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How tea farmers can easily turnaround their fortunes

Monday October 21 2019

By FRANCIS WANYANGA
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The recent exposé by the Daily Nation about the goings-on in the tea sector shows how cartels in the Kenya Tea Development Agency (KTDA) have reduced the farmer to a life of servitude while theirs remains in the first lane.

With the advantage of this knowledge, farmers should push for change.

To see the typical farmer’s predicament in perspective, the average annual production of green leaf is 2,000kg per year.

The total pay at Sh45 per kilo is Sh90,000. Less plucking cost at Sh12 per kilo is Sh24,000, while fertiliser cost is Sh7,500.

The net income for this farmer with dependants is therefore under Sh60,000 or Sh5,000 per month, the bulk of which is paid after one year. This is breeding poverty, whichever way you look at it.

To save the farmer from total collapse, deliberate steps must be taken to raise the amount of money that reaches him to at least Sh100 per kilo, paid promptly upon receipt.

MANDATE

The rain began beating the farmer when KTDA unilaterally modified the original mandate, which was crop-husbandly, processing plants, staffing and management, marketing, sales and remittance of sales proceeds.

Today, greed by directors has led to this mandate being exercised through nine entities, which ensure each of the 12 directors sits in several boards and committees.

This has resulted in a steady flow of fees and allowances as well as increased operational costs.

Additionally, the transparent auction system has been muddled with a direct selling system with a built-in 90-day credit, which affects at least 30 per cent of all produce and confers staff leeway to play games.

Most annoying, KTDA has been exhibiting impunity while global tea output is on the rise.

CHANGES

Global production has hit six billion kilos, up from five billion in less than a decade, out of which Kenya contributes 440 million kilos and China about 500 million kilos.

UAE and Germany have now joined the top six leading exporters after China, Kenya, Sri Lanka and India.

To rescue the sector, the following changes should be effected. The Agriculture and Food Authority (AFA) proposed legislation, which would reform KTDA, should be enacted fast.

Value addition for export should begin with acquisition of overseas supply chains. Outlaw all non-transparent sales practices as presently carried out at KTDA.

LEADERSHIP QUALITY

Amend Companies Act 2015, which removed age limits for public company directors, exposing the populace to a medically senile leadership in the public sector. We should learn from recent political events in Algeria.

Raise leadership quality in tea processing firms by amending the colonial Memorandum and Articles of Association to allow for direct election of all directors by all shareholders, which would conform to World Best Practice.

Today, a director who will end up on the KTDA board is elected by growers from a tiny constituency possibly of clansmen.