About Agrocel Agrocel Pure & Fair Cotton Growers’ Association
The association was formed in 2005 with the guidance of the Agri-Service Division of Agrocel Industries Ltd. Based in Bangalore, it 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. Factors contributing to this decline include reductions in production costs, strong competition from synthetic fibres, and 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 Rapar 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.
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 64 women farmers. Production extends to more than 6,000 hectares, with an average farm size of 3.3 hectares.
Fairtrade Minimum Price & Premium
Around 20% of production by members of the Agrocel Pure & Fair Cotton Growers’ Association is certified organic. In 2012, members produced a total of 4,232 tonnes of seed cotton. This was processed into 1,210 tonnes of cotton lint, of which 526 tonnes was sold to the Fairtrade market.
The Fairtrade Minimum Price for seed cotton produced by the group is €0.53/kg for organic and €0.44/kg 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.
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.
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.
Farming is not easy in the semi-arid Kutch region, which is prone to drought and where summer temperatures exceed 45°C. 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.
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.
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.