Economy

Tea farmers sell produce to multinationals under new law

tea

Competition has been stirred between tea processing companies which will eventually empower farmers with price negotiation. Photo/File

Tea farmers are now supplying to more than one processing company with green leaf following amendments to an Act, which now allows multinationals to compete with the Kenya Tea Development Agency (KTDA) for produce.

Companies like James Finlay, Kabianga, Kapchebet and Changoi are now directly competing with KTDA for produce from farmers in Bomet, eliminating middlemen who have been behind tea hawking, the illegal sale of the crop without contracts.

“The competition that has been stirred between the factories will eventually empower price negotiation. Exploitation and monopoly is now a thing of the past,” says former Konoin MP Julius Kones, who sponsored the amendment allowing farmers to sell tea to buyers of their choice.

Although private and multinational tea companies offer better prices in delivery, many farmers are yet to sign valid agreements with the firms forcing them to sell part of the produce to KTDA as well.

Some farmers have sub-divided their farms into sections based on the number of companies they sell tea to.

Joel Sang, a resident of Kimulot said he had divided his land such that tea factories giving high returns get more acreage.

“I sell my tea to KTDA and James Finlays. This has been a solace because it can be disappointing to be loyal to one and reap meagre earnings,” said Joel Sang of Kimulot location.

Before liberalisation of the market, middlemen would pay farmers Sh10 per kilogramme of green leaf without bonuses.

KTDA, which manages more than 50 factories on behalf of over 600,000 smallholder tea farmers, said the liberalisation was a blessing in disguise especially during peak seasons when its factories could not cope with the bounty harvest.

Dr. Kones, now an official with the Transition Authority, said tea growers still faced structural problems such as subdivision of land into portions too small for profitable tea growing.

More than 70 per cent of tea growers have bushes of less than one acre.

Poor husbandry, retention of old tea varieties, high labour and energy costs and unstable global prices are other issues the farmers contend with.

READ: Nyeri plans value addition in tea industry to boost earnings