Kanchan Ghanshyam Kazarie farms 7 acres of cotton in the Indian state of Gujarat

Kanchan Ghanshyam Kazarie farms 7 acres of cotton in the Indian state of Gujarat

View 9 related images

With the ultimate aim of ensuring all the cotton in its products is sourced sustainably, value clothing retailer Primark is adamant that having a business model focused on offering the lowest prices on the high street is not at odds with efforts to improve ethical standards in its supply chain. just-style's deputy editor Michelle Russell found out more during a trip to northern India where the company's sustainable cotton programme is taking shape.

"We're a volume retailer and we want to make sure we're doing things the right way and minimise the impact we're having in relation to both social and environmental issues," Katharine Stewart, ethical trade and environmental sustainability director for Primark, tells just-style.

For Primark, the UK's third-largest clothing retailer by value with 325 stores across 11 countries, and sales of GBP5.95bn (US$7.38bn) in its last fiscal year, one of the goals is to reach 100% sustainable cotton sourcing through an ongoing programme in Gujarat, India's biggest cotton and cottonseed producing state.

The project, set up just over four years ago in traditionally male-dominated farming communities, has combined the expertise of agricultural expert CottonConnect and the Self Employed Women's Association (SEWA) to bring about lasting, sustainable change for female farmers. It offers on-the-ground training sessions and in-field training on farming techniques, seed selection, sowing, soil, water, pesticide management, picking, fibre quality, grading and storage.

Around 1,251 women in 37 villages have participated so far, with an additional 10,000 set to be taken through the programme over the next six years. The first intake of female farmers is also receiving additional training through the Farmer Business School on how to manage input costs, book-keeping, and how to buy and sell cotton.

In the third year of the programme the farmers saw an average profit increase of 247%. This compares to a group of 50 control farmers who are representative of the general cotton industry in Gujarat. Chemical pesticide use is down by an average of 44%, while chemical fertiliser use is down by 40%. Water use has fallen by 10%, while input costs are 19.2% lower.

A sustainable move?

Stewart says only a "small percentage" of the cotton produced by the programme has so far made its way into Primark's clothing, with volumes expected to "pick up" as the initiative continues.

She also says there are zero cost implications to the retailer sourcing its cotton through the initiative – an important point for a retailer selling a GBP2 T-shirt yet under constant pressure to explain how its low prices don't lead to exploitation.

"We looked at all of the programmes available around cotton and none of them were really suitable for Primark for various reasons. It also had to work with the price model of offering customers great value. Joining one of the well-known initiatives would have been a seven figure sum. You are then paying more for the cotton and we didn't want to do that because it's not necessary.

"The cotton [through this programme] leaves the field at the same price as any other cotton. There is no incremental cost to the cotton."

Whether this will change as the programme grows and Primark takes a stricter approach to the traceability of its cotton is uncertain, but Stewart doesn't think so.

At present, CottonConnect and Primark take a manual approach to tracing the cotton through the supply chain in order to ensure the cotton from this sustainable programme makes it into the retailer's clothing. This means checking purchase orders, using bale IDs from farmer to spinner, and utilising the relationships developed with ginners.

Alison Ward, CEO of CottonConnect, admits traceability is a "difficult task", made easier through engagement along the supply chain, but says Primark could invest in technology for "more reassurance" on traceability as the programme grows.

"We can strengthen that with our 'Trade Bales' programme, or they could use a blockchain or a smart scanner. Everything costs money so there is a decision. What level of information do we need and what parameters do we need to put it in? And what is the cost versus investing back at the farm? Certainly it can be done."

Stewart says Primark is considering investment in technology as the programme scales up, admitting "there is only so much you can do with a largely hands-on approach. Once you get to a larger scale, you need to have a system. Paper systems are open to abuse, but we have to find something that works for us."

Farming success stories

The retailer chose India for the pilot initiative because it wanted to engage with cotton farms already being used by its suppliers. It is also one of the retailer's top five sourcing destinations, and the world's largest producer of the raw material.

"I wasn't blind to the fact everyone said this was going to be really difficult. We started where we know the cotton in India is being used by our suppliers in India, and we've got a better chance of understanding the more simple cotton supply chain," Stewart explains.

On one of the Gujarat farms taking part in the initiative, female farmer Kanchan Ghanshyam Kazarie, who has been with the programme from the start, says she has increased her yield from 300kg of raw cotton per acre to 800kg, on average. The price she receives for her cotton has also increased, from 600 rupees per kg, to around 1,000 rupees.

She farms around seven acres and says the programme has taught her how to reduce costs by using less chemical pesticides and more natural pesticides, how to achieve a better price for her cotton, and how to save water using a furrow irrigation system. The increase in profit has enabled her to buy a tractor, put her two daughters through higher education, and help her son buy a shop.

The programme, she says, has certainly changed her life although she admits it is "tough" being a cotton farmer. "It's like a child, you have to nurture it from a small baby to an adult. It's the same with a crop. To nurture it is a tough job."

"From our experience working with poor rural women workers across India we know that employment is key to economic empowerment and self-reliance, both economically and in terms of their decision-making ability," says SEWA leader Reema Nanavaty. "What's most exciting is the impact the programme is having on not just the women farmers themselves, but the broader village community too."

Supplier relationships

Most of the cotton from the farm will end up in the domestic supply chain, with around 20% exported. The small amount of cotton currently being produced for Primark will flow through some of the 1,200 supplier factories the retailer sources from in India.

One Delhi-based apparel manufacturer, while not receiving cotton from this programme, has worked with Primark for over 13 years, with the retailer driving around 70% of its business. The remainder is taken up by Hennes & Mauritz (H&M) and smaller brands such as Peacocks. The manufacturer owns three factories in Delhi, each with a capacity of around 300,000 items per month such as woven skirts and blouses, employing around 1,800 staff.

"Our margins are the same and our qualities are the same," says owner Sumir Kumra. "We earn more with Primark than any other brand because they bring the volumes in and they do this because they have low margins."

Questioned on how its low price points consistently undercut those of its rivals, even though it still sources from the same suppliers and factories and strives for the same ethical and environmental standards, the fashion retailer says this is due to placing orders in huge volumes and off-season, not advertising or having the expense of an online business, and making small changes such as folding clothes at the manufacturing end, thereby eliminating one layer in the process from production to shelf.

Close engagement with the supply chain is also key, it says. Of the factories Primark visits as potential suppliers, only around 50% will get approved.

The retailer hopes that its sustainable cotton programme can eventually be expanded into China, Pakistan and potentially Myanmar, although it is reluctant to put a time-frame on how long this may take.

"This is the first step and then we will look at other countries and other product types other than just garments," says Stewart. "This is just the start. We're not a business that sets targets. We'll just get on and do it."