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The Rupp Report: SEEP - A Glimpse At Global Cotton Production

The Washington-based International Cotton Advisory Committee (ICAC) Expert Panel on Social, Environmental and Economic Performance of Cotton Production (SEEP) has released three reports covering pesticide use in cotton production, production efficiency and energy use in cotton production, and the components of labor costs in major cotton-producing countries. Below are excerpts from the abstract of the very interesting and detailed reports:

Worldwide, the annual sales of crop protection chemicals on cotton rose from $2.6 billion in 1999 to $3 billion in 2009, but because of inflation and the use of more expensive chemicals, applications of active ingredients per hectare have fallen. The use of pesticides on cotton peaked in the 1990s when cotton accounted for about 20 percent of all insecticides used in agriculture.

Agriculture accounts for about three-fourths of human water consumption, and cotton production accounts for about 3 percent of the volume of water used for global crop production, proportional to cotton's share of world arable land use. The amount of energy required in cotton production varies primarily because of differences in yields and the use of irrigation.

An estimated 110 million households produce cotton in more than 80 countries. When family labor, hired labor and employment in ancillary industries such as transportation, ginning and warehousing are included, total employment in the cotton industry reaches more than 200 million each season. Cotton industry employment in the eleven countries represented in the latest SEEP report on labor cost components totals about 45 million, with India alone accounting for 35 million. In some countries, such as Australia, Brazil and the USA, employers are required to provide substantial benefits to employees ranging from health insurance to education for children.

Editor's note: The SEEP Fact Sheet on Pesticide Use in Cotton Production is available online at: http://icac.org/wp-content/uploads/2012/04/seep_pesticides_facts1.pdf
The SEEP Fact Sheet on Production Efficiency and Energy Usage in Cotton Production is available online at: http://icac.org/wp-content/uploads/2012/04/seep_efficiency_energy_facts.pdf
The full SEEP report titled "Survey of Cotton Labor Cost Components in Major Producing Countries" is available online at: http://icac.org/wp-content/uploads/2012/04/seep_labor_survey_20121.pdf

Zeroing In On Labor Costs
The following excerpts come from the report on labor costs:

The ICAC Secretariat completed this report over a three year period between 2009 and 2011 on behalf of the SEEP. The report is a response to questions from Member Governments of the ICAC regarding the social consequences of cotton production practices and labor requirements in different countries.

The objective of the report is not to quantify labor costs per kilogram or hectare of cotton production; this is not a report on the cost of cotton production. Rather, the purpose of the report is to identify the different cost components associated with labor in cotton production.

The ICAC Secretariat developed a template for information about labor practices in the cotton industry and asked researchers in 18 major cotton producing countries to provide information. As of November 2011, responses had been received from researchers or government agencies in eleven countries.

Cotton accounts for about 2.5% of world arable land. Because one hectare of cotton is generally worth more than one hectare of grain or oilseeds, cotton's share of world crop production is probably higher than its share of arable land.

Below are some excerpts from the reports on different countries:

The number of people employed by the cotton industry in a non-drought year is estimated at 10,000. Total agricultural employment in the Australia is estimated at 3.6% of the total labor force, or approximately 430,000. Accordingly, cotton industry employment in Australia represents about 2% of agricultural employment and less than 0.1% of total employment.

[Thirty-three percent] of cotton growers, and only 15% of other farmers earned over AU$1000 per week. The proportion of cotton growers in lower income brackets is also less, with 32% of cotton growers earning less than $600/week, whilst 60% of other farmers are earning less than $600/week. Wages have risen, but not as steeply as one might expect, as better technology enables the more efficient use of labor. Minimum wage for a general farm hand is AU$562/week.

The normal work-week is 38 hours. The data show that 54% of cotton growers and 43% of other farmers were working more than 49 hours per week.

Average employment among commercial producers is one worker per 28 hectares. In 2011, Brazilian cotton area is estimated at 1.4 million hectares, suggesting that on-farm employment is approximately 50,000. An estimated 21 million, or 20% of Brazilian labor, is employed in agriculture. Accordingly, cotton industry employment represents just 0.2% of Brazilian agricultural employment and just 0.05% of total employment.

The minimum wage in Brazil is R$545/month (US$340/month) for agricultural workers. Actual wages in some states are higher, depending on local wage conditions. Skilled labor, such as machinery operators, chemical applicators, or managers, receive between R$1,500 and R$5,000 per month (US$940 and $3125 per month.)

The maximum work-week is 44 hours. Overtime must be paid for hours more than 8 hours/day or more than 44 hours/week.

Burkina Faso
Burkina Faso has an estimated 300,000 family-run cotton farms, providing work for about one million people, and supporting the incomes of about one-fourth of the total population. Out of a total labor force of 6.7 million, agriculture accounts for 34.2% or 2.3 million. Thus cotton industry employment in Burkina Faso represents nearly half of total agricultural employment and about 15% of total employment.

A farm worker may have an informal contract up to 10 months. The contract amount is from 80,000 to 100,000 CFA ($175 to $215). They are paid after the crop is sold.

For casual wage labors, they work for specific agricultural operations. The average daily rate is 750 CFA ($1.60) for a 6-hour average work time.

Cotton industry employment in Colombia is estimated at 12,000. Agriculture accounts for 9.2% of total employment, or about two million people. Accordingly, cotton accounts for 0.6% of total agricultural employment and 0.06% of total employment.

The minimum wage in Colombia is US$229/month. Wages in some departments are lower, depending on local wage conditions. Skilled labor receive the same wage, managers receive between US$1,675 and US$3,400 per month. Managers' wages may be higher or lower depending on the size of the cooperative, and have additional fringe benefits. Maximum work-week is 48 hours.

Cotton industry employment in Egypt is estimated at 500,000, or about 5 persons per hectare. Agriculture accounts for 32% of total employment, or 8.4 million people. Thus cotton industry employment represents about 6% of agricultural employment, or 2% of total employment.

The minimum wage per month is 500 Egyptian pounds ($83). Some workers are paid several thousands according to experience and responsibility. Workers have a monthly incentive of between one to three months' wages. For permanent workers, the maximum work-week is 42 hours.

Cotton industry employment in Greece is estimated at 50,000. Field workers are mainly economic immigrants from the neighboring Balkan states. Agriculture represents 3.3% of total employment, or about 165,000. Thus cotton employment represents nearly one-third of agricultural employment, and about 1% of total employment in the country.

The wages for field workers for 8 hours of work ranges between 25 and 35 euros/day (US$35 to $50) depending on the region. For industrial workers, the minimum wage as of January 2009 is 33.04 euros/day ($46) with increases of 3.5% for every 3 years work. Skilled labors, such as machinery operators, chemical applicators, or managers receive between 1,000 and 2,000 euros per month ($1,400 and $2,800). The maximum work-week for industrial workers in Greece is 40 hours.

Agriculture accounts for 21.8% of total employment in Pakistan, or about 12 million people. Thus cotton industry employment represents 17% of total agricultural employment or about 3.5% of national employment.

Managers are paid Rs10,000 per month (US$115) during the 8-month agricultural season, or Rs80,000/year ($930) per 100-acre (40 ha) farm unit. Skilled labors (tractor driver) are paid Rs6,000 ($70) per month, or Rs 48,000/year ($560). Unskilled labor is paid Rs5,000 per month ($60) or Rs60,000 per full calendar year ($700). Contractual labor for thinning, weeding, etc., is paid Rs 200 per acre ($2.30) or Rs 20,000/year ($230). Hand picking by female labor is paid Rs3.50 per kg of seed cotton (4 cents per kilogram).

South Africa
For the period April to June 2009: 710,000 were employed in the cotton industry. The ICAC Secretariat estimates employment in the South African cotton industry at 48,000. Agriculture accounts for 2.5% of total employment, or 435,000. Thus cotton industry employment represents about 10% of agricultural employment and about 0.3% of national employment.

The monthly minimum wage is R1,231 (US$122).as of March 2009. The maximum hours to be worked in any 24-hour period are 12. If a worker is working for 1 to 5 days a week, the ordinary hours per day will be 9 to a total of 12 hours per day (including overtime), 45 hours per week with a total of 15 hours overtime per week.

Cotton industry employment in Sudan (Here, Sudan refers to the united nation of Sudan prior to the independence referendum by South Sudan.) is estimated at 300,000. About 2.8 million people live in the Gezira Scheme and depend on it for their livelihood as farmers, sharecroppers, agricultural laborers, traders or providers of various services. The core of this population is made up of about 129,000 farmers with an associated population of about 903,000. Agriculture represents 30.5% of total employment in Sudan, or 3.6 million. Thus, cotton industry employment is about 8% of agricultural employment or 2.5% of national employment.

Employment in the U.S. cotton industry is estimated at about 100,000. Agriculture represents just 1.1% of U.S. employment, or 1.7 million. Thus, cotton industry employment represents 6% of agricultural employment but just 0.07% of total employment.

Wage rate for hired workers ranges between US$10.07 and US$10.85 per hour. The minimum wage is US$7.25 per hour.

Hired farm workers make up a third of the total agricultural labor force and are critical to U.S. agricultural production, particularly for labor-intensive sectors such as fruits and vegetables. In 2006, 1.01 million hired farm workers made up a third of the estimated 3.0 million people employed in agriculture. The other 2.05 million included self-employed farmers and their unpaid family members. Workers employed on small farms (i.e., those that used less than 500 "man-days" of farm labor in any calendar quarter of the preceding calendar year) are exempt from both the minimum wage and overtime pay requirements.

Average employment in 2010 was 40.1 hours. According to the USDA, hired labor cost cotton producers US$16.42 per planted acre in 2007 and US$16.33 per planted acre in 2008. Opportunity cost of unpaid labor for those years was US$37.10 per planted acre in 2007 and $39.05 per planted acre in 2007.

April 24, 2012