A row is brewing between Kenya Tea Development Agency (KTDA) and farmers in Tigania East in Meru over the construction of a satellite factory.
KTDA has been deducting Sh1 per kilogramme from the 11,000 shareholders of Miciimikuru Tea Factory since 2007 when plans for the construction of a satellite plant were mooted. So far, farmers have contributed Sh270 million and demand that KTDA delivers the promise.
The agency is, however, said to be opposed the project, arguing it was not viable since Athi Tea Factory is near the proposed site.
Athi Tea factory was constructed in 2010 as a satellite to Kiegoi Tea Factory, which is located in Igembe South.
The new factory was supposed to be built at Amugaa, a few kilometres from Athi factory.
Yesterday, Miciimikuru Tea Factory board chairman Francis Akula said KTDA had conducted a feasibility study and a report would be presented to shareholders on November 18 during the annual general meeting.
“After presentation of the report, farmers will decide whether to build a new factory or not,” said Mr Akula.
There were plans that shareholders of Kiegoi and Miciimikuru co-own the Athi Factory on a 50-50 basis, which farmers rejected, throwing the plans into disarray.
Mr Akula, however, said it was more viable to co-own Athi factory since they would install one processing line.
“We will need more than Sh600 million for the construction of a satellite factory. Our concern is that debt financing may reduce farmers’ earnings and this is why we were considering co-owing Athi factory,” Mr Akula said.
After raising Sh270 million, KTDA advised that the money be used to establish an additional processing line at Athi satellite factory, terming the option cost effective.
KTDA’s concern was that a new plant would not get enough green leaf.
Mr James Murungi, a former KTDA director at Miciimikuru said farmers resorted to boycotting tea picking in June after several meetings to address the matter with the management flopped. Farmers held several demonstrations in July this year, which culminated in a special AGM.
The stormy meeting was manned by anti-riot police with farmers shouting down those who were opposed to the construction of the satellite factory.