Pamela Ravasio asks if the cotton crop, or "white gold" as some call it, is ousting food crops. And what will happen as a result?
More land was converted to crop land in the 30 years after 1950 than in the 150 years between 1700 and 1850. The trend increased even further between 1995 and 2005, and the portion of farmed land grew from five per cent to 25 per cent. Intensive agricultural systems now covers one quarter of the planet's land surface, a fifth of what used to be wild a decade ago. A further 25 per cent of surface area is covered by cities, railways, factories or mines.
Of a world crop production
of 2748.2 million tonnes (2011), only four per cent was cotton, the most popular of fibre crops. However the picture manifests itself very differently if land usage is the measure to go by: the plantations of the three largest cotton growers – the US, China and India - alone account for 50 million acres, 42 per cent of all agricultural land. In contrast, food
crops amount to some 40 million acres and fuel crops to 32 million acres.
In other words: It is the 'white gold', cotton, not fuel, that is in direct competition with food.
In the recent past, floods in Pakistan, India and Australia caused significant loss of cotton as well as food crops, triggering the 2011 spike in both commodity's prices. This development was exacerbated by the global demand for biofuel crops. While the loss of cotton harvests manifested itself through peaks in prices, the concurrent peak in food commodity prices triggered severe food supply scarcity, and malnourishment, in net importing countries.
This is not new: food crops have historically been swapped for cotton because of its higher monetary value; which is by far offset by higher maintainence costs. And currently, cotton as well as food, are swapped for fuel crops, which bring higher yields at market alongside relatively low maintenance costs. More income, less work – is often too good an incentive.
Dazzled by the 2011 cotton price peak, many farmers jumped on what seemed a promising band wagon, and have swapped their food for cotton. The 2012 cotton harvest will by all estimates be abundant, and prices have already started plummeting in view of a diminished consumption forecast. The farmers will not be able to sell their 2012 cotton at the expected price level; foreseeably, the 2013 cotton yield will decrease, while market prices rebound.
The food riots in Algeria and Tunisia in early 2011 illustrate the explosiveness and impact of food shortages. It is improbable that the cotton industry could withstand such pressure. If this is the case a likely scenario would see cotton lose ground as a cash crop. When compared to food and fuel, it is non-essential and high maintenance. In the face of competition for food and biofuels, the proportion of land dedicated to its farming could diminish and global cotton production become smaller as a consequence.
The overall shift in agricultural priorities is bound to change the rules of the fashion game. The ability to pay adequate prices to secure raw materials and guarantee a stable cotton supply will be key to survival. Cotton prices will in all likelihood rise until its cash crop value is aligned with that of food and fuel crops.
And then fashion retailers will be confronted with three options: First, squeeze their suppliers' margins. In other words, manufacturers rather than retailers, will be required to absorb raw material price increases. In turn, suppliers may compensate by reducing salaries paid to workers (or reduce staff and increase hours). Given that numerous NGOs are sensitised to this danger, it will not take long to raise the alarm in the global media, and brands' reputations and ultimately sales could suffer. Alternatively, retailers could absorb the raw material price hike themselves in return for lower margins or finally, raw material price hikes are ultimately passed on to consumers.
Could the days of cheap, fast fashion slowly yet surely be coming to an end?Dr Pamela Ravasio is an independent researcher, journalist and consultant specialising in sustainable fashion businesses processes.
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