OVERVIEW OF THE COTTON SECTOR IN KENYA Head: Fibre Crops Directorate Anthony Muriithi Head: Fibre Crops Directorate ACCRA,GHANA

Main Growing Areas Rift Valley Irrigated production Western Nyanza LEGEND Irrigated production Rain fed production Nyanza

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 Intervention s High input costs (mainly pesticides at 35% to 57%) -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 Intervention Inefficient technology -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 by-products value addition -Collapse Farmer ginneries -Inadequate working capital and weak management of farmer owned ginneries -Promote PPP to revive farmer owned facilities -Enhance capacity through application of CAP 490 of the amended cooperative Act, 2004 Delay in payment for lint

Interventions – Textile and Apparel Manufacturing Status Intervention High cost of manufacturing, particularly from high power and labour cost -Revise tariff lines on power for the sector 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 Intervention Inadequate skilled manpower– Expatriates Affirmative action to build local capacity. PPP High rate of interest Incentives like government guarantees on borrowed capital for modernization -Programs with Development partners Inadequate cotton from within the country (quantity, quality, consistency and price) Forward contracts and strengthen quality control Missing links and disproportionate capacities across the chain forward contracts

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