Global Confidence in Organic Cotton Dips. Reason: The Great Indian Organic Cotton Scam

Last month, Textile Exchange announced that it would be making a policy change to its Organic Content Standard (OCS). Starting 1 December 2022, OCS would mandatorily require that site inputs from the Global Organic Textile Standard (GOTS) should provide traceability of all transaction certificate data back to the original farm source (e.g. full transaction certificate data including product and input product) and farm input data (e.g. farm capacity).

Though Textile Exchange did not say this in as many words, the main reason for this would have been the scams and scandals that have plagued the organic cotton sector in India.

Also, unlike in the previous years’ reports, the latest Organic Cotton Market Report carries carefully-worded sections on ‘Standards & certification’ and ‘Integrity & traceability’.

But back to India. The feedback that Textile Exchange received from “local stakeholders suggests that around 90% of this growth was in in-conversion cotton production and 10% in organic cotton. This is very different to what we had forecast when preparing last year’s Organic Cotton Market Report and it is why India’s estimated growth in organic cotton production in 2020–21 is 5.3%, not the 48% that we had forecast.” Revising a number from 48 to 5.3 is not something minor—it is as good as turning something upside down.

As the report remarks: “A much higher proportion of the growth reported by APEDA is now thought to be in-conversion cotton. While this indicates that there could be a large rise in organic cotton production from India in the coming years, it may not necessarily be the case as organic cotton is a cash crop and is therefore heavily influenced by market demand and price.”

APEDA shares only total seed cotton production–with no breakdown between organic and in-conversion cotton. The total reported organic and in-conversion seed cotton production doubled since 2019–20, from 335,794 tonnes to 811,008 tonnes. Now, to estimate the breakdown between organic and in-conversion cotton production volumes and land area in India for 2020–21, Textile Exchange had to apply the following assumptions:

1. The average ginning outturn was 35%.
2. The average yield average was 538 kg/hectare (based on the three-year average of data provided to us by certification bodies in 2017–18 to 2019–20).
3. All certified organic cotton land reported in 2019–20 remained active and in-certification in 2020–21.
4. All Y3 in-conversion land reported in 2019–20 successfully reached certification in 2020–21.
5. 90% of India’s growth in certified land between 2019–20 and 2020–21 was in-conversion and 10% organic.

All these assumptions were derived based on input from the Organic Cotton Market Report Advisory Panel and past data reported combined with internal observations. In other words, there are far too many assumptions. But, this is the best that Textile Exchange could have done.

Scandals and scams have dominated the Indian organic cotton sector over the last few years.

In October 2020, GOTS itself had admitted that it had finally obtained substantial documentary evidence confirming rumours about systematic fraud abusing Indian government certification system of organic cotton production. It found that fake raw cotton transaction certificates (TCs) were being created by fraudsters using APEDA templates with fake QR codes which led to a cloned APEDA website to show that the TCs were apparently authentic.  GOTS admitted knowledge of 20.000 metric tonnes being fake organic cotton.

The immediate fallout was that the United States Department of Agriculture’s National Organic Program (USDA NOP) in January 2021 decided to end the direct accreditation of USDA NOP with APEDA. This meant that all certification bodies now needed to become accredited to NOP directly with the USDA in order to certify crops as USDA NOP in India. And now, Textile Exchange has virtually done the same by seeking original data from GOTS-certified players.

Earlier this year, Control Union—one of the world’s largest certifiers of organic cotton—announced that it would no longer certify cotton in India. The entire certification process apparently was too much of a balancing act, Control Union sources told texfash.com.

The problem is that of India, but the entire world has to bear the burden. And, the Organic Cotton Market Report 2022 shows the strain that the world has to endure.

The report carries a highlighted section on the steps Textile Exchange is taking to improve traceability and prevent fraud, and also makes a ‘Call to Action’: “Data sharing should be a basic requirement. We can’t enforce it, but together we can create demand for key stakeholders to share their data openly, helping us to understand what is happening on the ground.

“Together, we must call on the industry to be more transparent in sharing aggregated data on organic cotton production. This includes government agencies, accreditation bodies, certification bodies, suppliers, voluntary supply chain standards, and umbrella organisations for organic agriculture. Organic cotton producers are another important data source, but compiling data is a burden that shouldn’t have to fall on them.”

It ends on the note: “Going forward, access to more reliable and timely data will be key to accelerating the adoption of organic cotton and overcoming adversities as they arise.”

Or else, it would be the end of the organic cotton sector, as we have known it.