KNCCI calls for stabilisation fund to cushion tea farmers

A tea farmer on a farm in Tetu Nyeri. [Kibata Kihu, Standard]

Kenya National Chamber of Commerce and Industry (KNCCI) is pushing for the establishment of a Stabilization Fund to cushion tea farmers against global economic inflation.

They said tea is a top foreign exchange earner, and the government should consider protecting the sector against an erratic market.

They noted that factors that have negatively affected the sector include external market prices and climate change impacts.

Speaking during a breakfast forum in Kapsabet, Nandi county, KNCC President Erick Ruto said they are looking forward to engage the national government and tea stakeholders to lobby for funds to boost profit margins and expansion of the tea market.

He noted that for the past ten years, tea production has steadily declined and recently worsened by the Covid-19 impact and conflict in the Middle East and Russia- Ukraine wars and called for financial stimulus to regulate tea prices dictated by external factors.

“Kenya exports tea worth Sh130 Billion to the international market annually, which contributes to the country’s economy. But farmers get little since the cost of production is high and shortage of dollars are among the limiting factors in the market,” Dr Ruto said.

KNCCI, tea brokers, farmers, county government and processors were among the stakeholders who attended the forum over the weekend to deliberate on issues affecting the tea sector in Rift Valley.

They called for urgent expansion of the market for tea to stabilize prices, noting that currently, the country depends on 13 market centres globally.

The stakeholders noted that Egypt is among the countries that may be affected by importing Kenyan tea due to shortage of the dollar

Ruto said Egypt has been importing up to 40 per cent of Kenya’s tea and the uptake has significantly reduced over the months.

“We have signed over 240 agreements with the international tea key players in a bid to expand the market for our local tea, and we are reaching out to farmers and processors to enhance quality and value addition for particular market destinations. The post-plucking of tea determines the quality of tea products that attract the available market,” he said.

The KNCCI president further revealed that they initiated talks with financial partners on the mode of funding farmers and factory owners to scale up the production of tea to create employment and better economic standards for the households.

KNCCI Deputy President Mustafa Ramadhan said that they have engaged tea estates and private processors on the quality of the tea that meets the standards for the respective newer markets.

“We are reaching out to the farmers to create awareness on the varieties of the tea and technique of handling tea to maintain the quality of tea at the harvesting level. Red tea is high in demand, and we need farmers to grow cash crops that will attract new markets at the international level,” added Mustafa.

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