The Kenya Tea Development Agency (KTDA) faced strong criticism from farmers and leaders during the Tea Reforms Conference which concluded yesterday in Kericho.
Deputy President Rigathi Gachagua accused the KTDA management of exploiting small-scale farmers by diverting profits to new projects without involving them.
“Whenever the agency makes a profit, it initiates new projects instead of distributing the earnings to the farmers. This is because the management seeks personal commissions and benefits,” said Gachagua.
“We will not allow the Agency’s management to make unilateral decisions in Nairobi anymore, especially regarding new projects worth billions of shillings. Small-scale tea farmers must be actively engaged in such decision-making processes,” he added.
The Deputy President also warned KTDA management against establishing subsidiary companies without conducting public participation, citing constitutional obligations.
“The Constitution states that public participation must be carried out on everything that affects stakeholders,” said Gachagua, referring to the need for inclusive decision-making processes.
Gachagua said any savings collected by KTDA through initiatives like hydropower should directly benefit small-scale tea farmers, who also shot at KTDA for their poor earnings.
Wesley Cheruiyot, a tea farmer from Kapkatet said they are not sure if they will continue reaping from the sector as the government continues taking them in circles.
“We are lost; former Agriculture Cabinet Secretary Peter Munya initiated the reforms process and to date, we are yet to realize full benefits despite holding a number of meetings,’’ said Cheruiyot.
He said as farmers, they are wallowing in poverty as KTDA had failed to carry out its mandate.
“We don’t even know where this conference is leading us, we had such forums during CS Munya’s time and we are yet to realise its fruits,” he said.
Cheruiyot added that they were promised to get tea bonus last month but they are still waiting.
Thomas Nyandieka, a tea farmer from Kisii, said marketing of tea was a challenge. Kephas Ogeto, another farmer, said they are working hard as farmers but the payment made is so low.
“KTDA is to blame for this because the money we get does not cater for the cost of production,” said Ogeto.
Energy Cabinet Secretary Davis Chirchir criticised KTDA’s power production unit for obtaining power generation licences but failing to initiate the projects despite having secured loans for them.
“It is concerning that we have licenses that are not operational yet,” he said.
Chirchir further highlighted the discrepancy in power purchase rates between tea factories producing hydropower and Kenya Power.
While Kenya Power purchases electricity from the national grid at 20 US cents per unit, it buys power from the tea factories at significantly lower prices.
“Imenti sells at 7.9 US cents per unit, Gura at 9.8 US cents, and Kigira tea factory at 12.3 cents. This raises the question of why Kenya Power acquires power at such low prices while paying more for electricity from the grid. It defies logic,” he said.
The energy CS expressed the government’s commitment to reducing energy costs in tea production. Currently, the cost of producing a kilogramme of processed tea amounts to between Sh60 and Sh70, with power costs accounting for Sh15 to Sh20.
“Energy constitutes 30 per cent of the production cost. Therefore, we need to lower the energy expenses to enhance the competitiveness of the entire economy,” said Chirchir.
Labour Cabinet Secretary Florence Bore also criticised KTDA for its failure to effectively market Kenyan tea, leading to independent tea producers and marketers exploiting the gap in the market. Bore further emphasised the need for value addition as unscrupulous packaging companies were capitalizing on the country’s inadequate efforts in this area.
“These companies were packaging and selling substandard tea in the international market, falsely branded as Kenyan tea,” she said.
East Africa Tea Trade Association (EATTA) Chairperson, Arthur Sewe, said despite being the highest exporter of tea in the world, Kenya has taken the achievement for granted.
“Marketing has been a big issue, it is done but not the way it should. We have remained the same with only four destinations,” he said.
KTDA CEO Wilson Muthaura, while responding to the issue of subsidiaries, promised to do an evaluation of all the subsidiaries.
“If I was to give an answer here, I will perhaps be dishonest to you, I request we do an evaluation of all the subsidiaries and we are ready to bring it to the Senate so that when get independent value of the subsidiaries we can make the decision of which one we want to get rid of,” he said.
Yesterday, the Deputy President announced the formation of a technical committee to further refine the recommendations made.
“We will undertake necessary legal and administrative reforms, and policies will be presented to the Cabinet for consideration,” said Gachagua.