ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Organic Cotton Supply Chains and Small Producers

Whether local producers will benefit from trade liberalisation is predicated upon their ability to enter global value chains or production networks of the lead firms. Understanding how these chains are organised, controlled and governed is the key to unravelling how the gains from these networks/chains are shared across the participants. This paper examines the issues of governance and small producer participation in the organic cotton supply chain in India with the help of a case study of a private firm. The paper assesses the prospects and ways and means of including marginal and small producers in these chains if the organic sector has to play its developmental role.

T he concept of supply chain has many variants such as commodity chain, value system, value chain, production network, value network, complex and filerie which are also, sometimes, used interchangeably. A value system is a set of interlinked complete firms that have all the business functions [Gereffi et al 2001]. Alternatively, a commodity chain is a network of labour and production processes whose end result is a finished commodity. It is the series of relations through which an item passes from extraction through conversion, exchange, transport, distribution and final use [Ribot 1998]. The term filerie refers to material flows through the agro-industrial food chain and consists of vertical, horizontal and diagonal linkages. It was only during the 1990s that the commodity chain concept came to be widely used mainly because of the writings of Michel Porter, Womack and Jones, and Gereffi. There are three key elements of value chain analysis barrier to entry and rent, governance, and systemic efficiency [Kaplinsky 2000]. The measurement of value in a chain involves looking at distribution of profits, value added, and price mark ups [Gereffi et al 2001]. The value chains or production networks can range from local to domestic/national, regional, and global. The actors in a value chain can be integrated firms, retailers, lead firms, turn key suppliers, and component suppliers [Sturgeon 2001].

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