In 1994, as a young boy growing up in Siaya, western Kenya, I used to see a truck from Kisumu Cotton Mills (Kicomi) — then the region’s only ginnery — drive into our school field every Monday, to collect cotton from farmers.

Cotton was then a valued cash crop that sustained thousands of families in the area. But in about four years, the truck stopped coming. And so did the farmers. They said it was no longer a viable crop. My grandfather, a cotton farmer then, abandoned the crop and switched to growing maize. Many of his peers did the same.

About a decade previously, in 1985, cotton production in East Africa was at its peak, with Kenya producing about 100,000 bales annually. Tanzania and Uganda were the regional powerhouses in the sector, producing 700,000 and 400,000 bales respectively.

Today, the cotton industry is still troubled, with Kenya managing to grow a meagre 25,000 bales as at 2014. The other two East African countries have also recorded a more than two-third drop in cotton production as textile mills and ginneries have either closed shop or have been run down.

Sector players blame the industry’s poor performance on weak farmer organisations, high costs of production, inadequate quality inputs and over-reliance on rain-fed production.

The acting chief executive officer of Kenya’s Cotton Development Authority (CODA), Antony Mureithi said that due to the challenges facing the sector, the country is yet to exploit its full potential for cotton production.

“We can produce over 300,000 bales of cotton lint but are doing just 25,000,” said Mr Mureithi.

During the cotton boom in the late 1970s and 1980s, the government supported the industry through the Cotton Board of Kenya, which had an organised marketing system that saw farmers get paid promptly. The board invested heavily in factories such as Raymonds and Rift Valley Textiles (Rivatex) in Eldoret as well as Kicomi.

In 1991, when the textile market was liberalised, the Cotton Board lost its clout and cheap secondhand clothes began crippling the industry. With time, all the textile firms closed down.

However, a new Industrialisation Policy that seeks to outlaw the importation of used clothes and shoes could boost the region’s textile and leather industries. Last week, the five regional presidents, meeting in Arusha for the 17th session of the East African Community Heads of State Summit, adopted the Industrialisation Policy, after which individual countries are expected to domesticate it.

“This means the region, like other developing countries, is ready to transition into an industrial bloc through a higher level of production and manufacturing practices,” said Betty Maina, Principal Secretary in Kenya’s Ministry of EAC. “It will increase access to locally manufactured products and create jobs.”

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At the local level, Kisumu Governor Jack Ranguma and his Siaya counterpart Cornel Rasanga have put the revival of the cotton sector at the top of the agenda during their mandate that ends next year when Kenya holds its general election.

Two years ago, Mr Ranguma said that a legal battle over the land ownership where Kicomi lies is the biggest obstacle to reviving the firm.

“We had planned to revive all factories that had stalled, but the investor has moved to court seeking orders to block the move,” said Mr Ranguma.

Started in 1965 as a joint venture between Kenyan and Indian businessmen, Kicomi was the country’s first textile mill. However, the rise in oil prices in 1974 led to a spike in production costs. The collapse of the East African Community in 1977 compounded Kicomi’s problems, shrinking its exports to the region, as the Tanzania and Uganda markets became tightly controlled. In 1982, the firm collapsed and went into receivership.

Then president Daniel arap Moi intervened in a bid to save jobs and the government’s investment, directing various state banks to offer Kicomi credit. It was turned into a parastatal and returned to profitability between 1985 and 1987. But the liberalisation of the textiles market that led to an influx of cheap secondhand clothes imports famously known as mitumba hit the firm hard. Kicomi defaulted on its loans and was placed in receivership for the second time in 1991.

PricewaterhouseCoopers (PwC), which was appointed Kicomi’s receiver manager, sold it to one, Rumi Singh for an undisclosed fee in 1993. But Mr Singh only operated the firm for five years before it ground to a halt in 1999. In a 2009 interview with Business Daily, Mr Singh said that the mill could not operate due to competition from mitumba.

Members of the Muluanda cotton ginnery in Busia County, western Kenya. Sector players blame the industry’s poor performance on weak farmer organisations, high costs of production, inadequate quality inputs and over-reliance on rain-fed production. PHOTO | TOM OTIENO

Cheap imports

“It is true that we are down because of competition from cheap imported clothes and the lack of raw materials from the local market,” said Mr Singh.

Between 2005 and 2009, the Kenyan government, together with the investor said it had injected $93.5 million into the revival of the company and a further $15 million from CODA in cotton farmers within the Nyanza and Western region.

In 2014, the then Industrialisation principal secretary Dr Wilson Songa said that he would sit with the directors of Kicomi and present a proposal with the aim of reviving the ginnery. Nothing came out of this.

Kellen Njue, CODA head of legal affairs, said that two years ago, Kenya repealed the Cotton Act, effectively setting the stage for the sector’s revival.

“Also under the new Crops Act, a Commodities Fund was established, through which farmers can access affordable credit and advances,” said Ms Njue.

Already, there are pilot projects in Bura in the Coast region, Kitui in lower Eastern and another one is expected in Ahero in the west, where farmers will get high yielding seeds from.

“We have established a system for production of certified seeds under irrigation in the Bura project and we expect to cover other regions of the country in the next few years,” said Mr Mureithi.

According to the Food and Agriculture Organisation, Kenya’s ginnery industry is operating at 14 per cent of its capacity due to the reduced supply of cotton. The country boasts 52 textile mills, some of which are also spinners, and more than 110 large-scale garment manufacturers, with almost all of them importing their raw materials from the region.

Moses Nthumbi, a researcher and former manager at Export Processing Zone said that it is still possible for the government to revive the cotton industry in the early 1980s that was the leading manufacturing activity in Kenya.

“Here we have an industry that employed close to quarter a million people. The new Crop Act, the formation of the textile city and other initiatives should revive this sector,” said Mr Nthumbi.

Uganda is now the region’s largest cotton producer and Kenya’s biggest supplier of the commodity, with an expected average of 150,000 bales produced last year, up from 100,000 in 2014.

Jolly Sabune, managing director of Uganda’s Cotton Development Organisation, said that the rise in output was due to good weather and stable global prices.

“We saw a revival of morale in farmers due to the good prices in the 2014 season. We expect this output growth to continue this year because the weather has been favourable,” said Ms Sabune.

Uganda’s cotton production is largely small scale and is weather-dependent, with the 2012-13 season severely affected by flooding that saw the output drop to below 90,000 bales.

In November, Tanzania, now the regions second largest cotton producer said that it expected 50,000 bales of cotton in 2015/16 season.

Tanzania Cotton Board director general, Gabriel Mwalo, said that good weather, and the timely planting season were the reasons for the expected good harvest.

In 2014, the country produced close to 30,000 bales, down from an expected 36,000 bales due to flooding and erratic weather.

“We owe this rise in production to contract farming which has been boosted by good prices. The ginners and buyers complete the cycle through supply of inputs and guaranteeing the market for the produce,” said Mr Mwalo.

In 2007, in an effort to revive the cotton sector in Tanzania, the board engaged several farmers and ginners in a pilot contract farming project in the west of the country, but it failed.