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Report of the 73rd International Cotton

Advisory Committee Plenary Meeting

he 73rd Plenary Meeting of the Promotion, in close collaboration with the supply chain, such as garmenting, low labor
TICAC since 1939 was conducted ICAC, should remain closely involved with this costs continued to be important but other
from November 2-7, 2014 in the city of work. Sustainability and its Measurement: factors, such as participation in free trade
Thessaloniki (Greece). Participation was 401, Presentations on national programs of agreements, could be decisive.
including, representatives from 33 member responsible cotton production were received
governments, 9 international organizations from three countries. It was suggested that Contract Sanctity: The Plenary hosted a
and 19 non-member governments. Cotton countries should work together through panel discussion on the question of measures
SA was part of South Africa’s offi cial mutual exchange of information to expand that could be introduced to reduce disputes
delegation who attended the meeting these important programs in order to ensure in cotton trading. Panelists noted the
and was represented by the Chairman, Mr a healthy future for cotton. The Committee importance of contract sanctity to a healthy
Leonard Venter and Chief Executive Offi cer, also received a report from its Expert Panel cotton supply chain. Member governments
Mr Hennie Bruwer. The theme of the 73rd on the Social, Environmental and Economic were reminded of their responsibility,
Plenary Meeting was “From Land to Brand: Performance of Cotton Production (SEEP) on under the New York Convention of 1958, to
Strengthening the Cotton Value Chain”, which “Measuring sustainability in cotton farming ensure that arbitration awards were duly
covered a wide variety of topics, ranging from systems: Towards a guidance framework.” recognized by their judicial systems. The
sustainable production practices, climate This report was now in its fi nal stages of concept of contract sanctity centers on the
change, exchange of germplasm and logistics preparation for publication. It provided a understanding that parties must honor their
to value addition and national branding. comprehensive set of sustainability indicators contractual obligations. The high volatility of
Open sessions were conducted on the that were designed for use in the context cotton prices in 2010/11 put contract sanctity
topics of: National Programs of Responsible of cotton cultivation, but could also be under stress and, although the number of
Cotton Production; Promotion of Cotton usefully applied to other crops. Following disputes had declined considerably in the
Use in Product Markets; Contract Sanctity; recommendations made at the 72nd Plenary recent past, no grounds for complacency
the Outlook for Cotton Supply and Use; and Meeting, pilot testing of the indicators was existed. The panel noted that the problem of
Prerequisites for Textile Industry Growth. In being undertaken. In addition to monitoring contract sanctity extends further up through
addition, the program included a Technical such tests, the SEEP would now evaluate the value chain, as far as the fi nal retailers.
Seminar on “Enhancing the Mechanism other sustainability assessment tools that To avoid future disputes over delivery, the
of Input Interaction in Cotton Production”. aff ected the world cotton sector. panel proposed the universal application
Breakout sessions were dedicated to: of hedging practices to cope with price
Production Practices for the Improvement Cotton Identity Programs: The Task Force volatility and the resulting contract defaults,
of Cotton Productivity; International Ex- on Cotton Identity Programs had expanded thereby providing insurance against the risks
change of Cotton Germplasm; Climate the coverage of its report presented at the of volatility. Although the Panel stated that
Change and Cotton; National Cotton Brands: previous Plenary Meeting to include fi ve this issue primarily concerned the private
Strengthening Awareness of the Attributes programs. The Chair reported that about 1.1 sector, it could also have repercussions at
of Cotton; Cotton Classifi cation: A Vehicle for million tons of cotton had been produced the government level, especially during
Standardization of Trading Practices; and The under the fi ve identity programs in 2012/13. the negotiation of free trade agreements.
Importance of Logistics: Enhancing Effi ciency. However, side-by-side comparisons of Therefore, in places where traditional risk
identity cotton programs might be mis- management tools were unavailable, the
Achievements of the 73rd Plenary Meeting leading, since each program had diff erent Panel recommended the exploration of
objectives. Some ICAC members expressed
Promoting Demand for Cotton: The concern at the possibility of Cotton Identity mechanisms, such as compulsory insurance,
importance of ensuring the growth of Programs promoting one origin or type of to guarantee the execution of contracts
cotton consumption was emphasized in cotton at the expense of others. The updated and thereby contractual protection for the
various presentations from diverse sectors report will be made available on the ICAC industry. Additionally, the establishment of a
of the textile chain. Two World Café Sessions website after fi nal editing. world yarn contract would assist in off ering
were dedicated to creatively discuss how further protection.
to best promote cotton as a brand. ICAC Prerequisites for Textile Industry Growth: Doha Round: The ICAC received a report
member countries noted the importance of Many ICAC members desired to add value on the treatment of cotton in the Doha
promoting demand for cotton and endorsed to their crop by further processing their Development Agenda (DDA) and relevant
eff orts to encourage consumption. Cotton production. This issue was the subject of developments at the Bali Ministerial Meeting
had many competitive advantages and extensive analysis and debate. In the case of of the World Trade Organization. The ICAC
was highly valued by consumers. In recent smaller countries, one promising possibility noted the production of a specifi c document
years, high cotton prices had damaged the was the creation of regional collaboration on cotton and other outcomes involving
competiveness of the product. Prices were arrangements to establish economies agriculture reached at that meeting. It was
now coming down and cotton had become of scale and exchange experiences. The further noted that the deadline for the
more competitive with man-made fi bers. key factors in the success of the industrial
However, competitive pricing was not enough processing of cotton and the attraction of adoption of the Protocol of Amendment
and more proactive promotion actions foreign direct investment changed as one had passed without any convergence of
were required. Cotton is in competition with moved downstream along the supply chain. members. ICAC members reiterated that
man-made fi bers, not other cottons. ICAC In the initial stages, such as spinning and cotton is an integral part of the DDA and that
member countries were urged to promote weaving, low labor and electricity costs were there can be no successful conclusion of that
the use of cotton, especially in their internal crucial. Government policies could also play agenda without an agreement on cotton.
The Committee restated the importance
markets. The International Forum for Cotton a considerable role. At later stages in the
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Katoen SA Cotton 18 January-March 2015