Agrocel Pure & Fair Cotton Growers' Association, Gujarat, India

About the co-operative

Location: Kutch region, Gujarat State, Western India
Members: 1,930
Area under cotton: 6,000 hectares
Farm size: 4-8 hectares
Production: 4,408 tonnes (2008/09 season)
Fairtrade sales: 12% of production (2008/09 season) 
Certified organic: 20% of production, remainder under conversion
Harvest: November - February
Laljibhai Narranbhai, Cotton Farmer and Member of Agrocel
Picking cotton, India © Simon Rawles



"I did not get any education but I want my children to. Because of the Fairtrade price, I can send them to school."
- Laljibhai Narranbhai, cotton farmer, Agroocel Pure & Fair Cotton Growers' Assiciation 


Introduction


Agrocel Pure & Fair Cotton Growers’ Association was formed in 2005 with the guidance of the Agri-Service Division of Agrocel Industries Ltd. Based at Bangalore, Agrocel’s Agri-Service division currently works with more than 20,000 farmers across India. It aims to improve the livelihoods of small-scale and marginalised Indian farmers by enabling them to participate in organic and Fairtrade production and by marketing with added value their production of cotton, rice, nuts and other crops.


Tough times for cotton growers


In spite of the huge importance of cotton to the global textile industry, world market prices have been in long- term decline in real terms since the 1970s, notwithstanding a recent upturn in cotton and other commodity prices linked to the global financial crisis and to Pakistan’s cotton production being hit by severe flooding. While some of this decline can be explained by reductions in production costs and strong competition from synthetic fibres, the major downward pressure on prices is caused by the payment of huge subsidies by rich cotton producing countries – notably, the US, China and the EU – to protect the domestic production of cotton and related industries.

As a result cotton farmers in Africa, Asia and Latin America are struggling to survive, while developing countries which rely on cotton exports are losing out on vital foreign exchange earnings that could be allocated to health, education and other social development projects.

The industry’s high use of chemical pesticides is harming agricultural communities and the environment. And traditional flood irrigation is depleting rivers, lakes and water tables, making water a scarce commodity for many cotton growing communities.

 

Agrocel Organic & Fairtrade cotton project


One of Agrocel’s major current projects is the Organic & Fairtrade Cotton Project, located in southern India. The project involves organising small-scale farmers into functioning farmers associations to help them meet organic and Fairtrade certification standards, improve farming techniques and reduce production costs. With marketing support from Agrocel, the farmers are able to access higher value markets and increase their incomes and profits. This long-term partnership also includes spreading the Fairtrade philosophy and encouraging pride in farming, particularly among younger farmers, many of whom drift to the cities, disillusioned with the status and financial prospects of farming.

Five Fairtrade certified organic cotton farmers’ groups in the states of Gujarat, Tamil Nadu, Andhra Pradesh, Orissa, and Karnataka are currently participating in this project.

Agrocel Pure & Fair Cotton Growers’ Association from Kutch in Gujarat was one of the earliest participants in the project and typifies the scheme. With guidance from Agrocel, this previously unorganised group of 50 farmers was formalised into a legal entity in 2005. This was the first step in successfully gaining Fairtrade certification, which enabled the farmers to supply the UK market when Fairtrade certified cotton products were launched in November 2005. Products made with Agrocel Fairtrade cotton are available from Marks & Spencer, Bishopston Trading, Debenhams, Monsoon Accessorize, People Tree, Traidcraft, Tesco and many more retailers.

The success of the group has enabled them to extend membership to farmers in neighbouring Surendranagar district. Membership now stands at 1,930 farmers, including 77 women farmers, and extending to more than 6,000 hectares of cotton production.


Fairtrade Minimum Price & Premium


The Fairtrade Minimum Price for seed cotton from India is $0.46/kg (Rs29.70) for organic and $0.38/kg (Rs28.50) for conventional. The additional Fairtrade Premium of $0.05/kg is for investment in projects that benefit the members and their communities. Projects are discussed and approved by members and managed by an elected committee.

Around 20% of production by members of the Agrocel Pure & Fair Cotton Growers’ Association is certified organic, with nearly all the remaining production in conversion to organic. In the December 2008 – April 2009 season, members produced 4,408 tonnes of seed cotton, of which 3,000 tonnes were sold to the conventional export market, 886 tonnes to the local market and 538 tonnes (12% of the total) to the Fairtrade market, including 92 tonnes certified organic.

 

Fairtrade Premium projects


As well as the Fairtrade Minimum Price and Organic Premium, farmers’ groups receive the additional Fairtrade Premium for investment in business or community projects agreed by members. Recent projects include: 

  • short-term loan scheme for farmers to finance agricultural improvements
  • relief fund to pay medical costs of poor farmers
  • installation of on-farm drip irrigation & construction of village ponds to conserve rainwater
  • construction of a kitchen and provision of clean running water for a village school
  • provision of schoolbooks and clothes for children of poor farmers and villagers
  • rehabilitation of degraded farm land
  • farmer education and training programmes
  • technical assistance to develop compost pits to make organic manure and fertilisers
  • regular veterinary checks for farm animals
  • free vegetable seed distribution scheme for farmers
  • homeworking embroidery scheme to improve women’s incomes
  • footwear stands for village schools (considered holy places so footwear must be removed)
  • provision of solar street lamps in villages
  • provision of pump equipment for the lift irrigation system
  • provision of a tractor and land clearing equipment for the use of farmers
  • provision of community hall for village meetings, weddings, and other social events
  • integrated crop management practices to encourage pollinators, predators and parasitoids (P3), the natural enemies useful in reducing the population of insects known as sucking pests that attack cotton. 
 

Khima's story



Khima and Jamnaben Ranchhod
© Simon Rawles

Khima Ranchhod lives on his four-acre farm with his wife Jamnaben, son Sujubhai and daughters Jomiben, Gitaben and Nariben.

Khima has farmed cotton all his life, like his father before him. He also grows millet to make flour for the family’s chapatis, with any excess being sold to the local market along with the beans he grows and harvests in the summer.

Growing cotton is hard work. Khima digs channels each year to irrigate his two acres of cotton to ensure a good crop, but the falling water table means this can only be done twice a year. With the help of his neighbours he gathers his harvest
over an eight-day period, starting at 6am and finishing at 4pm and breaking only for lunch. Khima used to sell his seed cotton to local traders and often received a poor price. “We would deliver the cotton by bullock cart but the trader would always find a reason to give us a bad price.”

He now sells his entire crop to Agrocel for a higher, stable price and, with the help of their field officers, has converted the farm to organic production. A big advantage is that organic farming improves the soil’s ability to retain moisture.

Khima and his wife have struggled to keep their son in school but their daughters weren’t so lucky. The village school only takes students up to age 14 and they couldn’t afford the only option of sending the girls to a boarding school. Khima sees a brighter future now that Agrocel is supplying his cotton to the UK Fairtrade market. “We will benefit economically, but more than this we will be able to improve the education of the children in the village.”

And Khima is looking forward to replacing the thatched roof on their mud-walled house with tiles: “A higher income means we will be able to increase production by buying more organic manure to improve the soil - then we will be able to make improvements to our house.” 

 

Fairtrade for a stronger organisation


Small-scale farmers must normally be organised into a democratic organisation with legal status to be eligible to join Fairtrade. Embryonic or informal groups like the Agrocel cotton farmers can now join Fairtrade under the Contract Production Standards if they are contracted to a Promoting Body such as Agrocel Industries which is committed to mentoring the development of their organisation into an autonomous Fairtrade partner and to undertaking functions such as marketing and export on behalf of the producers.


For the Agrocel farmers this means that with support and business training provided by Agrocel Industries, they have the potential to develop into a strong and independent organisation capable of dealing directly with international buyers. Gaining the knowledge and experience to handle all aspects of processing and export procedures on behalf of their members would substantially increase the value of the farmers’ production.

 

Cotton production


Farming is not easy in the Kutch region, which is prone to drought, where summer temperatures exceed 45°C and where yields are reduced by the salinity of the soil – the result of irrigating land with water from wells that have been infiltrated by sea water. There are only 15 days of rain a year, bringing less than 12 inches of water, making water a scarce and valuable commodity, and water management a priority. The water table is dropping every year and poor farmers can’t afford to keep digging deeper wells. So check dams are constructed to collect rain water, streams are dammed to increase the underground level and, old wells are recharged with river water.
 

To counteract the lack of water farmers grow traditional varieties of cotton and other crops that are well adapted to arid conditions. Rain-fed agriculture produces poor yields and flood irrigation reduces the fertility of the soil. Therefore, Agrocel is promoting drip irrigation which is better for both farmers and the environment. Farmers are being provided with expensive Netafim drip irrigation kits imported from Israel. They cost Rs65,000 (£800) per hectare so Agrocel is helping farmers to access government grants of Rs22,500 (£280) available for purchasing the kits.

Most farms in the area are around 10 to 20 acres (4ha–8ha) in size and average yields are around 1,600kg/acre for conventional cotton. Farmers also grow a variety of other crops such as wheat, moong dal (lentils), sorghum (grain), sesame, groundnuts, tomatoes, peppers, mangoes, and fodder crops for the cows, buffaloes and bullocks which are kept for their milk and manure and used as draft animals.

Seasonal labour on daily wages is employed to help with weeding and harvesting. A common feature of agriculture in Gujarat is the labour partnership system where poor farmers from other areas bring their families to live on the land of a local farmer. The local farmer provides accommodation, electricity, water and buttermilk and land to grow vegetables and keep a cow. In return, the poor farmer works the land and receives 20%–25% of the crop which he can sell either on his own or in conjunction with the landowner. Many families stay for seven or eight months and return each year, others only return to their villages for family events and holidays.

 

Organic conversion


Yields are reduced by about 15% for the first three years of organic conversion, during which chemical fertilisers and pesticides are gradually replaced by organic products.

Farmers produce much of their organic fertiliser needs from the manure of their own cows and pesticide sprays are made from the oil of crushed neem tree kernels. Once converted, the cost of inputs is much cheaper for organic production.

Paying an organic premium is vital in giving the farmers a financial incentive to go to the trouble of converting to organic production, which is also more labour intensive. Agrocel Industries promotes crop rotation as it contributes to improving soil fertility and stops pest levels from increasing. When fields are rotated from cotton to wheat or other grains the farmers must continue with organic practices even if there is no premium for that crop, a further reason why organic premiums are so important.

The cotton supply chain


Cotton supply chains vary greatly by country as cotton makes its journey from plant to ginnery to merchant. Several countries in Francophone West Africa had until recently a single state-controlled company controlling the provision of inputs and other services to farmers and buying and marketing the entire cotton harvest. Some companies continue these roles but have been privatized, with the state now holding a share alongside private investors and, in some cases, producer organisations.

In Burkina Faso, Benin and Mali, the government still sets a guaranteed base price paid to producers, although with liberalization, private, sometimes foreign, companies now play a greater role in cotton markets. Almost all cotton exports from West Africa are in raw, unprocessed form: only around 6 per cent of cotton is made locally into end products.

In India, cotton farmers sell their produce in local mandis or market yards through an open auction/tender system, following the prevalent market practices in the various yards. The main buyers are local ginneries, traders and commission agents, as well as government agencies such as the Cotton Corporation of India (CCI).
State governments set a minimum support price (MSP) and the local Agricultural Produce Marketing Committee (APMC) regulates and monitors product prices. International market forces ultimately determine the market price and if the local market price falls below the MSP, the CCI intervenes and buys the cotton.
Some multinationals also play key roles in cotton: 
 
  • Geocoton, owned by two France-based agro-industrial and shipping companies, is the major shareholder in Dagris, which has interests in cotton enterprises in several African countries; Dagris was a French-government controlled company before being privatized.
  • The world’s three largest cotton traders – US-based Allenberg (part of French company, Louis Dreyfus Commodities), Cargill Cotton and Dunavant - sell around four million tonnes of cotton a year, much of which is internationally traded – a figure which amounts to up to half of world trade. 


Agrocel Pure & Fair Cotton Growers’ Association is a group of cotton farmers from the arid Rapar area of Kutch who are participating in an organic conversion project established by Agrocel Industries Ltd. Until recently, they were an unorganised group of farmers who met informally a few times a year to discuss organic farming issues. With guidance from Agrocel Industries, this loose association was formalised in 2005 into a legal entity with a democratic structure. This enabled it to achieve Fairtrade certification and to supply the seed cotton for the UK launch in November 2005 of products made from Fairtrade certified cotton.

Agrocel Industries markets agricultural products including cotton, rice and wheat and promotes sustainable production, organic farming and fair trade practices with 20,000 farmers across six states in India. It pays a sustainable price with premiums for organic and fair trade cotton. It also provides agricultural inputs at cost price, interest-free pre-finance, and agricultural advice and support from Field Service Officers.

The Agrocel farmers are taking a positive approach to tackling the challenges they face as cotton growers. Their partnership with Agrocel Industries is helping them to convert to organic production, protect their environment and access markets such as Fairtrade and organic with higher prices.

  • The Fairtrade guaranteed minimum price covers the costs of production and provides a sustainable livelihood for the producers
  • The Fairtrade premium enables co-operatives to fund projects that benefit the organisation and wider community: business and agricultural training; drilling bore holes for clean water; building schools and clinics
  • Fairtrade producers benefit from advance payment and long-term relationships with buyers
  • Fairtrade producer groups are democratically run and respect the rights of farmers and farm workers
  • Fairtrade production standards encourage sustainable agriculture and protection of the environment.


        The Cotton supply chain

 

Source: http://www.unctad.org/infocomm/anglais/cotton/chain.htm
 


Fairtrade Foundation November 2010

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