Cotton is the most important natural fibre, constituting roughly 40% of the world fibre trade and providing a source of income to over 30 million smallholder farmers in 65 countries worldwide, mostly in developing countries. The cotton sector in many countries faces innumerable challenges with respect to social, economic and environmental conditions. Cotton production consumes an estimated 11% of the world’s pesticides and a large volume of water. The cotton industry also requires high upfront investment costs for agricultural inputs, while revenues can often be low due to volatile markets and unstable climate conditions. As a result of these challenges, there is a strong need to assist in the sustainable development of the cotton sector, particularly for the smallholder farmers in developing countries. Several initiatives have been developed to ensure that cotton production is environmentally friendly and socially conscious, including Fair Trade and organic agriculture, as well as the recently launched Better Cotton Initiative. These initiatives have additional benefits for smallholder farmers because they also attempt to support the direct access to markets and value added products.
ABOUT THE PROCOTTON PROGRAM Recognizing the importance of supporting the cotton industry, ProCotton assists smallholder cotton farmers in developing countries, and is developed around the three pillars of sustainability: people, planet, profit. The program’s philosophy is that producer organizations, such as farmer cooperatives and similar structures, are the entry point for activities. ProCotton utilizes an integrated approach by engaging farmers, providing training and technical assistance, access to finance and support in marketing and certification processes.
C O T T O N & SUSTAINABLE DEVELOPMENT
Some criteria for producer organizations to participate in the program: Producing sustainable cotton such as organic, Fair Trade, or Better Cotton or organizations that are strongly interested to start with sustainable production;
Potential to further develop the organization, but in need of support and capacity building to fully unlock this potential.
Willingness to develop a long-term strategy and work towards financial independance.
B
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S U S T A I N
Riyaz set up a company, Biosustain, which focuses on the purchase and marketing of organic cotton, supports organic farming by setting up an infrastructure for farmers and continues to purchase the cotton and train the farmers in the region. Biosustain works with buying posts in the villages in the Singida area and has staff that regularly visit the farmers. To date, the company has registered 4000 farmers and managed to produce 3000 MT or organic seed cotton. Since 2009, Biosustain dreamed of owning a cotton ginnery in Singida rea, which would be the vital next step to the recovery of cotton cultivation in the region. Because of the low cotton production over the past few years, the local ginnery had stopped ginning cotton. Although it was a big investment for Biosustain, the purchase of the cotton ginnery was made possible through the financial support of ProCotton, who arranged a 4 year term loan together with Cordaid and NMB Bank from Tanzania. NMB Bank then managed to arrange a short-term credit facility for the purchase of the raw cotton from the farmers.
Over the past few years, the cotton sector in Tanzania has been neglected by various stakeholders, forcing many farmers to cultivate other crops or to quit farming altogether. The cotton industry of Singida Region, one of the poorest areas in Tanzania, has been affected primarily due to late or insufficient payments to farmers. As a result, the region has lost its cotton industry since the early nineties. Recognizing an opportunity, Riyaz Haider explored the region’s cotton industry and quickly reached the conclusion that farmers were indeed ready and interested to begin cotton cultivation again. The biggest obstacle to overcome was the reluctance of farmers who suffered from late payments in the past. However, it was an advantage that the area did not produce cotton for a long time, the soil was clean and could be directly certified as organic cotton resulting in paying a premium to farmer groups for organic cotton.
Biosustain, with the support from ProCotton, will continue to support the development of the cotton industry in Tanzania by implementing the project in 22 villages and increasing the number of smallholder farmers to over 6000. Other project activities include capacity building to strengthen group formation of farmers and extension services, sharing costs for certification, access to finance and developing markets for organic cotton. The success story continues because for the first time in Tanzania a privately held company (i.e. Biosustain) will be signing an MOU with all three districts in Singida Region for collaboration in the expansion of the organic cotton production. The MOU is expected to be finalized and signed before the end of August 2010.
AREAS OF SUPPORT AND
PROCESS
APPROACH THE PROCOTTON PROGRAM CREATES ADDED VALUE TO EXISTING SUPPORT PROGRAMS BY TAKING A PROCESS APPROACH:
THE PROCOTTON PROGRAM OFFERS SUPPORT IN SIX KEY AREAS: 1. TECHNICAL ASSISTANCE: Provide training for farmers to improve product quality and increase production yield, training for farmers to meet the criteria of cotton standards that generate a higher income, and knowledge transfer between producer organisations amongst other capacity building activities. 2.ACCESS TO FINANCES: Support producer organizations in order to gain access to microfinance schemes, working capital or loans for long-term investments.
Identifying needs and supporting gaps through a participatory needs assessment.
Analyzing the producer organization’s existing support given in order to prevent duplication
Offering an integrated support packa ge to producer organizations, of which they can tailor based on their own priorities.
Access to the areas of expertise of the partners involved.
3.CAPACITY-BUILDING: Assist producer organizations for reinforcement of human capital, knowledge exchange visits and sharing of best practices. 4. ACCESS TO MARKETS: Support producer organizations in expansion of commercial skills and connection to buyers. 5. PRODUCT DIVERSIFICATION: Help farmers in product diversification, which includes giving added value, rotation crops or linking to export markets. 6. MOVING FARMERS UP IN THE VALUE CHAIN: Support producer organizations in getting a higher position in the textile supply chain.
ProCotton is active in Tanzania, Mali, Zambia, Senegal and India. In 2011 and onwards ProCotton will geographically focus more on Eastern Africa, in collaboration with the Common Fund for Commodities (CFC) and the International Cotton Advisory Committee (ICAC) and expand support projects in this region, especially in Tanzania and Zambia.
ABOUT THE PARTNERS
RABOBANK (www.rabobank.com) has expertise in financial services all over the world. Rabobank Foundation aims to support savings and credit cooperatives and producer organizations in a number of selected countries to achieve sustainable rural economic development. Rabobank Foundation’s mandate is to strengthen the position of primary producers and producer cooperatives, especially small farmers. Rabobank Foundation has a keen interest to support cotton farmers since cotton production is a major source of income for many small producers in Africa, Asia and Latin America. There are huge challenges in the cotton sector in order to produce more sustainable (economically, socially, and environmentally) cotton.
SOLIDARIDAD (www.solidaridadnetwork.org) created in 1969, is an NGO based in the Netherlands whose main objective is to alleviate poverty through the promotion of sustainable trade. Solidaridad has developed a programme for a sustainable economy as well as a human rights program. The organization is active in Latin America, Asia and Africa. When relevant, Solidaridad works with other NGOs, civil society organizations, government institutions and the private sector at a national and international level to implement is projects. Solidaridad has an extensive track record in sustainable supply chain development for coffee (Max Havelaar, Utz Certified) fruit (Oke fruit, Agrofair) and textiles (Kuyichi, M’Braze, MADE-BY). Solidaridad’s general strategy is always to work on both supply side, by supporting producers in developing countries on high quality and sustainable production, and on the demand side by creating new market models through labels and brands. For more information about the Solidaridad fashion programme (cotton & textile projects), please go the international webpage www.solidaridadnetwork.org/cotton.
PROCOTTON is developed based on the framework of previous successful programs initiated by Rabobank Foundation and Solidaridad in other sectors (coffee, cocoa, and tea).
A P P L I C A T I O N PROCESS AND PROCEDURE Application for the program follows a standard procedure. The first step is to complete an intake form to determine if the producer organization is eligible. If this is the case, the producer organization will be invited to conduct a Needs Assessment, which will be guided by ProCotton support staff. The producer organization will be requested to elaborate the results into a project proposal that contains a long-term perspective as well as a strategy for phasing out of the program. Producer organizations that are eligible will be supported by ProCotton staff through the application process. For more information on ProCotton and the application procedure, please contact the program coordinator:
Tel + 31-(0)30 272 0313 info@ProCotton.nl This project is being financed by the Common Fund for Commodities, an intergovernmental financial institution established within the framework of the United Nations, headquartered in Amsterdam, the Netherlands.