DISADVANTAGED

Farmers seek to stop state from collecting tea levies

Say a tea levy on exports and curtailment of direct sales is discriminatory.

In Summary

• The Kenya Tea Growers Association is challenging Section 36 of the Tea Act. 

• Also challenged is Section 53 of the same Act.

A tea estate in Bomet
A tea estate in Bomet
Image: Felix Kipkemoi

A farmers' association is asking the court to stop the state from demanding and collecting any tea levy.

The Kenya Tea Growers Association is challenging Section 53 of the Tea Act.

They say the section is in contravention of the Constitution because the application of a tea levy on exports and curtailment of direct sales is discriminatory.

The court was told that the introduction of the tea levy violates the rights of the farmers, and it puts them at a distinct disadvantage with respect to their counterparts in the East African Community market at the tea auction.

The association is now asking the court to stop the state from demanding and collecting any tea levy pending determination of their case.

The association is also challenging a law allowing the exclusive sale of tea processed and manufactured in the country for the export market on the auction floor.

They are challenging Section 36 of the Tea Act. This, however, does not affect orthodox and specialty teas.

The association, which has brought the case to court, says its members have various direct contracts with tea buyers from Central Africa, the United Arab Emirates, Russia, Europe and Asia.

They say their contracts are for specific qualities and quantities for 2021 up to 2023.

Many of the direct contracts are in respect of bespoke and customised categories of teas which are not sold through the auction and which have been certified by different agencies such as Rainforest, Fairtrade and Ethical Tea Partnership.

These teas fetch a higher premium overseas.

The implementation of the law in question will result in the association members being unable to fulfil their contractual obligations.

They will lose the financial benefit of the direct/forward contracts which offer better and higher returns than auction prices.

In addition, the implementation of the law in question will give a competitive edge to other countries in the region that will be able to continue selling their teas directly.

Also sought is an order to stop implementation of Sections 36(1) and 53 of the Tea Act 2020.