Organic Cotton: Easing the Transition

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It is clear that producing organic cotton, especially certified organic cotton, costs more. The transition from conventional growing to organic growing can be a significant burden on the small to medium size farmer.

While it is true that certified organic cotton can receive a price premium, worth the cost of investment, the process of certification can take months to years. Meanwhile, the farmer must invest thousands of dollars in transforming its farming practices to meet the certification requirements.

Organic farming upgrades include:
• Transition to zero pesticide use (FYI cotton happens to be one of the highest-pesticide dependent crops in the world so transitioning the crop to no pesticides and still yielding a productive, viable crop is no small feat). See Green Cotton for more information.
• Better use of water management
• Must be grown using methods and materials that have a low impact on the environment.
• Farming production systems must replenish and maintain soil fertility.
• Farming must reduce the use of toxic and persistent pesticides and fertilizers; and,
• Organic farming must build biologically diverse agriculture.

While the above list of organic farming requirements are all terrific, they are, as one can imagine, incredibly costly. Unless a farmer can ensure that the new crop will yield the price premium it deserves, transitioning over to these methods could mean the end of their business.

We have all read lately about the 3 and 4 fold surge in organic cotton demand. For example, organic cotton sales, not including other organic fibers, reached $1.1 billion in 2006 and is projected to double to $2+ billion in 2007 (Organic Exchange 2007). More and more retailers are demanding use of organic fabrics, including some of the largest ones (e.g. Wal-Mart, Barney’s and Target). At the same time, the supply can not easily keep up with demand, especially when certified organic farming can take years to establish.

As noted in the above requirements, it can be very risky for a farmer to transition too quickly unless they can be assured that there is a buyer. Furthermore, because the organic transition can take years to complete, the in between years mean higher costs for farmers and potentially low returns if not going out of business.

There are some retailers however who are recognizing this problem, AND in addition to being benevolent, happen to be the largest potential buyers of the organic cotton themselves. As such they are willing to step in and ease the transition for farmers by buying their transition product at the premium price. To be specific, Wal-Mart recently offered to pay transition farmers, those that are converting their farming practices from conventional to organic, the premium price for organic, even though their product is not yet certified. Side question: Is Wal-Mart going to label this product in their stores as organic cotton? This is one issue, since there is A LOT of organic cotton on the market that is not truly certified organic. Suppliers tend to overuse the term for the benefit of marketing, without communicating the whole truth as to whether it is CERTIFIED or not. This is a side note, but something for consumers to be aware of when they shop for organic clothing…

All in all, by Wal-Mart paying the interim premium price, it helps the farmers lower their risk, remain in business, AND be well-positioned to provide the increased supply needed of organic cotton to buyers such as Wal-Mart and Barney’s who want the organic cotton.

Note: Organic Certification requires a 3rd party organization to verify that farmers are using the methods and materials allowed in organic certification. Find out more about organic cotton certification at the Organic Trade Association .

You can also check out OneCert, one of the oldest and most reputable certification organizations on the market:

You can read more on this particular issue at Reuters.

Fair Trade: What is It and How to Certify


On the Rise
Since 2000, the Fair Trade industry has grown extensively, leading to more than a half dozen certification and membership associations. Sales and consumer awareness have increased tremendously as well:

• According to the International Fair Trade Association, in 2006 there were $2.6 billion in fair trade sales ($160 million FTF Members)
• In 2006, the cocoa sector grew 93% according to the Fair Trade Labeling Organization (FLO).

• In addition, coffee gew by 53%; tea by 41%; and, bananas by 31%.

What is Fair Trade
Fair trade is a system of exchange that seeks to create greater equity and partnership in the international trading system by

* Providing fair wages in the local context,

* Supporting safe, healthy, and participatory workplaces,
* Supplying financial and technical support to build capacity,
* Ensuring environmental sustainability,

* Respecting cultural identity,
* Offering public accountability and transparency,
* Building direct and long-term relationships, and

* Educating consumers.

Source: Fair Trade Federation

Fair trade is a holistic approach to trade and development that aims to alter the ways in which commerce is conducted, so that trade can empower the poorest of the poor.


The “Fair Trade Certified” system involves non-profit organizations in 17 different countries, all affiliated with Fairtrade Labeling Organizations International including the European Fair Label Organization (FLO). In the USA, TransFair USA places the “Fair Trade Certified” label on coffee, cocoa, tea, bananas and other fruits. This label is product-specific, meaning that its presence on one product doesn’t mean that all of the companies products are Fair Trade. The Fair Trade Federation (FTF) is an association of businesses that follow fair trade principles universally, so its presence on a product DOES mean that a company supports the highest level of commitment to fair trade. FTF also applies to products beyond food and beverage to include a wide range of goods.


TransFair, focusing on commodities, food and beverages, certifies products and is the main fair trade food and beverage certifying organization in the United States. Major products certified include coffee, tea, chocolate, bananas, sugar, wine, spices and a variety of gourmet foods. Beginning its certification in the 1990s, coffee holds the largest share of fair trade commodity certifications. 85% of fair trade coffee is also organic.

According to TransFairUSA, the Fair Trade Certified™ label “guarantees consumers that strict economic, social and environmental criteria were met in the production and trade of an agricultural product.”

TransFair principles include:
• Fair prices: Democratically organized farmer groups receive a guaranteed minimum floor price and an additional premium for certified organic products. Farmer organizations are also eligible for pre-harvest credit.
• Fair labor conditions: Workers on Fair Trade farms enjoy freedom of association, safe working conditions, and living wages. Forced child labor is strictly prohibited.
• Direct trade: With Fair Trade, importers purchase from Fair Trade producer groups as directly as possible, eliminating unnecessary middlemen and empowering farmers to develop the business capacity necessary to compete in the global marketplace.
• Democratic and transparent organizations: Fair Trade farmers and farm workers decide democratically how to invest Fair Trade revenues.
• Community development: Fair Trade farmers and farm workers invest Fair Trade premiums in social and business development projects like scholarship programs, quality improvement trainings, and organic certification
• Environmental sustainability: Harmful agrochemicals and GMOs are strictly prohibited in favor of environmentally sustainable farming methods that protect farmers’ health and preserve valuable ecosystems for future generations.

TransFair USA licenses companies to display the Fair Trade Certified label on products that meet strict international Fair Trade standards.

Fair Trade Federation


FTF on the other hand, is another major US association with a slightly different focus than TransFair. FTF is “an association of businesses and organizations who are fully committed to fair trade. FTF strengthens the capacity of its members, encourages the exchange of best practices, and raises awareness about the importance of choosing fairly traded products and supporting businesses committed to fair trade principles.”

FTF’s members are not just commodity-based businesses, but include crafts, gifts, household items, clothing, books, music and a variety of other goods. FTF does not actually certify goods, but maintains an affiliation with businesses and organizations that meet their established criteria for Fair Trade. FTF’s criteria are similar to TransFair, and are best described in the definition at the top of this page.

International Fair Trade Association (IFAT)

In the late 1970s, US- and Canadian-based entrepreneurs who defined their businesses with the producers at heart began to meet regularly, exchange ideas, and network. This informal group would evolve into the Fair Trade Federation and formally incorporate in 1994. In 1989, the International Fair Trade Association (IFAT) was founded as a global network of committed fair trade organizations, aiming to improve the livelihoods of disadvantaged people through trade and to provide a forum for the exchange of information and ideas.
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Fair Trade Labeling Organization (FLO)

In 1988, as world coffee prices began to sharply decline, a Dutch NGO, Solidaridad, created the first European fair trade certification initiative. Similar labeling initiatives grew up independently across Europe within a few years. In 1997, these organizations created Fairtrade Labelling Organizations International (FLO), an umbrella organization which sets the fair trade certification standards and supports, inspects, and certifies disadvantaged farmers. In 1999, FLO affiliates, TransFair USA and TransFair Canada opened in North America.

According to FTF, fair trade in North America began in 1946 with Edna Ruth Byler. As a Mennonite volunteer, Edna visited a sewing class in Puerto Rico and discovered local women’s talent for creating beautiful lace, despite extreme poverty. Edna carried the lace back to the US, selling the items to women. She then returned to Puerto Rico with the money earned, giving back to local Puerto Rican women. Edna’s work grew into Ten Thousand Villages, which opened its first fair trade store in 1958 and is now the largest fair trade retailer in North America.

World Fair Trade Day 2002 marked the first World Fair Trade Day (which will be May 10 2008 this year) in an effort to celebrate local artisans, heighten consumer awareness and strengthen partnerships among fair trader artisans/farmers and interested citizens around the globe.

Why Fair Trade?
Everyone’s consumer spending choices directly affect people’s lives around the world. The products we enjoy are often made in conditions that harm workers, communities and the environment. Increasingly consumers are demanding more information on how products are made, both in terms of the ingredients (including toxins, pesticides, and hormones etc), as well as the impact on the environment and human beings. Fair trade, and its certification bodies are an effort to regulate and promote this emerging industry to create more equitable and sustainable commerce worldwide.

Fair Trade Partners
The Fair Trade system benefits over 800,000 farmers organized into cooperatives and unions in 48 countries. Fair Trade has helped farmers provide for their families’ basic needs and invest in community development.

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