AGRICULTURE

Uhuru's tea sector reforms targets farmers earnings

The directive will for instance see the Kenya Tea Development Agency (KTDA ) pay farmers no less than 50 per cent of their deliveries as monthly payments with the balance being paid as annual bonus.

In Summary
  • He called for quick restructuring of KTDA to assure tea farmers get more revenue from their tea sales.
  • Uhuru has further called for the limitation of weekly volumes tea traded at the Mombasa Auction to manage prices.
A worker picking tea at a farm in Nandi on April 29th
A worker picking tea at a farm in Nandi on April 29th

 

Tea farmers were yesterday divided on President Uhuru Kenyatta's directive on the payment and marketing of their produce.

Some argued that lack of a liberal market will create a monopoly, further hurting green leaf prices for smallholder farmers while others said this was the right step in eliminating middlemen and tea brokers.

 

James Kipsang from Kapsabet told the Star that while KTDA is pays Sh15 per kilo, multi national tea firms pay between Sh21-23 but minus a bonus.

''Monopoly is not good for the market. Uhuru must compel KTDA to pay farmers well and stop dictating prices. We get only Sh15 per kilo, I have never been paid Sh41,'' Kipsang said.

 Other farmers from Rift Valley led by Benjamin Leting said they were already uprooting tea plants due to reduced earnings from the crop but the president's measure had given them hope.

They also welcomed Uhuru's appointment of Peter Munya as new Cabinet Secretary for Agriculture. He was moved from Trade to replace Mwangi Kiunjuri who has since been axed from the cabinet.

Farmers from Vihiga and Murang'a hailed Uhuru's directives as right way towards cleansing the rot in Kenya's tea sector.

In his address, the president targeted middle men in the tea sector blaming them for exploiting smallholders farmers.

Uhuru said smallholders farmers are losing at least Sh50 per kilo to middlemen

 

''Empirical evidence abounds; as a result of poor corporate governance farmers who would be earning about Sh91 per kilo for their tea, are currently earning about Sh41 with Sh50 going to brokers and middle men,'' Uhuru said.

 

To resolve perennial poor prices for farmers, Uhuru directed quick enhancement and implementation of the Tea Regulations 2019 which dictates pricing policy and mechanisms for smallholder farmers.

The directive will for instance see the Kenya Tea Development Agency (KTDA ) pay farmers no less than 50 per cent of their deliveries as monthly payments with the balance being paid as annual bonus. It also ensures that no one who is not a registered tea grower, sells green leaf

He called for quick restructuring of KTDA to assure tea farmers get more revenue from their tea sales.

''I call on the Ministry of Agriculture and that of Trade to take immediate measures to ensure that each of the subsidiaries has separate governance structures; and that the profits from each of the subsidiaries is reflected in farmers’ incomes,'' Uhuru said.

Uhuru has further called for the limitation of weekly volumes tea traded at the Mombasa Auction to manage prices.

According to Uhuru, the management of demand and control will guarantee better pay for farmers, saying low returns are as a result of market saturation.

Speaking to the Star on phone, East African Tea Trade Association (EATTA) managing director Edward Mudibo said any change brought into the market should not disrupt the natural flow of market and supply.

''Any positive reform ins the sector is welcome. The control of volumes could be counter productive, considering that every trader expects to sell tea brought in the market,'' Mudibo said.

Uhuru is want the regulation of the volume of teas sold through the auction and through direct sales to be set at 80 per cent and 20 per cent respectively.