Agriculture Cabinet Secretary Peter Munya has said the withholding of tea at the Mombasa auction when rates fall beyond the reserve price will not affect farmers payment.
He said the government will continue withdrawing tea from the auction if the prices do not reflect the minimum set rate but assured farmers that they will be paid.
Munya spoke on Monday at a consultative meeting of the Independent Tea Producers to discuss interventions on tea prices and their role in the tea industry reforms.
He said they are working with KTDA to ensure there is enough storage space for unsold tea that has not attracted the minimum price.
Munya said there is nothing unusual in withdrawing tea from the market adding that the government is determined to make sure the prices in Mombasa improve the pressure from other quarters notwithstanding.
“Just about a week ago, we made a drastic but necessary decision with regard to sale of teas at the Mombasa tea auction with the smallholder tea producers introducing a minimum price below which teas presented at the auction cannot be sold," he said.
He said while key players at the auction may have thought that the move was too radical and disruptive for the industry they should take the requisite steps to align their requirements and business transactions accordingly.
“I am certain that the teas not sold in last week’s auction remain ready to be moved to the market at the right price. As i indicated last week, we do have adequate storage capacity for the teas as it awaits to be presented to the auction and subsequently shipped to our international markets,” said the CS
Munya called upon auction organizers to facilitate a smooth transition in view of the new changes.
He further directed them to make effective and clear communication to the industry players for business to get back on track as soon as possible.
"We will continue engaging with all stakeholders with a view to ensuring that the tea industry is appropriately repositioned as a sustainable and profitable investment,” he said.
