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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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