As cotton prices are set to fall, a fair deal for farmers becomes even more vital, says Anup Singh, Global Product Manager for Cotton, Fairtrade International.
Smallholder cotton farmers in Asia and Africa are struggling to cope with falling prices and, as a result of climate change, a shortage of the rainfall vital for their crops. Now they are facing a new blow to their precarious livelihoods.
China has announced that it will start selling its stockpile of cotton in July and August. The stockpile stands at around 10 million tonnes and was accumulated during a now-abandoned state buying scheme to support its own growers. This amounts to more than 40 per cent of world stock, expected to be available at low prices to the supply chains of global brands. Smallholder farmers hoping to sell their crops on the international markets will not be able to compete with these prices, certainly under terms which would enable them to survive and cultivate cotton in future.
In my daily working life, I see the harrowing consequences of a life without hope for small-scale farmers and their families in India, West Africa and beyond. Their families have been farming cotton for generations, but today's cotton farmers see no one to take over their farms as they get older. Their children want to leave farming in search of a better life.
Many cotton farmers are under severe pressure from loans, taken out against crops that failed or yielded below average. These loans are now beyond their capacity to pay back. How surprising is it that hope is gone and, with 285,000 lives lost in India over the past 20 years, suicide becomes a well-known by-product of poverty among these farmers. I have no doubt this figure will increase both in numbers and speed unless smallholders are paid a fair price for cotton which enables them to see a future - and unless benefits which come with Fairtrade cotton are taken seriously by the industry.
Two years ago, Rana Plaza laid bare the pathetic working conditions of the textile mill workers and has prompted the textiles industry to call for action. Yet, we must also not forget the manifold, smaller-scale, highly personal disasters happening every day for those at the very end of the supply chain. The farmers who work their small patches of land are paying increasing amounts for transportation, fertilisers, seed and more, while their profits are declining. Real cotton prices, when inflation is taken into account, have fallen by 45 per cent, from more than $3 per kg in the 1960s to $1.73 last year. Even a small decrease in cotton prices hits struggling cotton farmers more than many can imagine, as they battle to find the money to feed their families, educate their children, protect them from disease, and buy tools to work on their farms.
China has indicated that it does not want to destabilise cotton prices with this latest move, but cotton prices are already at a five-year low. It's easy to see how the repercussions of the Chinese move could last for several years.
We need more than ever to protect cotton farmers with the Fairtrade Mark: the fair price paid to farmers for their crop which makes cotton cultivation less precarious and allows them to plan for the future. On top of this is the additional premium for farmers. Farmers democratically decide to invest this Fairtrade Premium money to address their most pressing concerns - i.e., investing in their farms to improve quality and productivity or in social projects to benefit their communities.
Most farmers have allocated premium funds towards training; agricultural equipment; technical help for in-house production of organic manures; and undertaken measures to implement integrated crop management systems to improve production. In terms of social development projects, focus has been on health, such as building clinics and paying farmers' medical costs; and on education: building schools; providing clean drinking water for schools; paying for schoolbooks and clothes for children of farmers and villagers; and funding scholarships.
New to Fairtrade is the simple and more flexible Fairtrade Cotton Sourcing Programme. The programme allows bulk buying of cotton on Fairtrade terms and this can be mixed with non-Fairtrade cotton and other fibres as needed. This new model allows manufacturers to use more Fairtrade cotton without requiring the need to create separate Fairtrade cotton ranges or separating out Fairtrade cotton from the production processes. Items which contain 100 per cent, traceable Fairtrade cotton will carry the Fairtrade Mark as before.
Fairtrade cotton sales did show an increase last year, but industry has yet to take a big enough step to ensure that the vast majority of cotton farmers in Africa and Asia are paid enough to secure their present and their future. Everyone in this business will know the small percentage of the final price of a garment which comes from the cost of the raw material. Extra money paid to cotton farmers will have little impact on the cost to the consumer - but it will breathe new hope into many lives.