Small-scale producers who want to participate in Fairtrade are certified against the Generic Fairtrade Standards for Small Producer Organisations. The standards require that producers are organised into formal member-owned organisations with the capacity to contribute to the social and economic development of members and their communities.

Farmers who do not yet meet this provision may be eligible for certification under the Contract Production Standards. In this case, farmers must be contracted to an intermediary organisation (usually an exporter or NGO), known as a Promoting Body, which will support them in the process of forming a functioning independent organisation.

Eco Nectar is certified by Fairtrade International (FLO) as the Promoting Body for small-scale cotton farmers who are members of Khargone Krushak Utthan Samiti (KKUS) farmers’ group.

Background & Structure

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Eco Nectar is an organic certified company and part of the Manjeet Group, a leading Indian producer and exporter of cotton. Its main objective is the promotion of organic agriculture and training farmers in organic practices. It also promotes the economic, social and educational improvement of underdeveloped communities and provides education and training for women to enable them to engage in various forms of self-employment.

Eco Nectar established KKUS in March 2007. Members were trained in organic production and were certified organic by ECOCERT in 2008. The group is made up of 549 cotton farmers from the Satpura Hills in Khargone District, a predominantly tribal belt in Madhya Pradesh, Central India. Members come from seven villages made up of 26 hamlets where they are organised into groups of around 15 to 20 farmers. The villages are located in remote, hilly terrain, often very close to forest areas, and far from urban areas and modern facilities. Access by road is poor, with many farmers having to walk for up to four hours to access transport. The hills were once heavily forested but much of the forest has now been destroyed. The farmers are becoming more aware of the problems of deforestation and are organising tree planting programmes.

The majority of KKUS members are illiterate and have a very poor standard of living. Like most farmers in the area they are officially classified as BPL (living Below the Poverty Line). Their communities lack basic infrastructure such as decent medical and educational facilities, and children have to travel long distances for secondary education. Sanitation is poor and there is a shortage of clean drinking water, particularly in summer when temperatures can reach 48°C, badly affecting livestock. Every year farmers have to borrow capital to buy seed for next season’s crop. They are entirely dependent on moneylenders, who charge interest rates 10% to 15% a month. At harvest, they have no option but to sell their crop to middlemen for a low price and the cycle continues.

 

Production & Sales

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Harvest period (March - November)	2008 - 2009	2009 - 2010	2010 - 2011
Total production of cotton (tonnes)	375	464	567
Fairtrade sales (tonnes)	375	464	66
Cotton held in stock (tonnes)			510

Cotton is the farmers’ main cash crop but they also grow soya, wheat, maize, pulses and vegetables and keep livestock. The group own a total of 775 hectares and grow cotton on 461 hectares. Individual farms are small, just 1 to 2 hectares, and rely on family labour except at harvest when farmers from each village help each other out. The entire seed cotton crop is purchased by Eco Nectar. It is transported from village collection centres to a ginning unit where the seeds are separated from the lint which is then pressed and baled.

Fairtrade

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Fairtrade standards for seed cotton include a minimum price to cover sustainable costs of production and an additional premium to invest in business and community projects. Producers can also request pre-finance of up to 60% of the value of a sales contract.

Fairtrade Minimum Price for seed cotton: €0.38/kg (organic); €0.46/kg (conventional).
Fairtrade Premium: €0.05/kg.

The organisation was Fairtrade certified in March 2009, motivated by the opportunity to access to new markets and benefit from the Fairtrade Premium. By selling their entire crop to Eco Nectar members receive a stable price and prompt payment. Previously they had to transport their cotton to market by bullock cart for up to 15 kilometres and then wait between four and eight weeks for payment.

Fairtrade Premium Projects

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An elected Producer Executive Body (PEB) meets every two months in village community halls to decide how to invest the Fairtrade Premium. So far, the group has focussed on using the premium to fund community development projects.

Enclosed drinking water tanks have been installed in 26 hamlets, benefiting around 5,000 people. Villagers used to travel between two and 10 kilometres to get drinking waters from ponds, wells or hand pumps, most of which dry up during the summer. They are also unhygienic as they are uncovered and liable to be contaminated by animals.

Six brick-built water tanks connected to the water supply of a nearby farmer have been constructed to address the urgent need for clean water for both villagers and livestock, particularly during the hot summer months.

The communities celebrate many religious festivals and organise community functions where communal food and hospitality are traditionally offered. They had to pay high rental and transport costs to hire cooking pots and utensils from nearby towns as well as bedding for weddings guests. The premium has been used to purchase a set of cooking and serving utensils plus mattresses and pillows for each hamlet. These facilities are available at a nominal cost to everyone in the community, whether or not they are part of the Fairtrade project.

Healthcare is a real issue – a few villages have primary healthcare centres but without proper facilities or a doctor in regular attendance, and the nearest hospital is 50 kilometres away. The farmers have used the premium to organise the first of what they hope will be regular medical camps, providing free check-ups and medicines initially for 200 people.

Around 5,000 saplings have been distributed free to local communities to encourage tree planting to improve the environment and promote conservation.

Regular workshops are held to train farmers on Fairtrade Standards and the concept of Fairtrade.

Planned premium projects for the future:

• ‘Recharge’ of wells – drilling narrow bore holes to pump water from aquifers to replenish wells with low water levels.

• Construction of additional water tanks to provide clearn drinking water.

• Construction of village ponds to conserve rainwater.

• Scholarship programme for school students and adult education programme.

• Life insurance & health insurance schemes for farmers.

• Communal flour mills at six locations so that women don’t have to travel long distances to grind flour.

• Sewing machine centre – income generating scheme for women.

• Vermi-composting project – production of organic fertiliser for farm use and for sale at market to generate additional income.

• Ongoing tree planting project.

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Fairtrade Foundation May 2011