Download OVERVIEW OF THE COTTON SECTOR IN KENYA Anthony Muriithi

OVERVIEW OF THE COTTON SECTOR
IN KENYA
Anthony Muriithi
Head: Fibre Crops Directorate
ACCRA,GHANA
Main Growing Areas
ETHIOPIA
UGANDA
Western
Rift Valley
SOMALIA
Baringo
Meru North
LEGEND
Tharaka
Kisumu
Mbeere
Nyanza
Irrigated production
Rain fed production
Mwingi
Nairobi
Machakos
Kitui
Makueni
Tana River
Lamu
TANZANIA
Malindi
Taita
Taveta
Mombasa
Background: Cotton lint Production
Historical Background
• Introduced in 2002 cotton is among the first
cash crops in Kenya
• 1932 Colonial Government enacted the Kenya
Cotton Ordinance.
• 1950: East Africa Cotton Research established
at Msabaha
• 1950 – 1960: Cotton was principal export at
the port of Mombasa
Historical Background(contd)
• 1955: Cotton Act enacted establishing the
Cotton Lint and Seed Marketing Board(CLSMB)
to promote Cotton production and Marketing
• 1963:Cotton spread to western Kenya, KICOMI
opened and thrived.
• 1977 – 1978:Colapse of East African
Community and instability in the region
• Mid 1980’s: cotton was leading manufacturing
activity in terms of size and employment
Historical Background(contd)
• Structural Adjustment Programmes(SAP’s) in
mid 1980’s , collapse of the cotton industry
due to influx of cheaper textiles and Second
hand clothes(Mitumba).
• 1991: Collapse of Cotton Board of Kenya due
to indebtness
• 2000: Preferential trade with EU and USA
Structure of Kenya Cotton Value Chain
The sub-sector is comprised of following:
• Cotton production
• Ginning
• Spinning
• Weaving
• Garment and non apparels making
• Peripheral industries (oil, animal feed
manufacture, sanitary wares)
Achievements
• Implementation of Trade rules (LN 405 of 2007)
- Seed
-Production
-Primary processing (ginning)
-Marketing (seed cotton)
• Improvement of price from Kshs 20.00 in 2005 to Kshs
42.00 in 2015
-From 2010 seed cotton price pegged to global market
• Seed multiplication with Kenya Seed company and
Kenya Agricultural Research Institute .
• New private varieties at advanced stage towards
introduction
Quality assurance for local lint
To address concern on quality and consistency
of demanded local lint by buyers and processors,
classification services being have been rolled
out from this season.
Cotton Classification
procedures developed for measuring physical attributes for cotton
that affect quality of the finished products and manufacturing
efficiency.
All bales will be tested and quality attributes will accompany bales
offered for sale
Attributes are among others: trash levels, fibre length, micronaire,
fibre strength, colour grade, maturity etc
Interventions – Production
Status
High input costs (mainly pesticides at
35% to 57%)
Intervention s
-Integrated input system ( cooperative approach)
-Implement crops Act 2013
Poor farm yields from:
-Low adoption of technology
-Lack of certified seeds
-New varieties, Bt cotton, Certified seed
-Incentives to catalyze Public Private Partnerships
Marketing :
-Poor and unpredictable prices
-High cost of capital leading to delayed
and irregular payments to farmers
-Collapse of cooperatives
-Establish a price stabilization fund or a revolving
fund
-Contract farming
Interventions – Ginning
Status
Inefficient technology
Intervention
-Incentives or appropriate long term credit schemes for
integrated ginning investments. And PPP
-Consider ginning sector under the implementation of SME
parks
High cost of power
-Revise tariff lines on power for the sub sector (billing)
High operational costs
-Invest in energy efficient solutions & integrate into byproducts value addition
-Collapse Farmer ginneries -Promote PPP to revive farmer owned facilities
-Inadequate working capital -Enhance capacity through application of CAP 490 of the
and weak management of amended cooperative Act, 2004
farmer owned ginneries
Delay in payment for lint
Interventions – Textile and Apparel Manufacturing
Status
Intervention
High cost of manufacturing, particularly -Revise tariff lines on power for the sector
from high power and labour cost
Usage of obsolete technology
-Incentives to investments (investigate
rebates and other options to investors).
Threat from cheap imports (new and used) -Appropriate tax to level competition
-Strengthen surveillance for compliance to
standards and taxes
-Promote local consumption
-Introduce incentives for buy Kenya, build
Kenya brand
Interventions – Textile and Apparel Manufacturing
Status
Inadequate
Intervention
skilled manpower– Affirmative action to build local capacity.
Expatriates
PPP
High rate of interest
Incentives like government guarantees on
borrowed capital for modernization
-Programs with Development partners
Inadequate cotton from within the Forward contracts and strengthen quality
country
(quantity,
quality, control
consistency and price)
Missing links and disproportionate forward contracts
capacities across the chain
Role of Women in Enhancing Cotton Competitiveness
Women are key players in cotton value chain
Provide bulk of labour in farms through family
and salaried labour
Comprise of two thirds labour force in
ginneries
Form about 70% of workers in spinning and
textile mills and are key players in the fashion
industry
Hand Spinning
Handwoven garments by women
groups
A lady farmer scouting for pests
Field training to women cotton
farmers
A hand weaving women group
Thank you