Sunday, March 20, 2011

Cotton growers rejoice on doubling of farm gate prices

It was a rejoicing moment for the cotton cultivators, as pursuant to a deal cracked between several industry players, the minimum farm gate prices, that is the price at which these farmers sell their produce, was doubled.
During a recently convened meeting between the farmers’ representatives and the ginning mill owners at Nairobi’s Kenya Agricultural Research Institute, the minimum farm gate prices for cotton were raised from last year’s Sh 32 to Sh65 per kilo of cotton seed.
Dennis Ochwada, Chairman of the industry regulator, Cotton Development Authority, said that the new minimum farm gate price has been fixed in consideration of various factors like, the global market situations, domestic production cost, and rising demand-supply gap.
He said that, after considering the factors like rising demand in the global markets and decreasing supply in some countries and export ban in others, which are likely to boost cotton prices to Sh80 per kilo this year, due to which, they decided to share this benefit with the farmers.
However the spinners decided to stay away from the meeting.
Driven by the market forces, the cotton cultivators in Western and Nyanza earned up to Sh 65 per kilo of cotton seed during last year, while earnings of the cultivators in Central, Coast and Eastern regions averaged at Sh45 per kilo.
Some of the ginners last month complained that, they are experiencing severe dearth of cotton which may compel them to cut down on production.