Business

By Kiprono Kurgat | Jul. 02, 2024

The Kenya Tea Development Agency (KTDA) has new directors after elections were held on Saturday. The directors of the 54 factories in 21 counties, who will serve for three years, face the daunting task of implementing reforms in the tea sector.

Expectations are high among tea farmers, who are looking to the new team to increase tea bonuses and carry out the reforms as envisioned by the government. The former directors had gone to court to challenge their election, hindering the implementation of the tea reforms.

When announcing the results of the polls conducted by the Independent Electoral and Boundaries Commission (IEBC) on Sunday, Agriculture Cabinet Secretary Minthika Linturi urged the newly elected directors to ensure they implement the tea reforms.

“I implore you to implement reforms, review governance practices, and let us ensure we curb inefficiencies. I once more thank our farmers for making their voices heard.”

He added, “I am delighted to announce the results of the smallholder directors’ elections held on June 29, 2024. This historic moment marks the first tea farmers’ election by a national, independent body (IEBC) with a one-farmer-one-vote system.”

A total of 328,253 out of 628,555 registered farmers voted (52.2 per cent) to elect the new directors. Linturi said the new directors will be confirmed at the Special General Meeting this month, while elections for the national directors for the KTDA Holdings Board are on July 26, 2024. Some of the reforms the new directors are expected to carry out include setting a minimum price in the market, providing a fertiliser subsidy, increasing monthly payments to farmers, and paying bonuses in July instead of October.

They will also seek a reduction of interest rates by Greenland Fedha, which has ensured affordable loans. Introduced through the Tea Act of 2020, the reforms aim to improve returns to smallholder farmers.

The tea sector is a key driver of Kenya’s socio-economic development, providing a livelihood to over 834,129 farmers and about 6.5 million Kenyans directly and indirectly, representing 13 per cent of Kenya’s population.

It contributes about two per cent of Kenya’s GDP and 4 per cent of the agricultural GDP. The sub-sector accounts for approximately 21 per cent of the export earnings and is the third leading foreign exchange earner for the country after diaspora remittances and tourism.

Following the tea reforms, the reserve price and other factors have led to a rise in the earnings of tea farmers in the last two years.

In 2022 and 2023, the total green leaf payment to tea farmers increased by 45 per cent and 70 per cent, to Sh50.18 per kg and Sh59.02 per kg from Sh34.71 per kg.

As a result, the total payout to smallholder tea farmers increased from Sh62.8 billion in 2022 to Sh67.7 billion in 2023.