Lewis Njoka and Nicholas Waitathu
REFORMS: Kenya Tea Development Agency (KTDA) could soon have competition in the management of smallholder tea sub-sector after the government said farmers were now free to pick any management agent they deemed fit.
Agriculture Cabinet Secretary, Peter Munya, said under the newly passed Tea Act 2020, tea farmers are free to choose any registered tea agency to manage their factories unlike before when the only option they had was the KTDA.
“The new law now allows other management agencies to register themselves and come on board.
There is no requirement that it is only KTDA that can run the factories. It is the farmers in their AGM who will be deciding after every five years which management agent they require,” Munya said. Previously, the agency contract was renewed after every ten years.
According to Munya, farmers can review the performance of the performance of the agent midterm to determine whether they want to continue with him for the balance of the period or not.
At the same time, Munya warned that the government will license other auctions to compete with the Mombasa Tea Auction should it establish that the auction is unable to sell all smallholder tea produced in the country as required by the new law.
Under the Tea Act 2020, all tea is supposed to be sold via auction except specialty teas, such as Orthodox tea, whose volume of production is still too low to support independent trading.The new law prohibits direct sale of tea.
He said his ministry will in a month’s time send ICT experts to assess the preparedness of the Mombasa Auction to carry out electronic sale of all smallholder tea produced in the country as per the law.
“Nothing prevents the government from licensing multiple auctions. If they are not ready within a month, the government will license other auctions.
We will not accept the excuse that the tea is too much for the auction to handle.”
In an interview with BusinessHub on Wednesday, East African Tea Traders Association (EATTA) CEO Edward Mudibo expressed fears that requiring all tea to be sold via auction would flood the mart causing prices to dip.