Cotton supply chains are complex, however, and present a number of challenges in relation to both human and environmental issues.
Promoting the Better Cotton Initiative’s (BCI) comprehensive sustainability standards, working with a range of partners to improve supply chain practices through local projects, and purchasing more Better Cotton are the main ways in which we influence production methods to address these issues.
“We believe that sustainable agriculture is closely linked with farmers’ wellbeing. Where possible, we therefore choose to work directly with coffee growers in the field, supporting them through initiatives that aim to increase their productivity and incomes through the adoption of more sustainable farming practices.”
Head of Cotton
Cotton was one of the agricultural sectors most adversely impacted by Covid-19 in 2020. With many clothing retailers across the world forced into bankruptcy, we saw a ripple effect throughout the supply chain, as textile mills stopped operations abruptly and tried to cancel contracts.
When the global supply chain slowed, LDC leveraged its significant warehouse network to hold inventory, thereby offsetting the impact of contract delays. We were also at pains to honor all existing purchase obligations to our suppliers, fulfilling our role as a trusted partner at a time of crisis for the industry.
To encourage responsible cotton production, we support BCI in its important efforts to drive progress in the industry.
Since 2013, we have steadily grown year-on-year volumes of cotton purchased from sources certified by BCI. In 2020, the pandemic’s negative impact on cotton consumption and supply chains resulted in a lower uptake of BCI-certified cotton. Volumes in the US were hit particularly hard, due to lower production in the west Texas region, where we have a big footprint.
Nevertheless, as the sector recovered toward the end of the year, we saw a big upswing in our BCI program and managed to increase our BCI-certified cotton purchases by more than 4% year-on-year.
In such unprecedented and volatile circumstances, this is a positive outcome that signals our firm intent to continue to increase the volume of BCI-certified cotton purchased – in 2021 and beyond. It also means that we have already met our medium-term goal of purchasing 50% more Better Cotton in 2023 compared to 2018.
Better Cotton Initiative’s Theory of Change
Launched in the US in 2019, this initiative is developing quantifiable and verifiable goals for sustainable cotton production, and seeks to drive improvement across six key sustainability metrics: land use, soil carbon, water management, soil loss, greenhouse gas emissions and energy efficiency.
The CTP aims for third-party verification on a portion of the program to provide real sustainability data, by combining a unique credit transfer system and the assignation of individual barcodes to every bale of US-grown cotton, providing full farm-to-mill traceability.
These processes were further developed in 2020 and the pilot phase is nearing completion. With numerous farmers joining each day, the program will soon reach a critical mass, and brand and retailer adoption has also been brisk. LDC continues to help forge the CTP and looks forward to assisting in its global roll-out in the coming months.
LDC has been active in Kazakhstan since 2006, building strong ties with local cotton farmers and communities over time.
Through our partnership with BCI, we were the first company in the country to call for sustainable cotton production in Kazakhstan and continue to work closely with local authorities to drive lasting positive change for local farmers.
In 2020, in addition to the challenges posed by Covid-19, cotton farmers in Kazakhstan were adversely affected by heavy floods that inundated villages and farmlands across the country.
In these disruptive circumstances, we introduced an initiative to strengthen farmers’ capacity to sustain a decent livelihood and facilitate the country’s cotton supply chain continuity. We provided direct and immediate funding to farmers who were greatly affected by this disaster, offering some financial relief in the face of significant production losses.
We need some copy here to be an introduction for the area, ideally not too long though.
In 2020, LDC trained an additional 5,000 smallholder cotton farmers in Maharashtra, India, in sustainable agricultural practices according to BCI principles.
This joint project with BCI and Puneet Enterprises began in 2018 and has since supported some 15,000 farmers. The scheme aims to help alleviate or address some of the social, economic and climatic challenges of cotton production, such as dependence on credit, unpredictable weather conditions, lack of technical information and market access, as well as gender inequality.
Participants acquire new knowledge on sustainable farming techniques such as intercropping to improve yields and productivity, proper application of fertilizers and effective pest control methods, as well as the key role of women in agriculture and how to engage their active participation in cotton farming.
The project benefits for farmers are clear: more efficient farming methods cut cultivation costs by 30-35%, and the higher quality cotton they produce sells at better prices in the market.
Since 2015, we have worked with Cotton Made in Africa (CMiA to train Zambia’s cotton farmers in good agricultural practices (GAPs).
In 2020, as a result of the pandemic, LDC recorded a 25% reduction in the overall number of farmers growing cotton in Zambia, down to 41,429 from 69,332 the previous season. Furthermore, because of contact restrictions put in place by the government, only approximately 70% of these farmers received full training in GAPs and general sustainability issues.
Despite these setbacks, by the end of 2020 our project with CMiA had trained a total of just over 114,500 farmers, exceeding our target set in 2018 by almost 15,000.
In April 2020, LDC Zambia was audited by AfriCert (an audit company from Kenya), hired by Aid by Trade Foundation to conduct a field-based audit of how LDC is managing its sustainability program, focusing on the criteria set by CMiA.
Following the audit, a management plan was put in place to address any areas of concern, and successfully implemented over the course of the year. Measures included:
Train 100,000 farmers in Zambia
Increase our BCI Kazakhstan partnership to 700 farmers
Status: Delayed (to 2021)
Increase Better Cotton purchased over previous year by 10%
Purchase 50% more Better Cotton than in 2018
Status: Complete (ahead of time)
Take individual membership of the ILO’s Child Labour Platform
Status: In progress