Sustainable Cotton Is Industry's Future

DUNDEE, Miss. (DTN) -- Jake Dodd earns a $2.50 premium for every ginned bale of cotton for acres enrolled in BASF's e3 sustainability program. The Wilson, Arkansas, producer said the financial participation incentive is nice, but the perks associated with the program go far beyond extra money in his pocket.

Growers and industry officials who have embraced sustainable cotton production believe it protects the land, preserves precious resources and builds demand to keep farms viable for generations to come. Supporters deem sustainability as the future of cotton production.

"As producers, we've been very poor storytellers about what we do," Dodd said. "e3 cotton and other sustainability programs are a great way to let the world see what we do. To see we are sustainable and not killing the earth.

"The more we can prove and provide a sustainable crop to the world, that will hopefully drive domestic and foreign demand to buy American-grown cotton," he added.

There are more than a dozen cotton sustainability programs worldwide, according to TextileExchange.org. BASF's e3 Sustainable Cotton, Better Cotton based in Europe, and the United States Cotton Trust Protocol are three of the largest when it comes to farmer and end-user participation.

To qualify for most cotton sustainability programs, farmers must use a combination of production practices that improve soil health, prevent erosion, save water and energy, and encourage biodiversity. Programs also strive to enhance the personal and economic well-being of cotton farmers, industry workers and local communities.

Cotton sustainability program participation is verified through production records and on-farm inspections. In the e3 cotton program, enrolled farmers upload production data on the MyFarms online farm management platform.

The e3 cotton program uses MyFarms to track eight specific on-farm environmental and social measures -- irrigation water use and water quality, pesticide management and usage, soil conservation and fertility management, greenhouse gas emissions, energy use and conservation, worker health and safety, identity preservation and soil carbon. Farmers retain ownership of their data.

To qualify for the premium, farmers must implement at least three qualifying practices in the eight categories such as cover crops, conservation tillage and precision irrigation management.

Growers provide BASF identification numbers of cotton bales from enrolled e3 cotton acres. The company uploads the ID numbers in the MyFarms system. The numbers provide traceability of cotton from the field to the end user, proving where and how it was grown. All U.S. cotton is issued bale identification numbers whether enrolled in a sustainability program or not.

Farmers and industry officials say sustainable cotton production is a growing trend.

Still, Tri Watkins, co-owner of Rabbit Ridge Gin Company near Dyess, Arkansas, said only a couple of the dozen farmers who use his family's gin are members of sustainability programs.

Watkins chalks up the low number to opposition to change, a belief that compliance will take too much time and data privacy concerns.

"Farmers can be a hard bunch to convince sometimes," Watkins continued. "But if you show them it's easy, it won't cost them money and there's a future benefit, then it will grow."

INDUSTRY PUSH

Growing BASF's e3 cotton program is one of Jennifer Crumpler's main jobs as head of seed sustainability and fiber development manager. Participation exceeded 700 farmers in 2021, up from more than 500 two years ago.

Crumpler said BASF embraced the e3 cotton program after acquiring it and FiberMax and Stoneville cotton seed brands from Bayer Crop Science in 2018. What e3 stands for -- socially equitable, economically viable and environmentally responsible -- matches BASF's beliefs, Crumpler said. It also resonates with other companies and consumers as well, she added.

"The different brands and companies (Wrangler, Trindad3 Jeans, etc.) I work with have different sustainability goals," Crumpler continued.

"Some might be to save water, some might be soil health or worker rights. We have the data to prove cotton is sustainable, and it can be traced from the field through the supply chain. The new consumer wants transparency."

Manufacturers often charge a premium for sustainable-branded cotton items, but Crumpler said farmers often don't get a cut of that money.

That's why BASF believes in the $2.50-per-bale producer premium, and it established a grower fund in 2021. End users of e3 cotton can contribute a monetary amount at their discretion to the fund from revenue generated by selling products made with sustainable cotton. All funds collected will be distributed to enrolled farmers annually. The 2021 figure will be determined at the end of the year.

"We want to ensure the partnerships we create will add value for everyone," Crumpler said, adding this in turn motivates farmers to grow more sustainable cotton.

A spokesperson for Better Cotton said the non-profit is prohibited from offering participation compensation to farmers because it can't interfere with the price of cotton or cotton-containing products. The program is funded through donations and fees to access the Better Cotton platform. Membership fees and volume-based fees are collected so small farmers can participate in the program for free, with large farms contributing to the cost of verification only. Most of the money raised is used for field-level activities.

The Better Cotton program allows members to make claims that consumers support responsible cotton production by purchasing their cotton products.

In an email to DTN/Progressive Farmer, a Better Cotton official wrote that the program exists to help farmers adopt more sustainable practices so that cotton farming communities can gain real economic, social and environmental benefits.

About 2.7 million farmers worldwide participated in 2020, up from 1.5 million from 2017. Some 6.2 million metric tons of Better Cotton was produced in 2020 or 23% of global production.

"We remain committed to our mission to transform the cotton sector -- deepening the impact on cotton farming communities while catalyzing systemic change to support more sustainable cotton," the Better Cotton email said. "By making more sustainable cotton the preferred choice for growers and buyers, and in turn funding programs that reach more farmers, that will drive global demand to accelerate this transformation."

According to Cotton Australia's website, https://cottonaustralia.com.au/…, many of its farmer-members have been able to negotiate an additional $2 to $3 per bale for cotton enrolled in the Better Cotton program.

The U.S. Cotton Trust Protocol is one of the newest sustainability programs. It was launched by the U.S. cotton industry in 2020. More than 560 brands, retailers, mills and manufacturers became members the first-year, sourcing 950,000 million bales from more than 300 U.S. growers enrolled in the program. Farmers aren't compensated for participation.

Growing cotton in a way that reduces greenhouse gas emissions and environmental degradation is a big part of the program.

"The Trust Protocol isn't just designed to help brands and retailers. It also helps us document our sustainability progress and compare it anonymously as we work to improve each year," Kellon Lee, an enrolled protocol grower, said in a news release.

FROM THE FIELD

The e3 cotton grower incentive is a big reason why Dodd joined the program in 2019. Average farm prices for upland cotton averaged 65 cents per pound that year, according to USDA data, which is below the cost of production for most producers. "When prices are low, any little bump in revenue is good," the Arkansas grower said.

2021 was Dodd's fourth year farming and most likely his most profitable. He grew 3,500 acres of cotton, along with rice and soybeans. Total cotton production is estimated at 9,000 bales -- 4,312 bales harvested from 1,669 acres were enrolled in the e3 cotton program.

With the 2020-21 season-average farm price for upland cotton projected by USDA at a record 90 cents per pound, Dodd said the expected e3 cotton payment of $10,780 ($2.50 per bale) plus a little more from the grower fund is "icing on top of the cake."

"I'm in the e3 cotton program to reap the benefits of sustainable practices we are already doing such as minimal tillage, crop rotation, water conservation and planting cover crops," Dodd said. "Our goal is to be progressive and make the most yields with the least inputs. I already keep good records to know what is working and what isn't, so e3 isn't really any more work."

Part of Dodd's sustainability efforts is using soil moisture sensors and Pipe Planner irrigation software to know when to irrigate cotton and how much water is needed. He's not only saving water (an estimate wasn't available), but diesel-powered well pumps run less, cutting fuel consumption by 20% and reducing harmful emissions, Dodd claimed.

Cotton grower Justin Cariker of Dundee, Mississippi, enrolled 60% of his 3,000 cotton acres in the e3 cotton program in 2021. His cotton yields averaged about 2.5 bales per acre. At $2.50 per bale, he will likely get a premium payment of more than $11,200 for 2021, plus an undetermined share of the new grower fund.

In 2022, Cariker said he'll likely plant all BASF cotton varieties. He likes the performance and the e3 cotton payday for not doing anything but sharing production records that he already keeps.

Cariker said sustainability means keeping his farm financially viable and the soil healthy and productive for future generations. He has two sons in college who will eventually take over the operation.

So, Cariker will continue to take soil samples to variable rate fertilizer applications, minimize erosion, follow all chemical label instructions and conserve water using soil moisture sensors and automation when irrigating.

"With my boys coming back to farm, I need to be a good steward and take care of the land and its resources," he said.

SUSTAINABLE FUTURE

Jeff Johnson, vice president and head of U.S. cotton sales at Allenberg Cotton Company in Memphis, Tennessee, expects the bulk of cotton will eventually be sustainably produced.

"I don't see sustainability going away, and it will become a bigger and bigger issue," Johnson said. "I can see it getting to a point that if your cotton is not part of a sustainability program, it will be priced differently."

Allenberg, a subsidiary of Louis Dreyfus Company, is the largest cotton merchant in the world, selling tens of millions bales annually. Until five years ago, he says, cotton sustainability programs were pushed by seed companies and retailers to differentiate themselves in the market.

Today, Johnson said, sustainably produced cotton initiatives are "demand pull." More and more companies have sustainability goals. Plus, more consumers want to know where and how the food and products they buy are grown or made. They also want farmers and companies to care for the environment and treat workers fairly.

A 2019 McKinsey and Company survey of fashion executives indicated:

-- 55% of companies plan to source at least half of their products with sustainable materials by 2025.

-- 56% agree that sustainable sourcing is considered a strategic part of doing business.

-- There was a five-fold increase in the number of sustainable fashion products in the two years prior to the survey.

Read the entire survey at https://www.mckinsey.com/….

Wrangler uses e3 cotton in its "Rooted" collection. It also has its WeCare program, www.wrangler.com/about/sustainability.html. The manufacturer pledges it will use 100% sustainable cotton by 2025, among other environmental promises.

Dodd believes sustainable cotton production is the future, which is another reason he joined the e3 cotton program and is working to enroll in Better Cotton as well.

"I believe it's the way things will go," Dodd continued. "I want to be on the forefront of it and not come in on the back end trying to figure out the programs."

Watch a video about cotton sustainability at https://www.dtnpf.com/….

Matthew Wilde can be reached at matt.wilde@dtn.com

Follow him on Twitter @progressivwilde

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