Agriculture and Livestock Development CS Mithika Linturi has directed the Tea Board of Kenya (TBK) to work with directors and other stakeholders to explore alternative dispute resolution mechanisms in order to resolve outstanding issues and pave the way for the implementation of the provisions of the Tea Act 2020.
Linturi said the many court cases that have been lodged against the implementation of the Tea Act has hampered implementation of some of the tea reforms and realization of the desired outcomes for the tea subsector.
The CS was speaking in Nairobi during the Kenya Tea Development Authority (KTDA) Annual Directors Conference, which brought together over 400 Directors, Senior Management and stakeholders of the 71 KTDA-managed tea factories spread across 16 Counties in the country.
He noted that once the Act is fully implemented, some provisions such as Section 54 of the Tea Act, 2020 which provides for the establishment of a Tea Fund, will become operational.
The tea fund, he expounded, will partly be applied for price stabilization to cushion tea growers against price fluctuations and the source of these funds will be the Tea levy, among other sources provided for under Section 54.
However, Linturi noted that imposition and collection of the tea levy is being hampered by ex parte court orders suspending the implementation of Section 53 of the Tea Act, urging the petitioners to reconsider their stand and withdraw this petition amongst others filed against the Tea Act, 2020 for the purposes of moving the tea industry forward.
The CS noted that among the key interventions that was made to address the high cost of inputs and to cushion tea farmers from an upsurge in fertilizer prices occasioned by global economic factors was the provision of fertilizer subsidy.
“In the current financial year, the Government provided Sh4.44 billion fertilizer subsidies to tea farmers in all the 54 smallholder’s tea factories. This reduced the cost of fertilizer by Sh2,117 per 50 Kg bag. It is expected that following the application of the fertilizer during the short-rains season, productivity and quality of green leaf will be enhanced and consequently, improve tea farmers’ earnings,” said the CS.
In line with the recent Government directives on tea value addition and production diversification, Linturi noted that the Ministry of Agriculture, through the Tea Board of Kenya has developed a concept note, which will also be translated into a Cabinet Memorandum for presentation to Cabinet to incentivize tea value addition.
He explained that the concept note proposes the establishment of a scheme aimed at unlocking the potential of Kenya tea by providing both tax and other incentives necessary to make local value addition more attractive.
The CS noted that the Scheme will also entail promotion of a Kenya tea brand and enhancement of orthodox tea manufacturing for smallholder tea factories.
“Once the envisaged incentives are made available, I urge KTDA managed tea factories to leverage on the incentives to upscale their manufacture of orthodox teas and value addition at factory level instead of continuing to do bulk tea sales,” he added.
Expressing his happiness to the recent export of value-added teas by KETEPA to West Africa under the African markets under Africa Continental Free Trade Area (AfCFTA) framework, Linturi urged KTDA to continue harnessing the opportunities presented by the AfCFTA currently under the guided initiative with ECOWAS, where there are fifteen member countries, with whom they can enjoy preferential negotiated tariffs.
About the recent attempts by the former directors to take-over the management of KTDA Holdings and the smallholder tea factories, the CS said government will not allow interference with the management of tea farmers properties and therefore urge those aggrieved with the elections that were held last year by smallholder tea farmers to await conclusion of the cases they filed in court.
In his remarks, KTDA Holdings Chairman David Muni Ichoho said he is proud that Kenya is in position one in terms of the dividends supply chain market.
“According to the Economic Survey of 2022, Agriculture remained the most dominant sector accounting for 22.4% of the overall GDP in 2021. Tea production reduced by 5.6% from 569.5 thousand tonnes in 2020 to 537.8 thousand tonnes in 2021, due to lower-than-expected rainfall in the tea growing areas during the year,” said Ichoho.
He noted that Group Revenues increased by 4.6% to Shs 25.076b from 23.970b, while Profit before tax increased by 9.11% to Sh.2.118b from 1.941M driven by value-addition, market diversification, cost management, and leveraging on ICT for productivity and efficiencies.
Being an export-oriented crop, tea is among the leading forex earners for the country generating on average over Sh.130 billion annually in export earnings.
Tea has also put Kenya on the global map, as Kenya is the 3rd leading producer of tea after China and India and the leading exporter of tea to over 77 countries globally.
By Catherine Muindi
