FAIRTRADE
AND COTTON
Millions of small-scale farmers in developing countries
depend on cotton for their livelihoods. This briefing
provides an industry overview, and explores why
Fairtrade is needed and what it can achieve…

May 2020

COTTON AT A GLANCE

fairtrade facts

global facts

Fairtrade works with 19 producer
organisations growing Fairtradecotton in seven countries.1

Fairtrade cotton farmers produced
48,838 metric tonnes (MT) of certified
seed cotton in 2018.2 10,188MT
of cotton lint was sold as Fairtradein 2018.3

18%Around 25 million MT of cotton
have been produced each year
over the past five years.7$56.7bn

In 2017, global exports of cotton
were worth $56.7 billion.8

There are 45,576 Fairtrade smallholder
seed cotton farmers cultivating a totalof 55,516 hectares.4

The global average water footprintof seed cotton is 3,644 cubic
metres per tonne, which isequivalent to nearly 1.5 Olympic
swimming pools.9

Farmers generated €1,434,146 of
Fairtrade Premium in 2018.5

Six percent of the world’s pesticides
and 16 percent of insecticides areused on cotton production.10

Farmers spent 18 percent of their
Fairtrade Premium on community
services, including education, and47 percent on agricultural tools
and inputs.6

Fairtrade International, Key Data: Fairtrade Cotton, https://www.fairtrade.net/impact/keydata-fairtrade-cotton [accessed 29 September 2020].
2	
Ibid.
3	
Ibid.
4
Ibid.
5	
Ibid.
6	
Ibid.
7	
Keith Tyrell, Anne-Katrien Denissen, Isabelle Roger, Lisa Schonenberg, Richard Holland, EllyPeters, Justin Woolford, Edith Verhoestraete, Sustainable Cotton Ranking 2017: Assessing
Company Performance (PAN UK, WWF & Solidaridad, 2017), p.1.
1	2 								

65Cotton is grown in around 65
countries on approximately 29.67m
hectares – or 2.1 percent of global
arable land.11

International Trade Centre, Trade Map, https://www.trademap.org/Index.aspx, [accessed 5
September 2019]. *Includes cotton, yarn, thread and fabrics.
9	
Cotton Up Guide to Sourcing Sustainable Cotton, Challenges for Cotton, http://cottonupguide.
org/why-source-sustainable-cotton/challenges-for-cotton/#1518784631421-5825380e-f0f8,[accessed 18 March 2020].
10	
PAN UK, Pesticide Concerns in Cotton, https://www.pan-uk.org/cotton/, [accessed
18 March 2020].
11	
Textile Exchange, 2025 Sustainable Cotton Challenge: First Annual Report (2018), p.13.
8	

Commodity briefing: Cotton | Fairtrade Foundation May 2020

GLOBAL facts CONTINUEd...
$1.3t

n

$5.9bnThe apparel market today is worth
around $1.3 trillion (excluding
footwear and jewellery) in retailsales globally.12

Over 150 countries are involved inexporting or importing cotton.14

Government subsidies for domestic
cotton production were up 33 percent
in 2017/18 and totalled $5.9bn.
47 percent of world cotton production
received direct government assistancein 2017/18. China led the way with
$4.3bn paid.13

75 percent of cotton grown globallyis genetically modified.15

100m rural households are directly
engaged in cotton production –90 percent of them in developing
countries.

350m

An estimated 350 million people
work in the cotton sector.

Common Objective, The Size of the Global Fashion Retail Market, https://www.
commonobjective.co/article/the-size-of-the-global-fashion-retail-market, [accessed 18
March 2020].
13	
ICAC, Production and Trade Subsidies Affecting the Cotton Industry (Secretariat of theInternational Cotton Advisory Committee: Washington DC, November 2018), pp.1 – 2.
14International Trade Centre, Cotton Exporters Guide: The importance of cotton in world
trade, http://www.cottonguide.org/cotton-guide/the-world-cotton-market/theimportance-of-cotton-in-world-trade/, [accessed 15 April 2020].
12	3 								

14%Polyester accounts for more than 50
percent of global textile product, withan average of 53m MT produced
every year. However, in recent years
there has been an increase in the
production of recycled polyester,which was up to 14 percent in 2017.16

$1.98
/KG

Cotton prices are volatile, and haveexperienced long-term decline sincethe 1980s. Taking inflation into
account, prices have fallen fromaround $3.00/kg in the 1980s to$1.98 today.17

BCI, Genetically Modified (GM) Cotton, https://bettercotton.org/resources/key-facts/fact-6genetically-modified-gm-cotton/, [accessed 23 March 2020].
16
Textile Exchange, Preferred Fiber & Materials: Market Report 2018 (Textile Exchange: 2018),
pp.5 – 6.
17	World Bank, World Bank Commodities Price Forecast: April 2019, http://pubdocs.worldbank.
org/en/598821555973008624/CMO-April-2019-Forecasts.pdf, [accessed 24 March 2020].
15	

Commodity briefing: Cotton | Fairtrade Foundation May 2020THE ECONOMICS

1

Cotton is the world’s oldest commercial crop andone of the most important fibre crops in the global
textile industry. It is grown in around 65 countries
on approximately 29.67m hectares – or 2.1 percent
of global arable land. This makes cotton one of themost significant crops in terms of land use after
food grains and soybeans.

Cotton is also a heavily traded agricultural commodity with over
150 countries involved in exporting or importing it. It makes up nearly
30 percent of global production and has a history dating back over
8,000 years.18 Cotton also plays a major role in the economic andsocial development of developing and newly industrialised countries.
It is an especially important source of employment and income inWest and Central Africa, India, Pakistan and Central Asia.
As many as 100m rural households – 90 percent of them indeveloping countries – are directly engaged in cotton production,
relying on it for their income. An estimated 350 million people workin the cotton sector when family labour, farm labour and workers
in connected services such as transportation, ginning, baling andstorage are taken into account.19

The major cotton producing countries are India, China, the UnitedStates, Brazil and Pakistan.20 China is both the largest exporter andimporter of cotton by value. Since 2015, Bangladesh has been thesecond largest importer of cotton, with Vietnam and Turkey also
importing significant volumes – possibly due to the developmentof textile and garment manufacturing industries in these countries.
World cotton production for the 2018/19 season showed a three
percent decrease to 25.7m MT.21 This signals the first decrease inproduction since 2015/2016.22 While some countries’ production
remained steady, or even increased, several of the major players– the US, Australia and Pakistan – suffered production losses asa result of poor weather conditions and a lack of available water.23
Additionally, the global consumption of cotton suffered a one
percent decrease to 26.2m MT during the 2018/19 season.24

from cotton plant to clothing
1 Cotton is primarily grown in dry
tropical and subtropical climatesat temperatures between 11°C
and 25°C.

4 The lint is compacted inbales and stored before
being spun into yarn or
thread and processed intoa range of textile products...

2 The flower of the cotton plant(genus Gossypium) produces
seeds and surrounding white
downy fibre known as bolls.

5 ...whether that’s throughweaving, knitting, dyeing
and printing or being sewn
into garments, accessories
and homeware products.

3 After harvesting – by hand or
mechanically – the bolls aretransported to a ginnery where
the fibres, known as lint, areseparated from the cottonseed.

Cotton Up Guide to Sourcing Sustainable Cotton, Cotton at a Glance,
http://cottonupguide.org/why-source-sustainable-cotton/cotton-at-a-glance/#151878
4631421-5825380e-f0f8, [accessed 24 March 2020].
19
Fashion Revolution, Meet Kady Waylie: Fairtrade Cotton Farmer, https://www.
fashionrevolution.org/meet-kady-waylie-fairtrade-cotton-farmer/, [accessed 24 March 2020].
20
Statista, Distribution of Cotton Production Worldwide in 2017 / 2018, By Country,
https://www.statista.com/statistics/595561/distribution-of-global-cotton-production-bycountry/, [accessed 24 March 2020].
18	4 								6 The cottonseed is used inanimal feed or pressed tomake cooking oil.

ICAC, News – 21 November 2019 – Cotton Review of the World Situation,www.icac.org/News/NewsDetails?NewsId=2314&YearId=2019, [accessed 25 March 2020].
22
ICAC, News – 17 December 2018 – Global Stocks Expected to Decrease,https://icac.org/News/NewsDetails?NewsId=1258&YearId=2018, [accessed 25 March 2020].
23
ICAC, News – 1 July 2019 – Rising Stocks and Uncertain Demand Cloud the Outlook for2019 / 20, https://www.icac.org/News/NewsDetails?NewsId=1287&YearId=2019,[accessed 25 March 2020].
24
ICAC, News – 21 November 2019 – Cotton Review of the World Situation.
21

Commodity briefing: Cotton | Fairtrade Foundation May 2020THE CHALLENGES

2

The cotton industry faces a number of challenges
to its long-term sustainability – from the intensive
use of hazardous chemicals to climate change andlow cotton prices. Many of these contribute to thefact that cotton is failing to provide a sustainable
and profitable livelihood for the millions of smallscale farmers predominantly in Asia and Africa
who are responsible for growing the seed cotton
the global cotton textile industry depends on.

Industry challenges
Competition from synthetic fibres
In 2017, over 100m MT of fibres were produced, from cotton topolyester. Of this, around 65 percent were synthetic fibres derived
from petrochemicals, with polyester being the most commonly
produced. Meanwhile, cotton currently has an increasing market
share with around 25 percent of global fibre production being
cotton-based.25
Synthetic fibres have a different, but still significant, impact on theenvironment. While cotton production is water and land-intensive,the production of synthetic fibres produces substantial greenhousegas emissions. The production of a polyester shirt has more thandouble the carbon footprint of a cotton shirt (5.5kg CO2e vs.
2.1kg CO2e).26 However, growing concern about the climate crisis,
microplastics and microfibres has led to an industry-level focus
on more sustainable alternatives such as recycled fibres (eg fromplastic waste or reused textiles), man-made cellulosics (includingfrom recycled cotton), and natural and bio-based fibres.
The gap between cotton and polyester prices has been narrowing
since mid-2017. Recycled polyester also has a growing market
share (up to 14 percent of production in 2017), however a recent
ban on imports of polyester solid and textile waste to China may
cause recycled polyester production to decrease. At present,
less than one percent of all clothing is recycled back into clothing.
However, increasing commitment from the fashion industry tocircularity makes growth in this area likely, potentially reducing
cotton’s market share.27
Government subsidies
Intended to shield domestic producers from volatile and low cotton
prices, government subsidies include direct support to production,
border protection, crop insurance subsidies and minimum support
price mechanisms. It has been seen that in years when prices are
high, subsidies tend to decline. In years when prices are low,
subsidies tend to rise.28

Workers weeding a cotton field in Rapar district,
Cotton at Noble Ecotech, India

Textile Exchange, Preferred Fiber & Materials: Market Report 2018, p.6.
UK Parliament, Fixing Fashion: Clothing Consumption and Sustainability, Fashion’s
Environmental Price Tag, https://publications.parliament.uk/pa/cm201719/
cmselect/cmenvaud/1952/report-files/195206.htm [accessed 15 April 2020].
27
Textile Exchange, Preferred Fiber & Materials: Market Report 2018.
28
ICAC, Production and Trade Subsidies Affecting the Cotton Industry, p.1.
25
265 								Commodity briefing: Cotton | Fairtrade Foundation May 2020

Government subsidies for cotton farmers in rich countries createa market with artificially low prices in which small-scale farmers
in developing countries are unable to compete.29
High price volatility can negatively affect the competitiveness ofcotton. This can have disastrous consequences that threaten the
future of the cotton economy, including pushing retailers to shift tohigher blend textiles. For example, they might move to making what
was formerly a 100 percent cotton shirt to 50 percent cotton and
50 percent polyester.30
Child labour and forced labour
Child labour in cotton has been reported in several countries andis most prominent on small-scale farms, particularly at planting
and harvesting times. The US Department of Labor’s 2018 listof goods produced by child labour or forced labour states cotton
as having the joint fourth highest number of listings (17 countries).31
Forced and child labour presents a major challenge to the cotton
industry and is well documented in nine cotton-producing countries.
In Turkmenistan and Uzbekistan, state-controlled forced labour isused to complete the cotton harvest each year.
Following global scrutiny and pressure from across the industry,including from consumers and brands, Uzbekistan has begun totake measures to address the issue. Following the introduction of
new policies in 2017, children aged between seven and 14 are nolonger sent to the cotton fields. However, forced labour remains an
issue – in 2017, the International Labor Organization estimated thataround 336,000 forced labourers were sent to the cotton fields forthe harvest.

Workers weeding a cotton field in Rapar district, India

Fairtrade Foundation, Cotton is Failing to Provide a Profitable Livelihood for Small Scale
Farmers, https://www.fairtrade.org.uk/Media-Centre/News/April-2015/
Cotton-is-failing-to-provide-a-profitable-livelihood-for-small-scale-farmers, [accessed 26
March 2020].
30
Report from the Task Force on the Challenges from Competing Fibers to the 72nd Plenary
Meeting of the International Cotton Advisory Committee, September 29-October 4, 2013.

29

6 								Similarly, in Turkmenistan, despite national laws prohibiting forced
labour, citizens are forced to pick cotton under various threats. As
the Turkmen government owns all land in the country, farmers
have no choice but to grow cotton to the government’s demands.
The Responsible Sourcing Network is advocating for industry
stakeholders to pledge not to knowingly source cotton fromUzbekistan and Turkmenistan, and many companies have alreadyjoined this campaign.32

31

32

US Department of Labour, 2018 List of Goods Produced by Child Labour or Forced Labour(Office of Child Labour, Forced Labour, and Human Trafficking: 2018), pp.11 – 14.
Responsible Sourcing Network, Cotton, https://www.sourcingnetwork.org/cotton,[accessed 26 March 2020].

Commodity briefing: Cotton | Fairtrade Foundation May 2020

US$/kg
5

4

3

2

1

2018

2016

2014

2012

2010

2008

2006

2004

2002

2000

1998

1996

1994

1992

1990

1988

1986

1984

1982

1980

1978

1976

1974

1972

1970

1968

1966

1964

1962

1960

0

Trend line

Source: World Bank, World Bank Commodities Price Data, Annual Prices

Figure 1: Cotton prices in real terms 1960 – 2019

Challenges for farmers

Low incomes, low investment, high dependency
Cotton farmers are at the end of a long and complex supply chain
in which they are virtually invisible and wield little power or influence.
With high levels of illiteracy and limited land holdings, many cotton
farmers live below the poverty line and are dependent on the
middlemen or ginners who buy their cotton, often at prices below
the cost of production.
Rising costs of production, fluctuating market prices, decreasing
yields and climate change are daily challenges, along with foodprice inflation and food insecurity. These factors also affect farmers’ability to provide decent wages and conditions to the casual workers
they employ. In West Africa, a cotton farmer’s typical smallholdingof two to five hectares provides the essential income for basic needs
such as food, healthcare, school fees and tools. A small fall in
cotton prices can have serious implications for a farmer’s ability tomeet these needs. In India, many farmers are seriously indebted
because of the high interest loans needed to purchase fertilisersand other farm inputs. Unstable, inadequate incomes perpetuate
the situation in which farmers lack the finances to invest in theinfrastructure, training and tools needed to improve their livelihoods.

33

World Bank, World Bank Commodities Price Data, Annual Prices (The Pink
Sheet), https://www.worldbank.org/en/research/commoditymarkets#1, [accessed 16 April 2020].

7 								Price volatility
Like many commodities, cotton is traded on international markets
in US dollars, while the Cotlook A Index is the recognised barometerof world prices. Cotton prices are volatile, and have experienced
long-term decline since the 1980s. In real terms (accounting for
inflation), prices per kg have decreased from $3.00 in the 1980s
to $1.98 today, particularly striking as the 2018 price is the highest
price achieved since 2011.33 Technology-driven productivity gains,competition with other fibres and changes in consumption andproduction (supply and demand) patterns all have downstream
impacts on the value chain, ultimately affecting the prices received
by farmers.
Research shows that a small increase in the seed cotton pricewould significantly improve the livelihood of cotton farmers but
have little impact on retail prices. Depending on the amount ofcotton used and the processing needed, the cost of raw cotton
makes up a small share of the retail price, not exceeding ten
percent. This is because a textile product’s price includes added
value in the various processing and manufacturing activities along
the supply chain. So a ten percent increase in the seed cotton pricewould only result in a one percent or less increase in the retail price– a negligible amount given that retailers often receive more thanhalf of the final retail price of cotton finished products.34

34

Valerie Nelson and Sally Smith, Fairtrade Cotton: Assessing Impact in Mali,
Senegal, Cameroon and India, Summary of Synthesis Report (London:
University of Greenwich, May 2011), p.2.

Commodity briefing: Cotton | Fairtrade Foundation May 2020Agrochemical use and the environment
Concern is growing about the sustainability of cotton production as
the environmental impacts of conventional cotton production become
more apparent. Cotton farmers rely heavily on agrochemicals suchas herbicides to eradicate weeds and pesticides to control thenumerous pests that destroy around 15 percent of world production.35
According to an ICAC report released in 2012, around five percentof the world’s pesticides sold are destined to be used for cotton and
14 percent of insecticides.36
The consequences of intense chemical use include deterioration insoil quality and productivity, and contamination of groundwater – themain source of drinking water for most rural populations in developing
countries. Other consequences include increasing resistance of pests,
negative effects on biodiversity and the potential health risks ofcooking oil and animal feed made from cottonseed. Meanwhile,
poor storage, inadequate or unused personal protective equipment
and lack of training in safely handling hazardous chemicals resultsin widespread pesticide poisoning among cotton workers, ranging
from headaches, nausea and vomiting to loss of consciousness
and seizures.37
In recent years there has been significant reporting suggesting adecrease in the use of agrochemicals, however many figures are outof date and inaccurate. Findings show that pesticide use has not
dropped as substantially as some believe – cotton is still the fourthlargest consumer of agricultural chemicals. And while pesticide use
has undoubtedly dropped since the 1980s, progress is not uniform
and the extent of the problem is under-reported.38

Water use
Under poor management practices, cotton can contribute toover-consumption of water, depending on where and how it isgrown. The global average water footprint of seed cotton is 3,644
cubic metres per tonne, the equivalent of nearly 1.5 Olympic
swimming pools.39
In Central Asia, water consumption for irrigation for cotton
production has had pronounced environmental impacts.
The Aral Sea has shrunk to only 25 percent of its original sizeand soil salinity is affecting cotton yield and productivity.40
Other major cotton producing regions, such as Pakistan, China,
Uzbekistan and the US, use artificial irrigation, particularly in large
plantations. Artificially irrigated areas represent about half the
global area under cotton cultivation but, because of higher yields,
account for 73 percent of the global cotton production.41 Inefficientirrigation systems can deplete local water sources, making water ascarce commodity for many cotton-growing communities. Traditional
techniques such as flood irrigation can be wasteful and also leadto the runoff of fertilisers and pesticides causing the pollution of rivers,
lakes and water tables. Similarly, cotton-processing industries inmany countries pollute natural water sources by pumping untreatedwaste flows into them.

Cotton harvests are weighed and shipped in Segou, Senegal

Carmelo Rapisarda & Giuseppe E Massimino Cocuzza (eds.), Integrated Pest Managementin Tropical Regions (CAB; Wallingford, Oxon; Boston, MA: 2017), p.137. https://books.
google.co.uk/books?id=PY1FDwAAQBAJ&pg=PA137&lpg=PA137&dq=cotton+pests+15%2
5&source=bl&ots=BI6vOTWW6l&sig=ACfU3U1sL40nvve-G9FhBkwWOlm4Oaap-Q&hl=en&sa=X&
ved=2ahUKEwjNkbn5s8zoAhVGQUEAHWuGADgQ6AEwBXoECAwQMg#v=onepage&q=cotton%20
pests%2015%25&f=false.
36
PANUK, Is Cotton Conquering its Chemical Addiction? A Review of Pesticide use in Global Cotton
Production (Brighton: PANUK, October 2017), p.17.
37
Peter A. C. Ooi, Suwanna Praneetvatakul, Hermann Waibel, Gerd Walter-Echols “The Impact of
the FAO-EU IPM Programme for Cotton in Asia”, Pesticide Policy Project Publication SeriesSpecial Issue No. 9, July 2005 University of Hannover, Germany.
35

8 								PANUK, Is Cotton Conquering its Chemical Addiction?, pp.2 – 7.
Cotton Up Guide to Sourcing Sustainable Cotton, Challenges for Cotton,
http://cottonupguide.org/why-source-sustainablecotton/challenges-for-cotton/#15
18784631421-5825380e-f0f8, [accessed 18 March 2020].
40
Nasa, Landsat Top Ten – A Shrinking Sea, Aral Sea, https://www.nasa.gov/mission_pages/landsat/news/40th-top10-aralsea.html, [accessed 9 April 2020].
41
Jason Potts, Matthew Lynch, Ann Wilkings, Gabriel Huppé, Maxine Cunningham,
Vivek Voora, The State of Sustainability Initiatives Review 2014 (International Institutefor Sustainable Development & International Institute for Environment and Development,2014), p.187.
38
39

Commodity briefing: Cotton | Fairtrade Foundation May 2020Climate change
Textile production is a major contributor to climate change. It isestimated that across the full life cycle of clothing, the industry has
an annual carbon footprint of 3.3bn tonnes of CO2e, rising to nearly
4bn tonnes if footwear is included.42 Globally, 73 percent of cotton
cultivation relies on irrigation, and water use can be significant.
Rising temperatures can also lead to cotton plants suffering heatstress. This is likely to reduce yields and increase the prevalenceof pests and diseases, particularly in hotter growing environments(eg India, Pakistan and Sudan).
Agricultural areas in China, Pakistan, India and Central Asia
that depend on fresh water from the Himalayan glaciers are very
vulnerable to the effects of climate change. The rapid retreat ofglaciers caused by higher temperatures is significantly reducing
the amount of fresh water released into rivers and streams and,
consequently, available for agricultural use. In India, farmers areexperiencing erratic and extreme weather patterns, including
delayed monsoons, and dry spells and floods during the same
season, which have a huge impact on livelihoods. Similarly, inPakistan, above average summer monsoon rains have resulted
in damaging floods alternating with extended droughts that
reduce fresh water supplies even further.
Similar changes in weather patterns are also likely to have anegative impact on agriculture in many parts of Sub-Saharan Africa.
In particular, dependence on rain-fed agriculture and natural resources
for livelihoods, combined with limited knowledge on climate change
and limited resources for adaptation, make this region especiallyvulnerable to higher climatic variability and climate change.43
Under business-as-usual conditions, the fashion industry’s climate
impact is projected to increase by 49 percent against 2016 levels
by 2030.44

Cotton bolls, Pratima, India

Quantis, Measuring Fashion: Insights from the Environmental Impact of the Global Appareland Footwear Industries Study (2018), p.3.
43
Patrick Gwimbi and Tanyaradzwa Mundoga. “Impact of climate change on cotton
production under rainfed conditions: case of Gokwe”, Journal of Sustainable Developmentin Africa 12 (8), 2010: pp.59 – 69.
44
Quantis, Measuring Fashion, p.2.
429 								Pratima Organic Grower Group worker Katha Mahananda

GM cotton
GM (genetically modified) cotton was widely adopted in cottongrowing regions in the late 1990s to early 2000s (1997 in South
Africa and 2002 in India). It was hoped that the genetic modifications
would improve resistance to pests and to certain herbicides, making
it easier to eliminate weeds. For example, the most common formof GM cotton – Bt Cotton – is resistant to bollworm. However, theexperience of many cotton farmers using GM seeds has not been
positive, mainly as the initial purchase cost of the seeds is higher.
A range of negative impacts has been documented. For example,
target pests begin to develop resistance over time, requiring
intensive management and monitoring regimes, and, even where
the target pest is effectively removed, secondary pests may become
more problematic. A study across five Chinese provinces found that
Bt Cotton farmers earned less than conventional cotton-growers,
primarily due to the need to treat the emergence of previously
insignificant (secondary) pests.45 Similarly, in 2015, whitefly
destroyed two thirds of the cotton crop in the Punjab, causing an
estimated loss of $629m and leading to several farmer suicides.46
In India, 90 percent of India’s cotton area is planted with GM seeds.
And the companies selling GM seeds have a monopoly over thecotton seed market, leaving farmers with little choice.47

Brian Dowd-Uribe & Jim Bingen, “Debating the merits of biotech crop adoption in
sub-Saharan Africa: distributional impacts, climatic variability and pest dynamics”,
Progress in Development Studies, 11(1), 2011: p.66.
46
Soil Association, Failed Promises: The Rise and Fall of GM Cotton in India (October 2017), p.2.
47
Canadian Biotechnology Action Network (CBAN), Genetically Modified Cotton: CBAN
Factsheet, (CBAN: Ottawa CA, February 2013), p.3.
45

Commodity briefing: Cotton | Fairtrade Foundation May 2020

HOW FAIRTRADE
WORKS IN COTTON

3

Fairtrade Standards cover all three pillars ofsustainability – economic, social and environmental.

What differentiates Fairtrade from othercertification schemes?
The negative aspects of conventional cotton production are causing
concern to both consumers and industry. Social and environmental
accountability and sustainability issues are becoming increasingly
important for major brands and retailers. This has seen a growthin the number of certification schemes that aim to improve theeconomic, social and environmental conditions within cotton
production. The 2016 ‘Textiles Standards and Legislation’ lists
more than 70 sustainable textile labels and standards.48
The share of more sustainable cotton increased to 21 percent of
global production in the 2017/18 season (12 percent in 2015/16,
which was reported in the Sustainable Cotton Ranking’s 2017
report, with approximately 5.3m MT of cotton lint.49
The volume of more sustainable cotton actively sourced by brands
and retailers increased slightly to approximately 25 percent of theavailable supply in 2018 (21 percent in 2016), still leaving 75 percent
of more sustainable cotton traded as conventional cotton.50

There are many certifications, codes and programmes trying toaddress the challenges in the cotton sector. While others aim toprotect the environment or enable companies to trace their products,
Fairtrade is unique in being the only certification scheme whose
primary aim is to tackle poverty through better terms of trade as
well as giving farmers greater power within their trading relationships.
Small-scale cotton farmers have limited options for improving theireconomic and social situation within the conventional supply chain.
Fairtrade supports farmers with fairer, more stable prices andadditional income to invest in infrastructure, training, farm equipment
and business improvements as well as programmes such as
healthcare, clean water and education that contribute to flourishingcommunities. Fairtrade supports farmers in managing theenvironmental and health risks from cotton production and in building
stronger organisations with increased bargaining power and a more
active role in global supply chains. Fairtrade works with 19 producer
organisations growing Fairtrade cotton in seven countries.51 In 2018,
cotton farmers generated €1,434,146 of Fairtrade Premium.52
18 percent of this Premium was spent on community services,
including education, and 47 percent on agricultural tools and inputs.53

Fairtrade in brief

For me, Fairtrade is the balance between
ethics and the environment. The
disadvantaged co-operatives benefit
socially, economically and ecologicallyfrom Fairtrade. The system encourages
them to participate democratically in alldecisions of the co-operative.

• Fairtrade Minimum Price protects against volatile market prices•F airtrade Premium for strategic investment (fertilisers, pesticides,
fuel, yield and quality)•F airtrade Premium for community investment in essential
infrastructure (healthcare, education, clean water)•F acilitates access to export markets•S upports strong, entrepreneurial and representative farmerorganisations

Siddharth Tripathy, Press Secretary of Chetna Organic
Farmers Association•A ccess to training and capacity building•E nvironmentally friendly and long-term sustainable practices

Textile Standards & Legislation, A Guide to Environmental & Social Compliance Textile
Standards & Legislation, https://www.textilestandards.com/ [accessed 15 April2020].
49
Sustainable Cotton Ranking, Market Update, https://sustainablecottonranking.org/
market-update, [accessed 9 April 2020].
48

10 								Sustainable Cotton Ranking, Market Update, https://sustainablecottonranking.org/
market-update, [accessed 9 April 2020].
51
Fairtrade International, Key Data: Fairtrade Cotton, https://www.fairtrade.net/impact/
key-data-fairtrade-cotton [accessed 29 September 2020].
52
Ibid.
53
Ibid.
50

Commodity briefing: Cotton | Fairtrade Foundation May 2020

Fairtrade Standards for cotton

Environmental and social production standards

Fairtrade cotton was launched in 2005 to offer cotton producers
an alternative to the volatile and unreliable conventional market.
Producer organisations are audited against Fairtrade Standards,
which provide a framework for a sustainable approach to productionthat can have long-term economic, social and environmental
benefits for farmers and their communities. The Standards include
a guaranteed Fairtrade Minimum Price for seed cotton and the
additional Fairtrade Premium for farmers to invest in strengthening
their organisations, developing their businesses and improving theinfrastructure of their communities.

Environmental standards promote best agricultural practices thatare sustainable, minimise risks and protect biodiversity:

The main provisions and objectives of Fairtrade Standards are:• Appropriate and safe use, storage and disposal of hazardous waste

Minimum Price and Premium payment• No use of genetically modified organisms (GMOs)•P roducer organisations are paid a Fairtrade Minimum Price forseed cotton. Set by region and variety, it ranges from €0.66/kg
in Kyrgyzstan to €0.39/kg in South Asia
•T he Fairtrade Minimum Price aims to cover average costs ofsustainable production and provides a safety net when market
prices fall below a sustainable level• When the market price is higher than the Fairtrade Minimum Price,
the buyer must pay the higher price. Producers and traders canalso negotiate higher prices on the basis of quality and otherattributes• Producer organisations are paid an additional Fairtrade Premiumof €0.05/kg to invest in business development and communityand environmental projects chosen by their members• Minimised use and safe handling and storage of pesticides,
herbicides and hazardous chemicals• No use of chemicals included in the Fairtrade Prohibited Materials List
• Integrated pest management including non-chemical pesticides
and biological pest controls• Improve soil fertility, reduce and prevent soil erosion• Efficient and sustainable use of water resources• Maintain buffer zones around bodies of water and conservation
areas where pesticides and hazardous chemicals must not be used
• Re-use of organic waste for composting, mulching and manure• Protect and enhance biodiversity by identifying and protecting
natural ecosystems, protected areas and conservation areas• Work towards efficient energy use and reduction in greenhousegas emissions• Forced labour and child labour are prohibited• The Trader Standard aims to encourage fairer negotiations andinclude signing contracts that allow for long-term planning andsustainable production practices• Operators within the supply chain must comply with core
International Labor Organization Conventions

Organisational development and strengthening• No discrimination of members or workers on the basis of race,
colour, religion, gender, sexual orientation, age, marital status,
disability, HIV/AIDS status, nationality or social origin, politicalopinion, trade union membership•F airtrade certified seed cotton is open to small producer
organisations that are owned and governed by their members•A democratic decision-making process must be in place,with all members having an equal right to vote on key issues•F armers in India who are not organised to this level can becertified under the Contract Production Standards. Farmers must
be contracted to an intermediary organisation (usually an exporteror NGO), known as a Promoting Body, which will support themin the process of forming a functioning independent organisation•P roducer organisations can request pre-finance of up to 60
percent of the negotiated contract value. This is vital in providing
small-scale farmers’ organisations with the capital to purchasetheir members’ crop and provide agreed services

54

Fairtrade Standards include core requirements which must be met
by all producer organisations (eg training in handling pesticides)and development requirements, which are a process for making
continuous improvements within realistic timeframes (eg reducing
the use of herbicides). Fairtrade International provides training andguidance in meeting standards, supported by training manuals andin-country liaison officers.
Fairtrade certification includes regular audit FLOCERT (flocert.net),a global certification and verification body with the main role ofindependently certifying Fairtrade products. Producer organisations
and traders pay a certification fee, which contributes to the costof the service and which is compulsory for ISO 17065 accreditation.54
Producer organisations that lack sufficient financial resources to pay
the full Fairtrade certification or renewal fee can apply for a grant of
up to 75 percent of the fee. Certification provides the scrutiny that
motivates producer organisations and traders to actively andeffectively ensure compliance with Fairtrade Standards. It also
helps producers to progressively strengthen their organisations
by developing and adapting internal systems and processes.

ISO 17065 is the standard set by the International Organization forStandardization for bodies certifying products, processes and services, and isintended to ensure they operate certification schemes in a competent, consistentand impartial manner. https://www.iso.org/standard/46568.html

11 								Commodity briefing: Cotton | Fairtrade Foundation May 2020THE DIFFERENCE FAIRTRADE
MAKES TO FARMERS AND
THEIR COMMUNITIES4

In 2018 FAIRTRADE COTTONFARMERS PRODUCED

48,838MT

OF CERTIFIABLE SEEDCOTTON GENERATING€1,434,146

IN FAIRTRADE PREMIUM TO
INVEST IN THEIR BUSINESSESAND COMMUNITIES.56

Farmer working in Kyrgyzstan

There are now 19 Fairtrade certified cotton
producer organisations representing 45,576
smallholder farmers across seven countries– including Burkina Faso, India, Kyrgyzstan
and Senegal.55

Before, we farmers had to buy seeds fromlocal merchants every year and remain
in debt to them. The Fairtrade certified
co-operative that we are now members ofbuys seeds in large quantities and sells
to us farmers for a reasonable price. The
co-operative buys all the cotton we growand sells it for us, so that each farmer
does not have to handle the sale himself.
Chatr Singh, Noble Ecotech co-operative, India

Fairtrade International, Key Data: Fairtrade Cotton, https://www.fairtrade.net/impact/
key-data-fairtrade-cotton [accessed 29 September 2020].
56
Ibid.
55

12 								Commodity briefing: Cotton | Fairtrade Foundation May 2020

RESEARCHING THE IMPACTS OF
FAIRTRADE COTTON
Fairtrade commissioned Trucost and Gist tocompare and benchmark the external socialand environmental costs and benefits ofFairtrade cotton against conventional cotton.

Researchers took a high-level approach, averaging the datafrom two Fairtrade co-operatives and comparing it with data on
conventional cotton farming in India. We acknowledge that thissample may not be representative of the entire Fairtrade cotton
farming community in India.
The aim of the study was to identify opportunities to reduce theexternal costs and to use this information to target improvements
and support programmes offered by Fairtrade.
These external costs, or ‘externalities’, are defined as costs imposedon society by the production, consumption or investment decisionsof individuals, governments and businesses for which they do
not pay.57
A classic example of a negative environmental externality is theemission of air pollution due to the burning of fossil fuels to
produce electricity. The emission of air pollution is damaging to thecommunities living nearby – increasing healthcare costs and reducing
life expectancy due to poor health – but the electricity producer may
not fully pay these costs to the communities. In this way, the healthdamages caused by the emission of air pollution represent an
external cost of electricity generation.
An example of a negative social externality is the exposure of workers
to health and safety risks. If workers do not wear sufficient protective
clothing and equipment, they are exposed to a greater risk ofoccupational incidents and associated injuries. The cost of such
incidents increases healthcare costs, which the producer may not
fully pay, shifting the cost to the worker or to society more broadly.
Another example is the provision of wages to workers that are
insufficient to support a decent living, imposing negative effects
on the wellbeing of the worker and their household.

57

A cotton farmer picks a handful of
cotton in Rapar district, Gujarat, India

Thomas Helbling, “What Are Externalities?”, Finance and Development:International Monetary Fund (IMF), Vol. 47, No. 4: December 2010: p.48.

13 								Commodity briefing: Cotton | Fairtrade Foundation May 2020The results
The research revealed that the combined social and environmental
costs of Fairtrade cotton farming are five times lower than that ofconventional cotton farming.
The findings showed:•F airtrade cotton farming has lower environmental costs due toa number of factors. For instance, agrochemical use is lower.
Synthetic fertilisers are replaced with organic fertilisers such ascompost, which normally contain less nitrogen and phosphorous,and synthetic pesticides are replaced with organic pesticides suchas leaf extract. These agricultural practices lead to reduced waterand soil pollution impacts. Greenhouse gas emissions are also
lower for Fairtrade cotton farming, mainly because in conventional
cotton farming there is the burning of crop residues whereas for
Fairtrade this technique is no longer practiced. Finally, for Fairtradecotton farming, water use per kg of seed cotton produced is also
reduced (on average approximately 30 percent lower).
• Fairtrade cotton cultivation has approximately 97 percent lower
social costs than conventional cotton cultivation. This can be
attributed to the absence of forced overtime for farm labourers

Externalities (INR/KG COTTON)FAIRTRADE COTTON – COSTS AND BENEFITS
100
50• For all the KPIs except for land use, Fairtrade cotton performed
better than conventional cotton. This can be explained by thelower level of inputs per kg of cotton and appropriate crop residue
management practices. On average, land use for Fairtrade cotton
is higher. This is because Fairtrade cotton farming has slightly
lower yield than conventional and therefore more land is required
to produce one kg of seed cotton.
• Fairtrade cotton farming generated approximately 13 percent
higher social benefits than conventional farming. These benefits
are attributable to the payment of Fairtrade Minimum Prices
to farmers, which deliver higher returns than market prices. In
addition, Fairtrade Premium received by the co-operative benefit
local communities by enabling them to implement projects toenhance wellbeing. Finally, the fair wages paid to the agriculturallabourers play an important role in improving their incomes.

Fairtrade cotton farming had externalcosts five times lower thanconventional cotton farming:• 31% lower for the environmental
components

0-50• 97% lower for the social components

-100
-150
-200

In this study, Fairtrade cotton farming
had external benefits that were
non-existent in conventional cotton
farming, such as benefits from fairer
wages and community benefits.

-250
-300
-350
-400
-450

Conventional

Fairtrade

Income benefits

27

27

Benefits from fair wages-

2

Community benefits

and the lower impacts associated with child labour on Fairtradefarms when compared to conventional farms.

-

2Child labour

-212

-10

Overtime-73-

Land use-25-27

Water pollutants

-39

-23

Water use

-20

-14

GHG emissions

-14

-3

Soil pollutants-0-0About the data in this report
With reference to some social indicators, the overall industry and Fairtrade
figures might be underestimated due to some methodological choices, data
access restrictions, and the hidden nature of these practices. The small sample
size is a limitation applicable to both social and environmental KPIs.

Please email cotton@fairtrade.org.uk for more information on
this report.

Figure 2: Fairtrade cotton costs and benefits – data
14 								Commodity briefing: Cotton | Fairtrade Foundation May 2020

FAIRTRADE AND COTTON IN INDIA
A. PRATIMA ORGANIC GROWER GROUP

Pratima Organic Grower Group was founded in2003 and became Fairtrade certified in 2010.
It has more than 3,500 members who cultivatearound 4,500 hectares of land. It is dedicatedto 100 percent organic and Fairtrade production.
It was the second Fairtrade cotton producer
organisation to transition from contract production
to a fully-fledged, farmer-owned small producer
organisation.

Pratima worker Lal Majhi

About Pratima

Fairtrade Premium• Annual production capacity: 1,000MT

One of the most significant projects Pratima has used the Fairtrade
Premium for is the community centre. This provides extra space forfamilies, and electricity for children to do their homework.

• Number of farmers: Approximately 3,683 – 10 percent are women•L and under cultivation: 3,072 hectares
Pratima is located in the state of Odisha, one of the poorest regionsin India. Over 42 million people live in the state, with the majorityof them working in the agricultural sector. Drought and irrigation
problems have had major impacts on the sector and many people
have moved away in search of other employment opportunities.
Pratima has a democratic structure, with an executive committeeof farmers elected every three years. Annual general meetings areheld and all decisions are taken democratically. As Pratima has its
own Global Organic Textile Standard (GOTS) certified ginning millonsite, farmers are able to weigh their cotton themselves at themill before being verified in front of a farmer representative.

Pratima is using some of the Fairtrade Premium to establish a fundfrom which women’s self-help groups can seek loans to set up
income-generating activities like brickmaking, tailoring andaquaculture initiatives.
Farmers have also used the Fairtrade Premium for drinking water
pumps, water-harvesting structures and farm ponds, and to provide
seeds and other agricultural inputs to farmers. Women-only changing
rooms have also been built by the ponds where villagers bathe.
Pratima also provides 600 – 700 scholarships for school children
every year using the Fairtrade Premium.

In order to help farmers generate sufficient incomes, Pratima
began running information events for its members. These help
farmers to identify alternative income-generating opportunities.

15 								Commodity briefing: Cotton | Fairtrade Foundation May 2020

FAIRTRADE AND COTTON IN INDIA

B. PRATIBHA SYNTEX LIMITEDPRATIBHA-VASUDHA JAIVIK KRISHI KALYAN SAMITI
Pratibha Vasudha is promoted by Pratibha Syntex
Ltd., one of the largest textile manufacturers in
the world. Vasudha translates as ‘Mother Earth’and this represents Pratibha’s commitment tohelping people and the environment.

Use of the Fairtrade Premium in Pratibha, India, 2018

About Pratibha

Fairtrade Premium•A nnual production capacity: 1,850MT from 32,000 farmers in

Vasudha has a strong focus on women’s empowerment andholds various training activities to encourage women to become
stakeholders in the decision-making process. They wish to increase
female representation in the executive committee by 15 percent.
Vasudha has also established a skill development centre where
women learn additional craft skills such as tailoring and stitching to
supplement their income, and is making efforts to enrol all girls in
the community in the local schools.

Rajasthan and Madhya Pradesh• Number of farmers: 1,524 members – around 10 percent are women• Land under cultivation: 3,581 hectares
Pratibha has started the process of converting the project fromcontract production to a small producer organisation. This has beenaccomplished through capacity building and education initiatives totrain the farmer members to become more democratically organised.
It also employs specialists to train and educate farmers on waste
management, recycling, pest management, healthcare and better
farming practices.
Pratibha Syntex quality checks the cotton and weighs this in frontof the farmer at the local ginning site. Payment is made in cash on thesame day. Farmers may also receive a bonus from Pratibha based
on total annual sales to promote Fairtrade and organic farming. The
cotton is processed at a spinning mill into yarn, fabric and garments.

In 2009, the Vasudha Vidya Vihar school was built for the children of
the farmers. Today, over 450 students attend the school, which offers
education until the 12th grade. Farmers pay a nominal tuition fee andFairtrade farmers get a 10 percent subsidy on the fee and an additional
discount on sibling enrolment.
Good quality seed material is provided annually to farmer members
in order to maintain genetic purity and prevent GMO contamination
at the farm level. The co-operative also benefits from a TRAID-funded
seed multiplication programme. Other field-based initiatives include
the installation of drip irrigation for 125 farmers (covering 50 hectares
acres), conserving 35 to 40 percent water; the distribution of saplings
to promote agroforestry and reduce soil erosion; and reduced use offertilisers and pesticides through the use and sale of organic manure
at cost price.
Pratibha has used some of the Premium towards the constructionof infrastructure and demonstration farms to teach other farmers
about organic farming and best agricultural practices.
Farmers have put the Fairtrade Premium towards supporting
education projects, subsidies for farm inputs, medical camps andhealth check-ups, and to invest in income diversification initiatives.

16 								Commodity briefing: Cotton | Fairtrade Foundation May 2020

FAIRTRADE AND COTTON IN INDIA
C. RAPAR AND DHRANGADHRA FARMERSPRODUCER COMPANY (RDFC)

RDFC is a cotton co-operative founded in 2015
with almost 500 members, located in the western
Indian state of Gujarat. In 2016, more than
1,200MT of cotton on the world market camefrom this co-operative.

Students at a school supported by Fairtradepremium payments in Rapar district, Gujarat, India

About RDFC

Being a cotton farmer associated with

Fairtrade is prestigious in the village
as it differentiates us from the otherfarmers in the village. We have our own
organisation, which is necessary to
associate with Fairtrade, others don’t.
We meet regularly to discuss aboutproblems and opportunities; collectively
bargain to get better-than-market-pricefor our cotton since we follow Fairtradeand organic standards; discuss best
agricultural practices and technologies
at the meetings; and, most importantly
we have the power of the Fairtrade
Premium which we can invest to solve
the problems in our daily lives and forthe village.
Jayavant Sinh Zala, Farmer and President, RDFC

• Annual production capacity: 5,000MT• Number of farmers: 497, all men• Average farm size: 0.5 – 2 hectares• Other Fairtrade commodities: peanuts, cumin, sesame and tea
RDFC became a Fairtrade small producer organisation in April 2016.
Prior to this, the organisation was certified as a Fairtrade contract
production project under the name Agrocel Pure and Fair Cotton
Growers Association.
As a small producer organisation, RDFC consists of around 260
farming families who collectively manage about 1,700 hectares ofcultivated land. The co-operative has a democratically electedboard of directors and committees responsible for different areas,for example, environmental affairs.

Fairtrade Premium
The co-operative uses the Fairtrade Premium to invest in businessdevelopment, environmental protection and education. Particular
projects have included:• Purchasing agricultural equipment• Purchasing non-GMO seed and farm implements to reduce thecost of cultivation• Renovating a school, building new classrooms and providing
sports equipment
They plan to invest future Fairtrade Premium revenues in engaging
women and helping them to develop income-earning opportunities,
for example through the production and sale of handicrafts.

17 								Commodity briefing: Cotton | Fairtrade Foundation May 2020

FAIRTRADE AND COTTON IN KYRGYZSTANAGRICULTURAL COMMODITY AND SERVICE
CO-OPERATIVE (ACSC)ACSC is based in the south of Kyrgyzstan.
The co-operative has been certified since2008 and sell 60 – 70 percent of their cropon Fairtrade terms.

There have been many things happening
since we became Fairtrade certified in2008. We only had small amounts ofFairtrade sales by 2014, but we did
not give up hope and believed we could
do it and be successful. We did that –since 2014, we sell 60 – 70 percent ofour cotton under Fairtrade conditions.
Nurbek KJannazarov, Chairman of the co-operative

About ACSC
• Production capacity: 1,200MT• Number of farmers: 1,000• Average farm size: 2 – 10 hectares; 98 percent are small farmers
with an average of two hectares• Other Fairtrade commodities: cotton derivatives eg cottonseed oil

Fairtrade Premium
The co-operative has used the Fairtrade Premium to provide training
and technical assistance to improve the quality of their crop andimprove yield. As a result of the training, farmers are reporting
better soil fertility and higher water retention within their farms.
The Premium has also supported other social and community
projects.

Group of women workers, Kyrgyzstan

18 								Commodity briefing: Cotton | Fairtrade Foundation May 2020

FAIRTRADE TEXTILE STANDARD
Fairtrade introduced the Textile Standard in2016 as a first step towards implementing acomprehensive Fairtrade textile programme
to change textile supply chains and related
business practices throughout the textile
industry.

Inside the factory at Loocust Incorp
Apparel Export PVT in Tripur, India

The Standard is based on Fairtrade’s existing Hired Labour
Standard and focuses on working conditions, living wages andworkers’ rights. It requires living wages to be paid within a set
time period – six years – and makes brand owners contractually
responsible for their fair and long-term purchasing practices.

• Better working conditions, including requirements related toworking hours, overtime, contracts and temporary employment

Key benefits for workers within the Standard are:• Support for youth employment and apprentice programmes• Living wages must be implemented within six years

The Standard also seeks to minimise negative impacts on workers
and the environment through control of chemical use and practices,
including through the prohibition of materials specific to the textile
industry.

• Support for workers to unionise, leading to greater
worker empowerment• Engagement with the Standard through inclusion inCompliance Committees• Improved health and safety

19 								• Training and capacity building, including raising awareness ofworkers’ rights

Products meeting set criteria for all stagesof production for the entire supply chain may
carry the Fairtrade Textile Production Mark.

Commodity briefing: Cotton | Fairtrade Foundation May 2020

WHY WORKWITH FAIRTRADE?

5A SUSTAINABILITY OPTION FOR
COTTON-SOURCING COMPANIESThe success of Fairtrade is due to the risein public demand for sustainable and ethicalsourcing, including procurement tenders. This
has encouraged businesses to be responsible
for the integrity of their supply chains and to
consider carefully how they purchase products.

Sourcing Fairtrade cotton under either of our sourcing models
also provides businesses with traceability of their cotton andtransparency within their supply chains.

Fairtrade offers the flexibility of two models:
The FAIRTRADE Certified Cotton Mark provides
physical traceability of the cotton from a labelled
end garment back to the farmers who grew it,with the assurance to consumers that all cotton
in a finished product is Fairtrade certified.
The Fairtrade Sourced Cotton model makes it
easier for businesses to source some of theircotton on Fairtrade terms. This way, farmers
can sell more of their cotton, which means
more benefits for them and their communities.

Fairtrade cotton farmers, US GPC de Kedougou, Senegal

Enlightened business leadership understands that investingin long-term sustainable practices and more resilient producer
communities is a sound business strategy, especially in commodity
markets such as cotton where prices and yields can fluctuate greatly.
Fairtrade can offer solutions which meet these consumer
demands and give businesses the opportunity to demonstrate
their commitment to sustainability through a widely recognised
and understood scheme, both in-store and through other channels.

20 								The Fairtrade Sourced Cotton model provides businesses withgreater flexibility – businesses commit to sourcing a total volume
of cotton but have flexibility in how this is incorporated into
different product lines and ranges.
Designed for scale, this model is cost-effective and also provides fulltraceability and supply chain transparency for partners, with farm-level,
credible data available to show a company’s impact. Transactions
are tracked and verified in real time throughout the supply chain
using our online reporting system, Fairtrace. This system uses a‘digital handshake’ so that both parties confirm transactions, andallows FLOCERT to check and verify the actual volumes sourced bycommercial partners.
This model also offers flexibility in terms of communications –businesses can choose whether to use on-pack (consumer) or
off-pack (corporate) communications.

Commodity briefing: Cotton | Fairtrade Foundation May 2020THE DATA

6

Producer organisations

Fairtrade Premium

In 2018, there were 19 Fairtrade certified producer organisations
located in seven countries. These producer organisations represent
45,576 smallholder farmers.58

Producer organisations reported that 76 percent of the Fairtrade
Premium was invested in services for farmer members in 2018.60

They grow seed cotton on 55,516 hectares (equivalent to over
77,000 football pitches) and produce 48,838MT of Fairtradecertified seed cotton. Global sales of 10,188MT in 2018 generated€1,434,146 in Fairtrade Premium.59• Cotton producers spent 18 percent of the Fairtrade Premium
they earned on services for their communities, including education
services61• 47 percent was spent on the provision of agricultural tools andinputs, to improve producer organisations and services for farmers62

3% Other
2% Human resources
and administration
47% Provision of agricultural
tools and inputs

2% Facilities and infrastructure

3% Community
infrastructure

7% Education services
for communities

8% Other services
to communities

1% Health services
for members
1% Farmer training
in agricultural or
business practices

5% Credit and financeservices for members

9% Other services
to members

Services to farmer members

76%

Services for communities

18%

Investment in producer
organisations

4%

Other			3%11% Education
services for members

Figure 3: Fairtrade cotton Premium use
in small producer organisations 201863

Fairtrade International, Key Data: Fairtrade Cotton, https://www.fairtrade.
net/impact/key-data-fairtrade-cotton [accessed 29 September 2020].
59
Ibid.
60
Ibid.
58

21 								

Ibid.
Ibid.
63
Ibid.
61
62

Commodity briefing: Cotton | Fairtrade Foundation May 2020CONCLUSION

7

Despite supplying the raw commodity that themulti-billion dollar global clothing and textile
industries depend on, growing cotton is failingto provide millions of rural households indeveloping countries with a sustainable
and profitable livelihood.

Cotton farmers’ incomes are being hit by low and volatile cotton
prices and by the rising costs of food, fuel, transport and farm
inputs, preventing investment in modern farming practices andtechnology. Their families’ health and the environment are at risk
from the widespread use of hazardous agrochemicals, child labourand forced labour continue to blight the industry, while climatechange is bringing more unpredictable challenges.
Fairtrade Standards provide a framework for cotton farmers toform democratic organisations or strengthen existing organisations.
This enables farmers to increase their negotiating power in themarketplace, improve business systems, access new markets,
develop long-term trading partnerships and implement sustainable
farming practices. Fairtrade Minimum Prices contribute to financial
stability, while Fairtrade Premium can be invested in improving
cotton quality and productivity, climate change adaptation andimproving community welfare.
By offering Fairtrade cotton products, businesses are contributing
to a more sustainable future for cotton farmers, their communities
and the environment. And by purchasing them, consumers arechoosing products that change lives.

Pratima worker Radha Majhi

22 								Commodity briefing: Cotton | Fairtrade Foundation May 2020

APPENDIX

COTTON VS. SUBSTITUTE FABRICS
Cotton production is widely associated withdriving large environmental and resource usage.
It is important to compare and contrast theenvironmental costs of production for different
fabrics in order to identify any appropriate
substitute.

To complete this assessment, the following factors were considered:energy use, CO2 emissions, freshwater use, biogeochemical flows,
land use change and genetic diversity. The assessment wascompleted for the following fabrics: conventional cotton, organic
cotton, polyester, hemp and wool.

Energy requirements• Polyester: the largest embedded energy use – raw materials
are petroleum products and the manufacturing process is quiteenergy and heat intensive• Hemp: varies depending on production method

MJ per tonne spun fibre• Conventional cotton: has a high energy requirement in the crop
cultivation stage due to the use of synthetic fertilisers, herbicides
and energy intensive irrigation schemes

140,000

Fibre production		

120,000

Crop cultivation		

100,000
80,00060,00040,00020,000

S
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Case studies
Figure 4: Total energy (in megajoules) required to produce one tonne of spun fibre
N Cherrett, J Barrett, A Clemett, M Chadwick, and M J Chadwick, Ecological Footprint
and Water Analysis of Cotton, Hemp and Polyester: Report prepared for and reviewed by
BioRegional Development Group and World Wide Fund for Nature – Cymru (Stockholm
Environment Institute, 2005).

23 								Commodity briefing: Cotton | Fairtrade Foundation May 2020

APPENDIX

COTTON VS. SUBSTITUTE FABRICS CONTINUED...
Carbon dioxide emissions• Polyester: production results in the greatest CO2 emission, ranging• Conventional cotton: once again, that grown in the US has
the highest emissions associated to crop cultivation due toinefficient production methods

from 7.2 – 9.52kg of CO2 per metric tonne of fibre• Cotton: significantly lower and ranged from 2.35 – 5.89kg of CO2
per metric tonne of fibre• Hemp: ranges moderately between 3.5 – 4.1kg of CO2 per
metric tonne of fibre• Organic cotton: different fuel mixes used by India and the US
results in the different emissions

10

Fibre production		KG CO2 per tonne spun fibre

9

Crop cultivation		

8
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Figure 5: CO2 emissions (in kilograms) associated with the production of one tonne of spun fibre
N Cherrett, J Barrett, A Clemett, M Chadwick, and M J Chadwick, Ecological Footprint
and Water Analysis of Cotton, Hemp and Polyester: Report prepared for and reviewed by
BioRegional Development Group and World Wide Fund for Nature – Cymru (Stockholm
Environment Institute, 2005).

24 								Commodity briefing: Cotton | Fairtrade Foundation May 2020

APPENDIX

COTTON VS. SUBSTITUTE FABRICS CONTINUED...
Freshwater use• Cotton: has by far the highest water footprint in comparison to its

substitutes. An estimated 9,788 – 9,958 litres of water is required to
produce 1kg of cotton. Top cotton producing countries – China,
the US and India – are all facing water scarcity• Hemp: the most water-efficient, requiring just 2,123 litres of waterto produce 1kg of useful fibre•P olyester: uses almost no freshwater in the production process.
The little water that is used for cooling is often returned to the system

Biogeochemical flows• Cotton: conventional uses a lot of mineral fertilisers andpesticides but organic cotton is less intense with these products• Polyester and wool: use a lot of toxic chemicals, contaminatedgroundwater/water sources a common occurrence• Hemp: better than conventional cotton as less fertilisers andpesticides are needed
S Muthu, Assessing the Environmental Impact of Textiles and the Clothing Supply Chain,
Woodhead Publishing Series in Textiles, (Cambridge: Woodhead Publishing Ltd, 2014).

•W ool: data is inconclusive
N Cherrett, J Barrett, A Clemett, M Chadwick, and M J Chadwick, Ecological Footprint
and Water Analysis of Cotton, Hemp and Polyester: Report prepared for and reviewed by
BioRegional Development Group and World Wide Fund for Nature – Cymru (Stockholm
Environment Institute, 2005).

Land use• Polyester: land used for oil drilling for raw material extraction,and production facilities• Cotton: large land areas needed for cultivation• Hemp: higher yields per hectare than cotton• Wool: high land requirement for grazing
S Muthu, Assessing the Environmental Impact of Textiles and the Clothing Supply Chain,
Woodhead Publishing Series in Textiles, (Cambridge: Woodhead Publishing Ltd, 2014).

Genetic diversity• Conventional cotton: large areas of land cleared to grow GMO
or single species cotton. Furthermore, pesticides and fertilisers
depress ecosystems• Organic cotton: allows for more diversity, and no pesticides or
fertilisers are used
• Polyester: no direct impact, other than impacts from land/waterpollution• Hemp: other plants cleared away for cultivation, but lower useof fertilisers and pesticides in comparison to cotton
S Muthu, Assessing the Environmental Impact of Textiles and the Clothing Supply Chain,
Woodhead Publishing Series in Textiles, (Cambridge: Woodhead Publishing Ltd, 2014).

Note: Data is not explicit, as there can be variations subject to where it is produced,
how affluent the producing country is, technological capabilities etc.

25 								Commodity briefing: Cotton | Fairtrade Foundation May 2020

APPENDIX

COTTON SUBSIDIES
United States

China

The importance of the US in the global cotton market has diminishedin recent years with the rise of China. Nonetheless, the US is still justas critical to the issue of cotton subsidies. Their dominance as thelargest cotton exporters can be highlighted by the fact that between
1990 and 2014 they had consistently supplied a third of all cotton
exports.64

With over half of the world’s textile production taking place in China,
the Chinese market is the most important for all cotton producers.
China’s cotton policies therefore have profound global consequences.

The 2014 Farm Bill altered the cotton programme so that farmers
were more reliant on insurance schemes that enabled them toevade World Trade Organization rulings.65 STAX, the Stacked
Income Protection Plan, was introduced and provided crop
insurance to cotton farmers. Support through subsidised crop
insurance protects producers against crop yield and revenue losses
caused by natural disasters, weather, pests and fire.66 Alternatively,
there is also the Cotton Ginning Cost‐Share (CGCS) programme,
which provides cost‐share payments for the cotton ginning costs
faced by producers.67 The sum of all types of support provided to US
cotton producers, including crop insurance, STAX and the CGCS
programme, is estimated at $469m in 2016/17. During 2017/18, total
support to US cotton producers increased to an estimated $890m.68

Through the implementation of rigorous border protection methods,
China effectively controls cotton import volumes and values. Thereis an effective tariff of 40 percent on cotton imported without a quota.
Between 2017/18, the Chinese government provided an estimated$4.3bn in cotton subsidies. This was an increase of $1bn from theprevious year. In addition, China has a large strategic reserve ofcotton that enables them to appropriately respond to pricefluctuations through a national buffer stock.70

C‐4
The C‐4 countries are dependent on the Chinese cotton market,
and are also recipients of substantial sums of aid, investment andcredit from China.71

India

The new 2018 tax bill now includes cotton seeds as a food product,
and this has placed further uncertainties on America’s cotton
trade policies.69

India implements a Minimum Support Price (MSP) system whichaims to support farmers so that they avoid incurring losses from theirsales. These were active in 2014/15 due to low market prices, and so
farmers were supported by cotton sales to the government. In
addition, Indian cotton farmers are supported by the government
through debt forgiveness, subsidised crop insurance and fertiliser
subsidies.72

Sophia Murphy and Karen Hansen-Kuhn, The Stubborn Persistence of US Cotton
Dumping (Institute for Agriculture and Trade Policy: Minneapolis; Washington D.C.;
Berlin; 2017), p.2.
65
Ibid, p.3.
66
ICAC, Production and Trade Subsidies Affecting the Cotton Industry, pp.2 – 3.
67
National Cotton Council of America (NCCA), Cotton Ginning Cost-Share (CGCS) Program
Fact Sheet, 2016, https://www.cotton.org/issues/2016/upload/16cgcsfact.pdf [accessed
14 April 2020].

68

6426 								ICAC, Production and Trade Subsidies Affecting the Cotton Industry, p.3.
Farm Bureau (FB), (Seed) Cotton is Back in the Farm Bill, https://www.fb.org/
market-intel/seed-cotton-is-back-in-the-farm-bill [accessed 16 April 2020].
70
Ibid, pp.1 – 2.
71
Kristen Hopewell, “US-China conflict in global trade governance: the new politics ofagricultural subsidies at the WTO”, Review Of International Political Economy, 26(2), 2019:
pp. 207 – 231.
72
ICAC, Production and Trade Subsidies Affecting the Cotton Industry, p.4.
69

Commodity briefing: Cotton | Fairtrade Foundation May 2020

APPENDIX

COTTON: GROWERS AND BUYERS
Main producing countries

Largest exporting countries by value

World cotton production for the 2018/19 season showed a three
percent decrease to 25.7m MT.73 The largest exporters by value
in 2018 were China ($15.4bn) the US ($8.4bn), India ($8.1bn),
Pakistan ($3.5bn) and Vietnam ($2.8bn).74

15,393581

China

8,377508

United States

8,130128

India

3,498997

Pakistan

2,797371

Vietnam02,000000

4,000000

6,000000

8,000000

1,0000000

Export value (US Dollar Thousand)Figure 6: Exporters and exported value in 2018
Source: ITC calculations based on UN COMTRADE and ITC statistics.
Ref: International Trade Centre (ITC), International trade in goods –Exports 2001 – 2019, http://www.intracen.org/itc/market-info-tools/
statistics-export-product-country/, [accessed 14 April 2020].

ICAC, News – 21 November 2019 – Cotton Review of the World Situation,
https://www.icac.org/News/NewsDetails?NewsId=2314&YearId=2019 [accessed 14
April 2020].
74
International Trade Centre (ITC), International trade in goods - Exports 2001-2019,http://www.intracen.org/itc/market-info-tools/statistics-export-productcountry/, [accessed 14 April 2020].
73

27 								Commodity briefing: Cotton | Fairtrade Foundation May 2020

APPENDIX

COTTON: GROWERS AND BUYERS
Main consuming and importing countries

Largest importing countries by value

While Chinese cotton production was projected to decrease to
5.6m MT in 2018/19, consumption was forecast to increase to
8.4m MT during the same period.75 This is due to both the continued
prominence of China’s huge textile industry and increasing domestic
demand for apparel and footwear. The Chinese government
controls import volumes and values for cotton, but its strategicreserve means that it can release cotton to the market for use intimes of shortage.76

China

9,890790

6,579659

Bangladesh

5,088364

VietnamTurkey2,508500

Indonesia

2,39684902,000000

4,000000

6,000000

8,000000

1,0000000

Imported value (US Dollar Thousand)Figure 7: Importers and imported value in 2018
Source: ITC calculations based on UN COMTRADE and ITC statistics.
Ref: International Trade Centre (ITC), International trade in goods –Imports 2001 – 2019, http://www.intracen.org/itc/market-info-tools/
statistics-import-product-country/, [accessed 5 September 2019].

ICAC, News – 1 June 2018 – Stocks Declining in China, Increasing
Elsewhere, https://icac.org/News/
NewsDetails?NewsId=1245&YearId=201876
ICAC, Production and Trade Subsidies Affecting the Cotton Industry, p.1.
7528 								Commodity briefing: Cotton | Fairtrade Foundation May 2020

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