Economy

KTDA loses key powers as Munya reforms tea sector

munya

Agriculture Cabinet Secretary Peter Munya. FILE PHOTO | NMG

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Summary

  • The Kenya Tea Development Agency (KTDA) is set to lose its stranglehold of the 69 factories that it manages across the country in far-reaching measures announced by Agriculture Cabinet Secretary Peter Munya.
  • The measures, meant to implement reforms issued by President Uhuru Kenyatta in January, will see all earnings from the tea auction being remitted directly to individual factories as opposed to the current practice where the returns are held centrally in KTDA accounts.

The Kenya Tea Development Agency (KTDA) is set to lose its stranglehold of the 69 factories that it manages across the country in far-reaching measures announced by Agriculture Cabinet Secretary Peter Munya.

The measures, meant to implement reforms issued by President Uhuru Kenyatta in January, will see all earnings from the tea auction being remitted directly to individual factories as opposed to the current practice where the returns are held centrally in KTDA accounts.

Mr Munya has also moved to cut KTDA’s role in tea export business. The agency, through its subsidiary Chai Trading Limited Company, has been selling a portion of its tea directly to international buyers at an agreed price. Under the measures announced yesterday, Mr Munya has outlawed direct sale overseas.

He has also capped the management fee that KTDA levies on farmers-owned factories to two percent as opposed to 2.5 percent at the moment.

“These measures, aimed at safeguarding the earnings of smallscale tea farmers, will be implemented immediately," said Mr Munya.

Mr Munya has also directed all KTDA run factories to register and enlist with the tea regulator and auction organiser to participate at the tea auction directly other than being represented by their parent company.

In what comes as a boost to farmers, Mr Munya has directed KTDA to pay farmers 50 percent of the total value of the green leaf that they have delivered to the factories with the remainder, normally referred to as bonus to be paid within the financial year.

“This idea of enslaving farmers in loans has to come to an end. KTDA has been putting money in the banks earning interest, hence farmers do not been benefit from that,” he said.