Home » Blockchain » Blockchain in Cotton Value Chain: Enhance Sustainability

Blockchain in Cotton is one of the most utilized fabrics in the world due to its characteristics, nature, and cost. Cotton fibres help in manufacturing an extensive variety of fabrics including lightweight laces to heavy velveteen. Advancements in cotton technology have helped in the development of stain, water, and dew-resistant cotton. 

However, to achieve the standards, growers use a lot of pesticides and fertilizers on high-yielding genetically engineered plants. The crop pollutes the environment, and the finished goods are chemical-rich and may cause allergic reactions on the skin. Cotton makes up just 2.5 per cent of all cultivated land worldwide, but it uses 10–16 per cent of all pesticides used worldwide, more than any other major crop, according to the Organic Trade Association in 2014. As a result, organic cotton has gained importance in the worldwide textile, garment, and fashion industries.

The cotton market is estimated to be at nearly a CAGR of 4.1% from 2022 to 2027. However, cotton is difficult to trace because it’s an international commodity and the supply chain is long and complex. The supply chain typically involves 6 to 7 players between fiber and retail. Hence, cotton traceability lacks transparency and visibility. However, traceability is important because it helps track the origin of the product and its impact on the environment and society. So, how can Blockchain technology improve the traceability in the cotton value chain? 

The below blog covers what are the currency challenges faced by the cotton chain, and how Blockchain-based cotton supply chain traceability is eliminating these issues. 

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Challenges in the Cotton Value Chain

  • Historical Status Determination: Numerous stages and procedures within the cotton supply chain have given rise to a multitude of issues about the quality and sustainability of cotton production. Both organizations and customers seek to ascertain the origin and quality of their cotton. However, tracing such information in a complex supply chain poses a formidable challenge, impeding efforts for sustainable improvements. Specifically, in the spinning mill, various types of cotton are blended to achieve the desired quality, making it difficult to accurately trace their specific origins. Consequently, the origins of products and the conditions under which they are produced cannot be effectively determined.

  • Farming Practices: The average global water footprint of seed cotton amounts to 3.644 cubic metrics per ton, indicating substantial water usage and pollution levels. Additionally, the excessive and inappropriate application of pesticides and fertilizers exacerbates water pollution, greenhouse gas emissions, and soil fertility depletion, thereby posing risks to human health. Cotton cultivation also contributes to soil erosion, leading to the loss of soil biodiversity.

  • Unethical Labor Practices: Certain countries continue to employ child labor and maintain hazardous working conditions, lacking ethical labor practices and fair trade standards.

  • Market Uncertainty For Farmers: A significant number of cotton farmers struggle to subsist below the poverty line, unable to meet their basic needs. Moreover, they face significant debt burdens due to high input costs. The market for farmers remains uncertain due to price volatility and government subsidies.

  • Fraud And Quality Dilution: Unscrupulous producers engage in the adulteration of cotton varieties, compromising their purity and original quality. Mislabeling of brands is prevalent in certain countries.

  • Climate Impact: Extreme weather events and carbon emissions have adverse effects on cotton yield. Genetically modified organisms (GMOs) are utilized in 66% of total cotton production, raising concerns about seed diversity and ecological balance.

Blockchain-Based Cotton Supply Chain Traceability

Blockchain-Based Cotton Supply Chain Traceability

Blockchain can assist in organic cotton traceability to its origin by accurately handling information, which is sourced by utilizing sensors and IoT. Through this, the movement of organic cotton can be traced back to as early as the time when the cotton was harvested on the farm and put into bags.  

The commendable application of blockchain technology in tracing organic cotton demonstrates the recognition deserved by organic cotton farmers and their hard work. This implementation enables others to adopt genuine organic products and experience their advantages. Frequently, people struggle to acknowledge the worth of organic goods due to concerns about their authenticity.

Moreover, Blockchain Serves as an effective tool in preventing bio-fraud, allowing consumers to access verified garments and textile items. It is inherent in human nature to prefer products with a known and reliable origin, thereby promoting their purchase certainty.

Advantages of Blockchain in Cotton Supply Chain

  1. Validation and Showcase of Product Claims: Brands can authenticate their product claims and effectively present them to consumers.
  2. Building Consumer Trust: The narrative of the entire process from farming to fiber engages consumers and fosters trust in the brands.
  3. Improved Yields and Market Reach for Farmers: Farmers gain access to valuable agronomy advice, resulting in increased crop yields and improved market opportunities.
  4. Productivity Enhancement and Cost Reduction: The digitalization of the supply chain leads to higher productivity levels and reduced costs.
  5. Ensuring Integrity in the Supply Chain: The use of unchangeable digital ledgers guarantees a single source of truth, preventing fraud and maintaining product quality throughout the supply chain.
  6. Mutual Trust and Regulatory Compliance: The collaborative nature of shared platforms fosters mutual trust among stakeholders and enables thorough data auditing for regulatory compliance.

Future Takeaway

Blockchain, a distributed ledger operating without a central authority, enables the creation of a verifiable and traceable decentralized ledger of transactions. These unique features have led to extensive exploration of blockchain primarily in the traceability sector.

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