What you need to know:
- Mr Nyakera said the ongoing push for total overhaul of the value chain structures have the ability to push up farmers’ earnings and improve bonus calculations.
- The Nyeri and Murang’a farmers said the government has to as a matter of urgency, shift gears to hound out of office all KTDA directors.
Tea farmers from the Mt Kenya region are putting pressure on Kenya Tea Development Agency chairman Peter Kanyago to quit following a Nation expose that he was also doubling as a broker.
They have also threatened to boycott harvesting tea until the National Assembly passes the sector reforms proposed by Agriculture minister Peter Munya.
While a Tea Bill is awaiting approval, a Parliamentary Committee on Delegated Legislation which has been holding meetings with farmers in Mt Kenya region, was told that factory directors had illegally handed over their governance mandate to KTDA against management principles.
“In law, we have a dictum delegatus non potest delegare which means that delegated authority cannot be delegated further. A delegatee cannot delegate without our permission. They could only delegate management, not governance,” said Mr Moffat Kamau during a meeting with MPs at Nduti Tea Factory in Murang’a County.
“We are giving KTDA up to October 5 to withdraw all the court cases failure to which we shall stop harvesting of tea and we shall remove all the KTDA officers seconded to our factories,” a memorandum handed over to the MPs said in part.
“We have reached a moment of no turning back. It is now do or die and this sector must be liberated against all odds. KTDA cannot pay farmers a bonus of between Sh9 and Sh30 and expect to be offered a rose,” said Mr Irungu Nyakera, a member of the Taskforce on Tea Reforms.
Mr Nyakera said the ongoing push for total overhaul of the value chain structures have the ability to push up farmers’ earnings and improve bonus calculations.
There has been uproar in the tea industry after KTDA’s second payment, known in the industry as bonus, was dismissed by farmers as meagre and they demanded to know how it was calculated for various factories.
“If you calculate the net working capital ratio, the liquidity ratio, solvency ratio and return on capital of all tea factories, you will realise that the tea factories are broke,” Mr Kamau, an accountant, told the MPs and pleaded for an overhaul of the tea sector.
While it was common knowledge that KTDA directors were trading with the firm – and that farmers were not getting value for their produce after it was sold by private treaty by Chai Trading, a KTDA company, the revelation that Mr Kanyago was also a shareholder in Atlas Tea Brokers through his company, Geopet Investment, came as a surprise to the industry.
The Nyeri and Murang’a farmers said the government has to as a matter of urgency, shift gears to hound out of office all KTDA directors. “They should surcharge all found to have by commission or omission occasioned farmers’ revenue losses and jail those who have acted criminally in the whole of the value chain,” said Mr Njunu.
But KTDA has stopped investigations by the Directorate of Criminal Investigations after the High Court ordered DCI boss George Kinoti to stop investigating the firm. KTDA says it is a private company that is only answerable to its shareholders.
If farmers boycott tea picking, it will be the first time since 2014 when they protested against low bonus payments.
In various meetings, the farmers have taken issue with Meru Governor Kiraitu Murungi, who they accused of leading opposition to the reforms “merely on account that he is Munya’s competitor in Meru politics.”
But Mr Murungi has denied the accusation, saying in a liberalised global economy, market forces should be left to shape out returns.
“After we started these reforms, tea prices at the auction have improved by more than 50 per cent,” CS Munya recently told a tea farmers rally in Muranga.
Kirinyaga Central MP Munene Wambugu and his Gichugu counterpart Gichimu Githinji told the Nation that “the cartels have no playing ground in Parliament since all MPs from tea growing regions are united in doing all possible to endorse the Munya reforms.”
The two said they will ensure that no clause in the Tea Bill will be inserted or watered down to conform to the “business as usual” and blatant impunity in the management of the tea sector.
“For the first time, we have the direct and hands-on support of the President who has guaranteed us that he has no favourites,” Mr Wambugu said.