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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