The government has ordered an audit of all Kenya Tea Development Agency (KTDA) factories in what Agriculture CS Peter Munya said will help stamp out exploitation of small-scale farmers as well as improve their monthly earnings.
The auditing, which is also aimed at eradicating duplication of roles, will begin at KTDA head office then cover all the 69 factories under the authority.
Mr Munya said the government has directed the Tea Board of Kenya to engage a reputable audit firm to conduct the audit on the factories to seal loopholes that lead to loss of revenue.
“We want an audit firm that hasn’t done business with KTDA before to conduct a forensic audit on its books of financial accounts both at headquarters and at individual factories,” the CS said.
He cited the existence of a regional and a factory manager, both in one factory, whose duties and responsibilities, he said, can be handled by one manager.
Exploited by cartels
“Farmers have been exploited by cartels, who pocket millions of shillings while the small scale farmer, who struggles to produce the crop, takes home peanuts. Directors have been conspiring with a section of managers to exploit farmers.
“The government is, therefore, committed to overhaul KTDA,” Mr Munya said in Nandi on Saturday, when he met tea delegates from the North Rift region at Chebut factory in Kapsabet.
He said the audit will be done by an external auditor, and will look into the human resources sector with the aim of retaining only staff that are necessary for the running of the factories and the removal of those performing similar or overlapping roles.
The Ethics and Anti-corruption Commission (EACC), he said, will also be called in to help with the investigations, and those found guilty of looting will face the law.
He added that his ministry would work with the EACC to expose cartels and end corruption in the tea industry “as well as ensure farmers benefit through increased tea prices.”
The CS announced a plan to ferry tea to Mombasa through the Standard Gauge Railway — a move will help the government cut on operational costs in the authority and direct the money into farmers’ pockets.
In the past, small-scale farmers from tea growing regions in Central, Rift Valley and Western have uprooted tea and invested in residential houses and horticulture farming due to low tea bonuses.
In Trans Nzoia, Mr Munya directed officers attached to the Directorate of Criminal Investigations to inquire into alleged misappropriation of funds meant for development at Kapsara Tea Factory.
Meanwhile, the government has directed that small- scale tea growers supplying green leaf to KTDA be advanced loans at 8 per cent interest per annum.
Apply for loans
Mr Munya said that farmers will apply for the loans from the Greenland Fedha Microfinance institution. The new rates announced by the government take effect on December 1.
Mr Munya said it was unacceptable for the management of the microfinance owned by KTDA holdings Limited to apply commercial rates on loans advanced to farmers.
“If the microfinance is owned by KTDA, which in turn is owned by small-scale tea growers, what informs the management to charge farmers at commercial rates?” Mr Munya posed.
The CS spoke when he toured Litein and Kapkatet tea factories in Kericho County on Friday.
“In future there is a possibility to further reduce the interest rates charged to five per cent per annum,” Mr Munya said.
Greenland Fedha Limited, a member of the Association of Microfinance Institutions in Kenya, offers development, emergency and salary loans, working capital and solar energy loans to its members.
Farmers have raised issues over the high number of business enterprises run by KTDA but whose operations and proceeds have not been declared to the shareholders, raising suspicions on how the revenue generated is accounted for.
Additional reporting by Vitalis Kimutai