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La experiencia de Organic Cotton Accelerator (OCA) para la conformación de mercados – Laure Heilbron

Presentación de la experiencia OCA, una iniciativa de múltiples partes interesadas centradas en la creación de un próspero sector del algodón orgánico que beneficia a todos, desde el agricultor al consumidor.

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La experiencia de Organic Cotton Accelerator (OCA) para la conformación de mercados – Laure Heilbron

  1. 1. ©OCA | All rights reserved The Organic Cotton Accelerator 13.12.2016 Laure Heilbron Presentation for the “Cotton weaving opportunities for Latin America and the Caribbean” conference
  2. 2. ©OCA | All rights reserved Founding partners Network partners What is the Organic Cotton Accelerator? OCA is a multi-stakeholder initiative focused on creating a prosperous organic cotton sector which benefits everyone—from farmer to consumer. OCA represents a group of frontrunners that represent ~70% of buying power in the organic cotton market
  3. 3. ©OCA | All rights reserved Organic cotton has many benefits Sources: FAO (2015) Measuring sustainability in cotton farming systems; Life Cycle Assessment (LCA) of organic cotton – A global average, PE International for Textile Exchange, 2014; Greenpeace (2010) Picking Cotton: The choice between organic and genetically-engineered for farmers in South India Improves farmer incomes Decreases credit dependency Promotes gender equality Improves worker health and safety Livelihood Fights climate change Reduces water footprint Improves soil health Improves biodiversity Environment
  4. 4. ©OCA | All rights reserved But there are challenges Fragmented organization of the sector • Main actors in the sector are not aligned on a vision for the future • Initiatives to tackle supply and demand challenges are fragmented An insecure business case for the value chain • Supply insecurity and integrity challenges • Quality and contamination issues • Lack of supply chain transparency The farmer business case is under pressure • Lack of access to quality organic seeds • Lower yields and profits while lacking secure offtake of organic produce • Organic differentials often do not end up in the farmers’ hands
  5. 5. ©OCA | All rights reserved What is OCA’s history and future agenda? Initiation Strategy Proto- typing Scaling 2013-2014 2015 2016-2017 (focus on India) 2018 onwards
  6. 6. ©OCA | All rights reserved Global organic cotton sales Demand for organic food and cotton is growing Global organic sales are growing - Ecological benefits - Health benefits The market for organic cotton has grown - Most sustainable cotton - Increasing popularity Sources: FiBL and IFOAM: “The World of Organic Agriculture: Statistics & Emerging Trends 2016”; Textile Exchange Organic Cotton Market Reports 2010-2015 6 Global organic food sales, in billion USD +141% 2005 2014 2006 2015 +10- 15% p.a.
  7. 7. ©OCA | All rights reserved 7 Average cotton farming P&L: Cotton income of current organic vs conventional cotton farmers in Madhya Pradesh, India But organic cotton farmers are among the poorest Difficult enabling environment Short contracts, low prices Few viable alternatives Sources: CottonConnect and NewForesight analysis of field data; TruePrice and IDH: “The True Price of Cocoa from Ivory Coast”; Fountain, A.C. and Hütz-Adams, F. (2015): “Cocoa Barometer 2015” $0.7-1.3 ($330-462) $0.6-1.9 ($220-695) $0.5-3.9 ($183-1,423) $1.1-2.7 ($402-986) $1.9 ($694) Farmer incomes per day (and per year) Strict/expensive standard -80000 -60000 -40000 -20000 0 20000 40000 60000 80000 100000 Cotton revenue Production costs Net income INR/ha Organic Conventional
  8. 8. ©OCA | All rights reserved The consequences are severe: production drops, integrity is questioned, reputation is at risk 8 Production (MT) source: TE market reports Production decrease Integrity issues Reputational risk • GMO contamination • Double-selling of TCs Sustainability claims challenged by media and consumers -53% These are crippling, systemic issues; there is no easy fix here! Sustainability issues Severe poverty Indebtedness Less ecological benefits
  9. 9. ©OCA | All rights reserved -60000 -40000 -20000 0 20000 40000 60000 80000 Cotton revenue Production costs Net income Organic 9 If we do it right, there can be a more attractive business case 3: Improved sourcing practices and inputs 1: Work with the farmers of the future 2: Reward farmers for their efforts Average cotton farming P&L: Cotton income of improved organic farmers in MP, India INR/ha Sources: CottonConnect, NewForesight analysis of field data Income from cotton of $1.25-1.87 p.d. ($456-683 per year) Conditions: Profit increase: + Productivity - Input costs and use 4: Access to the right seeds
  10. 10. ©OCA | All rights reserved What will OCA do? Seed breeding program Working with research institutes and seed breeders to increase the quality and supply of organic cotton cultivars Farm level incentives Piloting interventions that improve the farmer business case Improved sourcing practices Piloting interventions that balance risk across the supply chain and improve the business case for spinners and garment manufacturers Traceability system Accelerating the development of an efficient, up-to-date traceability system to ensure the integrity of organic cotton Sector organization Aligning civil society-, industry- and government initiatives towards a collective vision and joint interventions that aim for structural change
  11. 11. ©OCA | All rights reserved How will OCA fix the business case for organic cotton? OCA aims to fix the business case for organic cotton Organic cotton breeding program Improved farmer business case Improved sourcing practices Traceability system Secretariat Sector organization Ginning Spinning Fabric makers Garment manufact. Farming Brand/ Retail
  12. 12. ©OCA | All rights reserved OCA strengthens the value chain of our partners Source: NewForesight analysis based on interviews and desk study Demand Program (middle and end of supply chain) Pilot aims Attractive incentives throughout supply chain Traceable integrity of organic cotton Supply Program (start of the supply chain) Improved integrity at the source Improved farmer business case OCA brand commit- ments Brands provide information on (organic) cotton sourcing practices for benchmark study Brands test customized best sourcing practices to learn and consequently improve current sourcing strategy Brands develop and implement sourcing pilots with farm program(s) in India, incl.: Purchase guarantees for X volume Pre-decided differential for farmer Access to seed clause in contracts Learn, Adjust, Scale-up
  13. 13. ©OCA | All rights reserved OCA organizes the organic cotton sector Sector organization Agenda 1 Organic cotton offers an attractive business case for each value chain actor Agenda 2 The organic cotton sector is organized to work towards a shared vision and strategy Agenda 3 Organic and sustainable cotton initiatives collaborate to grow the use of sustainable cotton Now Future
  14. 14. ©OCA | All rights reserved laure@organiccottonaccelerator.org www.organiccottonaccelerator.org