Kenya enacts new tea regulation bill as agency declares US$6.73m dividend for tea farmers

KENYA – The push for reforms in Kenya’s tea sector culminated in the signing into law of a new bill by President Uhuru Kenyatta, bringing hope for thousands of farmers who have for a long time complained mismanagement of their beloved crop.

One of the major highlights of the new law is the creation of the Tea Board of Kenya and the revival of the Tea Research Institute.

This could mean that proper funding can be sourced for the sector to assist farmers and also to boost research on new teas. 

Other major amendments introduced by the National Assembly that were not in Cheruiyot’s original Bill included the tea levy and tea fund.

A levy is set to be imposed on tea exports and imports and to be collected by the board at a rate not exceeding one per cent of the auction value for teas sold through the auction.

Further, the levy on tea imports shall be charged at a rate of 100 per cent of the value of the imported teas, says the law.

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Half of the levy will be used by the board for income or price stabilisations for tea growers while 20 per cent will be remitted directly to the Tea Research Foundation, and 15 per cent used for “function or power of the board.”

The law also seeks the uprooting of cartels and middlemen who have profiteered from the toil of tea farmers by controlling how Kenya’s tea gets to the market.

It will also seek to improve the running of the 69 KTDA-managed tea factories owned by some 600,000 smallholders.

KTDA, whose founding intentions were to assist smallholder tea growers, has been facing scrutiny in the recent past and is also the target of the new legislation.

Despite of the legislation, the tea agency earlier this month declared a US$6.79 million dividend for tea farmers across the country.

This year’s declaration according to the agency represents a 15% increase from the previous year’s dividend (US$6.29 million) and comes on the back of enhanced green leaf production over the same period which led to growth in total revenues for the year.

Also, to come under government regulation will be the Mombasa Tea Auction with brokers, buyers and the auction organisers — the East African Tea Trade Association — subject to new rules.

The Act further outlaws direct sale of tea with all to be sold at the auction except for orthodox and specialty teas.

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