- The KTDA’s core mandate is to facilitate smallholder farmers to grow high quality tea, process and market the product to achieve the best possible return.
- The KTDA was privatised in 2000. Factory companies contract KTDA MS to manage for them the tea value chain at a management fee of 2.5 per cent.
For some, Kenya Tea Development Authority (KTDA) is the soul of one of Kenya’s most important crops. To its critics, however, the agency, which started out as a marketing facilitator for farmers, has since morphed into an all-powerful hydra-headed monster. Finance and Strategy Director Benson Ngari speaks on this.
Just what is the role of KTDA?
The KTDA Holdings Ltd is a company that provides critical services in the management, processing and marketing of high quality tea grown by Kenyan smallholder farmers.
The agency is owned by farmers through their respective factories. The more than 600,000 farmers are individual shareholders in 54 factory companies which in turn are corporate shareholders of KTDA Holdings.
Each factory company on average holds two per cent shares in KTDA.
The KTDA’s core mandate is to facilitate smallholder farmers to grow high quality tea, process and market the product to achieve the best possible return.
The subsidiaries are meant to make this tea value chain more efficient and earn profits that are paid to farmers as dividend, together with the second payment.
Has KTDA stretched its original mandate to include roles not envisaged by the law?
Following recommendations by Sessional Paper 2 of 1999, KTDA now runs multiple subsidiaries along the tea value chain that provide specialised services at the best rate.
This translates to cost-saving and efficiency across the chain from the moment the farmer picks his tea to the moment it is loaded to a ship or sold at a local shop.
For instance, our microfinance subsidiary, Greenland Fedha, offers farmers easy access to loans, enabling them to add value to their livelihoods by buying necessities such as water tanks and accessing funds to build homes.
Our brokerage subsidiary, Majani Insurance, facilitates insurance of all KTDA assets, including factories, at lower-than-market rates.
The KTDA Power Company (KTPC) was created to spearhead the development of renewable, reliable and affordable energy, starting with small hydropower projects across the tea growing regions.
KTDA Management Services (MS) Ltd runs the 69 processing factories through agreements with the respective factory companies, while Chai Trading Company Ltd is in tea warehousing, blending, trading and export.
Kenya Tea Packers (Ketepa) Ltd, a leader in tea blending, packaging and distribution for local and international markets has diversified to the bottled water business with its Maisha brand.
Tea Machinery and Engineering Company (Temec) Ltd does fabrication, installation, repair and maintenance of processing machinery and equipment. We also have KTDA Foundation through which the agency carries out corporate social investment activities.
Why does KTDA pay farmers west of the Rift Valley less than their eastern counterparts?