Tea farmers in Kisii could be losing cash to an organisation purporting to be acting for regulator Tea Board of Kenya (TBK), which has embarked on a campaign to fight illegal trade in green leaf.
The tea board has notified farmers about the operations of a company that has been demanding favours from suppliers.
The regulator said that the matter is now a police case with the company’s officials being questioned over suspected extortion and fraud.
“It has come to our attention that the company has approached some tea stakeholders purporting to be partnering with the TBK,” a notice by the board read in part.
“Further, some individuals have approached TBK suppliers purporting to be TBK consultants and demanding for favours,” added the authority, which is mandated to deal with malpractices in the tea sector.
TBK accused the organisation’s officials of posing as their partners and asking for favours – including bribes—from farmers and suppliers who are suspected to be taking part in the illegal business.
The board said some of their suppliers and farmers blew the whistle on the organisation’s activities in good time resulting in arrests and ongoing interrogation.
“The matter regarding the said organisation is now with the Nyamira police where reports were made by the complainants,” said Philip Cheruiyot, the TBK corporate relations executive.
Kenya Tea Development Authority (KTDA) — which serves more than 566,000 small-scale farmers — estimates that the sector lost over five million kilogrammes leaf last year through illegal trade.
The problem has left factories operating in excess capacity as well as hurt small-scale tea growers.
Union officials argue that farmers are lured into engaging in the illegal trade due to low returns from the KTDA compared to rival factories and multinationals.
Early last month, the Kenya Union of Small Scale Tea Owners asked KTDA to increase payment from the current Sh14 to Sh50 a kilogramme of tea as a first measure to curb the vice.
READ: Union officials urge KTDA to raise tea prices
Diversion of green leaf from reaching their traditional factories has increased over past months with multinational competitors offering incentives including medical cover to lure small-scale farmers.
“Unless KTDA pays farmers well, tea companies where small-scale growers deliver their green leaf are going to collapse and in the process the county’s economy will be hurt,” said union’s secretary Richard Nyachiro in an interview with the Business Daily.
Kenya’s total earnings from tea sales climbed four per cent last year to Sh127.1 billion compared to the previous year, buoyed by good prices and favourable foreign exchange rates.
READ: Kenya's tea earnings grow 4pc to Sh127bn
The tea board said last year the country earned Sh112.2 billion from exports of the commodity and Sh14.90 billion from domestic sales.
Tea production volumes, however, dipped to 369 million kilogrammes compared to 377 million the previous year due to frost and delayed rains in the first quarter. The frost attack affected 3,000 hectares of crop.
The board has licensed 62 smallholder-owned factories managed by KTDA and 39 private estate companies.
Each factory is required to maintain a register of growers falling under them on behalf of the board, from which the shortfalls in supply are easily detectable.