ORGANIC COTTON: Thorny issues stifle growth

India is still miles away from tapping the full potential of organic cotton despite a major global share of 56 per cent and a promise of 20 per cent higher return for farmers from this white gold. An ITJ Exclusive portrays the problems and prospects.

India’s organic cotton has many thorny issues: Low-yield borne of unsuitable varieties, Bt-cotton contamination and lack of coordinated efforts to develop desi types have been choking this potential raw material. India is the largest producer of organic cotton in the world after overtaking Turkey and accounts for almost 56 per cent of the global organic cotton production.

“India has immense potential for organic cotton production. However, the yields of organic cotton in India are low at 318 kg lint per hectare in 2106, mainly because of the wrong choice of varieties for organic cultivation. Hybrid cotton is chemical-input intensive and is unsuitable for organic cultivation. It must be avoided for organic systems in India,” says KR Kranthi, Head, Technical Information Section, International Cotton Advisory Committee (ICAC).

In India, the area under organic cotton rose last year, paradoxically production fell. However, the organic wave is picking up speed thanks to sustainability gaining more space in textiles. Farmers are keen to take up organic cotton mainly because the return is higher by at least 20 per cent compared to Bt cotton. Besides, manufacturers for garment export markets are ready to give premium for the organic stuff.

From the industry, there are also increasing number of enthusiasts like engineer-turned-businessman Amit Narke, Managing Director, Purecotz Eco Lifestyle Pvt Ltd, who does garment business with 100 per cent organic cotton. The soft-spoken Narke gets peppy and excited when he talks about organic cotton: “Organic cotton product manufacturing is safe for workmen as it creates less dust particles as compared to other products, which bring chest and respiratory illness to workmen working factories. Also farm workers also suffer due to use of pesticides and farm land gets infertile due to use of chemicals, which also kills all living earth organisms required for crops. As per the GOTS compliance, there is traceability of whatever we are doing in the entire product cycle – seeding to product finishing.”

Anandi Eco Farms started in 2014 and is an organic cotton project in Tamil Nadu, India, with 3,000 farmers audited and certified by Control Union. Anandi’s farmers use non-GMO seed of the Surabhi variety, which produces a staple length of around 33 mm. One thousand of Anandi’s farmers are also in the Fairtrade programme, supplying FLO certified cotton. 150 of Anandi’s farmers are also about to start growing Suvin Cotton, a traditional variety from Tamil Nadu known for its long staple length, softness and strength.

Anandi also has an in-house garment brand named Ecoelate that makes pure organic cotton baby clothes made with biodegradable, herbal dyes under traditional processes. The finished garments are soft, breathable and have natural antibacterial properties.

According to Sumit Gupta, India Head, Global Organic Textile Standard (GOTS): “Organic textiles are most stringent in terms of criteria. GOTS is a textile processing standard that begins with the first processing activity in textile chain, like ginning for cotton. In order to give a healthy life to our future generations, all of us must have a holistic approach towards our working. We must address the triple bottom line and work towards all the three aspects- People, Planet and Profit.”

Says Avinash Mayekar, MD & CEO of Suvin Advisors Pvt Ltd: “Despite India being major producer of organic cotton globally there are very few Indian brands developing the finished organic product. The major reason behind this is that as far as organic farming is concerned, the initial cost of cultivation is not that high but when it comes to producing the finished organic product, a lot of changes are needed in machinery, in the process and also in treating the waste, which ultimately increases the cost of product at much lower productivity. More than the cost parameter, another important factor is that the demand of these products in India is much less and has not yet reached the peak for Indian entrepreneurs to jump to organic manufacturing. The major market dominance is seen in developed countries and so few export targeted units have converted and dedicated part of their business towards sustainable development.”

Kranthi adds, “For organic cotton cultivation of Gossypium hirsutum varieties (not hybrids), the following traits will be critical for success especially in drylands farming systems: Short season, tolerant to sap sucking insects and compact architecture for high density planting. There is a need to identify or develop cotton varieties (not hybrids) that are suitable for organic farming. Currently the varieties or hybrids that are cultivated under organic farming are unsuitable for organic because these were developed for conventional chemical input-intensive farming. The species Gossypium arboreum (Desi cotton) is robust and resilient to abiotic and biotic stresses. There are five to six excellent short season varieties with premier fibre traits (Variety PA 812: 31-32 mm length, 30.0 g-tex strength and 4.0-48 micronaire), developed recently by scientists of the Cotton Research Station Nanded, MAU. These varieties were tested at CICR, Nagpur and were found to give high yields in high density planting. These varieties will be suitable for organic systems. The fibre was tested for spinning consistency index and a few varieties were found to be superior to the best of Bt-cotton hybrids.”

“Concerns have been raised in Europe on the integrity of organic cotton produced in India, which was reportedly found to be contaminated with Bt-cotton. One of the most elegant solutions to overcome the problem of any possible genetic contamination with Br is to cultivate Desi cotton. The Desi varieties are diploids and do not genetically cross with Bt-cotton (Gossypium hirsutum) hybrids (tetraploids). Therefore there is no risk of genetic contamination. Physical contamination can be prevented. Efforts must be made to develop suitable organic farming systems for Desi cotton in India as part of long term plans for sustainability,” added Kranthi.

Says Kranthi: “There is a need to develop traceability systems for organic cotton based on elemental fingerprinting which will enable unambiguous authentication of the fiber source from specific production systems. India can actually create a brand ‘Indian Cotton’ with the native extra-long-staple Desi cotton grown under organic cultivation. The brand can become as famous, if not more, as the brand Egyptian Cotton.

According to Textile Exchange’s Organic Cotton Market Report 2017, total production for the 18 countries growing organic cotton in 2015-16 was 107,980 MT (4 per cent decrease on last year). India represents a slimmer majority than ever before (a decline in global share from 67 per cent to 56 per cent). There was a total of 262,975 ha of organic in-conversion – the vast majority (249,816 ha) in India.

Sitting at number two in global production, with a growth of 13 per cent over last year and with 27,477 ha in-conversion, China is set for growth. Further efforts on building market linkages will be needed to fully establish China as a growing solution to meet growth in demand for organic cotton.

Organic farmers in Brazil have come together with researchers and extension providers to take initial pilot projects to commercial scale. Partnerships with large retail companies to smaller brands are helping to build capacity of this resilient producer group based in the semi-arid region of North East Brazil.

While Africa faces challenges in growth and market linkages, targeted work on organic farm practices is resulting in yield growth. Research shows that 80 per cent of OBEPAB farmers in Benin are experiencing yields higher than the average organic yield for the country, and in Tanzania, yields have doubled for bioRe farmers.

Growth in Central Asia continues with Kyrgyzstan reporting 7,981 MT organic cotton fibre (44 per cent), and Tajikistan 6,620 MT organic cotton fibre (562 per cent) placing the country third in the production rankings. This growth is a response to demand from Turkish.

Demand for organic is growing within pockets of the industry and stabilising within others. Market segments experiencing growth include home textiles, hospitality, and non-wovens (feminine products), as well as longer staple lengths for use in higher-end products.

Companies are strategising to build greater transparency in their supply networks, review pricing structures, and look to greater diversity in organic cotton sourcing regions. A number of companies are consolidating efforts pre-competitively through initiatives such as the Organic Cotton Accelerator and the Chetna Coalition.

Collaborations are forming to develop and drive fairer finance models for smallholder, organic cotton farmers. Improving livelihoods for marginal farmers, often women, is now well understood to bring both financial and non-financial capital to where it matters most.

The cotton fibre market was estimated at 21.07 million MT in 2016 (ICAC). The preferred cotton segment which is made up of Organic, Fair Trade, CmiA, BCI, REEL, Cleaner Cotton and e3 makes up approximately 15 per cent of total cotton fibre production (Note: analysis in this section does not include recycled cotton). This is a significant increase from nine per cent of the cotton market share in 2015.

Preferred cotton increased from nine to 15 per cent of total cotton production between 2015 and 2016. The two factors that contributed to this shift were: firstly the reduction in the overall cotton fibre production, from 26 million MT in 2015 to 21 million MT in 2016; and secondly preferred cotton fibre production increased from 2.2 to 3.2 million MT between 2015 and 2016.

Organic makes up 3.3 per cent of the production of preferred cotton, of which approximately one per cent consists of organic Fair Trade and organic CmiA. Fair Trade makes up 1.3 per cent and CmiA makes up 8.7 per cent of the preferred cotton market.

BCI makes up 40.4 per cent of the preferred cotton market, whilst its equivalent programmes (which includes CmiA, Cotton Australia, ABR Standard (ABRAPA) and SCS Benchmark) makes up 37.6 per cent. It is worth noting that a comparison of BCI’s market share for 2015 and 2016 is limited due to a change in the program’s data reporting format from calendar to harvest year.

e3 gained significant market share of the preferred cotton segment in the past year with an increase of production from 113,398 MT in 2015 to 578,000 MT in 2016.

According to TextileExchange’s Organic Cotton Market Report-2016, organic farming in India is certified under the National Programme for Organic Production (NPOP), with more than 157,721 organic cotton farmers certified to the Standard in 2014-15. In 2014-15, 276,736 ha of land was certified organic with approximately 148,105 ha (54 per cent) dedicated to organic cotton. Almost every State showed an increase in land area with the exceptions of Tamil Nadu and Rajasthan. Madhya Pradesh continued its strong leadership, with 46,511 ha under organic, followed by Odisha at 35,264 ha and Maharashtra at 32,739 ha.

Another reason behind the drop in organic cotton production in some parts of India is to do with the missmatch of fibre lengths for the market. Common lengths are 19-26 mm, suitable for denim products and home furnishings, and 33-40 mm, suitable for luxury products – both of which have a relatively lower market demand than the medium lengths, which sit between the two.

India’s response to the “seed situation” is starting to gain momentum. The vision is for a joined up strategy across the country, and 2014-15 marks a year of significant progress. Initiatives and investments, both small and large scale, include: The Green Cotton Project in Madya Pradesh.

The demand for organic cotton is high relative to production. Yet demand is not balanced across the producing countries. Farmers in Africa and Latin America, for example, are not experiencing this demand, while farmers in other countries, India in particular, have demand but price differentials are low, trading lower than “price neutral” cottons in some cases. This is in turn dis-incentivising the farmer, and while the farmer may remain in organic agriculture, they turn their backs on cotton, and switch to higher value or more reliable cash crops. As well as the long term decision of staying organic or not , farmers make an annual decision on which is the best crop to grow, so price uncertainty in cotton can cause them to be lost to this sector.

Indian organic cotton farmers continue to face systemic challenges but work is under way to find solutions. Particularly to: The restricted availability of non-GMO seed, which suffers a lack of investment at both the government and private level. Many producer groups are keen and ready to develop their organic cotton production but need more support.

The integrity and transparency of organic cotton continues to be a challenge, not only at the farm level but also further up the textile supply chain. Improving transparency is key to better understanding the root causes, strengthening integrity, and improving business models.

The business case for farmers is intrinsically linked to trade. Unless prices, terms and conditions of trade improve, organic farmers will choose to grow other, more lucrative, crops.

We acknowledge Textile Exchange as a source of information for some of the inputs in the cover story.