Kenya’s cash crops have experienced mixed fortunes since independence 56 years ago.
During the good times, coffee and tea sectors were booming with a significant contribution to the country’s forex earnings, especially in the golden years of the 1970s for coffee and 1980s for tea. Cotton and pyrethrum too had their pride of place among top income earners.
However, starting from the late 1980s, the fortunes of some of the commodities started heading south, partly due to poor policies, free-market dynamics and frustration of farmers by government agencies.
First to go was cotton as second-hand clothes imports increased and textile millers collapsed. Pyrethrum and sugarcane have since followed suit.
Sadly, the government has taken a “business as usual” attitude even as key industries and sources of livelihoods for millions of Kenyans continue to collapse. And heading in the same direction are coffee and tea. Only last week, farmers from the Rift Valley and western Kenya warned that they would stop plucking their tea because it no longer makes sense for them to grow the cash crop.
Data released last week shows that tea farmers’ earnings have plunged to a six-year low. According to the report for the financial year ended June 2019, small-scale tea farmers expect to earn 18.6 percent less than the previous period. The Kenya Tea Development Agency-affiliated growers will earn Sh67.7 billion, down from Sh87.7 billion earlier. The KTDA plans to pay farmers 67 percent of the earnings or Sh46.45 billion while the remaining Sh23 billion will cover the agency’s fees and costs of running the factories.
The KTDA says a glut in the global tea market is to blame for low prices that have eaten into the earnings. However, the agency, factories and other key stakeholders should come up with sound strategies to mitigate the challenges in production and marketing of the commodity and also find new revenue streams to ensure that farmers are cushioned whenever tea prices take a hit. For instance, there is no reason why it cannot embark on a more aggressive campaign locally seeing that Kenyans consume only a small fraction of the tea produced here. KTDA can also target the rest of the continent with our high-quality teas, especially as the African Continental Free Trade Area agreement takes effect.
Lastly, KTDA should find ways to increase efficiency in its factories and cut costs to boost farmers’ income.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
