How value addition can earn small tea farmers more cash

Tea plucking at a farm in Ndugamano village, Nyeri. [Kibata Kihu, Standard]

As the world’s largest exporter of black tea, Kenya is undoubtedly one of the most respected tea producers. To move the tea sub-sector to the next level, we must pay special attention to value addition.

Value-added tea can earn farmers about 40 per cent more income than that which has no value added. Value addition in tea includes packaging, branding, blending, quality certification and accreditation.

Other forms of value addition include flavouring and sale of instant tea. So far, only about five per cent of Kenya’s tea is value-added, most of which is sold locally. The rest is exported without any value addition, hence lower earnings for the farmer.

Adding value to tea before selling has several benefits to the sub-sector and the economy as a whole. To begin with, value addition will put more money in the pockets of smallholder farmers. Sri Lanka, for instance, earns more money from tea despite producing less than us. This is because over 80 per cent of their tea is packaged before selling.

In Sri Lanka, it is mandatory to package and brand tea before selling it, failure to which the seller is slapped with additional taxes. Done alongside increased production of specialty teas such as orthodox, purple, and green and white tea, value addition will earn Kenyan farmers more than unbranded bulk tea. With more earnings, smallholder farmers will put more land under tea, increasing production and profitability. Value addition will also help Kenyan tea retain its originality and traceability.

Our tea is one of the best globally. After importing it, international buyers brand it as their own making money that should be ours. Hence, it loses its identity and traceability as Kenyan tea and the final consumer has no chance of knowing it is Kenyan.

Tea buyers, international and local, should trace the product through all stages including production, processing and distribution.

Improving supply chain traceability of our tea will increase customer trust making marketing easier and fetching better earnings.

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Industry stakeholders can make value addition in tea sub-sector a reality is by setting up a central value addition facility. This will be a central blending and packaging facility used by all tea factories to produce finished products for export while still maintaining their different identities.

Such a facility will enable industry players enjoy economies of scale. The government can support tea factories to set up the facility by helping them acquire machinery and technology via Public Private Partnership (PPP) or other viable arrangement.

Further, the government can develop a policy on value addition practice. About 60 per cent of our tea is grown by about 650,000 KTDA-affiliated smallholder farmers. The remaining 40 per cent is produced by large tea plantations. Unfortunately, smallholder tea farmers are exploited by middlemen who buy at low prices and resell at higher prices.

The government has prioritised kicking brokers out, a move overseen by none other than Deputy President Rigathi Gachagua himself. Getting rid of the brokers will protect the value addition exercise.

-The writer is Chief Executive Officer of Kenya Tea Development Agency (KTDA)