Technology, Systems Integration, and Positive Information Provide Keys to Meeting Competitive Pressures

By Jim.Robinson|March 13, 2009

Competitive pressures are nothing new to commodity markets. Orange juice must compete with processed fruit drinks, coffee and cocoa must compete with soft drinks, copper competes with fiber optic cables, sugar competes with corn-based sweeteners and, of course, natural fibers compete with a plethora of chemical fibers. The keys to meeting competitive pressures facing the cotton industry are new technologies that reduce costs and raise productivity, the integration of commodity handling, processing and storage systems to improve efficiency through elimination of unnecessary functions and organized programs of promotion to provide positive information about cotton to consumers. The International Cotton Advisory Committee (ICAC) can assist in meeting competitive challenges by raising awareness of critical issues, providing information necessary for decision-making and facilitating cooperation.

The world cotton industry faced a larger array of problems and a greater degree of economic uncertainty during 2008 than at any time since the collapse of the USSR in the early 1990s, or even the economic upheavals of the 1970s. However, in adversity there is opportunity, and the events of 2008 offer ample opportunities for concerted actions by government and private sector stakeholders in the cotton supply chain to improve market conditions, the underlying premise for the existence of the ICAC.

The Theme of the 67th ICAC Plenary Meeting in Burkina Faso was “Technologies for Cotton Development.” Some of the important outcomes from the meeting were that the use of biotechnology in cotton is safe, that biotechnology is effective in controlling certain pests while reducing insecticide use, and that farmer field schools are the most effective form of technology transfer to smallholders. Other outcomes from the meeting included an agreement among private sector participants to work toward harmonization of rules for international trade in cotton, an agreement by governments to recognize the International Year of Natural Fibres (IYNF) during 2009, an agreement to study the labor impacts of changing technology in cotton production, and, based on a recommendation from the Private Sector Advisory Panel, the ICAC will begin gathering information on the impacts of carbon trading schemes on the world cotton market.

Surely the events of 2008 put to rest the assertion that in an age of reliance on the private sector to self-regulate, self-insure, self-finance and self-promote, the role of governments in commodity industries has been eliminated. The events of 2008, with massive government intervention in markets and efforts to buttress regulation, provide clear evidence that the rationale for the existence of international commodity bodies is as valid today as in 1939 when the ICAC was formed.