One of the funny traits that we Kenyans have is that we are very quick to criticise what is wrong about our country, and not so quick to praise our achievements.
Apart from our world-beating athletes, you will rarely ever hear Kenyans take pride in the things that many of our neighbouring countries envy us for, such as the quality of our transport infrastructure, our ability to host very large international conferences, etc.
And, definitely, you will not hear anyone mention that we are a global benchmark for farm produce aggregation.
So what is an aggregator?
Aggregators in agribusiness play a critical role among smallholder farmers. They come in different forms as agricultural businesses or cooperatives of growers that consolidate and distribute agricultural products. They typically support regional growers of diverse sizes and experience, and sell products to local, regional and international markets.
Aggregation models allow small farms to jointly access credit, inputs, information and product markets. In many parts of the world agricultural cooperatives have played this critical role by rectifying small farm disadvantages in market access.
KTDA as a producer organisation has played this role since 1964.
KTDA is one of the most successful global aggregator models. The sheer number of about 700,000 smallholder farmers under its wings, operating successfully for over 50 years and growing to be the single biggest producer of black CTC tea in the world, is no mean feat. This could be the biggest global aggregator model.
With smallholder farmers spread across 21 counties, 71 tea factories, it's just a miracle that for the longest time, KTDA teas have defined the quality of teas globally. More often these teas have been sought to blend with teas from other producers to up their quality.
Achievement of such quality levels requires stringent quality measures at the agronomy level, post-harvesting handling and leaf processing at the factories. That’s how the success story has remained a scholarly attraction for MBA and doctorate students.
The propagation of planting materials is a highly controlled exercise and so are the agronomic practices, including fertiliser application, pruning and general crop husbandry. Besides the hawk-eyes of field services teams from the factories, each farmer polices the other against malpractices.
Any green leaf below the required standards is rejected at the leaf buying centres. The factories are organised to have a leaf buying centre at each of the different catchment areas closest to the farms. The factory logistics team collect leaf from these centres and deliver the same to the factory within the shortest time possible.
Most of the centres are within 30km radius to allow for this seamless process. A digitised data system is used to capture the weights for each farmer's green leaf delivery to the leaf collection centre.
KTDA at the national level has its smallholder-managed factories placed in each of its 12 Electoral Zones. Given KTDA is corporately owned by 54 of the mother smallholder factories that gave birth to the rest to make the current 71 factories, it is the factory directors in each of these 12 Electoral Zones that elect one of them to represent them at the National KTDA Board (KTDA Holdings).
These are the same administrative structures used in key decision-making, distribution of inputs, marketing and sourcing other value chain services. KTDA also has several subsidiaries established to ease most of these services, as well as create own in-house capacities for services they would otherwise be paying for from others. The entire of the KTDA family generates well over Sh100 billion turnover in a year.
The factory companies are therefore the shareholders of the KTDA Group (KTDA Holdings) who receive dividends and onward pay to their registered farmers.
The subsidiaries are KTDA Management Services, KTDA Power, Greenland Fedha, Ketepa, Chai Trading Company Limited, Majani Insurance Brokers, Tea Machinery & Engineering Company Ltd and KTDA Foundation.
Such is the KTDA success story as a global tea aggregator. This must be protected. Like every other institution, KTDA has its fair share of challenges that need to be soberly addressed in the best interest of smallholder tea farmers doting 21 counties across the country.
