Tea farmers in Kenya could get relief after the directives made by President Uhuru Kenyatta. The president announced this during a State Nation address in Mombasa on Tuesday, January 14. However, the instructions aim at increasing the amount of money a tea farmer gets.
The president cited several challenges farmers face, which include exploitation by the cartels. Besides, he noted that Kenya is the leading coffee exporter all over the world.
Previously, farmers received low earnings and fluctuation of net income, delayed payment and low initial payment by Kenya Tea Development Authority (KTDA).
In his speech, the president said, “Evidence shows that a farmer who should be earning Ksh. 91 per kilogram of tea has been earning Ksh 41. The balance of Ksh 50 per kilogram goes to both brokers and middlemen.”
The president directed the Ministry of Trade to ensure subsidiary tea companies have a different structure of governing. Competition Authority at the National Treasury was directed to bring the practices to an end.
According to Uhuru KTDA in the past delivered value to tea farmers, but recently the payments were overturned by operational governance. Also, he cited the conflict of interest by the directors and lack of clarification when declaring dividends by subsidiary companies.
The president said that intermediaries should stop taking advantage of the fact that they have the liberty to sell farmers tea to anyone they choose. Therefore, they exploit farmers by purchasing the tea at low prices and resell it to KTDA using their names at a higher price.
President pointed that, “Some people are taking unfortunate advantage to exploit farmers.”
Therefore, the ministry of Agriculture should ensure they incorporate the 2019 regulations, which said that only farmers should sell tea to KTDA. The agency should pay farmers at least 50 per cent of the tea deliveries every month, and the balance paid as an annual bonus.
When it came to value addition, the president said that Srilanka fetches more when exporting their tea which is 40 per cent less than Kenya’s export.
Additionally, he directed the newly developed tea regulations 2019 to be completed in the next two weeks and gazetted to add value to Kenyan tea.
In continuation, the president directed an establishment of a fund known as self-sustaining, which should cushion farmers against fluctuation of prices. The tea council should also regulate the volume of tea sold through both auctions and direct sales. He said, “Direct contracts should be set at 80 per cent and auction at 20 per cent.”