Walmart Sustainability

In the past organic cotton farming was considered

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Unformatted text preview: tandards, a farm needed to remain free of non-organic pesticides or similar materials for a period of three years prior to the harvest of any organic crop.42 Most farmers were only able to sell the cotton fiber, not the cotton seed, as organic. (Each cotton crop yielded 40 percent cotton fiber and 60 percent cotton seed by weight.43) Cotton seed could be used to feed dairy cows or to make cotton seed oil, a common ingredient in cookies, potato chips, and other processed food products. The price of cotton seed was low, with no premiums typically offered for an organic product, even though in some places like California it was illegal to feed conventional cotton seed to livestock because of concerns about pesticide residue.44 In 2006, Walmart became the world’s largest purchaser of organic cotton. To increase and secure its supply of organic cotton, Walmart started to make long-term quantity commitments to farmers. In the past, organic cotton farming was considered relatively risky due to the variable nature of demand. If farmers were unable to find buyers for their crops, they could be forced into selling the higher-cost organic cotton at lower conventional cotton prices. Walmart made a five-year verbal commitment to buy organic cotton from farmers. “It gives them confidence and stability,” said Lucy Cindric, senior vice president and general merchandise manager of Walmart’s ladies’ wear division and captain of the textiles network. The price of conventionally grown cotton ranged from $0.35 per pound to $1.10 per pound, depending upon location and quality45 and Calahan Klein estimated that organic cotton fiber cost approximately $0.20 more per pound. Processors also commanded a premium because production lines had to be dedicated to organic processing (or be shut down and thoroughly cleaned after handling conventional cotton),46 which Calahan Klein estimated could add an additional 5 percent to the cost of a garment. For these reasons, Walmart expected to pay Walmart’s Sustainability Strategy (A) OIT-71A p. 19 slightly more...
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