The Cotton Industry Development Bill, 2023

Background

The cotton industry in Kenya has previously been regulated under the omnibus Crops Act as part of scheduled crops managed by the Agriculture and Food Authority (AFA). The Cotton Industry Development Bill, 2023, establishes a dedicated statutory and institutional framework specifically tailored to revitalize, promote, and regulate cotton production, processing, value addition, and marketing across both national and county levels.

Key Amendments

• Crops Act Amendment (Section 49): Deletes 'Cotton...Gossypium spp.' from Part I of the First Schedule to the Crops Act, transferring all cotton-related regulatory powers away from the Agriculture and Food Authority.
• Establishment of the Cotton Industry Development Board (Section 4): Creates a new corporate body responsible for national-level coordination, advisory services, setting standards, and licensing imports/exports.
• County Cotton Development Committee (Section 24): Establishes committees in cotton-growing counties consisting of not more than nine members to advise county governments on cotton sector matters.

New Obligations

• Mandatory Registration for Growers and Cooperatives (Section 25): Every cotton grower, cooperative society, and association must register with their county government.
• Licensing of Processors (Section 26): Any person intending to engage in cotton ginning, spinning, or value addition must apply for and obtain a licence from the respective county executive committee member (CECM).
• Licensing of Importers and Exporters (Section 33): No person may import or export cotton, cotton seed, or cotton by-products without obtaining a license from the national Board.
• Reporting and Registers (Section 25): County governments must maintain an up-to-date register of growers and annually submit a copy to the Board. Registered cooperative societies must submit their membership registers and notify counties of any changes within 14 days.

Penalties

• Unlicensed Processing (Section 26(10)): Engaging in ginning, spinning, or value addition without a license attracts a fine not exceeding KSh 1 million, or twice the value of the cotton/products (whichever is greater), or imprisonment up to two years, or both.
• General Penalty (Section 46): For offences where no specific penalty is provided, the penalty is a fine of not less than KSh 20,000, or a fine not exceeding twice the value of the cotton/products, or imprisonment up to six months, or both.
• Conflict of Interest (First Schedule, Section 5(4)): Any Board member failing to declare a conflict of interest in a matter before the Board commits an offence and is liable to a fine not exceeding KSh 500,000, or imprisonment up to seven years, or both.

Transitional Provisions

• Transfer of Assets and Rights (Sections 51 & 52): All rights, obligations, funds, and assets previously vested in the AFA relating to the cotton sector are transferred to the newly established Board.
• Staff Transition (Section 56): Any employee of the AFA dealing with the cotton sector at the commencement of the Act shall become a member of staff of the new Board.
• Pending Proceedings and Authorisations (Sections 53 & 55): All pending legal proceedings by or against the AFA regarding cotton shall be continued by or against the Board. Existing licences, permits, or registrations issued by the AFA remain valid until expiry.