The Path to a More Sustainable Latin America Cotton Value Chain
Shift to Organic Cotton Presents Opportunities and Challenges
Cotton is the second-most used fiber in the textile industry. The economic activities related to cotton engage around 350 million people worldwide. According to Project +Cotton, in 2019 there were 131,500 cotton-producing farmers in Latin America, and 77% of them were family farmers. The region produces millions of tons of cotton annually, with Brazil ranking as the top-producing nation.
But we have a dichotomy. Most of the cotton grown every year worldwide is an intensive monoculture crop that involves the heavy use of irrigation practices and pollutants such as synthetic pesticides and fertilizers. Alternatively, organically grown cotton is commonly grown by family farmers who also use the fields for subsistence crops and do not use chemical fertilizers or pesticides. This format helps preserve the soil while making it more fertile.
The distinctive quality of organic cotton makes it possible to obtain higher prices than conventional cotton, adding value to production, increasing profitability per acre, and greatly reducing the use of water in planting by excluding the textile dyeing stages. However, according to the 2022 Textile Exchange Organic Cotton Market Report, only 1.4% of cotton grown worldwide in 2020-21 was organic — although that number was up 37% from the year before.
In Latin America, Brazil and Peru stand out in the cotton value chain although they differ in cotton varieties and production methods. Brazil is highlighted as the most productive, being the world’s second-largest exporter of cotton. Peru is the home of the well-known Pima cotton and has seen growing internal demand for organic cotton. Below are more highlights about each country’s value chain.
Brazilian Cotton Value Chain
Brazil is the world’s second-largest exporter of cotton and fifth-largest textile producer overall. It’s also the world’s second-largest producer and third-largest consumer of jeans. Brazil has the largest complete textile chain in the Western world, comprising everything from fiber production to spinning mills, weaving mills, processing plants, clothing manufacturers, and retailers.
According to PRONAF data, family farming is responsible for about 77% of rural employment and accounts for 37% of Brazilian agricultural production. Around 84% of the country’s 5 million agricultural establishments are owned by family farmers.
After years of governmental investment and public policies, cotton farming in the Brazilian Cerrado (tropical savanna) has become highly productive due to the use of fertilizers, pesticides, and GMO varieties of cotton (genetically modified organisms) and a shift toward high technology. They are dominating the exports with a large number of farms that have achieved the Better Cotton Initiative (BCI) certification. BCI recommends minimizing the use of pesticides and is neutral on the use of GMO.
While organic cotton makes up a small percentage of cotton in Brazil and worldwide, more farmers are showing interest in organic practices. According to a report by Embrapa Cotton, organic cotton production for the 2018-2019 crop in Brazil was 30 tons, grown by 600 families. For 2019-2020, the number rose to 134 tons, grown by 1,894 families.
But the quantities of organic cotton produced in Brazil are so small that they barely meet domestic demand. That makes it difficult to reach the foreign market, where farmers could make greater commercial gains. Mostly based in the Brazilian northeast semi-arid region, the production follows the socio-environmental agricultural model, in which farmers, cooperatives, and associations encourage organic production without chemical inputs. However, most production units don’t invest in official organic certification due to the high investment costs.
The French B Corp VEJA, launched in 2004, is among the companies encouraging the production of organic cotton in Brazil. The company has purchased more than 1,100 tons of organic, agroecological, and fair trade cotton directly from producer associations in various regions of Brazil and on the Peruvian coast.
Peruvian Cotton Value Chain
The cotton production in Peru is concentrated on the central and northern coast, where the weather is favorable for growth. At the beginning of the 20th century, two main varieties emerged: pima and tanguis. According to the Trade Commission of Peru, the main competitive advantage of the Peruvian apparel industry is its level of integration. The production chain — from the fiber to the yarn and fabric manufacturing to the making of garments — is fully integrated.
With organic cotton on the rise, the textile industry is beginning to work under the principles of fair trade in its relations with fiber suppliers. Peru has a national ban on GMOs, which aims to reduce the risk of contamination that exists in other cotton-producing countries. Most of the organic cotton produced in Peru is certified organic according to European and American standards and GOTS (global organic textile standard).
Bergman/Rivera is a B Corp working to make a difference in the cotton value chain in Peru. The Swedish-Peruvian family-owned company has been a pioneer in the production and promotion of organic cotton textiles in Peru since 1986. The cotton production company has been trying to transition the country’s farmland to organic and regenerative organic agriculture. Bergman/Rivera supports more than 200 families across three valleys in Peru and is a leader in organic cotton production in Latin America. Recently, the company partnered with global fashion brands like Patagonia and VEJA to establish cotton supply chains. This aims to reduce financial risks for farmers as they transition to organic methods while also addressing power imbalances in traditional supply chains and promoting better practices on a larger scale.
B The Change gathers and shares the voices from within the movement of people using business as a force for good and the community of Certified B Corporations. The opinions expressed do not necessarily reflect those of the nonprofit B Lab.
