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Munya orders audit of Tea Auction systems as farmer earnings fall

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Agriculture Cabinet Secretary Peter Munya. FILE PHOTO | NMG

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Summary

  • Mr Munya issued a two-week ultimatum to the Tea Board of Kenya (TBK) to appoint an auditor to review the system run by the East African Tea Trade Association.
  • For long, the government has accused the auction of conniving with players to fix prices of tea, a move that it argued has denied farmers a good earning from their produce.
  • As part of the reforms to ensure price transparency, the Ministry of Agriculture last year directed the Mombasa Tea Auction to shift from a manual system to an electronic one.

Agriculture Cabinet Secretary (CS) Peter Munya has directed the tea sector regulator to audit the Mombasa Auction to establish what is hindering farmers from better earnings.

Mr Munya issued a two-week ultimatum to the Tea Board of Kenya (TBK) to appoint an auditor to review the system run by the East African Tea Trade Association (Eatta) with the view to finding out if the price discovery mechanism is achieved during the auction.

For long, the government has accused the auction of conniving with players to fix prices of tea, a move that it argued has denied farmers a good earning from their produce.

“To further enhance the price discovery mechanisms at the auction, there is a need to audit the Electronic Auction Trading Platform to ensure it is foolproof and not prone to inefficiencies and lack of accountability in price determination that characterised the ‘open outcry’ system,” said Mr Munya.

As part of the reforms to ensure price transparency, the Ministry of Agriculture last year directed the Mombasa Tea Auction to shift from a manual system to an electronic one that was considered to be foolproof.

Chief executive officer of the TBK Perris Mudida said they have already started the process of identifying an auditor to undertake the task.

“We are currently developing terms of reference that will guide the auditor in doing this task, so the process is ongoing,” said Ms Mudida.

Mr Munya said the reforms are aimed at ensuring farmers get good earnings after years of exploitation by cartels.

Enhanced automation

To increase factory productivity and processing profitability, a task force formed by Mr Munya has recommended optimisation of factory processing capacity, rationalisation of energy costs, enhanced automation, value addition, and aggressive market promotion targeting both domestic and external markets.

“The Ministry through the newly established Tea Board of Kenya will in the next three months commence a programme to implement recommendations of the recently concluded study on the National Processing Capacity Survey,” said the CS.

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