June to October 2022 were some of the wettest months for Pakistan, with flooding of a third of the country inflicting nearly US$15 billion in damage and an additional $15 billion in economic losses.
June to October 2022 were some of the wettest months for Pakistan in recent history, with flooding of a third of the country inflicting nearly US$15 billion in damage and an additional $15 billion in economic losses. At least 1700 lives were lost and over 2 million people were rendered homeless.[1]
The flooding was particularly damaging to Pakistan’s cotton industry and the people who depend on it for income. Up to 40% of the country’s cotton crop was destroyed.[2] Damage was so severe that farm workers waded through flood waters, braving snakes, and mosquitoes, to find individual surviving stalks. As a 14-year-old girl told the New York Times, they had no choice because, “it was our only source of livelihood.”[3]
Without a crop to reap, many farmers will not be able to pay back the loans they took to plant the harvest. When harvests are destroyed by flooding or other natural disasters, farmers struggle to pay back loans. The debt ties a farmer and the farmer’s family to the landlord. “Our life goes like that — sinking into debt, not earning the money to pay it back, and then we do it again,” another farmer explained.[4]
According to a Post Disaster Needs Assessment [5], led by Pakistan’s Ministry of Planning, Development and Special Initiatives, the crisis will have lasting impact on lives and livelihoods of the most vulnerable groups, particularly agricultural workers, through a loss of household income, assets, rising food prices and outbreak of illness.[6]
Background on Cotton Production
Pakistan is the fifth largest producer of cotton in the world. In 2021, Pakistan exported $3.5 billion worth of cotton, making up around 6 percent of the commodity’s global supply. Cotton production is an integral part of Pakistan’s national and rural economy, employing 1.6 million farmers, 81% of them smallholder and family-based farms. It also serves as a major input to the textile sector, the largest industrial sector of the country, employing 40% of the country’s labor force.[7] Despite its importance to the economy, cotton production has been on the decline in the country for many years due to pest and disease, natural disasters, and decreasing economic incentives among farmers to grow the crop.[8] A recent study found that smallholders face the most vulnerable economic conditions stemming from a lack of access to extension services, expensive farm equipment, and difficulty in accessing credit.[9] The lack of formal agricultural credit forces smallholders to purchase inputs at expensive rates from informal credit sources, which can leave them indebted.
Debt Bondage in Cotton Sector
Globally, it’s estimated that 20% of all forced labor cases are attributable to debt bondage,[10] situations in which “people are coerced to work against their will to repay a debt with an employer or recruiter, or when debt is manipulated to compel people to perform work tasks or accept work conditions that they would otherwise refuse.” In agriculture, debt bondage frequently occurs when small-scale farmers – like most cotton growers in Pakistan – accept loans from landlords for seeds and fertilizer to plant. In exchange, they agree to cultivate the landlord’s fields while keeping a small cut for themselves, a portion of which goes towards repaying the loan.
Despite the existence of numerous labor laws and Pakistan’s adoption of the International Labor Organization’s forced labor conventions (C. 105[11] and 29[12]), debt bondage is a common form of forced labor in Pakistan, with some experts estimating that 4.5 million people live in it.[13]
It’s easy to see how shocks like the recent floods can increase the risk of debt bondage or intensify existing debt bondage. The farmers who spoke with the New York Times shared that, having lost a harvest, they would need to increase their debts to make the next planting season. “I don’t like this life, but we are stuck in it,” one farmer told the Times, referring to the cycle of debt, “We are slaves, that is clear.”[14]
Responses to Address Poverty Among Cotton Farmers
Through sustainable smallholder farmer support to increase cotton yields, quality, and access to markets, organizations such as Pakistan’s Central Cotton Research Institute (PCCRI), the World Wildlife Fund Pakistan, and the Better Cotton Institute in Pakistan are amongst those offering support, improving the livelihoods of cotton farmers, their families’, and communities, including during disaster periods. A few of these interventions include CABI’s Farmer Field School program; PCCRI’s integrated production and labor monitoring program; WWF’s recent focus on holistic approaches addressing the well-being of farmer family units and communities; and BCI’s Better Cotton Standard System (measuring decent work, crop protection, water, soil, biodiversity, fiber quality, and management systems). Despite these interventions, interviews with WWF, BCI and CABI revealed that cotton farmers require a premium payment as an incentive to grow higher quality cotton in increased yields. The low earnings of smallholder cotton farmers are a barrier to both increased quality cotton production and their increased resilience from economic and natural disaster shocks.
Responses to Floods
The Post Disaster Needs Assessment stresses both short and long-term rehabilitation needs; in the short term, targeted social assistance and emergency health programs, shelter, and strategies to revitalize local economic activities, particularly in the agriculture sector should be deployed.[15] To buffer against future shocks, experts claim that the country needs to invest in more climate-resilient infrastructure to adapt to climate change.
While CABI offered additional support to farmers affected by the floods through connections to government social services, seed support and food and shelter to the most vulnerable, Dr. Bajwa, CABI’s Asia’s Senior Regional Director, wants the cotton industry to help develop better support mechanisms to help cotton farmers mitigate against environmental risks, including flooding. WWF’s three prong relief strategy includes developing rehabilitation plans with farmer beneficiaries for the next cotton season; offering additional support to their affected employees; and developing long-term rehabilitation plans.
While there is no way to make up for the losses, Asad Imran, the Director of Food and Markets for WWF Pakistan, reiterated the need for long term investments in the social, economic, and environmental resilience of the affected communities. Hina Fouiza, the director of BCI Pakistan has also focused on addressing the short-term livelihood needs of cotton farmers through collaboration with local partners to find them alternative sources of employment and provide seeds for the next harvest. She is also reviewing long-term solutions, such as crop insurance for farmers.
How can traceability help?
Ultimately, efforts to secure the livelihood of farmers can be greatly aided by improved labor rights due diligence supported by a trustworthy tracing methodology, such as the one being developed as the Global Trace Protocol. Accountability is necessary to shift the market towards ethical, legal, and contractual obligations and away from debt bondage, child labor, and other forms of exploitation that can be exacerbated by natural disasters. That accountability starts with the transparency provided when goods can be traced back to the source, including farms that may use exploitative practices. In addition, tracing can give a more accurate picture of where cotton and other goods are produced, allowing the industry to better predict where losses may occur in natural disasters and to better target safeguards and responses like those previously shared. Traceability can be a key piece of any potential reform, with its protocols and tools improving and expanding over time.