Supporting the Aid by Trade Foundation Through the Mass Balance System

Mass Balance is a sourcing method that allows verified and non-verified raw materials to be mixed. The volume of verified raw materials used is precisely recorded and tracked so that the corresponding quantities remain traceable throughout the supply chain. This system makes it possible to use existing supply chains and production infrastructure efficiently and without the need to build separate processing lines for certified-origin materials. This allows sustainably sourced raw materials to be integrated into global supply chains more easily and at a greater scale.

Each product supports African small-scale farmers and promotes responsible farming practices. For as many small-scale farmers as possible to benefit from the demand for CmiA cotton and from reinvested licensing revenue, we use two chain of custody systems for the integration and traceability of CmiA cotton in the supply chain: Segregation and Mass Balance (MB).

In the Mass Balance system, CmiA cotton can be mixed with cotton of other origins in the spinning mill. This is similar to green power, where all produced power (green and conventional) flows into the same network.

For the processing stage in the spinning mill, the key factor is that the purchased quantity of CmiA cotton and the quantity of yarn sold as CmiA must balance out, like on a scale. This means that only as much CmiA yarn can be sold as CmiA cotton was purchased. In other words, the mass is balanced.

CmiA-verified cotton is strictly separated from other cotton until arriving at the spinning mill. This means that CmiA cotton can be traced back from the spinning mill to the ginneries without any gaps.

The Mass Balance principle makes it possible to scale more sustainable sourcing efficiently, as this approach is more cost-effective for companies than building a fully separate supply chain.

Cotton made in Africa’s focus is on the people at the very start of the value chain: the small-scale farmers in Africa who grow the cotton with their families. We support them in cultivating cotton in a resource-efficient manner while increasing their yields. In keeping with the principle of help for self-help, we enable them to improve their living and working conditions themselves.

This approach relies on the revenue earned from retail companies that procure CmiA cotton for their textile products. It is clear that, the more CmiA-verified cotton is used in commerce, the higher licensing revenue is. Moreover, the higher licensing revenue is, the more money can be reinvested in Africa—and the more small-scale farmers can benefit. Each licensee therefore plays a part in expanding support for small-scale farmers and improving farming practices with regard to cotton cultivation.

It is our goal to gain as many licensees as possible and to increase demand for CmiA cotton. The Mass Balance system offers a good route to this goal by enabling us to make responsibly grown cotton easier to access and to incorporate into the value chain in a cost-neutral and more flexible manner. Through the Mass Balance system, we make it easier for brands and retailers to procure responsibly produced cotton. At the same time, we are increasing the percentage of small-scale farmers who can improve their living conditions by selling CmiA cotton. Everyone benefits.

Because Mass Balance (MB) sourcing makes verified cotton more economically attractive for companies, demand increases as a result. Increased demand means that more African small-scale farmers can participate in the Aid by Trade Foundation’s CmiA programme and thereby benefit from its social and economic advantages. For farmers, what matters most is being able to sell their cotton as verified. Whether that cotton ultimately ends up in one T-shirt or another makes no real difference to their livelihoods.

CmiA Mass Balance yarns and the textiles produced from them do not necessarily contain physically traceable CmiA cotton. They can also consist of a mixture of CmiA-verified cotton and other cotton, and it is even possible for CmiA MB yarns to contain no CmiA-verified cotton whatsoever. The key is for the spinning mill to maintain the balance between the CmiA MB yarns it sells and the CmiA-verified cotton it purchases. As such, the number of products to which a retailer can affix the AbTF logo must correspond to the quantity of CmiA-verified cotton purchased and processed through the retailer’s supply chain.

Although this may appear confusing at first glance, it obeys a logical principle: the licensing fees paid by retailers are calculated based on the equivalent amount of CmiA cotton corresponding to the volume of products claimed as CmiA MB products. Under the Mass Balance system, this is independent of whether the physical CmiA cotton is actually present in the final product. It makes no difference to the small-scale farmers in Africa which system is used further along the chain. What matters to them is, firstly, that somebody in the CmiA supply chain purchases CmiA-verified cotton and processes it into textiles and, secondly, that retailers and brands pay licensing fees, which the Aid by Trade Foundation reinvests in cotton-growing regions in Africa South of the Sahara.

The Mass Balance system is common in the agricultural commodities sector and frequently used, for instance, for cocoa, sugar, fruit juice, and tea.

To measure and monitor quantities, Cotton made in Africa® developed its own tracking system, the Sustainable Cotton Tracker (SCOT). Spinning mills regularly record all CmiA MB yarn sales to CmiA-registered partners in this system and confirm purchases of CmiA-verified cotton from CmiA-nominated cotton traders. Their regular reports on sales and purchases ensure that the mass balance is maintained. Once a spinning mill has used up its digital volume of CmiA cotton, meaning that it has sold as much CmiA Mass Balance yarn as it has purchased CmiA cotton, the mill must purchase more CmiA cotton. When a mill’s allotment of CmiA cotton is at zero, no yarn transactions can be made through the SCOT system.

All other partners in the textile production chain are also included in the CmiA tracking system: cotton traders, fabric and textile producers, importers, and retailers – all the CmiA licensees. By recording the cotton percentage at each production level, the SCOT tracking system offers a certain level of transparency throughout the supply chain, but it cannot prove the origin of the cotton used in a specific garment. Additionally, assigning purchase quantities to sales allows the real demand for CmiA cotton to be calculated on an ongoing basis.

Each and every person who buys a CmiA-labelled product is making a direct contribution to supporting African small-scale farmers and their families and to promoting responsible cotton cultivation.

Products produced through the Mass Balance system are labelled with “Aid by Trade Foundation” logo.