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KENYA’S COTTON SUB-SECTOR REFORMS HIGH GROWTH POTENTIAL PRIVATE SECTOR PERSPECTIVE By Fred Kong’ong’o African Cotton & Textile Industries Federation (ACTIF) Secretariat COTTON IN AFRICA SEMINAR Ngurdoto Mountain Lodge, Arusha 7TH SEPTEMBER, 2007 Cotton-to-Garment Market and Institutional Support Structure Cotton Growers Association Smallholder Cotton Farmers Kenya Agricultural Research Institute (KARI) Kenya Cotton Ginners Association (KCGA) Ginneries Imported lint cotton Kenya Association of Manufacturers (KAM) – Spinners Integrated textile sector Mills Kenya Apparel Manufacturer Exporters Association (KAMEA) Imported fabric Textile Mfs Garment/Apparel Local MUB EPZ Second Hand Garments Local Market Export Market Dotted line (------) indicates a weak linkage, TM lack of organization, and areas where technical Source: Global Development Solutions, LLC support is required to help strengthen linkages along the supply chain. Kenya’s Cotton Sector Profile Land available for cotton production Rain-fed production 350,000 ha Irrigated production 34,500 ha Actual land currently under production 40,000 ha Capacity utilization 10.4% Production level Rain-fed production (potential) 260,000 bales (lint) Irrigated production (potential) 108,000 bales (lint) Actual production (2005) 30,000 bales (lint) Realized production potential 8.2% Kenya’s Ginning Sector Profile Number of ginneries 24 Cotton Board of Kenya 1 Ginning outturn (GOT) Cooperatives 6 Private investors 17 Potential 43% Ginning capacity Actual Number of gins 327 33% Cotton purchasing method Total ginning capacity 132.375 tons Technology in use Roller technology Direct purchase from farmers 77% Average capacity utilization 24% Intermediary/brokers 23% Reforms Government - Private sector Donor led Government •Most Gins bought by private sector •Struggled to survive • Established cotton Authority •Reforms currently supported and • All stakeholders represented funded by the World Bank • To regulate the sector •Provide matching grant •All supply chain stakeholders; • Research to improve seed variety Established an Apex committee •Positive results; Apex committee • BT trials on going developed cotton price formula acceptable to all • Supply seeds free, motivate farmers •Influencing policy chain Ginners initiative • Formed Association to improve competitiveness and market access • Organized- regional basis -Eastern region well organized so far Buy input and spare parts together: Economies of scale Enter contract with farmers-protect territory Organize joint training for Technicians/ farmers-reduce cost Joint marketing and export of surplus cotton Make sense in establishing price and market Utilizes www.cottonafrica.com for price/market discovery Bottom Line Needs • Is the glass half full or half empty? • Associations’ commitment to co-operate - formal • Communication & information key • Platform for information sharing • Public sector partnerships / dialogue a must • International alliances / linkages key • Institutional support paramount; still work in progress • Quality lint and honouring of contracts bottom line WHAT DO WE SAY ABOUT KENYA’S COTTON SUB-SECTOR THE GLASS IS HALF FULL…. Regional & Global Cooperation ~ the key to market development and enhancing competitiveness - directly linked to the industry’s ability & desire to organise itself!
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