Cotton's Renaissance: A Study in Market Innovation (review)

During the 1960s, cotton lost half of its market share to competition from synthetic fibers and cheaper foreign producers. Aware that individual and existing government efforts to manage supply could not arrest the steady demise of the cotton economy, Jacobson and Smith argue that growers, in a novel approach, increased the demand for their commodity. Over the last quarter-century, according to the authors, producers won back their market dominance through collective action to provide public goods. Growers voted to tax themselves $1 per bale of cotton produced (via a referendum authorized by the 1966 Cotton Research and Promotion Act). With that funding, Cotton Incorporated, a public- private company, engineered, according to the authors, "cotton's renaissance." Although most basic commodities had government-sanctioned agencies or boards, cotton alone had a well-funded entity that functioned as a problem-solving coordinator for all links in the long chain of production and distribution from fields to families, each stage of which involved separate owners and interests. To rebuild the fiber's market share, Cotton Incorporated launched major consumer advertising campaigns and fostered scientific, technological, and managerial improvements.

In the first three chapters of the book, Jacobson and Smith recap the familiar story of cotton production before and through World War II. By the mid-1950s, U.S. cotton production faced fierce competition from cotton production abroad and from man-made fibers domestically. In 1960, in response to the synthetic challenge, some growers on the National Cotton Council, a trade association and political lobby, formed the Cotton Producers Institute ( CPI) that was funded by a voluntary fee (Chapter 4). In 1967, free-riding problems led CPI trustees to obtain a government-administered assessment of $1 per bale that included a refund provision, which became mandatory in 1991 (interestingly, cotton was the only crop with federal marketing orders to include a refund option). Unfortunately, the authors offer no data regarding refunds other than to note that returned fees corresponded to the voting pattern of the initial assessment referendum. Refunds were eliminated when the assessment became mandatory in 1991.

The CPI evolved into Cotton Incorporated in 1970, under the direction of Dukes Wooter, a magazine advertising executive, who moved the headquarters of the organization from Memphis to New York City (Chapter 5). Wooter initiated a pattern of lavish spending—for office remodeling and new buildings, entertaining at the 1976 Olympic Winter Games and at the Metropolitan Museum of Art, and ad campaigns—viewed by some growers and officials at the USDA as an extravagant and questionable use of mandatory assessments. The growers' board of directors, however, supported such expenditures as important for cotton's future. The New York marketing department designed the "Seal of Cotton," the same ubiquitous logo in use today, and launched many advertising campaigns (recall "the fabric of our lives") to "create consumption" (Chapter 6).

To regain market share, cotton would have to become as reliable for textile mills and as convenient for consumers as synthetic fibers. Hence, the Memphis laboratories were relocated to North Carolina's Research Triangle and staffed with a first-rate research team. In "Managing the Mill," Chapter 7, the authors explain how the obstacles of processing cotton were overcome. Natural variations in cotton fiber's length, strength, fineness, and cleanliness caused havoc in the mass production of textiles. In the end, computer grading of cotton for specific fiber characteristics allowed the barcoding of shipments to mills according to precise technical requirements. Improved fabric stability was accomplished by developing synthetic-cotton blends.

Cotton Incorporated functioned as an unprecedented clearinghouse for disseminating scientific information and practical information. Discussing the many difficulties of maintaining cotton's competitiveness and quality while completely mechanizing production, the authors provide case studies of four solutions: modules for storing cotton between the field and the gin, boll weevil eradication programs, de-linting...