Bill seeks to assure farmers minimum pay for tea, coffee

Tea and coffee farmers will have guaranteed minimum returns for their crop if MPs approve a Bill that seeks to amend the Crops Act 2013.

Kiharu MP Irungu Kang’ata has drafted a Bill that seeks to expand the functions of the Agriculture, Fisheries and Food Authority (AFFA) to include prescribing the guaranteed minimum returns to coffee and tea farmers.

A minimum guarantee in the case of the two cash crops is an initial sum that is paid to the growers by the authorities irrespective of how they perform at the auction. It is also the initial sum that is paid to the farmer by the buyer (government) irrespective of how the crop performs.

Mr Kang’ata wants to add the functions of the Commodities Fund established under the Crops Act to include payment of minimum returns to farmers when prices of tea and coffee fluctuate downwards.

“The payment is to act as an incentive to tea and coffee farmers in order to boost the production of the said crops. The Bill also intends to boost production of tea and coffee by farmers through the incentive hence increased returns to farmers,” Mr Kang’ata said.

He said the Bill further seeks to establish that the monies (returns to farmers) will be paid out of the fund of the AFFA.

“There shall be criteria which will be used to pay such returns. The criterion will be predetermined by the authority,” the Kiharu MP said in the Bill.

Mr Kang’ata said tea and coffee estates currently are integrated operations which grow, process and market the crops in wholesale auctions in Nairobi and Mombasa.

“The final prices received by the farmer is net the marketing costs incurred. The prices tend to fluctuate a lot due to underlying factors of demand, supply and global prices. Good wholesale price signify good price passed to the farmer,” he said.

He argued that by introducing the minimum returns to farmers, the losses that usually accrue to them would be mitigated. Tea marketing is usually done by either private agents or State agencies such as the Kenya Tea Development Authority and the Coffee Board of Kenya.

“In the event of unfavourable marketing conditions, these entities may sell the commodities at low auction prices and may not break even.
Mr Kang’ata said tea prices in 2016 fluctuated downwards from $3.1 in January to $2.4 in April.

“The average prices for the year 2015 increased slightly compared to those of the year 2014 taking the average price for the year 2014 and 2015 to $2.8 per kilogramme.