Tea firms to pay new land rates in a renegotiated deal
A tea estate owned by a multinational tea company in Nandi County.
What you need to know:
- Nandi Governor Stephen Sang said the county and tea companies held talks and they had agreed on new rates
- Governors from tea counties in Rift Valley appointed teams that spearheaded talks with multinationals last year
- Tea companies had also rejected proposals to pay Sh10,000 per acre, arguing that the high costs would push them out of business
The stand-off between British-owned multinational tea companies and Nandi County over new land rates has been resolved.
The county declared it had made a breakthrough with the tea companies and within a month it would issue more details on the way forward.
The outcome was an agreement that the companies will now pay Sh5,000 per acre after the county government rejected the Sh100 rate, which the firms have been paying since 1923.
At a meeting with the British High Commissioner to Kenya Jane Marriott on Wednesday, Nandi Governor Stephen Sang said the county and tea companies held talks and they had agreed on new land rates.
Rejected old rates
“We have been holding talks with the tea companies on the need to solve a long-standing dispute on new land rates and the matter has been resolved," the governor said.
Last November, governors from tea counties in Rift Valley appointed a task force that spearheaded talks with multinationals.
Tea companies had also rejected a proposal to pay Sh10,000 per acre, arguing that the high cost would push them out of business. It is one of the reasons that drove the large tea companies to adopt tea-picking machines.
Rift Valley governors seem to have dropped the hardline stance they had taken before the 2022 General Election, where they were demanding a 100 percent rate increase.
50-to-50 formula
Mr Sang said Nandi County had adopted a 50-to-50 formula where everybody is a winner since the counties need the tea investors for economic sustainability
The task force teams that the governors appointed are expected to give in their findings at the end of this month.
Nation.Africa has established that the Kenya Tea Growers Association CEO Apollo Kiarii has been holding talks with governors in tea-growing regions to resolve the land rates issue.
Nandi County Agriculture CEC Kiplimo Lagat said revenue collection for the county is expected to double when the tea companies start paying the new land rates.
Dr Lagat told a farmers' meeting in Nandi Central that governors agreed that the Sh100 per acre that tea companies paid to counties was too little.
Rejected by MCAs
A previous attempt by county governments to raise land rates paid by tea companies was rejected by MCAs from the Rift Valley in 2019, who claimed they were not consulted by governors. They further argued that the move would scare away investors in the tea industry in the region.
In Nandi County, 37 out of 39 MCA were sent home by voters in the 2022 General Election.
County assemblies had dismissed proposed new land rates and voted down a Bill on the same, saying governors must act within the law under which counties were founded.
In Nandi alone, tea companies occupy 300,000 hectares of land according to county government records, while in Kericho they sit on 500,000 hectares and in Bomet, 150,000 hectares.
