Reforms are godsend, South Rift farmers say
For years, Kenya Tea Development Agency (KTDA) was not controlled by farmers. But slowly smallholder tea farmers are gaining control in it thanks to the tea reforms spearheaded by Agriculture Cabinet Secretary Peter Munya.
Tea-land Smallholder Tea Farmers Association (TESTEFA) chairman Richard Cheruiyot says for the first time in KTDA’s history, there was credibility in the election of factory directors. TESTEFA represents more than 80,000 tea farmers in Bomet and Kericho counties.
Previously, the election of tea factory directors was done based on the number of shares one held.
“The one man one vote change allows active participation of all the registered smallholder tea farmers in the election of factory directors. That is revolutionary,” Cheruiyot says.
Additionally, Cheruiyot says, farmers appreciate the new payment system whereby tea sale proceeds are remitted to individual tea factories within 14 days of the auction. The factories are required to pay farmers 50 per cent of what was paid for tea in the last auction and the remaining 50 per cent paid during the second payment popularly known as bonus.
“Stopping of direct tea sales of black Crush, Tear, Curl tea at the Mombasa Tea Auction except for specialty tea such as orthodox or purple tea is also a good idea,” says Cheruiyot.
Shrouded in mystery
Cheruiyot explains the direct sale of tea used to be shrouded in mystery.
“The price per kilogramme used to be lower than the price in the tea auction,” recalls Cheruiyot. He also notes that farmers have welcomed the reduction of the management fee from 2.5 to 1.5 per cent, a move the government says will save smallholder tea factories over Sh1 billion annually, He also points out that the reduction of the brokers fee from 0.5 to 0.2 per cent of the gross tea sale will boost tea farmers’ incomes.
“The automation of the tea auction will improve accountability and transparency of the tea sale,” says Cheruiyot.
The reforms are welcome news to farmers in KTDA’s zone eight which comprise Kericho and Bomet counties.
“We are happy to hear that satellite tea factories will be made autonomous and allowed to have their own corporate boards of directors,” says Cheruiyot.
Though the reforms have received positive reactions from stakeholders in the industry, there has been some resistance. Speaking in Kapkatet Tea Factory CS Munya said some clauses in the Tea Act, 2020 had met resistance from former KTDA directors who have moved to court to challenge it.
“The Attorney General is working hard to ensure that the hearing of the case is fast-tracked. Farmers do not want the case to drag, neither does the government,” Munya said.
Munya argued that the Sh21.6 billion tea bonuses released by KTDA to farmers was for the financial year ending June 30, 2021 - before the implementation of the tea reforms. Munya, therefore, told farmers to expect a “boom” next year. To address the drop in tea prices, Munya said the government had set Sh183 for a kilo of KTDA teas as the minimum price at the auction.
“We had to set the minimum reserve price because the tea prices in the international market such as the UK where the Kenyan teas is sold has been going up yet farmers do not see the profits,” noted Munya.
Munya argued that a forensic audit would seal the loopholes in KTDA’s managed factories.
“The audit will not only focus on the KTDA’s factories but also on the management top brass,” said Munya.
He also declared that the closure of some of the over 21 KTDA subsidiary companies will not be done before they are audited.
“We want a lean KTDA which doesn’t have tens of meaningless companies,” he said.
Munya added, “KTDA wasn’t formed to do any other business but market tea. It however branched into other meaningless businesses. It constructed stores in Nairobi and Mombasa and charged farmers a fee whereas the farmers owned the stores”. He also cited Greenland Fedha which advances loans to farmers at 14 per cent but when compounded rises to around 20 per cent.
“From December 1, farmers will take loans at 8 per cent,” said Munya.
The agriculture Cabinet secretary said though former KTDA management had bought fertiliser at Sh3,200 per 50kg bag, President Uhuru Kenyatta had released Sh1 billion allowing farmers to get subsidised fertiliser at Sh2,500.
Kericho Senator Aaron Cheruiyot who sponsored the Tea Bill argued that the tea reforms have the potential to transform the lives of small-scale tea farmers.
“As legislators, we have done everything we can to turn the tea sector around. We have sealed all the loopholes used to exploit farmers. We are telling the new tea factory directors that they will not have an excuse next year why farmers will not earn more than Sh30 per kilogramme of tea as a bonus,” he said.
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