Kenya Tea Development Agency to lose grip on industry

Friday, April 17th, 2020 00:00 |
Tea farmers pick tea. Photo/File

Kenya Tea Development Agency (KTDA) is likely to lose the control it currently enjoys in the tea sub-sector under new regulations.

Agriculture Cabinet secretary Peter Munya yesterday announced new policy, regulatory and administrative reforms in the sub-sector which are likely to elicit sharp reactions from key stakeholders, especially the agency.

Munya blamed the current sorry state in the tea sub-sector to a dysfunctional tea auction system, control and predatory behaviour of KTDA and its subsidiaries in the tea value chain.

The agency that supplies over 60 per cent of the tea traded at the Mombasa Tea Auction was accused of retention of large amounts of tea farmers’ money usually deducted at source and misapplication of the same.

Private entity

KTDA is a private company owned by about 600,000 smallholder tea farmers spread across 16 tea growing counties in Kenya. 

It is owned by 54 corporate tea companies which have expanded by setting up satellite factories in their neighborhoods to accommodate the extra leaf.

The satellite factories are 15, adding up to 69 the total number of tea factories owned by smallholder tea farmers.

The tea agency is further blamed for inordinate delays in making prompt payments to smallholder tea growers despite receiving payments from tea brokers within 14 days from the date of the auction.

Most of the regulations seek to lessen KTDA grip in the tea sub-sector and finally open up the market to new players.

“The government agenda is to bridge current gaps along the value chain and ensure small-scale tea farmers enjoy their hard-earned cash.

This will require improvement of the governance system and enabling small-scale farmers to have more authority on decision making,” Munya said yesterday at Kilimo House when he announced the regulations.

A key change the government is fast-tracking is to ensure KTDA Company Secretary participates in respective tea factories management meetings. KTDA operates an agent model whereby it is contracted by 66 tea factories as a management agent.

Tea value chains and members of the public have 14 days to air their views on the new regulations after which the technical committee that has been working on it will incorporate all the public views before they are gazetted.   

Munya added that an ongoing audit of KTDA will further spell more stern actions the government will undertake to minimise manipulative tendencies by KTDA.  

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