The origins, functioning and business model impact of the Sustainable Cotton Cluster in South Africa

Abstract

Cotton is produced in several countries globally for its economic benefit predominantly to manufacture a wide variety of fabrics suitable for wearing apparel, home furnishings, and for other industrial applications. However, over the past two decades, the production of cotton in South Africa has declined from over 25,000 metric tonnes in the 2004/2005 season to only about 5,000 metric tonnes in 2013/2014 a staggering 80% drop in yields. Farmers had switched to producing alternative crops because cotton was no longer profitable and was susceptible to high fluctuations in world cotton prices. Providentially, the formation of the Sustainable Cotton Cluster in the South African cotton value chain turned around the production of cotton locally and significant increase in yields were realised after the 2013/2014 season. This study investigated the origins, functioning and impact of the Sustainable Cotton Cluster in the revival of the cotton industry in South Africa. The study employed a qualitative research design and more specifically a case study approach to investigate in greater depth the understandings and/or perspectives on origins, functioning and impact of Sustainable Cotton Cluster in South Africa. It specifically applied thematic analysis for the concise explanations and understanding of the complex issues that have emerged on the existence of the cotton cluster.

Results of the research showed that the cluster was formed mainly to revive the competitiveness of the cotton industry, to serve local market, to overcome high production costs, and to close gaps on information flow. Fundamentally, cotton clusters eliminated information asymmetries across the cotton production value chain and aided the establishment of a profitable business venture for both small-scale and large-scale cotton producers.