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June 25, 2020

Sustainable cotton needs investment for more credibility

The organic cotton industry needs significant investment in infrastructure and seed, and the creation of a neutral body to ensure the distribution of more credible data, according to industry experts.

By Michelle Russell

The organic cotton industry needs significant investment in infrastructure and seed, and the creation of a neutral body to ensure the distribution of more credible data, according to industry experts.

Speaking to Andrew Olah, founder of the Kingpins denim trade show, on a two-day digital webinar of interviews and panel sessions called Kingpins24, independent activist Veronica Bates Kassatly, said there is “very little data” on organic cotton in the industry, despite the number of methods and systems developed over the last decade.

“I find people making all sorts of claims for which there is not an iota of data. I was looking at C&A’s [Laudes Foundation] annual report published in 2018 and it said their Madhya Pradesh study showed organic cotton consumed 93% less water. The [Madhya Pradesh] study does not show that. Why they put this figure in I do not know but it’s just not true.

“I do write to companies to tell them but nobody is interested. Most of them don’t reply when sent the articles for rights of reply. Nobody has answered my questions.”

Cotton consultant Crispin Argento says there needs to be a neutral body established to monitor the data that is “not encumbered by the financial influence or special interest to move the sector along.”

“There is always influence or special interest, whether that’s a private standard, a voluntary standard and/or a government standard like organic is. There are some standards that are willing to more easily admit that it is a continuous progress journey, if you will.”

Mass Balance system

He says the Mass Balance system, adopted by the Better Cotton Initiative (BCI), is “the only solution” right now, given how cotton is traded.

The Mass Balance chain of custody model uses ‘Better Cotton Claim Units’ (BCCUs) as a designated unit to track the volumes of physical cotton or cotton-containing products associated with a Better Cotton claim. One BCCU represents 1kg of physical Better Cotton lint procured from a gin processing Better Cotton by a merchant or a spinning mill, as a result of an order for Better Cotton products. It encourages supply chain actors to buy and use more Better Cotton, as it does not require complexities that result in costly physical segregation along the supply chain.

“How do you get organic from a farm and keep its ID preserved right up to the T-shirt? It’s really hard to do unless you have a closed system or a vertical supplier that is willing to have real traceability in place – and that is not something that exists yet in the sector,” Argento explains. “If you ask any merchant how they trade bales of cotton, it’s paper, and it’s really difficult, without adding too huge a cost and infrastructure shortfalls, to have certified fibre. Most organic is mass balanced at this point but we are unwilling as sector to admit that, or we just don’t understand the fundamentals of the trade enough.”

Argento says there is a lack of investment in the industry to be able to deliver credible and impact data.

“If you look at the aggregation of all the different standards and initiatives, it’s less than EUR50m (US$56m) a year, which is substantial, but when you take that EUR50m and you look at the number of farmers that are needed to invest in, where there is intervention, when there is infrastructure needed, and you look at the fact that an individual farmer is receiving EUR10-15 [each]. That is not enough for training, for capacity building, and let alone for that farmer to have a business case to actually commit to sustainability over time.

“We need to develop a system that not only invests in farmers and proves that there is a strong business case for sustainability, and not just for a reduction in costs and inputs, but actually a premium that comes on top of that to incentivise that farmer more.”

Poor infrastructure

Argento says there is also a need for “huge” infrastructure and seed, particularly in organic.

“The seed that is being used, predominantly, is North America Upland, in around 85% or 90% of all the sowing fields across the world. It doesn’t have the genetic diversity that would enable a farmer in western Africa and/or in India to, that is acclimatised for those particular regions.”

Argento also points to “poor infrastructure” across the industry, and the need for “massive, massive investment at scale that cannot come entirely from philanthropy”, particular in regions like Africa, India and Pakistan.

“We need to figure out ways in which you can get lower input agriculture to produce the yields that are common or expected in the developed world. There needs to be more direct relationships between the farmer and the supply chain so there is additional value that goes to the farmer.

“If you look at the two organic systems that exist in the US, for example, they’re receiving a premium price for their fibre that’s 50-100% at times above what the trade for cotton is so they have a little bit of a solution there. How are they achieving those costs for their fibre? Those guys have figured it out. It’s not easy for them, by any means, but it’s just a different approach to the market that is finding real commercial value in creating the business case for sustainable cotton.”

There is also a need, Argento says, to bring the farmers to the table to really understand what they need, what they want and how they want to operate as business people and contribute to a better world, socially and environmental, and “not impose these systems on them that can’t actually be applied in the real world”.

“I invite brands and retailers, and their suppliers, to come down to the farm and really nominate at the farmer level and engage and understand what each individual farmer needs and then invest in those systems that will lead to better data, better outcomes, and move the sector forward and not just assume that a piece of paper is delivering on real impact because we know it’s not.”

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