Brokers, traders dismiss new tea regulations by Agriculture CS

Thursday, May 7th, 2020 00:00 |
A small scale tea farmer picks tea. Photo/PD/File

Tea industry players have dismissed regulations published last month by Agriculture Cabinet Secretary Peter Munya, terming them anti-business.

East Africa Tea Trade Association (EATTA), the organisation managing Mombasa tea auction said some of the sub-regulations clauses as punitive and destructive which if approved in their current form will deprive players in the industry an opportunity to competitively sell their tea.

Implementation of the sub-regulation clauses, the organisation warned will subject farmers to low earnings as secondary players will pass incurred costs.

EATTA Managing director Edward Mudibo in a submission of views on the regulation to the ministry, argued that the industry survives on principles of sound competition and some sections of the regulations seek to deny the players that chance. 

The institution called for review or deletion of the punitive sub clauses.  

Export market

Mudibo said regulation 24(1) that provides for all teas processed and manufactured in Kenya for the export market except for orthodox and purple teas, within two months from the commencement date of these regulations, being offered for sale exclusively at the tea auction floor among other challenges, contradicts the Competition Act.

“Direct sales are commercial decisions made by producers and to restrict them from offloading products through channels of choice is anti-competition,” he added.

He added: “Dependence on one selling channel only can lead to lowering of prices. It is clear that the auction and private channel complement each other in obtaining the best possible average price.”

Government demands that all tea buyers shall henceforth submit to the regulatory authority –Agriculture Food Authority (AFA) a performance bond in the form of a bank guarantee equivalent to 10 per cent of the estimated value of the tea they intend to buy.

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