Round Table on Organic Cotton - Are you ready for something a little different...?
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!
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