Kenyan tea farmers welcome government reforms.
By Dan Bolton
In early December, Kenya's National Assembly passed the Tea Act of 2020, advancing sweeping reforms in the tea sector. The decision reestablishes the Tea Board of Kenya (TBK) and the Tea Research Foundation (TRF), two institutions dissolved in 2014 in favor of an Agriculture Fisheries and Foods Authority that managed eight sectors including coffee, tea, coconut, cotton, sisal, sugar, and pyrethrum.
Agriculture Cabinet Secretary Peter Munya, at the direction of President Uhuru Kenyatta, has for months pressed for a slate of reforms returning sector control in both tea and coffee.
The Tea Act, which was approved on Dec. 1, and the Coffee Act both institute direct settlement schemes (DSS) that require payment to farmers directly after the sale of their tea and coffee. Tea brokers, buyers, and the tea auction in Mombasa must remit sales within 14 days, and tea factories are required to pay 50% of sales direct to farmers. Tea farmers also earn an end-of-harvest-year bonus.
The legislation has strong support from the East Africa Tea Traders Association. Kenya Tea Development Agency (KTDA) prefers the status quo. The nation’s 700,000 tea farmers generally support reforms to right perceived wrongs they say are perpetuated by KTDA. Tea farmers, for example, do not receive fertilizer subsidies like those who farm other crops. Farmers hope to sell tea directly to overseas buyers, a practice blocked by regulations supported by KTDA.
One goal is to enable farmers to monitor their tea through the value chain. Irungu Nyakera, who chairs the Kenya tea sector lobby, called the act “a big step towards making sure that we save the farmer from exploitation by cartels.” He told Business Daily Africa that an electronic auction platform mandated in the act would make prices accessible to all value chain players. "This will remove the opaque practice where farmers hardly know how their produce is sold,” writes the newspaper.
The bill empowers the agriculture secretary to implement numerous changes in consultation with TBK. The act also funds TRF to resume scientific studies advancing the sector.
Kenya's economy is not good right now. The Kenya shilling recently fell to a historic low of Ksh110.05 against the US dollar, the trade currency for coffee and tea. Tea prices of black CTC (cut, tear, curl) are averaging well below $2 at auction, hovering around $1.90 per kilo for the past 12 weeks.