Gathuthi Tea Factory farmers

Farmers affiliated to Gathuthi Tea Factory in Nyeri protest over low bonus payout in September. They called for ouster of top KTDA officials.

| File | Nation Media Group

Why senators have last chance to rescue tea farmers from cartels

What you need to know:

  • The Tea Bill will streamline the sector, rescue the tea farmer and let them run the show to lift the industry.
  • What Senate will be asked today to do is to allow the monitoring of tea trade and to have farmers get at least 50 per cent of the auction price.

“The only thing necessary for the triumph of evil is for good men to do nothing.”  Edmund Burke, Irish Statesman and Philosopher.

Tomorrow afternoon, the Senate will be asked to either pass or reject the Tea Bill, which has become a subject of so much controversy and acrimony – with court cases, threats of prosecution and where both Kenya Tea Development Agency and East African Tea Traders Association are in court to stop proposed reforms in the sector.

So important is this bill that senators have been summoned back from holiday, and on a Monday, to decide whether to give a Christmas gift to smallholder tea farmers or to the cartels and multinationals. All eyes will be on them, individually.

While tea has been grown in Kenya for 117 years since it was introduced in Limuru by colonial settler, G.W. Caine, the smallholder growers only had a chance to firmly establish themselves after independence and under the umbrella of the former Kenya Tea Development Authority.

But that was until Kenya was caught up in some debt mess, among many African countries, that the Ronald Reagan administration suggested far-reaching global measures under the “Program for Sustained Growth” which called for privatisation, deregulation and liberalisation of various developing countries’ sectors in order to, ostensibly, spur economic growth.

This became the condition on which International Monetary Fund and World Bank would give loans to countries and they became known as Structural Adjustment Programmes (SAPS). That James Baker project, as we now know, was a fiasco – but some barons still want to retain its neoliberal mischief since it is their cash cow.

Neo-liberal reforms

When the International Monetary Fund and the World Bank started pushing for these neo-liberal reforms in the agriculture sector in 1990s, they imagined a situation where market forces would determine prices and where good governance would be enshrined to level the playing ground.

 But after the Moi government handed over the tea sector to the same mandarins who used to run the Kenya Tea Development Authority, it left the tea farmer at the mercy of cartels and multinational agents. The agency would ride roughshod on the farmer now that there was weakened monitoring by the Ministry of Agriculture.

When that happened, local brokers and international merchants took advantage of the new void. More so, when parliament sought to reform the tea sector to reflect the neo-liberal arrangement, it ended up crafting a new KTDA which favoured cartels and international merchants and it left the tea farmer at the bottom.

The stealing started immediately: Take the case of Lohit International which in 2006 with the connivance of the Agency shipped tea valued at over Sh650 million in 2006 without opening letters of credit or receiving cash.

In the same period, farmers had lost hundreds of millions from a Romania fertiliser deal and so on. KTDA is the single largest importer of bulk fertiliser and the stories you hear can only be unravelled through forensic investigations.

Shortly, everyone took advantage of the tea farmer in a structure which allowed KTDA, despite being an agency, to prequalify, and nominate those who would lead the farmers. It also got the mandate to conduct, supervise, and announce election outcomes of directors. These directors – prequalified by KTDA – would then be farmers’ representative and voice at the agency. In essence, KTDA behaves like an authority.

Kenyan tea farmer

That is what the Aaron Cheruiyot Tea Bill and Cabinet Secretary Peter Munya’s regulations intended to cure.

Despite the entire pretence by the agency, the Kenyan tea farmer has been unhappy. On Thursday, and at the possible tail-end of a long struggle, some tea farmers picketed at the Milimani Law Courts demanding that KTDA stops using their money on court cases – and the Senate, where they asked the legislators to pass the Tea Bill, just like their National Assembly counterparts.

Tea farmers, like those in the sugar, cotton and coffee sectors, are frustrated. They are tired. To some of them, trying to right the wrongs within the tea behemoth has been a full-time job.

They cannot understand, for instance, why their KTDA-run factories have a debt of Sh4.8 billion and by when they will manage to offset it. In the last bonus, farmers were deducted Sh3 for every kilo sold to try and offset these debts. And that is besides the Sh4.6 billion that tea farmers lost in the collapsed Chase Bank and Imperial Bank.

As tea farmers get poorer by the day, and I have said for the umpteenth time, the KTDA management hides behind the billions they receive from tea sales and the billions the organisation keeps as management fee to silence any alternative voice with court cases.

Tea farmers

 In my career as a journalist, I have never seen a company that loves court drama than KTDA and that is why Laikipia Woman rep Catherine Waruguru was right when she said as much on the floor of the National Assembly when they were discussing the Tea Bill.

And I am not saying this because they have sued me – nay. It is because I grew up picking tea in Gathaithi village in Murang’a and I have watched the tea farmers struggle and the tea barons’ wealth balloon.

It is tragic, and they are entitled to their opinion, that most of the governors and MPs in tea-growing areas had either maintained a studious silence on the tea reforms or simply went flat out to oppose the restructuring of the sector just to spite Agriculture CS Peter Munya.

Step forward, Meru governor Kiraitu Murungi and Council of Governors Agriculture committee chairman Muthomi Njuki, Kiambu governor James Nyoro, Kericho’s Paul Chepkwony, and Nandi’s Stephen Sang. Step forward also, Njeru Ndwiga, the Senate Agriculture Committee chairman and his committee which had rejected the regulations. Suddenly, they are pretending to care.

If the Tea Bill passes, credit should go to, among many others, the 34-year-old Kericho Senator Aaron Cheruiyot who grew up picking tea and understands the pains of a broken sector and to 38-year-old Stanford University-trained financial engineer, Irungu Nyakera who took on KTDA both in courts and the streets through the Kenya Tea Sector Lobby. The Tea Bill is Cheruiyot’s baby and he envisaged, and rightly so, a situation where KTDA and other organisations within the value-chain are monitored by the Tea Board of Kenya.

I don’t know why KTDA, which inherited for free all the assets of the former parastatal Kenya Tea Development Authority, does not want to be monitored. When cornered, KTDA claims to be a private company but in its books, it says it is a public company.

It has within it various hydra-headed outfits that were not declaring dividend to shareholders until this was questioned recently by Kenya Tea Lobby and other activists. On Friday during the KTDA Annual General Meeting at Safari Park, Nairobi, KTDA, for the second time, offered to pay Sh734 million from these outfits and which were used to bilk money from farmers through tenders awarded to insiders.

More so, it has not explained what happened to the retained earnings from these outfits for the last 20 years.

When factories, which are limited liability companies, cannot borrow from the banks, KTDA does a cross-factory borrowing in a convoluted scheme which has seen some processors enter into useless projects. Njunu Factory in Murang’a, for instance, borrowed millions of shillings to purchase land in Nyandarua where somebody is growing wheat. That is what we call impunity.

Politically-correct companies

Again, it is not commercially right for EATTA to licence the KTDA chairman Tirus Kanyago to run a brokerage firm when he is supposed to be the gate-keeper for the farmers’ produce. Certainly, there would be conflict of interest here, whether declared or not.

But Kanyago is not the only compromised person inside the sector. He has followed an internal tradition within KTDA where conflict of interest is treated as a virtue ever since EATTA started allowing politically-correct companies to become tea brokers.

What Senate will be asked today to do is to allow the monitoring of tea trade and to have farmers get at least 50 per cent of the auction price. It should also give farmers a chance to run their financing and remove the billions of shillings from KTDA coffers.

Certainly, a crop that contributes 23 per cent of the total foreign exchange cannot be left without guidance from the government. But at the end of it all, nobody wants to kill KTDA but there are many questions that the barons inside that entity might have to answer.

All that the bill wants to do is to streamline the sector, rescue the tea farmer and let them run the show. I might be speaking for the 650,000 smallholder farmers – but more importantly for my village folks whom we grew together picking tea but are caught in this shameless arrangement which they don’t understand.

[email protected] @johnkamau1


You're all set to enjoy unlimited Prime content.