Tuesday, Oct 24, 2017
Agriculture | Africa | Uganda

Cotton opportunities


3 years ago

Cotton Development Organization
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Mrs. Jolly Sabune

Managing Director of the Cotton Development Organization

Uganda has been making high-quality cotton for over 100 years, but still exports the majority of it as lint. The next step for Uganda’s cotton industry is value addition – by establishing a textiles industry to compete with the textiles centres of Asia, such as China, India, Pakistan and Bangladesh. This is the dream of many, including Jolly K. Sabune, Managing Director of the Cotton Development Organization (CDO). For this dream to become a reality, Uganda needs foreign investors to come and take advantage of the untapped opportunities in its white gold.

How has the cotton sector evolved in Uganda and what is the current situation of the industry?

Uganda went through civil strife from 1979 to 1986. Even after 86, the economy was not functioning. That is where we are coming from. Cotton is a seasonal crop, so the entire sector crumbled. Uganda’s cotton was introduced by our colonial partners in 1903 along with coffee, tea, and copper, to build up the economy. During war times, the farmers had no fallback, and there was no system to work in the seeds, so the sector collapsed. When the war was ending, we went from a high of about 467 thousand bales, to about 15 thousand. The sector had to be revived right from zero. Fortunately, farmers know how to grow this cotton. It is a tradition; small-scale farmers grow cotton in their farming systems. We are trying to encourage medium scale now, but because farmers of Uganda stay in family settlements, they do everything around their family holdings of land. Now, the economy has evolved over the last 20 years, so we are beginning to see some farmers with sizable lands that may go from small to medium scale. I think we will get good partners and investors who could come and partner with farmers to grow cotton.

In which areas would you like to see more partners and investors?

With the structural adjustment program under the World Bank, and the IMF, most of agricultural issues are being addressed. Coming to cotton in particular, where we have a big challenge is in value addition. Now, the farmers grow cotton, and then it is exported as lint. Heavy investment is required for processing. To attract new investment into these value addition or textiles has not been easy because we lost 30 years in war. This kind of business moved to Asia. China, India, Pakistan, Cambodia, Vietnam, Indonesia, Sri Lanka took over and grow much cotton, process it, add value, and make textiles. Our challenge is to attract investment to add value to what we produce.

If you add value locally, you can determine the price that you pay the farmer, which becomes an incentive and a good return. If you depend on the international market, the price comes down from overproduction. Farmers get confused about that, and don’t grow as much cotton as they can. When we reached near 500,000 bales in the late 60s, we had about seven spinning mills. Now we have one, which is making substantial value addition. We have someone coming in to invest, so we will have two of that size. We would like to see another 5 coming in (spinning and textile centers). We have a history of cotton in Uganda. Farmers know how to grow it in their farm systems, so as long as the price is right, and there is an off taker, then it becomes easier for government to promote cotton. It will add value, create jobs, have more economic value, and contribute to the country. The bigger gain is that we have access to the AGOA market, which will increase our trade with the US. However small we are, we will compete. We also have a regional market, which we could benefit from, but our big challenge is export. We have the cotton, the land, the farmers, good economic policies, good foreign exchange freedom; a young, trainable, English-speaking workforce that can be trained; and are inviting whoever wants to come where cotton is.

How is your institution encouraging farmers to attract investors?

The CDO is the regulator of the entire sector. It was set up in 1995, and pools together all segments of the cotton sector. So, we are the voice, but we are like the coordinating agency for all the interests of cotton. Any investor who wants to enter at whatever level, this is the fast center; we then can link them to whomever they want.

How do you feel about having partnerships with US companies?

They are welcome. Maybe we need to do more. A lot of companies may not understand Africa. A lot of people view Africa in different ways, and don’t know there are different countries. There is need to expose the American business class to understand that Uganda may be different from Congo or Tanzania, so they can come and see for themselves.

Tell us about the uniqueness of the white gold of Uganda, the 100% Ugandan Cotton.

We don’t have hybrid or genetically modified cotton. The world is now going back to natural. Uganda cotton is still very natural. We use very limited pesticides; we do not use a lot of chemicals yet, so the environment is not polluted. It is silky, fibers are maintained, and as it is handpicked, it is environmentally friendly cotton. Because of those intrinsic values –the fiber, length, strength, and color – we are in the premium type in the international market. We think it would be an added advantage to add value to cotton here.

You were saying Africa has different countries. When we had a meeting with the Minister of Trade, I asked her this question: If you had to think of something that would brand Uganda, what would it be? She said, “The sweetest pineapple in Africa”.

The sweetest pineapple, the sweetest banana, and very conducive weather throughout the year. The only thing you need on a chilly morning is a sweater, or a scarf. Other countries in Africa don’t have the weather that we have. We also have abundant water resources. We have two rainy seasons, which allow us to grow enough food to feed ourselves. Our food is very natural and organic. People looking for organic food might come to Uganda. Those who understand organic could come to partner with farmers. We would like to see fair partnerships in organic, to benefit farmers and empower them economically.

What is your dream for the cotton industry in Uganda?

I have been in the industry for quite some time. I know what other countries do. I don’t want big farms, like in Australia or the US. But I have also been in China, India, Pakistan, and Tanzania. My dream is to see a complete value chain back in Uganda, where the government’s role is just to create an enabling environment – and I think this government has done very well. Of course, there are still things to improve, but I think we are much better than 10 or 15 years ago. I would like to see a farmer produce cotton, sell it to a ginning, sell it to a textile, and then having the farmer wearing a T-shirt made from the cotton he grows. That partnership we have seen in India. The government makes the right policies, the private sector invests, and the farmer grows cotton. It is really beautiful. Farmers can chose, and cotton is paying them back.

Currently, the farmer grows, gives it to the ginning, and it ends there. That is not sustainable. We must make sure the farmer gets a fair price. The only way is assuring everything has added value. Another alternative is to have farmers ginning their own cotton, and exploiting the whole value chain. Overall, I would like to see this government continuing to support the sector, especially at research level. Investment in research is out of the reach of small farmers. My dream is that the government continues to support cotton research, promotion, regulation, and continues to invest in an enabling environment, like taxation, infrastructure, and electricity. These things they are working at, and have improved much.

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