KTDA bid to nip illegal tea trading in the bud

A farmer plucks tea leaves on her Tetu farm in Nyeri last year. [Kibata Kihu, Standard]

The tea sector is under threat from increased green leaf hawking in the Mt Kenya region.

The practice, which has been prevalent in the Rift Valley and Western regions, is now slowly creeping into tea-growing zones in Kiambu, Murang'a, Nyeri, Kirinyaga and Meru counties. 

The Kenya Tea Development Agency (KTDA), which processes and markets tea from smallholder farmers, is feeling the pinch of tea hawking as deliveries to key factories decrease.

Green leaf hawking is driven by middlemen who buy produce from KTDA-contracted farmers for delivery to private factories. The hawkers buy a kilo of tea at Sh22 and pay on the spot, unlike KTDA-run factories that pay farmers Sh15 per kilo monthly and a yearly bonus.

"From the Sh15, pluckers will be paid Sh12 and the rest will be deducted to pay loans. In the end, you get nothing," said Peter Kariuki, a tea farmer in Kiria-ini.

Rising demand and prompt payment have spurred illicit activities in which unscrupulous individuals raid tea collections centres or lorries transporting tea to factories. In some instances, tea pickers steal from farm owners and sell the produce to brokers, sometimes at throwaway prices.

Apart from the fact that stealing is punishable by law, the Crops Act prohibits any person who is not registered with a factory from buying, selling or even transporting tea. Those found guilty are liable to a fine not exceeding Sh1 million or imprisonment not exceeding two years, or both.

Two weeks ago, two men were arrested in Karatina illegally buying tea from farmers. Before that, a vehicle was seized in Murang'a and two people were arrested.

Urgent meeting

Last week, the Tea Directorate - the body charged with licensing tea factories - held an urgent meeting in Murang'a that brought together players in the tea sector with a view to addressing the issue.

Interim Tea Directorate head Anthony Muriithi emphasised the need for a permanent solution that would not isolate other players in the industry.

“Hawking is an issue and we need a solution that will work in future so that things work. When bad practices become good practices, it means that systems are not working," he said.

According to Maina Kimani, a smallholder farmer in Kiambu, farmers decide to sell their tea to hawkers to sidestep loans that they owe financial institutions.

The resultant effect of factories losing millions of shillings to middlemen, he said, was that factories could end up operating below capacity yet some were repaying loans for expansion.

"This will create idle resources, which are a loss to farmers who financed the building of the factories. The expansions are usually done to increase processing capacity based on projections so that increasing production can be accommodated," Mr Kimani said.

Below capacity

But while KTDA remains wary about factories running below capacity, some private millers are saying tea hawking is not entirely to blame.  

Michael Gakungu, the chief executive of Central Highlands Tea Company, which is setting up Kiriti Tea Factory in Mathioya, says the decline in tea processing is attributable to other factors.

“Nobody is in support of hawking but that is not the only problem ailing the industry. There could be other areas that need to be looked at such as bush potential,” he said.

Mr Gakungu insisted on the need for increased extension services since the average number of kilos a tea bush produces had declined. He said tea production was also hurt by sub-division of land.

"The contract between a farmer and factory should be elaborate to show how much tea is expected from them because if they don’t bring that tea to me, they are affecting capacity."

Some of the blame has also been directed back to the Tea Directorate, which is accused of licensing too many private tea factories.

Farmers are calling on the Government to clamp down on cottage industries that are set up under the guise of processing specialty tea but end up luring regular tea farmers.

Review regulations

"The Government should review licensing regulations for cottage tea factories to ensure applicants have adequate green leaf. This is to ensure the establishment of such will not adversely affect the existing factories through hawking of green leaf. The hawking practice, if not nipped, could lead to factories closing down as a result of operating below economic capacity," Kimani said.

And according to Philip Githua, a director at Ragati Tea Factory in Nyeri, the key to eliminating tea hawking is to reduce the time in which farmers are paid their bonuses.

"What is driving the farmers to hawk their tea is a desperate need for money. Waiting a whole year for their earnings is too much. KTDA should look for ways to pay the farmers for their tea every four months rather than have them wait a whole year," he said.

"At the moment you cannot tell the farmers not to sell their tea. I tried and they were very hostile," he added.