Corporate – Farmer Partnership for Ethical Business | Magazine | Global Partner Network: Corporate Social Responsibility

Corporate – Farmer Partnership for Ethical Business

Posted: Monday 15 September 08, 1.49pm GMT

Partners in Change (PiC) was formerly established by ActionAid International India in 1995. PiC was the first NGO in the country with a mandate to exclusively focus on engaging with business to make it an integral part of doing business to minimise its negative impact and maximise its positive impact upon the lives of the most vulnerable and marginalised. PiC became a valued member of CSR360 Global Partner Network in 2008. The author of the following article is Khurram Naayaab, Programme Manager of PiC, whom we asked to provide us with a current ethical supply chain example of one of India’s main industries – the textile and garment sector. India is the world’s second largest producer of textiles and garments after China and the world’s third largest producer of cotton—after China and the USA. In 2005 textiles and garments accounted for about 14% of industrial production and 16% of export earnings and after agriculture, it is the largest employer with a total workforce of 35 mn.

“The garment industry is no exception to ethical supply chain issues with several players in India making key developments in this complex area. One such example of a corporate house in the textile sector is the Kolkata-based Rajlakshmi Cotton Mills Limited (RCML). The company, established in 1934, has taken Corporate Responsibility (CR) beyond just responsibility and developed corporate ethical social practices by involving those in the production process at the grass-root level.

In a bid to show its commitment to ethical trade practices and spurred on by its conviction that all parties involved in business should benefit, RCML has given 10% of its equity to smallholder cotton-growing farmers in the country. This has been done via Chetna Organic Farmers Association (COFA) with support from Partners in Change (PiC) and Solidaridad, a Netherlands based development agency.

RCML’s CR initiative is based on Fair Trade’s basic principle of getting small producers in the supply chain a fair deal. RCML began making Organic cotton garments in 1997 and began marketing and selling to NGOs like Green Peace, Amnesty International, Oxfam and Fair & Co. It now has over 30 small and medium sized customers, including fair trade associations and environmental groups in Europe and the USA. RCML is seeing further growth in the market, selling to the bigger retail chains in Canada and the USA such as Cotton Ginny, Roots, Wholefoods, Aveda and trendy fashion label Leaf.

COFA was set-up around 2004 with the aim of helping farmers understand the entire supply chain and began with just 300 members organised in self help groups. It has since grown to include around 6000 members and has set-up cooperatives across four project states including Maharashtra, Orissa, Madhya Pradesh and Andhra Pradesh in order to promote national level associations. The availability of organic and fair-trade cotton from COFA increases with the levels of members.
Farmers linked through this project have benefited in a number of ways. The main economic impacts have come through engaging in collective input procurement, marketing & bargaining; reaching economies of scale; lower input costs and reducing the dependency on local buyers and money lenders. In addition, farmers have benefited from the development of social and community based infrastructure, asset creation and education for children, especially girls. Finally, environmental impacts include improved soil health, biomass plantations, water harvesting structures, composting and village sanitation programmes.

Sustainability is one word which collectively comprises CR and Fair Trade. Organic cotton cannot be sustained without Fair Trade. The organic cotton market is 1-5% of the conventional cotton market and growing.

The relationship between the corporate sector and agriculture/farmers has often been portrayed as antagonistic. With this is mind and given that cotton is a high risk business which demands huge investments, this demonstration of a successful partnership between farmers and the corporate sector could set the stage for more initiatives for sustainable agricultural production in the country. ”