Cabinet Secretary for Agriculture, Peter Munya, has proposed a new set of regulations that seek to protect farmers in the tea sector from exploitation.
The regulations include:
- All teas produced in Kenya for the export market be sold exclusively through the auction process
- All licensed tea auction organizers to establish an electronic trading platform
- Tea farmers who market the produce through the Kenya Tea Development Agency (KTDA) to be paid 50% of the delivery monthly, with the rest paid as bonus annually
- Buyers of green leaf to deposit a down payment of 10%, with the balance paid before export of the purchased consignment
- A single broker to only represent 15 factories at the tea auction
Therefore, once various stakeholders approve the regulations, it will be illegal to sell tea via private treaty, commonly known as Direct Sales Overseas. Additionally, any teas not sold during a particular auction shall be re-listed for sale during the subsequent auction.
Furthermore, factories will be mandated to pay farmers 30 days after receiving the auction proceeds.
The new regulations may also lessen the grip of KTDA on the sector, seeing that previously, KTDA factories used to pay farmers KSh14 to KSh16 per kilogram of tea per month, with the rest paid as bonus in October.
Kenya is the world’s largest black tea exporter. The Standard reports that in 2019, the tea sector earned the country KSh117 billion from exports, and KSh22 billion in local sales.