For anyone with a genuine interest in the lives of ordinary Kenyans, the last few weeks carried some ominous news headlines.
And these “ominous news headlines” have nothing to do with the Kibra constituency by-election, which some say will be a turning point in the struggle for political supremacy ahead of the 2022 general election.
They touch on something far more important. Something which will have far greater impact in the long run than any mere by-election could.
Now to the headlines:
First was the news that the Kenya Tea Development Agency (KTDA) – which basically runs the Kenyan small-scale tea farm sub-sector – would be paying a much smaller “bonus” than was generally expected. Specifically, 30 per cent less than was paid in 2018.
That is not the kind of drop in income that Kenyan farmers will take lying down. And hence the second headline: That already there have been reports of tea farmers in Kisii and Nyamira counties slashing and uprooting their tea bushes, in direct response to this decline in payment.
In typical Kenyan fashion, leaders in tea growing areas have blamed “corruption cartels” embedded in the KTDA for this steep drop in the tea farmers' earnings. And there have been demands for the resignation of the Cabinet Secretary for Agriculture.
But if these leaders had read an article which was published a few months ago in ‘Foreign Policy’ magazine, they would have known that the collapse of tea prices was not a question of ‘if’, but rather of ‘when’.
To understand why this is so – and even before we get to the magazine article I have referred to – we must recognise that the success of Kenya’s tea exports has been to some degree due to events beyond our borders.
First, two of the biggest tea producers – China and India – have longstanding and historically entrenched tea-drinking cultures. And given their vast populations, they have tended to consume a good deal of their tea, leaving relatively little for export.
Then many of the tea growing countries (mostly former British colonies) have had their economies disrupted by internal strife or even civil war over roughly that same period.
Thus, we find in Uganda the Milton Obote/Idi Amin turmoil from 1971 to the mid-1980s; and in Sri Lanka a full-scale civil war from 1983 to 2009.
These were profoundly disruptive events of the kind which tend to destabilise agricultural production, supply chains and other vital operations of any efficient agriculture export sector. And their effect was to suppress the global supply of tea.
Indeed, if we will only recall the total disruption of large-scale transport of agricultural produce during our post-election violence of early 2008, we can easily see why the tea sub-sector in these other nations could not thrive amidst political and social instability.
The lesson here is that the tea which our farmers have for decades been referring to as “green gold” is a commodity like any other. And as such, tea export earnings are subject not just to our own production capacity, but also to the global forces of supply and demand.
Here we come to the bad news contained in the Foreign Policy article, which was about the tea growers of Sri Lanka, but its insights apply equally to those in Kenya:
“…when [Sri Lanka’s] share in the global tea trade was 40 percent in 1970, the [tea] plantations would not have had trouble surviving…But a new crop of tea-growing countries—Argentina, Brazil, Cuba, Malawi, Malaysia, Peru, and Vietnam—have begun to produce for export…[and we also have]…expanding exports from Kenya, India, and China, the traditional rivals...”
In short, the total global production of tea has been steadily rising and so prices have fallen and will continue to fall.
About two years ago, in a column on Kenya’s failures of agriculture policy, I posed this question:
“…will the escalation in the supply of tea on the world market lead to a collapse in prices? And would this price collapse then end up in tea being yet another previously profitable cash crop, which [now] only yields a harvest of poverty and misery for all who grow it?”
We now know the answer to that question.
