Tea reforms – spelt out under the Tea Act 2020-are slowly bringing hope, in a sector that was riddled with corruption, mismanagement, favourism among other vices, killing the dreams of hardworking farmers. The more than 500,000 small-holder farmers from the large-scale growing areas in Central and Rift Valley have mixed views even as the changes take effect. As part of the new changes, already, a raft of measures has been undertaken. The biggest is the bonus payout for this year. The Kenya Tea Development Agency (KTDA) announced that it paid Sh21 billion bonus to be shared by the 600,000 smallholder tea growers countrywide.
From January 1, 2021 farmers in the East of the Rift Valley got their monthly payments adjusted upwards from Sh16 to Sh21 perhaps one of the highest increases in recent years. Those from West of the Rift Valley only started to enjoy the same from July 1, this year. Many have also welcomed changes at KTDA management, election rules and overhaul of governance structures in tea factories. Hopefully, there will no longer be a few powerful people determining who can be a leader at the agency.
But what do farmers feel about the reforms? A tea farmer at Gacharage Tea Factory in Murang’a, Milka Nyambura, says the new reforms will end control of the sector by the rich.
“The mighty used to determine the directors elected as they used proxy votes, that was full of cheats,” says Nyambura. She notes that the reforms are so promising, the low bonus this year should not discourage the farmers.
A number of farmers have expressed disappointment with regard to the low bonus.
Late October, Simon Charagu a tea farmer from Nyeri was frustrated when he found nothing had reflected in his bank after the payment of the bonus. His entire second payment had been spent to offset his pending loans.
“I had promised my children new clothes and pairs of shoes. But I went home empty-handed,” recalls Charagu.
He had hoped that the reforms would wipe away all his troubles, but the storm is not yet over.
“When we supported the reforms, we expected all will be well but things are still bad,” he said revealing that he had applied for a Sh230,000 loan payable in the new year which started on July 1 and runs until June 31, 2022.
Another farmer also expressed his disappointment. Kiru Tea Factory farmer Wallace Kamau, says they hoped for a bright future with a bonus payment of more than Sh5 per kilo. But all is not lost.
Change of managers
Kamau, a former director at the factory, says the change of the managers at the KTDA headquarters is a big plus to the value chain since new leaders will look at the sector with different lenses.
“Farm harvesting labour has already increased to between Sh12 and Sh13 per kilogramme chipping away some of the farmer’s gains,” says Kamau.
Samuel Kamau who manages his family tea farm in Murang’a recounts how he could not believe his eyes after he received Sh3 million in a bonus payment.
Kamau is among those who expected more money following the partial implementation of the Tea Act 2020 that was unanimously backed by the growers across the country.
Though the boom this year is disappointing to many growers, Agriculture and Livestock Cabinet Secretary Peter Munya has assured the farmers that next year’s bonus will be a boom once the reforms take full effect.
Kihu Irimu of the Kenya Tea Forum in Nyeri says there is hope in the sector after years of farmers suffering from insensitive management of their own resources.
The journalist who turned the spokesman of the oppressed farmers said the past regime failed in governance tests as the production costs were high.
“The small-scale farmers are supported by their children despite working in their tea farms all the time,” says Irimu.
Kiru Tea Factory Chairman Chege Kirundi who championed the tea reforms says the future of the sector is bright even though farmers had not registered instant gains in the first post-reforms years.
In three months, performance in sales reflected improvement as compared to the same duration last year, appreciating government-backed tea reserved price at the auction, he notes.
“We now have factories working on reforming the management contracts between tea factories and the KTDA all for the benefit of the farmer,” says Kirundi, a lawyer.
Jerald Ngumba, a director at Ikumbi Tea Factory, says they now understand the concept of the management of the sector after they were trained on governance and human resource by experts. They have now learnt how to keep production costs at manageable levels.
As the reforms set in, one of the issues that has come up is the transportation of manufactured tea to Mombasa Auction. Many farmers have always questioned why this cost has been placed on the business with tea factories required to give out contracts to transporters with containerised trucks. “This is not rocket science,” says a former director ousted under the Munya reforms.
“The auction is in Mombasa. That is where the market is – where the trader and the producer meet. People fail to appreciate that factories in the DRC, Madagascar, Malawi, and Zimbabwe bring their produce to our coastal city for trading.”
According to this former director, Kenya can as well legislate to require its produce to be picked up at the factories but that would only make our teas more expensive since it would increase the trading risk to buyers and the cost of accessing the commodity.
Another issue of concern is why tea from central fetches premium prices. Traditionally, tea from East of the Rift Valley growing regions such as Kiambu, Murang’a, Nyeri, Kirinyaga, Embu, Tharaka Nithi, and Meru have always fetched a premium per kilogramme as compared to that of producers from West of the Rift Valley.
A look at second payment figures for tea farmers this year shows that while a farmer at Gacharage Tea Factory in Murang’a earned Sh51 from each kilo he produced in the 2020/21 year, while their counterpart from Kapsara in Trans Nzoia took home about Sh20 per kilo.
But there is a reason behind this.
“Farmers in the East of the Rift Valley leverage on quality because of smaller holdings and availability of labour. But the tea millionaires are in the West where the emphasis is on quantities and not quality. A farmer producing 20,000 kilogrammes in the West of the Rift will always be far ahead of a farmer in the East who produces 3,000 kilogrammes despite the pay variance.”
The Sh31 variance is always wiped out by the amounts that the farmer in the West produces. “The problem with the tea industry is that you can only do so much with your produce. The producer has little control on the market,” explains the ousted director.
He says accessing new markets such as Japan was a challenge because their consumption was not just for different varieties of tea but also clones.
Many farmers who rushed to invest in the promised lucrative clones such as purple tea in the KTDA zones have been a disappointed lot in the last 20 years. The slow-maturing clone has continued to be processed as black CTC meaning many who invested in it took a risky gamble.