Chetna Organic and Fairtrade Premiums Utilization
Chetna farmers produce 100 percent OFT Certified Cotton and other crops without child labor, synthetic pesticides and fertilizers, or GMOs. Farmers have a direct role in decision-making throughout the production and selling processes rather than being mere recipients.
Integrity of Garments made from Chetna Cotton
Over the years, with support from brands and other stakeholders working on integrity aspects, the Chetna OFT cotton supply chain was the first to ground many innovations related to integrity of organic fairtrade cotton and its traceability from ‘Seed to Shirt’ or ‘Farm to Fashion’ in a complex cotton/textile supply chain. Garments manufactured from Chetna cotton are completely traceable to the farmers’ fields. Further, farmers are extensively trained in quality control, integrity and certification standards and have been empowered to understand what happens with their cotton, where it ends and therefore have a better negotiation position rather than being mere recipients.
Initially, an Organic and Fair Trade Certified garment manufacturing company called Rajlakshmi Cotton Mills Pvt. Ltd (RCML), which even today is India’s one & only 100% Organic and Fairtrade garmenting company (no conventional garments produced), purchased almost all cotton produced by the Chetna. In 2008, Chetna Organic through its cooperatives picked up a 10% stake in RCML. This relationship provides many additional benefits including the creation of contracts from the beginning of the season to secure bank loans for farmers, access to
pre-finance of over 50 percent of the cotton harvest, and importantly active participation of brands in community development projects such as supporting schools, vocational training centers, eco-centers, women enterprises (incl. tailoring units), creating revolving funds, etc. in remote villages – all as a result of the integrity demonstrated in the Chetna supply chain and further complimenting the Fairtrade
Over the years, COAPCL is reaching economies of scale in OFT- a critical part to meet market demands & requirements, and has continuously strived to expand its buyers to include many international customers like Remei / Biorei, M&S, H&M, Jackpot, Imps & Elfs, Fair & Co, Green Tea, ABC, Under The Canopy, Coyuchi, Felissimo, Pants to Poverty, PRANA, PACT and others. Chetna has always believed in ‘diversification of risk’ at all levels and this is also true with not falling into a dependency trap with buyers. They include both small & dedicated brands and a very few big players. It is imperative to mention here that Chetna benefited more from a large base of small-medium committed brands and their associated consumers in not only sustaining the Story but also ensuring more tangible benefits to the producers.
Previously, farmers had to risk their families’ health and safety by storing cotton in their small homes and usually caught in the trap of
distress selling leading to either low profits or losses. In the initial years, a large portion of the Chetna OFT Cotton also ended up in the open conventional markets. This led to farmers’ disappointment. Fairtrade Premiums (FTP) converted as Revolving Fund at the Coops’ level have come in handy to make immediate part payments to the member farmers and to procure their cotton (esp. during festival times) while p
rotecting it from being sold into open markets.
Further, the FTP has been effective in generating other match funding from brands, govt. schemes and farmers’ contribution to construct warehouses and set up procurement centers at the cooperative level where cotton from the farmers’ groups is aggregated and stored until low season when prices are higher. Apart from eliminating the threat of various insects and fungi from storing cotton at home, farmers no longer face the danger of a lurking fire hazard in their living spaces. These apart, the Fairtrade premiums at Chetna have clearly proven to generate substantial social premiums from many brands in various forms and have complemented the various interventions taken up the farmers’ cooperatives in the 3 regions.