Tea zone governors want fund to cushion farmers from price slump

It will cushion farmers against losses caused by a slump in tea prices, governors say.

Thursday March 3 2016

Kiambethu Tea Farm. Nandi and Kericho governors have urged the government to establish a stabilisation fund to cushion farmers from losses as prices slump. PHOTO | RUPI MANGAT | NATION MEDIA GROUP

Kiambethu Tea Farm. Nandi and Kericho governors have urged the government to establish a stabilisation fund to cushion farmers from losses as prices slump. PHOTO | RUPI MANGAT | NATION MEDIA GROUP 

By ANITA CHEPKOECH
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By TIMOTHY KEMEI
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Governors from tea growing areas have asked the government to set up a stabilisation fund to cushion farmers from losses as prices slump.

Kericho Governor Paul Chepkwony and his Nandi counterpart, Mr Cleophas Langat, said farmers were frustrated by the high cost of tea production and heavy taxation across the value chain.

Farmers in the South Rift recorded a drop of Sh10 in earnings for every kilogramme of tea produced.

“The government should act with speed and put in place measures to stabilise tea prices as it had promised,” said Prof Chepkwony.

Dr Lagat said the government should reduce levies that have eaten into farmers’ earnings over the years and support them to acquire better machines for value addition.

“We need leverage in policy framework around tea to address issues of red tape and marketing,” Prof Chepkwony told the Nation in an interview.

“We have set up an investment board to help identify potential investors who will work with local farmers to add value so that tea can fetch better prices,” he added.

'PAINFUL CHANGES'

Last month, Agriculture Cabinet Secretary Willy Bett assured tea farmers in Kericho that the ministry would soon announce major changes in the management of the sector, which he warned would be “very painful” to some people but necessary to deal with longstanding challenges.

Tea prices have declined steadily for the last seven years with the worst bonus payouts in the industry’s history recorded in 2014, at Sh8 for a kilo.

This was blamed on low prices on the global market arising from an oversupply of the cash crop.

Farmers supplying their green leaf to multinational companies suffered a price drop to Sh36 from Sh46 in October last year, which was attributed to overproduction.

As opposed to multinational companies that give farmers their entire pay at once, a majority that take supplies to the Kenya Tea Development Agency (KTDA) are yet to know their fate as their second payment is set to be determined in September.

But farmers fear that the low pay by multinationals could be an indication of bad days ahead for the entire sector.

“It’s only a matter of time before the KTDA announces the decline. As it is now, it is a wait-and-pray situation,” said Mr David Siele, a farmer in Bomet County.

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