•KTDA earns a handsome management agency fee negotiated with each factory.
• But to dismayed farmers KTDA never delivers on its obligations of extension services
Tea is earns Kenya Sh117 billion as foreign exchange, with local sales fetching another Sh22 billion.
It supports five million livelihoods. But farmers have been exploited like they were 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 the farmer costs labour and inputs, they takeaway pittance. As if this punishment is not enough, the farmer never gets paid monthly lumpsum. KTDA instead unilaterally retains half the net earnings to pay as “bonus” after it has traded 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 who never receive dividends from these investments.
A whole lot of good could therefore come tea farmers’ way should reforms courtesy of a directive by President Uhuru Kenyatta be implemented by Agriculture Cabinet Secretary Peter Munya. The changes could result in total overhaul of KTDA to ameliorate farmers tribulations. Years of servitude and mayhem that dog farmers to only eke out a living despite being the primary producers of lucrative tea, may end.
KTDA earns a handsome management agency fee negotiated with each factory. But to dismayed farmers KTDA never delivers on its obligations of extension services and farmer education on top of a rip-off – bulk buy cheap, sell expensive - on fertiliser inputs. Farmers build and manage collection centres even as late collection of green leaf; corrupted delivery entries and wastage is notorious.
That’s not enough. It is alleged KTDA acolyte 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 selling tea. Insider trading, sleaze and short-changing farmers runs 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 factory level, ghost farmers without a single tea bush have factory accounts through which they generously earn more than real farmers themselves. 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 like 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 cost of labour should be resolved. There is deliberate mix-up where farmers in the same locality either pay a daily wage or per kilogram of green leaf picked. Daily wage is considered cheaper for small-acreage farmers when collection is late afternoon for then all bushes would be cleared. However, when collection is early morning, one needs more hands on deck to beat the deadline therefore more expensive labour. Insidiously, in Vihiga county, Mudete Tea Factory (MTF) 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 Shh1,000 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 extended use of more labour caused by early green leave 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 at MTF. In KTDA books, farmers earned a whooping Sh225 million in 2019. Some Sh225 million pumped into Vihiga would result in a shock skyrocketing of living standards. But the poverty of tea farmers in the County isn’t consumerate with these supposed riches. The average takeaway per farmer was Sh500 a month totalling 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.
So, what is Munyas’s task? Break KTDA’s stranglehold on farmers’ incomes by ensuring KTDA no longer managers 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 farmers’’ money under guise of paying an accumulated annual “bonus”.
Evidence shows that the alleged “bonus” is actually retained farmers’ money KTDA uses to invest. KTDA assets acquired using such farmers money earn income that ought to go to farmers. 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 denouncing 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.