Imagine cotton that improves farmers' lives and protects the environment, instead of degrading it.

Today, conventional cotton farming, especially in the context of smallholder farmers in underregulated environments, leads to heavy water use, soil pollution, poor health and bad business for farmers.

However, cotton grown sustainably and sold fairly, can help small farmers, their families and entire communities thrive. Organic cotton eliminates dangerous chemicals, protects farmers' health, preserves the soil, conserves water, and helps farms break their cycle of debt. We need to unlock the potential of sustainable cotton. And fast.

Shifting the entire system means working with brands, networks, governments and farmers. Together we are creating a shared vision of what the organic cotton market could be. We are spotting gaps and going where others aren’t willing to go. Because when markets are failing, no one wins. To change the system, we've got to prove that large-scale change is possible. Together with our partners, we are implementing solutions that will live on well after our grants have ended.

Ben Langdon

In this section

  • 2.1

    Self-sustaining solutions

    Dinesh Natalia shows how a market-driven solution is saving water and accelerating organic cotton production in Madhya Pradesh.

    READ MORE
    Ben Langdon
  • 2.2

    It takes a team

    Lucas Simons explains how the Organic Cotton Accelerator is breaking down the barriers to organic cotton market growth.

    READ MORE
    Mahmud/Map
  • 2.3

    An organic future

    Dr Rao shares how a partnership between industry, academia and the state government is creating an ecosystem that can accelerate organic cotton.

    READ MORE
    Ben Langdon
GRANT VALUE: €4.3m (4 years)
2.1

Self-sustaining
solutions

Ben Langdon

Through our partnership with Aga Khan Foundation, we've catalysed a market-driven solution that will live on well beyond our support. Dinesh Natalia explains how de-risking finance for farmers, supporting them to get started and proving the business case is accelerating sustainable cotton production and improving lives.

Many smallholder cotton farmers in India struggle to make a good living from their land. There are many reasons for this, from climate change and fluctuating market prices, to the cycle of debt caused by farmers’ reliance on expensive inputs. As an extension worker, I help farmers increase their income and improve their livelihoods by imparting knowledge. Our drip irrigation project combines a simple technological fix with a self-sustaining financial solution.

First, the technology. Compared to traditional irrigation techniques, drip saves water and labour, while increasing yield. Once the initial investment is made, it reduces costs, increases income and frees up time for farmers to spend in other ways. It’s particularly effective in drought-prone areas. One farmer I work with, Vishram Makwhana, says he has grown more crops with less water since installing drip irrigation. He now spends his spare time working as a mason and tractor driver, and uses the extra income to send his two sons to school.

The drip irrigation system is transformative for farmers I work with. However, installing the system costs the equivalent of a typical smallholder farmer’s annual income. The government offers grants to help, but farmers still must put a sizeable amount of capital in themselves. It means the option is only available to bigger farms and excludes smallholder and vulnerable farmers. Which is where the exciting part of our project comes in: the revolving fund.

Ben Langdon

The farmer gets a loan from our fund, which he repays over two years through monthly instalments. The repayment goes back to the revolving fund and is used to give more loans to other farmers. In this way, the money keeps circulating and the benefits of drip irrigation help more and more farmers to improve their livelihoods. Initially managed by the Aga Khan Rural Support Programme, the farmers are now forming producer organisations that will manage the revolving fund and also allow farmers to collectively negotiate for inputs like seeds and fertilisers.

I’ve been working in this area for 10 years. I’ve seen how this simple irrigation system can transform lives, helping families eat better, access education and save money to grow their businesses. And, because the project is designed to spread, I’m confident this system will continue to change the lives of farmers and their families, again and again.

Farmer Income

0
%

Net increase

Water Saving

26
%

we aim to maintain this reduction for all 10,000 farmers we are planning to cover through this programme

Default rate compared to other agricultural loans

Drip pool fund:

0

Default

In general, financial institutions do not consider farmers to be bankable; the default rates of agricultural loans in India are high: 16% in 2013-2014 (Reserve Bank of India.). In comparison, this fund has a zero default rate, largely because payments are due only when farmers are more able to pay, such as during harvest.

Unlocking funds

The foundation’s grant of €2.77 million formed a revolving fund for providing interest-free loans to farmers. This corpues will be rotated endlessly to provide loans to new farmers as the old farmers pay back.

By 2024-25, the fund will be rotated to give loans worth €12.21 million and will unlock a contribution from the Indian government of €11.17 million. The farmers' contribution in this period would be €5.59 million. This means farmers will continue to reap the benefits and help themselves long after we exit in five years.

Government
11.17m
Farmers
5.59m
+
Foundation
2.77m
=
0.0m

Sheela's story
How can making the transition to organic cotton change farmers' lives and a family's future? Sheela, who relies on a small cotton farm for her survival, explains.

GRANT VALUE: €600,000
(2 years)
2.2

It takes a team

Despite much investment, growth of the organic cotton market remains slow. Why is that, and how can we change it? Lucas Simons explains how the Organic Cotton Accelerator (OCA) is bringing fragmented efforts together to create a collective impact with the power to break down the barriers to growth.

I wholeheartedly believe that change doesn't come from large organisations and corporations, but from individuals within those organisations. I use all my talent, drive and stamina to find and connect with those individuals and work with them to design transformative models that bring so much more value for everyone involved. Ultimately, that creates a better future for my children, and all future generations.

My organisation, New Foresight, specialises in systems change, turning complex challenges into shared opportunities. We've worked in transforming the coffee and cocoa markets and are now bringing our expertise to the cotton sector through our partnership with OCA. I couldn't wish for more rewarding and challenging work.

When it comes to creating change, it can be easy to spend time and money treating symptoms instead of root causes. We've spent millions on farmer training and certification programmes to promote organic, but it remains a tiny fraction of total cotton production. Trying to fix this through individual projects, CSR programmes or donor activity won't work. The simple truth is we have to get the whole industry aligned on a collective strategy to tackle the root causes that prevent organic cotton market growth.

The good news is that most major buyers of organic cotton agree the current system is broken. And that's what makes OCA unique. For the first time ever, we've convened brands that aren’t just committed to buying organic, they're committed to fixing the system. This proves the sector is now mature enough to move beyond individual acts to collective action.

A good example of this collective action is on the issue of sharing the fair value of organic with growers. One of the major barriers preventing growth that we identified is the business case for farmers. The differential for growing organic cotton doesn't reach the farmer. Those who choose to grow organic are making it work because their input costs are lower, but they are not necessarily getting more for their produce. In the long run, that is not an economically sustainable system for farmers or for brands.

Over the last year, OCA's Director, Hilde van Duijn, has devised a sourcing pilot to test how we can ensure the differential brands pay for organic reaches the farmer. First, we asked brands to commit to sourcing organic cotton upfront, even before the seeds are sown, and then to agree with their first-tier suppliers the differential that will be paid to farmers. But we also wanted to ensure those in the middle of the supply chain are interested in organic. We interviewed first-tier suppliers about interventions brands make to incentivise organic cotton production, such as longer-term contracts and listing selected spinners to guarantee quality. We're trying to find out what works best so that we can make more informed recommendations in the future.

Going forward, we want to capture this new spirit of collaboration to build momentum and further align the industry around a common goal. We plan to co-create a public statement with the sector frontrunners that articulates our shared vision for the organic cotton sector, and issues a call-to-action to OCA partners and beyond to step up and get involved.

I truly believe that markets can change. In fact, they change constantly. If we organise ourselves, we can double or triple the market share of organic cotton.

OCA members represents 60% of the organic cotton market

Up to

4000

Farmers served by OCA pilots

In 2015

4 brand partners
contributed:

€15k

C&A Foundation
contributed:

€91k

In 2016

7 brand partners
contributed:

€585k

C&A Foundation
contributed:

€300k

OCA supports 3 universities in
conducting seed trails

1

FIBL, Research Institute of Organic Agriculture, Switzerland;

2

JNKVV, Jawaharlal Nehru Krishi Vikas Vidyalaya, India; and

3

RMSKVV, Rajmata Vijayaraje Scindia Krishi Vishwavidyalaya, India).

GRANT VALUE: €126,000
(2.6 years)
2.3

An organic future

Ben Langdon
Dr Rao, Director Research Services,
Jawahrlal Nehru Krishi Vishwavidyala
(JNKVV)

For the last few years in Madhya Pradesh, the demand for organic cotton has outweighed the supply. Dr Rao discusses how matching technologies to farmer’s needs, and collaborating with key players will enable the OFCS, MP to accelerate the organic cotton sector in the global market.

I've dedicated the last 36 years of my life to developing seed systems for farmers in Madhya Pradesh. As Director of Research Services at JNKVV, one of India's prominent agriculture universities, I create new input varieties as well as match production technologies that will meet the farming communities' needs. And when it comes to organic cotton in India, those needs are vast.

The organic cotton sector is held back because non-gmo seeds and other organic inputs are not readily available. Additionally, farmers have limited access to the market and there are not enough skilled professionals. For the last 50 years, Madhya Pradesh has supplied organic cotton to the European market. But for the last few years, demand has outstripped supply. So if we want to futureproof our position in the global market, we must create a strong ecosystem for organic cotton sector development. That's exactly what OFCS, MP aims to do.

OFCS, MP is an exciting collaboration between NGO’s, the state government, the university, supply chain actors and C&A Foundation to accelerate the organic cotton sector. This is the first time that key players in the supply chain have come together to discuss challenges in a solution-focused, collaborative way. This collaboration is vital because, on their own, our individual actions are just a drop in the ocean. But when we leverage government support, our impact can go much, much further.

So far the university has developed a curriculum to train youth from rural areas in Madhya Pradesh in organic cultivation. C&A Foundation provided the initial grant to cover the tuition fee for the first group of students and the government has agreed to provide funding for subsequent groups. This way there is no cost to the students and we hope to create a continuous flow of trained professionals trained in organic agriculture. So far 30 students have successfully completed the course and are now gainfully employed by an OFCS, MP partner.

At JNKVV, we are also developing seed varieties that are suitable for organic production. Hopefully in the coming years we will be able to produce enough quality breeder seeds that the industry can multiply for farmers to use. This is a very important step to eliminate contamination and increase productivity for farmers, which will improve their incomes.

OFCS, MP is gaining in momentum and membership. The next step is to collaborate with the government to create a policy roadmap for the sector. So far, we have shared a proposal with the government, which includes recommendations including identifying organic cotton belts and providing financial incentives for farmers. This roadmap will ensure we have a favourable ecosystem for growth. That means everyone, from farmers and ginners to spinning mills, will be pulling in the same direction. It also means farmers will be able to derive the true economic and environmental benefits of organic cotton cultivation.

That's our vision for organic cotton: an ecosystem that accelerates organic cotton and brings benefits to farmers, communities, and therefore the entire state of Madhya Pradesh. Once we have established a successful model here and proved it can work, the whole system can be replicated across other states in India. That’s what makes this whole programme so exciting. This partnership and a shared common agenda could bring meaningful impact to the entire organic cotton sector in India.