• Tea payments dropped by Sh2.4 billion this year from Sh11.2 billion in 2018 to Sh8.8 billion in 2019
Image: FILE
“Ours has been a cry in the wilderness. Nobody is listening to us. Of what importance is a crop if there are no fruits for farmers?"
Those words from John Getacho summarise the mood of tea farmers across the country. They are angry over low bonuses announced by the Kenya Tea Development Agency.
Getacho spoke as a tractor uprooted his 800 tea bushes in Matembe, Kisii county. Farmers in the area received Sh11 per kilo in tea bonuses, the lowest in five years.
Leaders, including over 50 senators and MPs from tea-growing zones, have pointed an accusing finger at KTDA, saying the authority is to blame for the poor returns.
Kericho Senator Aaron Cheruiyot told mourners at a funeral in Nyamira that President Uhuru Kenyatta and Deputy President William Ruto are to blame for the farmers' woes. Cheruiyot chairs the Parliamentary Caucus of Tea-Growing Zones in the Senate.
He said Uhuru had commissioned a presidential task force to probe troubles facing the tea sector, but three years since the findings were compiled, it has been shelved without any action.
CALL FOR ACTION
Last month, Mathira MP Rigathi Gachagua said MPs will convene a meeting with KTDA to compel the authority to address the plight of farmers.
However, KTDA has denied wrongdoing and defended itself against blame for the farmers' dwindling fortunes.
Kanja Thuku, head of field services and agriculture at KTDA, said the 54 tea companies are independent and make all the decisions.
“We only come in to advise them on the finances, but most of the decisions are made at the companies’ level,” he said.
Thuku said the monthly payments made to tea farmers are not uniform in all the tea factories. This is because the prices in Mombasa auction are never uniform due to various reasons, including the catchment, management cost, cost of production and the price being realised in Mombasa.
“The net income is different. Each tea company looks at their cash flow, and they are able to know if they will pay Sh16, Sh18 or Sh20. Before, the prices used to be uniform, but some farmers started pressuring their directors, asking for more payment,” he said.
“It is a question of company directors looking at their accounts and assessing what they are capable of paying.”
TEA HAWKING
Thuku said since 1957 until 2018, the monthly payment to tea farmers across the country was uniform.
But the current business scenario, where there are independent tea factories, has changed the trend.
He said tea regulation in Kenya does not provide for the monitoring of independent factories, and this has led to increased tea hawking.
"These people come to a catchment and offer farmers as much as Sh27 for the initial payments of a kilo of green tea, but they do not offer them any bonus," he said.
In 2018, farmers produced 1.2 billion kilos of green leaf and earned Sh62 billion.
“So the farmer will receive Sh23 to Sh27 but there will be no bonus, and at the end of the year, the farmer will have lost. So the farmer gets a one-off payment that is higher than what KTDA is offering but loses out on the second/bonus payment,” Thuku said.
To address this, KTDA, through the tea factories in Kericho county where tea hawking is high, is paying farmers slightly more than other catchments.
“We do not want to lose tea, so we have taken this strategy to keep our farmers," Thuku said.
"This decision is being taken by the board at the factory level with recommendations from KTDA.”
Thuku says the final payment or the bonus is determined by the cost of production for the whole year and the market that is realised in the auction.
The cost of production varies from one factory to another, and the price realisation in Mombasa will also vary, due to the quality of tea.
“The quality is determined by a tea taster who can detect some characteristics of either sweet or not. Those characteristics may be coming from the soil, good agricultural practices or good manufacturing practices in the factory. This is how they tell which tea is superior to another,” Thuku said.
He said supply and demand dynamics are also coming out strongly. Since 2011, KTDA started realising surplus such that producers were supplying more than what the market demands.
Thuku adds that this continues to escalate to 200 million kilos surplus over and above the demand.
He said this is because the country consumes only five per cent of the tea produced, and this is not good for our Kenyan tea.
“Consumption of Kenyan tea in some of our major markets like the UK is coming down because of youth prevalences and due to the Brexit issue,” he said.
"Buying has also gone down in other markets like Pakistan, Iran and Egypt, and the situation is shaky. I urge Kenyans to increase consumption of what we are producing to widen our market, hence more pay for farmers."
KTDA ELECTIONS
The tea agency has been accused of interfering in the day-to-day activities of tea factories in the country, but Thuku denied the claim.
He said all the 54 KTDA companies have independent boards that give KTDA a written managing agent contract.
KTDA has over 4,000 buying centres, serving over 600,000 farmers. He said elections are done after every year, where a third of the directors of the factories retire.
The directors are elected by farmers depending on their strength in terms of shares. The shares are issued depending on the kilos delivered in the factory.
“Someone who delivers two kilos cannot have equal rights with somebody who delivers a thousand kilos,” Thuku said.
"So where a company is doing well, the farmers re-elect the directors. The company directors then come together and elect the KTDA board. From there, they elect directors in electoral zones, which are decided by the farmers.
"Those directors will come to the factory and form a board. We have grouped our factories into 12 regions. One member represents the factories in that zone in the KTDA boards."
In total, KTDA board has 17 board members, 12 elected members representing tea factories, one independent member who is a woman, plus four management directors, including the company's secretary.
This year's elections have been marred with controversies, with leaders calling on tea farmers to boycott the process. It was slotted for early November but was stopped by the court.
On October 13, Nyeri Senator Ephraim Maina called on farmers to shun the elections until an audit was done at KTDA as ordered by the High Court.
This is after Murang'a tea farmers, led by Governor Mwangi Wairia, called for an audit report following a Sh2.4 billion drop in payments. The payments dropped from Sh11.2 billion in 2018 to Sh8.8 billion in 2019.