Government seeks to end tea agency’s monopoly

Government took the first step in breaking the monopoly enjoyed by Kenya Tea Development Agency, which manages 68 tea factories in the country.

KTDA is at the centre of controversy over continued decline of prices, and has been the only managing agency of the factories since the law to liberalise the sector and put farmers in greater control of their activities, was enacted in 1999.

Farmers have, however, over the years complained that the management of KTDA has grown distant and unresponsive to their interests, and accused it of changing the articles of association to entrench a slew of directors.

“Who said KTDA should be the only agency managing the small scale tea sector?” asked Agriculture Cabinet Secretary Felix Koskei on Monday during a crisis meeting organised by Senate’s standing committee on Agriculture Livestock, which brought together industry stake holders.

MARKET BEHAVIOUR

The ministry, Mr Koskei said, had received complaints of cartel-like market behaviour at the Mombasa auction, which had resulted in disparity between the farmers’ income and the agents in the value-chain.

KTDA has been accused of price manipulation in collaboration with other bodies, which has resulted in farmers not getting value for their produce.

KTDA Managing Director Lerionka Tiampati, however, said the low earnings were a result of a market glut.

“The high volumes at the international market have caused the price to crush and the small scale farmer has been the hardest hit,” Mr Tiampati said.

He said that management fee charged on factories had reduced from five per cent in 2009 to 2.5 last year, adding that the sector was suffering from expensive credit, high cost of input and increased sub-division of land that had made the small units uneconomical.