• The changes could result in the total overhaul of KTDA to ameliorate farmers' tribulations. Years of servitude may end.
• KTDA earns a handsome management agency fee negotiated with each factory but does not deliver on its obligations — extension services and farmer education.
Tea is the second highest foreign exchange earner for Kenya after diaspora remittances.
It earns Kenya Sh117 billion, with local sales fetching another Sh22 billion, while remittances were Sh295.32 billion as at June 2019.
And while tea supports about five million livelihoods, farmers have been exploited as if they are modern poor Black Sharecroppers enslaved by racist white American South of yore. Farmers earn a measly return yet auction prices are minted in millions by brokers, allegedly Kenya Tea Development Agency insiders.
When KTDA deducts its unearned dues and farmers cost labour and inputs, they takeaway pittance. As if this is not enough, the farmer never gets paid monthly lumpsum. KTDA instead unilaterally retains half the net earnings to pay as “bonus” after trading with the cash. The income generated by KTDA after “investing” farmers' money is never shared with them. Allegations galore are about KTDA acquired properties with farmers' money but they don't share dividends from these investments wit them.
A whole lot of good could, therefore, come tea farmers’ way should the reforms directed by President Uhuru Kenyatta be implemented by Agriculture CS Peter Munya.
The changes could result in the total overhaul of KTDA to ameliorate farmers' tribulations. Years of servitude may end.
KTDA earns a handsome management agency fee negotiated with each factory but does not deliver on its obligations — extension services and farmer education.
On fertilizer inputs, they have perfected 'bulk buy cheap, sell expensive' rip off.
Farmers have to build and manage collection centres for themselves and also deal with late collection of green leaf.
That’s not enough. It is alleged KTDA wheeler-dealers, officials and directors have coalesced into a cartel of tea barons who are, despite obvious conflict of interest, in the business of procurement of tea services, marketing and sale. Insider trading, sleaze and short-changing farmers run from collection centres and factory floors to the corner offices at Chai House in Nairobi and trading floor at the Tea Auction in Mombasa.
At the factory level, ghost farmers without a single tea bush have factory accounts through which they generously earn more than real farmers. These fake accounts aren’t an accident: They’re contrived by factory management who facilitate their existence.
The new insidious scheme is to promote tea poaching in a cash scheme popularly known as “M-Pesa buying”. Here, factory officers collude with rival multinationals to poach farmers’ green leaf at a trifle with two dextrous impacts — the parent factory capacity is undermined and farmers sell green leaf at a throwaway price to vendors.
Despite counties such as Vihiga imposing tax on this transaction, the trade is thriving due to factory inefficiencies. Most buyers are now bold, using factory-based agents who rent factory vehicles to transport their illegal cargo.
The nagging issue of the cost of labour should be resolved. There is a deliberate mix-up where farmers in the same locality either pay a daily wage or per kilogram of green leaf picked. The daily wage is considered cheaper for small-acreage farmers when the collection is late afternoon.
However, when the collection is early morning, one needs more hands to beat the deadline, therefore, more expensive labour. Insidiously, in Vihiga county, Mudete Tea Factory farmers are being penalised for delivering “wet” tea in this rainy season. Illogically, farmers are required to dry wet leaf against wet weather.
A quarter acre with 500 bushes requires five casuals to handpick 50kgs of green leaf at Sh200 each plus food. A minimum of Sh14 a kilo translates to Sh700 earnings.
Paying Sh1,000 labour is a big loss, notwithstanding additional deficit in factory deductions. Meanwhile, farmers with extensive crop pay between Sh8 and Sh10 per kilogram of green leaf harvest. Other than the benefit of economies of scale, these aren’t better off. They still incur losses for the extended use of more labour due to early collection. The farmer ends up subsidizing the insatiable appetite of a corrupt system.
MTF has 10,000 farmers who account for 80 per cent green leaf. In KTDA books, farmers earned a whooping Sh225 million in 2019. If this amount is pumped back into the county, living standards would improve a great deal. But the poverty of tea farmers in the county does not commensurate with these supposed riches. The average takeaway per farmer was SH500 a month, Sh6,000 per year and Sh60 million for the 10,000 farmers. Where is the missing Sh165 million?
Then there is this illusion of factory independence when “elected” directors are in fact KTDA appointees through a forged vetting system that ensures only those who can paddle for KTDA get clearance. This electoral system produces pliant directors.
MUNYA'S JOB AHEAD
So, what is Munyas’s task? Break KTDA’s stranglehold on farmers’ incomes by ensuring it no longer manages farmers' accounts from Nairobi.
Have factories directly receive monies from the tea auctions. Farmers will at least get the equivalent of monthly sales at the auction, less brokerage fees.
It’ll ensure prompt payments after sales, instead of KTDA withholding money under the guise of paying an accumulated annual “bonus”.
KTDA assets acquired using such farmers' money earn income that ought to go to them. KTDA must then cede ownership of those assets to a new management entity answerable to farmers.
But KTDA is fighting back through incentives to factory directors and politicos, yet no factory has held a farmers’ meeting for their opinion on the changes. That’s why Munya faces a daunting task of unlocking the exploitative stranglehold KTDA has on the subsector for profitably for so long.
Vested interests in control of KTDA, require the stealth of a hunting tiger to claw because KTDA will fight tooth and nail to retain control as many who crossed KTDA obsession with deception have regretted.
Kabatesi is a governance, policy and communications Consultant. Views expressed are his own as a tea farmer.