THE new-age Indian consumer might be long way from supporting ethical business, but the small Indian producer is already at it. European ethical business practices are already finding their way into the life of Indians, but from the wrong end of the supply chain.
Fairtrade is a certification which ensures that products acquired by member companies have been produced under ethical working conditions. In India, coffee and cotton are procured under fairtrade practices and the products, be it garments or food, are sold at premium with a prominent Fairtrade tag.
By converting to Fairtade practices, the small cotton farmers in Gujarat and Orissa are now finding takers at global fashion houses. Their customers include European fashion labels like Marks and Spencer, Oxfam, Max Howler and Vericott.
Agrocel, an agriculture outreach initiative, pays Fairtrade price and markets the cotton, yarn and even garments made from the cotton grown by certified farmers in both the states. “We have an order to supply 10,000 pieces to Oxfam (Belgium) and orders for cotton garments from CTM Italy and Max Howler, France and Germany based Fairtrade brands.
Agrocel-linked farmers do the largest production for Faritrade. About 1,500 farmers in 70 villages have produced 1,250 tonnes of cotton that was supplied to M&S last year. This year, about 500 more farmers will join the Fairtrade initiative in Orissa,” informed Hasmukh Patel, GM, service division, Agrocel Industries Limited.
Indian companies, though not very forthcoming for their domestic brands, are sourcing cotton for overseas clients. Arvind Mills, Alps Industry, Maral Overseas and Vardhman Mills are few of the Agrocel’s India-based customers.
Fairtrade, a European quality certification brand, became known in 2005, when Marks & Spencer became the first high street retailer to sell a jeans and underwear, made from cotton, sourced from India.
According to the M&S website, the company plans to “bring even more Fairtrade cotton clothing into the stores which will add up to around 20 million garments and account for around one-third of the world’s current supply of Fairtrade cotton.”
M&S also sources Fairtrade coffee from India. Other UK companies that support the Fairtrade label for apparel and food are: People Tree, Gossypium, Bishopston Trading, La Redoute and Hug.
Agrocel, that is supported by Shell Foundation, gets about 10% revenue from domestic demand which is at Rs 5-6 crore. Bulk of it’s revenue (Rs 12-15 crore) comes from exports that include cotton yarn, fibre, fabric and garments.
“The business was running more at the farmer’s end. To make it more efficient, we helped with the marketing-linkages for example with Marks and Spencer. We are also looking at helping them establish domestic market linkages. Talks are on with players in hospitality and healthcare sectors,” said Anuradha Bhavani, advisor, Shell Foundation.
Fairtrade accreditation for cotton has increased the demand for products who support this logo.
The accreditation is based on system that the retailer has paid a fair price to people involved in production across the supply chain. The price covers cost of production and provides for a social premium, which is then collectively used to benefit the community.