KENYA – Tea farmers in Kenya anticipate earning more from the sector following the completion of negotiations to review management agreements between smallholder tea factories and KTDA Management Service LTD.
According to KTDA chairman David Ichoho, tea farmers are significant economic pillars, and as such, more efforts are being put towards supporting the empowerment and improved returns for the farmers.
He noted that the review of the management agreements hopes to remedy the relationship between the parties involved in the tea sector and improve the management of tea factories for the benefit of tea farmers.
Among the key changes in the revised management agreement is the money charged from farmers to facilitate the operations of KTDA-MS.
The charges have been reduced from the current 2.5pc to 1.5pc, a move that could give back the 8 million tea farmers over Sh 800 million (US$5.8m) charged by the MS every year.
In addition, there will be enhanced respect for farmers during and after the collection of their tea leaves and improved services in the collection of the produce from buying centers.
Mr. Ichoho also revealed that under the new arrangement, key performance indicators to monitor the performance of the management agency continuously have been introduced.
The term for services offered by the KTDA-MS such as production, transportation, marketing, and management of accounts, among others has also been reduced from the current 10 years to 5 years, which is expected to enhance the accountability of the management agency.
The review comes on the heels of a request from smallholder tea factories in Kirinyaga to the government to find an alternative way to fund KTDA-MS and similar agencies instead of levying farmers.
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, 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.