From tea, Ruto moves to cotton

August 12, 2008
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, NAIROBI, August 12- The government has moved to revive the cotton sector following the announcement that it would commit Sh60 million in the development of cotton seed.

Agriculture Minister William Ruto told a media briefing Tuesday that the Kenya Agricultural Research Institute (KARI) would undertake the project with the view to ultimately produce the six thousand tonnes of seeds required by cotton farmers.

He revealed that in 2007, Sh50 million had been used to develop and distribute cotton seeds to farmers and that he expected more to be spent in 2009 in a bid to boost production.

Sh500 million would also be pumped into the bulk purchase of pesticides, according to the Minister.

Kenya currently produces 45, 000 bails of cotton per year against a potential of 260, 000 bails.

Cotton farming almost collapsed in 1991 following the liberalization of the sector. The near collapse of the industry was largely blamed on the lack of hybrid seeds which forced the farmers to recycle seeds resulting in low yields.

“We believe that it’s possible to increase the yields by four folds if they (farmers) use the correct seeds,” Ruto maintained.

A meeting between Cotton Development Authority, the Cotton Secretariat and all the suppliers had been slated in the coming weeks to work out the modalities of how to make bulk purchase so as to cut down on costs and to also ensure that the application is made on time in order to boost the yields.

Ruto said they were in discussions with several commercial banks to work out how they can provide low interest credit to the farmers.

“The government is going to put in a credit guarantee to one of the financial institutions to be identified to expressly lend to cotton farmers at low interest,” the minister added.

The government has a similar arrangement with Equity bank for cereals farmers.

At the same time, he said the government would provide price guarantees for the growers by providing a market for their produce which would cushion them from price fluctuations, which are often manipulated by ginneries keen on making quick profits.

The current price per kilo is between Sh24 and Sh26.

“We believe that price should be enhanced to about Sh30 but it will depend on the negotiations that will go into what are the production costs,” Ruto explained.

In anticipation of increased production, Ruto revealed that the African Growth and Opportunity Act (AGOA) Agreements would be reviewed to allow for local raw materials such as cotton to be used in the Export Processing Zones (EPZ).

“The Ministry of Trade is leading those negotiation but we will keep you abreast once we have those details,” he added.

At the press conference, Ruto directed the Cotton Sector Secretariat that involves various ministries and the Cotton Development Authority to change the current legislation that combines the regulatory and management functions of the Authority which complicates its governance issues.

He also disclosed that the Secretariat would conduct an audit of all 22 ginneries, the status of their technology and their financial viability.

“We should not be giving away licenses to people who do not have the capacity to do what they claim because they became areas of extortions.
 
The Secretariat is expected to submit a report on the same on September 15.

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