is dependent on supply and demand. 2010/11 and 2011/12 has seen an extreme rise and fall in cotton prices impacting throughout the value chain from farm to retail, resulting in uncertainty in product pricing at retail and uncertainty in future planning for farmers.
As in any cyclical agricultural commodity in a rising market farmers plant more and yet a one crop per year harvest such as cotton can result in large increases in production coinciding with a decline in demand feeding straight back to lower prices for farmers.
This is the normal “way of the world.”
Those farmers, brands and retailers that have made a commitment to organic cotton have been faced with difficult decisions in these uncertain economic times, the difficult economies of Europe and USA directly impacting the farmers in the lesser developed nations.
The organic farmers and brands who have continued their commitment to organic cotton are to be congratulated. At the brand level there must be difficult decisions surrounding continued support for organic cotton, knowing that customer’s availability of income to spend on clothing has been hit hard. At the farm level it is not difficult to see that farmers could see any decline in organic cotton as a justified reason to switch to conventional cotton, if they have seen the previous financial benefits of growing organically diminish. It is hoped that organic farmers will remain committed to the cause, as it is their efforts, hopefully rewarded with a fair price that is providing “added value” through their endeavours to benefit the environment and their communities.
It is essential therefore that the entire supply chain involved in organic cotton has an understanding of the nature of cotton trade and that decisions to support organic cotton at retail is having the intended benefits – economically, socially, and environmentally at the farm level and at the same time ensuring their customers in the high street feel they are getting good value for money.
It is with this last point in mind that Textile Exchange is committed in 2012 to produce a cotton trade guide outlining the intricacies of cotton trade and providing guidance for retailers and brands to determine that the farmer groups involved in their organic programmes are receiving a fair and reasonable reward for their commitment to the environment and the social and economic benefits to their families and communities. As a member of the working group on this Guide I believe this will be an invaluable tool.
Graham Burden
Consultant at Sustainable Textile Solutions UK Ltd
Coming next, Carl Pepper gives us a West Texas Grower’s perspective of the challenges he faces as in organic cotton producer. Carls reveals the secret to his success and the recipe for a good night’s sleep!