In Summary
  • Tea farmers have no say on their produce — and have nobody to tell their story of pain and helplessness.

  • Although KTDA purports to be the farmer’s agent and voice — it is not.

  • It not only interferes with farmers’ bid to elect factory directors and run them independently but also stage-manages polls to its advantage.

The 600,000 smallholder tea farmers were supposed to be rich – but all they collectively own are lush rows of green bushes which help them brew their troubles and misery.

These small-scale tea farmers were lured — more than 50 years ago — to grow a cash-crop that promised them a good income. It did for some time. But not anymore.

BROKEN DREAMS

Today, they are caught between brokers, buyers and broken dreams. While last year Kenya sold 474,861,590 kilos worth Sh140 billion — at the average price of Sh296 per kilo — there is little economic progress seen in tea growing areas, thanks to an inept marketing structure that subjects the farmer to servitude.

This year, farmers received a second payment, wrongly christened bonus, of only Sh15 per kilo which is in addition to the Sh14 per kilo paid for green leaf delivered to the factory in a particular month.

Since it takes on average four kilos of green leaf to make one kilo of made tea, it means that one kilo of green leaf should average Sh74. But farmers got only Sh29, or less depending on factory, to take home.

Statistics indicate that more than 60 per cent of the tea dollars are deducted from the farmer’s produce to run factories, warehouses, the convoluted value chain and bureaucracy.

Why a country that hosts the second biggest tea auction in the world, Mombasa Auction, operated by the East African Tea Trade Association (EATTA), can have its farmers living in penury is a source of worry.

The farmers feel abandoned and turned into prisoners of a monolith that purports to stand for them — the Kenya Tea Development Agency.

At best, the farmers continue to deliver the produce to this agency, which manages 55 per cent of the country’s tea production, but in essence, and at worst, to the jaws of a giant ogre that gobbles up their money in one of the most scandalous market arrangements in history.

Tea is the last cash crop that has magically survived corruption, mismanagement of yesteryears. Attempts to liberalise the sector only led to an internal coup which saw previous managers return to run the show.

UPROOT

KTDA boss Lerionka Tiampati seems unapologetic about the low earnings that he gave this year and has asked farmers who want to uproot their tea plants to go ahead.

"We have no say over what farmers want to do with their tea bushes. They are overall owners of the plants," he told the press.

But farmers such as Laban Rotich, whose produce is processed by Kapkoros Tea Company, is a worried man: “It is unfortunate that after 15 years growing tea we have never experienced such low prices.”

This year, Kapkoros Tea Company had offered Sh18 per kilo in bonus compared with Sh34 offered last year. The same case with many other KTDA managed factories. Something has gone wrong.

“We have been left at the mercy of cartels operating in the sector who reap billions of shillings while growers are left to incur huge losses and without intervention from the government, we are doomed,” Mr Rotich lamented.

INTERMEDIARY

Tea production was, from the onset, not designed to help the smallholder farmer and was strategically suited for multinationals who for more than 300 years commanded the auction in London.

Kenya’s Nairobi auction began in 1956 and moved to Mombasa in 1969.

Now, our local auction is facing competition from Dubai where KTDA has opened an office at the Dubai Tea Trading Centre (DTTC), which has become an important intermediary between production and consumption.

Local cartels love this arrangement since from this base, they can sell tea without going through scrutiny at the Mombasa Auction.

LIBERALISATION

After months of research, the Nation can now reveal the reasons why Kenya’s tea sector is a sham – and why small-scale farmers still live in penury.

With the liberalisation of the tea sector, it was hoped that other management agents would emerge to compete with KTDA. But KTDA and its barons ensured that no such competitor arose.

What emerged, by design, was a super agency lording over factories and which held sway the regulator — The Tea Directorate — thanks to its billions. After all, the liberalisation strategy was written and carried out by KTDA and Kanu government insiders with interest in tea trade. Today, KTDA is a dominant monopoly in the sector.

At the moment, smallholder tea farmers receive only 16 per cent of the consumer price paid in Europe while 84 per cent is shared by traders, brokers, marketers and other boardroom boys. The farmers’ complaints are usually drowned by a powerful PR machine that has worked to keep KTDA away from scrutiny.

HELPLESSNESS

Tea farmers have no say on their produce — and have nobody to tell their story of pain and helplessness.

Although KTDA purports to be the farmer’s agent and voice — it is not. It not only interferes with farmers’ bid to elect factory directors and run them independently but also stage-manages polls to its advantage.

“The electoral system run by KTDA is opaque, conflicted, unjust and corrupt,” says a current director of KTDA in confidence.

When the tea sector was liberalised, it was hoped that farmers would run their factories independently and would only appoint KTDA as their management agent.

The thinking then was that as limited liability companies; the factories would be autonomous.

SHORT-CHANGED

But the barons who used to run the previous tea parastatal, Kenya Tea Development Authority, took over the running of the new Kenya Tea Development Agency and have short-changed farmers ever since.

The result: the KTDA neither protects the farmer, nor caters for their needs.

Under the Tea Act Cap 343, a “management agent” is appointed through a specific management contract or agreement to offer professional services in specific functions of production, processing or marketing of tea — “but does not include a buyer, broker or packer of tea.”

But KTDA has over the years become a buyer, broker and packer of tea, an unlawful act that has only hurt farmers. It has also become the supervisor of factories, lording on their boards and whittling down the voice of the farmer.

CONVOLUTED

After the liberalisation, KTDA was transformed into a new company — KTDA Holdings Limited which was to own all assets of the previous body.

It was this company which formed KTDA Management Services Limited to undertake the management of factories.

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