TRALAC - Trade Law Centre

Kenya: Helping the Cotton Sector Turn Over a New Leaf

Tuesday, 27 February 2007

Source: Inter Press Service (Johannesburg)

Kenya's cotton industry, once one of the country's main foreign exchange earners, declined substantially following liberalisation of the sector in 1991.

According to a recent report by the Institute of Economic Affairs, a non-governmental body based in the Kenyan capital, Nairobi, "continued synthetic competition, diminishing world prices, introduction of cheap imports of second hand clothes and diminished cotton profitability" were amongst factors that dealt a blow both to cotton production, and the textile and clothing industries.

However, efforts are now being made to address problems bedeviling the cotton sector, including a government-led campaign under the auspices of 'Kenya Vision 2030' -- an initiative launched last year that focuses on sectors central to addressing poverty by 2030.

Since cotton does well in areas with low rainfall, it has the potential to reduce poverty in the arid and semi-arid lands which make up 80 percent of Kenya, authorities say. The crop is grown in five of the country's eight provinces.

At a meeting held in Nairobi last week, over 60 farmers from across the country, representatives of the private sector, government and non-governmental organisations also discussed challenges confronting the industry -- not least the high cost of production.

"One spends a lot of money farming, yet what you get after harvesting is very discouraging. I spend about 217 dollars in farm inputs on my half acre of land. Last year I harvested 300 kilos of cotton, which I sold for 0.3 dollars per kilo (90 dollars in total). Where is the profit?" asked Leonora Were, chairperson of West Kenya Cotton Growers.

Such difficulties have prompted certain farmers to abandon cotton, she told IPS: "When we started as a group, we were more than 2,000 farmers; now we are only 600. The rest fell out because of the difficulties in cotton growing."

According to the Cotton Board of Kenya, about 350,000 hectares in the country are suitable for cotton production and have the potential to yield an estimated 260,000 bales of lint annually. However, cotton is only being cultivated on 25,000 hectares at present, with an annual lint production of 20,000 bales.

Other farmers have tried to cut costs, in part by stopping use of pesticides and the like that are said to account for 40 percent of the total cost of producing cotton. But this, in turn, has resulted in low yields.

"The 2030 strategy needs to intervene where costs are concerned. The cost of pesticides is very high Besides, farmers in Kenya are operating without certified seeds. The strategy must address a seed certification system to ensure that farmers have access to quality seeds," Peter Kegode of TechnoServe noted. This Washington-based organisation helps poor farmers in rural areas of developing countries.

The shortage of ginneries, where seeds and dirt are removed from cotton, presents additional difficulties.

In earlier years, ginneries were owned by government. However, the onset of liberalisation saw many close down. There are presently about 24 ginneries that are privately owned, only 60 percent of which are operational.

"In most places there are no ginneries and farmers have to walk for days looking for a place to sell their cotton," David Masika, owner of Makueni Ginneries in the Eastern Province, told IPS. Ginneries that are working face high electricity costs, and problems associated with obsolete technology.

Kenya's textile and clothing industries are also in need of resuscitation.

According to the Kenya Institute for Public Policy Research and Analysis, a government body, the industries rose in prominence after independence in 1963 to become the country's second largest employer after the civil service by the1980s. This was largely due to a lack of competition from foreign firms.

Liberalisation resulted in an influx of second-hand imports that have overwhelmed the domestic market. Kenyan firms have also had to compete with cheap Chinese imports that flooded into the country, particularly after the expiry of the Multi-Fibre Agreement (MFA) in December 2004.

In effect since 1974, the MFA allowed countries to set quotas on textile imports to protect domestic textile industries. It was phased out under World Trade Organisation policies aimed at freeing up trade in textiles.

David Nalo, permanent secretary in the Ministry of Trade and Industry, maintains Kenya's textile sector can still thrive, through the African Growth and Opportunity Act (AGOA) -- a claim that some dispute.

This U.S. initiative enables 37 countries in sub-Saharan Africa to export various goods, including textiles, to the United States, duty free -- something that has seen Kenya's share of textile and garment exports to the U.S. grow over the years.

AGOA was established in 2000, and is set to expire in 2015. Sub-Saharan African countries are able to benefit from the act if they can demonstrate progress in setting up market economies, observing the rule of law and protecting intellectual property -- amongst others.



“ Latest AGOA Trade Data currently available on AGOA.info


Click here to view a sector profile of Kenya’s bilateral trade with the United States, disaggregated by total exports and imports, AGOA exports and GSP exports.


Other regularly updated trade statistics on AGOA.info include: (click each link to view)

  • AGOA-Beneficiary Countries’ AGOA and GSP Trade Aggregates

  • AGOA Trade by Industry Sector

  • Apparel Trade under AGOA’s Wearing Apparel Provisions

  • Latest Apparel Quotas under AGOA

  • Bilateral Trade Data for all AGOA-eligible countries individually.