We are working to improve sustainability in nine key areas.
PROFITABILITY. A sustainability fundamental: profitable growers can confidently reinvest in their business and community.
Why is this a priority?
Profitability is a fundamental sustainability indicator for growers. Profitable cotton growers can invest in the technologies and practices needed to adapt to a changing environment and market. It also enables them to contribute to local communities, economies and the environment.
Our goal is for growers to have sufficient profitability to confidently re-invest in their business and community. This aligns to UN Sustainable Development Goal 8.2: achieve higher levels of economic productivity through diversification, technological upgrading and innovation.
What's the context?
Profitability can vary greatly between seasons: for example, in 2017/18 the average operating profit for cotton was $2,513/ha, and one year later it was $101/ha.
Many factors influence the profitability of cotton production. These include seasonal conditions, global cotton prices, exchange rates, yields and operating costs. While some factors are outside the control of growers, industry investments in research and innovation support higher yields, as well as lower expenditure per hectare.
What's our draft target?
We use two indicators of profitability in our PLANET.PEOPLE.PADDOCK sustainability framework: whole farm rate of return and operating profit per hectare of cotton. Our key indicator is whole farm rate of return, because just measuring the profitability of a cotton crop doesn’t provide an indication of the financial sustainability of the whole farm business.
A draft target has not been set, because each farm business will have a different view of what is an appropriate rate of return on their capital. It’s also important we don’t set a profitability target that may encourage growers to pursue short-term financial gains at the expense of long-term sustainability. Rather than set an industry target to aim for, we will report these indicators of profitability to allow individual growers to assess where they sit in relation to the industry average.
How do we support grower profitability?
Strategic plans of the Cotton Research and Development Corporation, CottonInfo and Cotton Seed Distributors have well established strategies, actions and networks to support sustained profitability.
PLANET.PEOPLE.PADDOCK is the Australian cotton industry’s sustainability framework. It has been created to guide work to:
• Set targets in the areas most important to industry and stakeholders
• Coordinate a whole-of-industry strategy to achieve these targets
• Engage effectively with stakeholders on actions and progress.
PLANET.PEOPLE.PADDOCK is not a compulsory standard or a brand. It is a framework that recognises sustainability is an integral part of doing business and provides a path for the entire industry to coordinate effort and benefit from continually improving sustainability performance.