Key Issues and Actions Facing the Cotton Sector in India Report from the CottonConnect Organic Cotton Roundtable, March 2014, Indore

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1 Time for Action Key Issues and Actions Facing the Cotton Sector in India Report from the

2 Introduction The organic cotton sector is at a critical stage in its development. The sector faces a global shortfall of up to 50% by Action is needed now to prevent a gap developing between demand and supply which could be as big as the current world production. On 19 and 20 March 2014, over 170 industry leaders from the Indian organic cotton sector met for an Organic Cotton Roundtable in Indore and agreed to take action. Here is their plan. The Challenge Organic cotton has massive growth potential, but trends suggest a serious shortfall in supply in coming years. Brands are continuing to consume rapidly increasing quantities of organic cotton, despite declines in production. To date, oversupply has meant this is not an issue, but in the next few years a supply crunch will exist. Given the lead times for organic conversion, seed research, and other interventions, the time for action is now. The Benefits For the Environment - Although more research is needed, studies to date have illustrated the substantial environmental benefits of organic cotton relative to conventional production methods. For Farmers - Studies on farm incomes reveal that, over time, a combination of substantially reduced input costs plus comparable yields can leave organic farmers better off than conventional farmers, and less susceptible to climatic yield fluctuations. For Brands and Retailers - People are interested in buying organic clothes and homewares and may pay a small premium for organic. By communicating more about the benefits of organic cotton there is an opportunity to grow the sector. 1

3 The Action Plan 1. Create an Organic & Fair Cotton Secretariat (OCS) The participants in the Organic Cotton Roundtable agreed an Organic & Fair Cotton Secretariat will be established at once to ensure that key actors are aligned around the management and sustained progress of three important areas. The Organic & Fair Cotton Secretariat will focus on three areas: Policy and advocacy Identifying and leveraging resources Providing support services covering social, technical, legal, research and impact aspects of cotton production to accelerate the growth of the organic cotton sector The aim of organising the Organic Cotton Roundtable was to agree actions. The Organic & Fair Cotton Secretariat has been given a clear mandate from the organic cotton sector to drive action at a critical time for organic cotton in India. This is not just business as usual. The Organic & Fair Cotton Secretariat will get to work immediately with a tight focus of delivering outputs on the three key areas in Alison Ward, CEO, CottonConnect The goal is to build an enabling environment for developing responsible organic cotton supply chains; create a credible Indian organic brand; and enhance livelihoods for smallholder organic cotton farmers. The challenges in growing the organic cotton sector are immense, and no single entity can solve them alone. Initiatives such as the Organic Cotton Roundtable offer the opportunity to join likeminded partners who commit to helping India to realize its potential in sustainable fibre production. At C&A Foundation, we are inspired by the outcome of this first convening and look forward to supporting the follow-up actions that ultimately will improve the livelihoods of smallholder farmers. - Leslie Johnston, Executive Director, C&A Foundation 2

4 2. Focus on seed supply The participants of the Roundtable were aligned on the importance of seed supply and seed research and development. They agreed that by developing the seed supply chain it is easier to assure the availability of organic seeds to farmers. CottonConnect will focus on seed supply via a dedicated resource, to be in place by June Specifically, this will include Forecasting the demand for seed Matching the Demand and Link groups for seed supply for 2014 Identifying the supply partners Identifying the varieties by geographical diversity and distribute accordingly Linking supply partners and allowing the existing linkages Identifying the farmers/farm for seed production, storage and distribution Separating ginning The seed supply can be made very effective if all the stakeholders cooperate and make their contribution at the right time to support the data and infrastructure. 3. Support seed research and development 100 per cent Organic and Genetically pure seeds is the key for Organic Cotton Programmes. To this end, the following actions were agreed. Identification and selection of region specific cultivars by Participatory Varietal Selection (Variety/Hybrids) Maintenance of the Variety (Short term Process) Long Term Process (For releasing variety/hybrids) including region specific multi location trial for stability Local/Desi hybrids (region-specific) that are high organic, more responsive and better quality will be identified and selected by Participatory Varietal Selection process. Parents of hybrid variety will be acquired from Cotton Research stations and multiplied in farmers fields as well as in Agricultural Research Stations. This will be supervised by Cotton Breeders, CottonConnect, NGOs, progressive farmers, and will lead to the adoption of breeding standards for short term and long term process. 3

5 4. Share good agricultural practices It was agreed that developing the best agricultural practices and disseminating these to each farmer will significantly enhance organic farming. Farmers are not sufficiently aware of organic farming and its benefits. A Farmer Group can build the capacity of farmers and promote the choice of organic farming which will assure significant quantity of organic cotton in the supply chain. CottonConnect will co-ordinate the compilation of packages of practices for organic farmers. This will help promote organic farming and its benefits leading to an increased quantity of organic cotton in the supply chain. Key action points are: Compile the best practices for organic farming Develop communication tools Build capacity of extension workers who will conduct training for farmers Open cluster base organic center and align with model farms One example of sharing good agricultural practices in in biomass production. Biomass production is critical to maintain the health of soil and improve the yield of organic cotton. The following actions are designed to share good agricultural practices for biomass production. Community based compost making Enhanced availability of organic matter for composting Green manuring/inter cropping with nitrogen fixing crops Support for small holding farmers from group farming Promoting micro irrigation drip Briquette making for enhance income of farmers 4

6 5. Improve efficiencies in organic supply chains There is currently a huge loss in supply chain of organic cotton due to various reasons: Organic cotton sold as conventional 5% waste in ginning Weight loss in transportation Up to 30% fiber loss in combed cotton Changeover losses (in Ginning and Spinning) Participants at the Roundtable agreed to coordinate their work to reduce waste in the Organic Cotton supply chain. An efficiency model will be created To develop practical and replicable supply chain models that can work by understanding the demand and identifying the applications To develop economics of scales, including identifying geographies to work and market options. To develop committed supply chains by identifying the right partners, communicating the demand clearly and supplying the product. 5

7 6. Improve integrity and use of certification The integrity of organic cotton is vital in promoting and growing the sector. Certification plays a critical role but a re-evaluation of the processes is necessary in order to identify and fix the issues. The participants of the Roundtable were determined to improve integrity and address the weakness in the process of certification of organic cotton. The actions agreed include improving integrity at farm level through training of trainers, further cascading through to farmers. The Organic & Fair Cotton Secretariat will conduct in depth analysis to identity weakness in certification process with respect to integrity. 7. Improve transparency and 100% traceability Transparency and traceability is important to increase retailer and consumer confidence in organic cotton textiles. Supply chain contributors need to coordinate better and provide trustworthy data. Currently, the supply chain is uncoordinated and non-transparent which leads to difficulty in finding the right contributors, produce, and has resulted in limited traceability of goods. To improve traceability through the supply chain, a feasibility study will be conducted to create a database of all certified Organic Cotton contributors. 6

8 The Participants The event was attended by cotton farmers, farm groups, ginners, spinners, brands, certification bodies, NGOs, government officials and key cotton buyers from all over India. It was a new and fruitful experience for me. I would like to now motivate women farmers back home to adopt Organic farming practices, by sharing the benefits of not only organic cotton production but also improved economic condition it brings. - Tarsilla Bhuria, Progressive organic cotton farmer Kudos to a very democratic process which was highly inclusive where people took the center stage and talked about making things move forward. The intent was shared loudly and clearly which is remarkable. - Prabha Nagarajan, Textile Exchange Collaboration is not about talking but on practically taking steps to make a difference- which has been the most exciting part of the whole process. Getting passionate inputs from key stakeholders, getting all diverse stake holders together and hearing collective perspective was a unique experience. - Abhishek Jani, Fair Trade India This was a revolutionary step and shall be helpful in developing a strong marketing chain of Organic cotton. - Dr. R.N Shukla, Vindhya Organic Foundation The actions agreed at the Organic Cotton Roundtable and the clear commitment from industry leaders in the Indian organic sector will forge a strong future for organic cotton. To find out more and join the movement for change, contact arvind.rewal@cottonconnnect.org 7