KENYA – Smallholder tea factories in Kirinyaga have requested the government of Kenya to find alternative funding for Kenya Tea Development Agency Management Services (KTDA-MS) and similar agencies instead of levying farmers to stimulate the industry into expanding.

KTDA Management Services Limited (KTDA MS Ltd) is a wholly-owned subsidiary of KTDA Holdings Limited, which provides management services to tea factories.

Factory directors raised concerns during a meeting with the agency in Sagana, over Section 53 (1) (2) of the Tea Act 2020, which levies farmers one percent on the net sales value of tea sold, arguing the provision would affect farmers’ income negatively.

Their spokesperson, John Mithamo, also a KTDA board member for the zone, said farmers will suffer if the contested clauses are adopted.

“The provision on governance and direct sale of tea should be among other clauses in the Tea Act that require revision,” he said.

Mithamo noted that the agency pays dividends to factories, and farmers will lose and may be subjected to unnecessary procedural management of their money if one percent of their sales went to other parties.

He wondered why it was only tea growers who were being subjected to such levies. So far, forty factories from different parts of the country have signed management agreements with KTDA-MS, aiming to improve relationships and ensure that farmers earn more from their leaf.

The tea factory directors tasked a select team from Kirinyaga to reexamine the current management agreement with KTDA-MS within seven working days, make the necessary changes, and forward them to the agency for further engagements.

They further urged the government to re-look at the contested clauses in line with its Bottom-up economic approach, which seeks to empower the low-income-earning members of the public.

The board and management of KTDA-MS, recently, finalized negotiations to review management agreements for the smallholder tea factories in Embu County.

According to KTDA-MS, the reviewed management agreement is a significant change from the current agreement, and after implementation, it is expected to remedy the relationship between the parties and improve the management of tea factories for the benefit of tea farmers.

Under the reviewed treaty, the agency has introduced key performance indicators to monitor performance continuously.

Another key change in the new management agreements is the reduction of the management fee from 2.5 percent per gross turnover to 1.5 percent and the reduction of the term of the agreement from the current 10 years to 5 years expected to enhance the accountability of the management agency.

Clear demarcation, which spells out the role of the management agency and the board to improve their services to tea factories and farmers, was also among the changes in the reviewed management agreement.

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