Development of fair trade cotton
FLO works with a guaranteed minimum price for producers that varies according to
the production context of each country. In West Africa, the minimum price was fixed
at FCFA 238 per kg of seed cotton (EUR 0.36 per kg; i.e. USD 0.43 per kg, or USD
0.20 per pound), which is well above the local conventional price. For example, in
Burkina Faso and in Mali the conventional price was FCFA 210 per kg in 2004/05,
and FCFA 175 in Burkina Faso and FCFA 160 in Mali in 2005/06. The producer
price of the fair trade cotton was thus 13% higher than for conventional cotton in
2004/05, 36% higher in Burkina Faso in 2005/06, and 49% higher in Mali in 2005/06.
A communal premium price of FCFA 34 per kg of seed cotton was paid as well, after
sale of the fibre.
The higher price of fair trade cotton must be put in context though. Firstly, the
producer price also covers the costs of registration, inspection and certification by
FLO-Cert. Secondly, the producers in West Africa agreed to select their seed cotton
more thoroughly at harvest in order to ensure quality. 10 They sold seed cotton of a
higher value to the ginning and trading companies than in conventional trade. Thirdly,
the producers receive the communal premium only for the cotton fibre quantities that
have actually been sold by the buyer in the marketplace as fair trade cotton.
Fair trade cotton, certified by FLO-Cert, is in its third year of existence. There are
now eight FLO-certified groups in six countries: Burkina Faso, Cameroon, India,
Mali, Peru and Senegal. In 2005, the first season of sale, trade in FLO-certified cotton
involved 1,400 tons, half of which went to France and half to Switzerland. Since then,
sale of fair trade cotton products has extended to Austria, Belgium, Luxembourg and
the United Kingdom. Sales will be launched in the Netherlands in 2007. Germany and
the United States may follow suit. Sales in 2006 were expected to be approximately
4,000 tons of cotton fibre.
Actors currently involved in the processing and distribution of fair
Organic and fair trade
FLO does not require fair trade cotton to be produced organically. However, the
produce may well be certified organic. Market actors are increasingly looking for
‘organic fair trade’ cotton when developing policies of corporate social responsibility
(CSR). Consumers of textiles and clothing do not want products to be just organic or
fair trade; they want them to be both.
The FLO standards prescribe the level of the additional premium that is paid for
certified organic produce. In West Africa, the organic premium is FCFA 34 per kg of
cotton (EUR 0.05 per kg; i.e. USD 0.06 per kg, or USD 0.027 per pound). A minor
part of the FLO-certified fair trade cotton is currently certified organic.
The organic cotton market
This section presents the history (2.1), the supply (2.2) and the demand (2.3) of
organic cotton worldwide, and gives estimates for the production, trade and
consumption of organic cotton fibre since the early 1990s. Information is also
provided about the retail end of the cotton textile supply chain.
2.1 The history of organic cotton production
The certified production and consumption of organic cotton dates back to the early
1990s, when pioneers in the United States and Turkey started to create markets for
cotton that was grown as a rotational crop on certified organic farms. The first organic
cotton textiles brought to the market consisted of a limited range of 100% certified
organic cotton products, which were sold in a small number of dedicated shops –
usually natural and health food stores. They were primarily marketed for their
ecological characteristics, rather than for their quality, design or fashionable appeal.
Trends in the 1990s
In late 1992, some environmentally motivated textile and clothing designers and
companies launched the sale of more fashionable ecological textiles, later known as
the ‘eco-look’ in fashion. Ecological textiles were now also for sale in fashionable
shops such as Esprit and Hennes & Mauritz (H&M), in addition to the continuing
sales in health food and natural textile shops. Products on offer tended to be either
‘ecru’ or dyed with soft ‘natural’ colours. Environmental awareness about fibre,
textile and clothing production was created among consumers and in the industry.
However, there was also confusion about the value of the different environmental
claims found in the marketplace (e.g. ‘natural’ or ‘100% hand-picked cotton’ 11). The
eco-look lasted till late 1994, when fashion turned towards the use of bright colours
and synthetic fibres.
The design, quality and colour range of organic cotton items improved significantly in
the second part of the 1990s. The range of yarns and fabrics available expanded,
which widened the offer and the quality of the organic cotton textiles and clothing for
sale. Supply of organic cotton fibre was in excess though, while overall demand
stagnated. Several large United States-based companies involved in organic cotton
usage at the time, such as Levi’s and the Gap, withdrew from organic cotton use.
Overall, global demand for organic cotton remained more or less stable up until 2000.
Most demand came from Europe, particularly from Germany thanks to mail order
companies such as OTTO and Hess Natur, and to a large number of small and
medium-sized companies processing and selling ‘natural textiles’ including organic
cotton items. In Switzerland, the supermarket chain Coop ensured a steady and
increasing demand for organic cotton from 1995. By 2000, this example was being
followed by its main, larger, Swiss competitor Migros. Demand in the United States
and the United Kingdom relied in this period primarily on mail order catalogues and
also on early electronic commerce.
Mail order catalogues were (and are) also very important in Germany. Catalogues are
a good medium to tell the ‘organic cotton story’ to geographically dispersed
consumers in a small and newly emerging market. Around 2000, however, the
German market for organic cotton textiles and clothing was in difficulties because of
a mail order crisis, affecting companies such as Hess Natur (Germany), Köppel
(Switzerland) and Waschbär (Germany). Many specialized natural textile shops had to
close down. The decrease in consumer demand was probably related to issues
concerning the design, quality and fit of the organic cotton items on offer. Design, fit,
colour and price are all major elements of consumer choice for textiles and clothing
Trends between 2000 and 2005
By 2000, new strategies were required to increase organic cotton demand and
subsequently production. In the United States, large companies operating
internationally became increasingly concerned about the value of their brand and
image, following public concern about social issues such as child labour and the
working conditions in sweatshops. Some brands became aware that involvement in
organics might help them to increase or restore their brand value and image.
They were not keen though on paying significantly more to farmers for certified
organic cotton than for conventional cotton. Supplying large brands would also
require fibre volumes which were enormous for the newly eme rging organic cotton
market. Furthermore, organic cotton actors (in the United States in particular) were
aware that the provision of large volumes of fibre to only a few large companies
would generate a high level of dependency and risk.
A solution was found in the development of so-called blending programmes, in which
brands engage in the use of a small percentage of organic cotton fibre (for example
starting with 3–5%) in their products. At the spinning mill, the organic cotton fibre is
mixed into conventional cotton yarn or into other yarn types. Thanks to blending, the
costs of using higher-priced organic cotton could be limited as a percentage of
product value. Organic cotton usage per company was intended to gradually increase
This United States-developed model for growth in organic cotton usage proved
successful for a number of brands. The sports brand Nike, in particular, gradually
increased its organic cotton usage from 2000 on, making it the global leader in
organic cotton fibre usage in 2005. Nike also succeeded, together with Patagonia, in
interesting brands such as Timberland, Marks & Spencer and Nordstrom in
conversion programmes using 5% organic cotton.
By 2006, many large and medium-sized textile and clothing companies had followed
the example of Nike and others, and launched organic cotton conversion programmes.
The organic cotton business network Organic Exchange has been instrumental in that
process since its foundation in 2002. According to Organic Exchange, there are now
at least 35 companies running organic cotton conversion programmes, plus an
additional 2,000 smaller brands and initiatives using organic cotton around the globe
(Calahan Klein, 2006).
The demand for organic cotton is increasing rapidly, with 100% organic cotton items
now showing up in regular fashion fairs such as Magic (United States), Première
Vision (France) and the London Fashion Week (United Kingdom). Organic cotton
textiles and clothing are now for sale at top locations in high-end fashion streets, in
addition to other distribution channels such as supermarkets, natural and health food