About Cotton

Among the poorest people on the planet are 40 million small-scale farmers that are responsible for producing more than 60% of the world’s cotton.

Why do cotton farmers remain poor? 

With high levels of illiteracy and limited land holdings, many cotton farmers live below the poverty line and are dependent on middle men or ginners who often buy their cotton at prices below the cost of production. 

Adding to this unfair pricing scheme are higher production costs, market price fluctuation and lower yields. Farmers are also troubled by the devastation caused by the changing climate, food price inflation and food insecurity. For example, in West Africa, a cotton farmer’s typical smallholding of 5-12 acres must provide the essential income to cover basic needs such as food and health care as well as to pay for school fees, seeds and tools. A small fall in cotton prices can have serious implications for a farmer’s ability to meet these needs. In India many farmers are seriously indebted because of the high-interest loans needed to purchase fertilizers and other farm inputs and have, in desperation, resorted to ending their lives. The complexity of the cotton and textile supply chain means that farmers have little power to negotiate with others in the chain to secure better prices. 

But in addition to these problems that plague most smallholder farmers, the situation in cotton is worse because global cotton trade is heavily distorted by subsidies given to cotton farmers in economic powerhouses like the US and EU. In 2010-11, direct support to cotton farmers was estimated to be $368 million in the EU and $319 million in the United States. Such enormous subsidies deflate the world price for cotton and also allow the US to export its cotton for much cheaper than cotton produced in West Africa or India.

How does Fairtrade make things better? 

Fairtrade works with small-scale cotton farmers in Asia, Africa and Latin America and helps build stronger farmer-owned organizations. This is important because farmers can achieve a lot more when they are grouped together trying to negotiate better prices with ginners and traders or when they are supporting the local community.

By establishing economic, social and environmental standards, Fairtrade encourages sustainable cotton production. The Fairtrade system is the only certification scheme to provide economic benefits, through a guaranteed Fairtrade Minimum Price and an additional Fairtrade Premium to be invested in community or  business development. In 2013-14, 22 farmers’ organizations in seven countries were certified for Fairtrade cotton production and earned approximately $1.4 million in Premium payments. Farmers invested a large percentage of this sum in community infrastructure and supporting local education facilities  Watch this video about what Fairtrade means to cotton farmers in Senegal. 

Through Fairtrade, thousands of cotton farmers have already improved their lives. Cotton cooperatives have become better organized, productivity has increased and women farmers are receiving the same rewards as male farmers, from voting rights to equal pay. A 2012 impact study (PDF)  particularly noted the positive effects of the Fairtrade Standards on gender equality. More specifically, it highlighted how a requirement in the Fairtrade Standards had encouraged more women in West and Central Africa to cultivate cotton and therefore giving them more influence over their household resources.

In the words of G S Rao, state coordinator of Fairtrade certified CHETNA Organics in India, "Buying a fairly traded garment is not giving to charity, but is much more a positive statement of fulfilling ones commitment towards all the people who are ultimately responsible for the garment. Fairtrade has helped Chetna to lay additional focus on setting up farmers’ institutions and building their capacities on leadership and self-sustainability. Other certifications do not focus on building producers’ institutions and yet, this is the key to long-term sustainability. With setting up of farmers’ institutions, involvement of women has also slowly started to increase, though there is still a long way to go."