Over the years, there have been myriad attempts to streamline the tea industry through government-initiated reforms that have come in various forms, including task forces, stakeholders' forums and legal reforms.
A review of these attempts would yield useful lessons on why key recommendations remain unimplemented and help inform the next initiative.
The Tea Ordinance No. 46 of 1934 was the first legal instrument enacted to govern and regulate commercial tea production. It was revised in 1948, creating the Directorate of Agriculture, which was responsible for controlling tea production by issuing licences and permits to growers.
The Tea Board of Kenya took over this regulatory function following its establishment in 1952 under the Tea Act (CAP. 343). In 1964, KTDA replaced the Special Crops Development Authority that had been established under the Agriculture Act of 1960 to regulate the cultivation of cash crops in Kenya.
KTDA was given exclusive management control over the supply of agrochemical inputs (notably fertiliser), planting materials and extension services, management of tea factories and marketing of processed tea. Under Legal Notice No. 99 of 2000, KTDA (Authority) was privatised and changed to KTDA (Agency), with tea farmers as the shareholders through their factory companies. In 2009 it was renamed Kenya Tea Development Agency Holdings Limited.
A presidential decree of 1977 led to the nationalisation of Brooke Bond Kenya Limited packing factory in Kericho and ownership was transferred to all the tea-producing factories in Kenya. The factory was renamed Ketepa. All tea factories were directed to deliver three per cent of their production to Ketepa for packing and selling in the local market. Over time, KTDA and the factory companies it manages have taken over majority shareholding.
In 2006, a task force was formed to address profitability and global competitiveness in light of rising production costs and declining auction prices. A number of its recommendations are yet to be implemented.
The Tea Licensing, Registration and Trade Regulations of 2008 and the Tea Amendment Bill of 2011 introduced changes to align the existing legal instruments with liberalisation and accommodate the recommendations of the Task Force Report of 2007. Key changes included the repeal of prohibition to uproot tea, introduction of green leaf supply agreements and introduction of guidelines and clarification of roles of managing agents.
In 2014, a Draft Tea Policy was formulated followed by the Tea Task Force Report of 2016 and Draft Tea Licensing, Registration and Trade Regulations in the same year. These aimed to align the existing policy and regulatory framework with the 2010 Constitution.
Some of the concerns addressed included low productivity, low product diversification and value addition, production inefficiencies, negative impacts of climate change on tea production, yield and quality and price volatility. However, a number of recommendations remain unimplemented.
The Senate Standing Committee on Agriculture, Livestock and Fisheries held a National Tea Conference in Nairobi in October 2014, whose theme was 'Crisis in the Tea Trade and the Way Out'. The objective was to identify problems facing the tea sector and provide a way forward.
The ongoing reform process followed a presidential directive on managing and improving the tea value chain, especially declining prices, poor governance and inefficiencies. This was followed shortly by enactment of the Tea Act, 2020 and election of new directors across the smallholder sector.
The Tea Act addressed tea hawking and low green leaf prices, delayed payment to farmers, poor governance along the value chain, inefficiencies in the trading systems, role of devolved units, establishment of a Tea Levy and Tea Fund and reestablishment of the Tea Board of Kenya and Tea Research Foundation of Kenya.
Another task force was formed in April 2021 to design, develop and implement a Tea Industry Price Stabilisation Framework. It recommended several interventions for eliminating value chain inefficiencies at farm, processing and trading levels.
At the farm level, it recommended cost-cutting, increasing productivity and improving quality, minimising vulnerability to market risks, increasing tea processing efficiency and improving governance structures.
At the trade level, it proposed promoting competitiveness in price discovery and cutting unnecessary costs. Cross-cutting issues included increasing efficiency in logistics, promoting value addition, market diversification, local tea consumption and capacities in research and development capacity, governance and regulatory framework.
It's all there. We only need to implement.
