Hennie Bruwer, CEO of Cotton SA, is optimistic about the future of cotton. Not only has production doubled between the 2014 and 2015 season – from 42 000 to 97 000 bales – but the year-old industry initiative, the Sustainable Cotton Cluster, is already making a positive impact.
Cotton SA was the driving force behind the Sustainable Cotton Cluster, but the initiative now involves 5 value chain stakeholders, including the Department of Trade and Industry (the dti). “Our aim is to create an enabling environment for cotton producers and manufacturers to supply local and international customers with fully traceable and sustainable cotton products,” says Hennie.
A recent study has shown that the demand is there; the task at hand is to increase the volumes that are being produced. To this end, one of the cluster’s objectives is to increase local production by 388%.
Another primary objective is to build 15 integrated supply chains. Hennie explains: “The growth and sustainability of our cotton industry depends on integrated supply chain programmes (ISCP) that are driven by retail demand and are built on virtual partnerships between supply chain stakeholders. It supports ‘near sourcing’ and ‘quick response’ and provides for supply chain transparency and stakeholder trust to make our industry competitive.”
To turn this ideal into reality, the cluster provides the technology for full traceability, from farm to retail, sustainability impact measurement and supply chain management. It also enables stakeholders to fulfil their social and environmental responsibility and contribute to a stronger economy in Southern Africa.
The Sustainable Cotton Cluster started operating in May 2014 under the leadership of Heinrich Schultz and has allowed itself five years to achieve its targets. Its mandate covers Southern Africa, mainly because South Africa alone has seldom been able to meet its domestic demand and has always depended on cotton imports from neighbouring states.
In terms of increasing production, Hennie is excited about the impact of a practical project the cluster implemented during the past season, namely a technology demonstration in Limpopo and the Northwest provinces.
Rising production costs, especially for dryland producers, was one of the main reasons for the decline of the cotton industry in recent years. Traditional cotton harvesting is extremely labour intensive, hence producers’ decision to switch to maize in many instances. Many dryland regions of South Africa, however, are far more suited to cotton than to maize.
To lure producers back to cotton – and better crop yields – the cluster funded the importing of a mechanical cotton stripper from the USA in 2014. “The demonstrations we held in Limpopo and the Northwest provinces showed growers what was possible with mechanisation,” says Hennie. “It unlocked tremendous positive energy overall.”
As a result, producers started returning to planting cotton and saw excellent yields in especially Northwest where rainfall was particularly low this year.
Before the cluster came into being, the cotton industry had done a lot of work by itself. Hennie mentions market research to determine demand, and value enhancement initiatives such as seed improvement. “In addition, in the context of the Preferential Procurement Policy Framework Act, we prepared and presented a document to government, advocating for local cotton to be included in the framework. We suggested a competitiveness improvement programme, based on the cluster concept and aimed at uplifting the complete value chain. The ultimate goal, of course, is economic growth and job creation.”
A major stumbling block in the way of sustainable production used to be the lack of a fixed cotton price. The industry was too small to enjoy the hedging benefits open to maize on the SAFEX futures market. Industry advocacy has also succeeded in solving this problem and growers can now hedge against both price and exchange rate fluctuations.
The scene has been set for growth. South Africa produces high quality, exportable cotton, the GMO technology applied to seed improvement is delivering better crop yields, mechanisation is a real possibility and the financial market concerns have been addressed. “The positive energy is palpable everywhere we go,” says Hennie. “The government is listening to us and people are aware of what we are doing. Now it is up to all of us in the supply chain to deliver.”