OMBEKO: Gov’t should not take back control of tea sector
- It is important to note that crop industries historically managed by government are dead or on their death bed, along with dreams of thousands of farmers.
- Cotton, pyrethrum, sugar, sisal and coffee firms are a few examples.
- It would be sad if the same thing happened to Kenya's vibrant tea sector.
There is a current push to take back control of the tea sector to the government, both in the county and nationally.
County governments, Senate and Parliament are behind the move on the pretext that the sector is not well managed; that cartels are running the industry and money for farmers is being stolen.
Their intent is ill-informed, unfortunate and bound to roll back the massive gains the sector has made over the years.
To put the tea sector into context, we must understand the contribution it is making to the economy of the country.
According to statistics, tea contributed more than 100 billion to the economy last year, making it the single biggest donor to the country’s GDP at 2.5%.
Out of this, about 78 billion was derived from the work of smallholder farmers, most of whom take their produce to factories managed by the Kenya Tea Development Agency (KTDA) spread all over the country.
It is important to understand the industry structure that has made it this successful. When the sector was privatised in 2000, ownership of factories was transferred from government to farmers under KTDA.
These farmers effectively became owners of the sector: the factories where they deliver their tea belongs to them and so do the accompanying assets. In essence, they have the power to decide how the factories run, who gets elected as factory leaders and growth of their business.
These more than 600,000 smallholder farmers, through sheer hard work and a clear vision, have collectively constructed 68 factories that they supply tea to. They have taken advantage of economies of scale accorded to them by their numbers to purchase fertilisers and machinery at fair prices.
They have invested along the tea value chain to build their own firms which manage critical aspects of the business such as insurance, warehousing and transport. These smallholder farmers gained control of the sector, pushing out middlemen who prior to privatisation were having a field day reaping where they did not sow.
The shareholders (farmers) have managed to do this thanks to an elaborate governance structure, right from buying centres to tea factories and the services in between. Even on a global scale, there are very few of such agricultural models.
Now, as a farmer who grew up in a tea growing area, was raised and educated with proceeds from tea, and later worked in the industry, I do not doubt that the agriculture sector has changed over the years. New challenges such as competition from cheaper food imports, reduced land sizes, climate change, taxation and destruction of our water towers, have emerged.
I would have expected that MPs and county assembly members work overtime to find solutions to more urgent problems that Kenya is facing instead of trying to return management of the tea sector to the government.
In a previous life as a practising agronomist, I toured the country and saw the kind of small but meaningful improvements tea farmers have made with their crop. In many households, tea is the only income earner.
Kenyan tea has raised generations, mine included, and with the consistency shown, it continues make even greater contributions to the economy.
Of course there are challenges: farmers could earn more money for their produce, use more reliable markets, reduce costs of inputs as well as internal influences in their trade in the form of middlemen and brokers. However, we need to interrogate what exactly the government has done over the years to help the agriculture sector.
Every year, government funding to the sector has been inadequate. We keep on hearing about stalled irrigation projects, substandard fertilisers and seeds supplied to farmers. There are always slow responses to agricultural crises such as pests and diseases.
Yet for smallholder tea farmers, as a result of the self governing structure within KTDA, always receive fertilisers such as inputs in good time. Markets are guaranteed and they are paid monthly without fail for the tea they deliver to their own factories. Auxiliary services such as transport and logistics are managed internally, leaving no room for external influence.
Some factories, according to press reports, are even constructing their own hydro-power plants. Farmers are doing this on their own with minimal government influence, other than regulation. Instead of placing unnecessary controls on the tea sector, government should be encouraging growth.
It is important to note that crop industries historically managed by government are dead or on their death bed, along with dreams of thousands of farmers. Cotton, pyrethrum, sugar, sisal and coffee firms are a few examples. It would be sad if the same thing happened to Kenya’s vibrant tea sector.
Wanjiku should jealously guard the gains she has made as an owner of the tea industry. The call to take back control of the tea sector to government isn’t really about improved management of the crop. It is about the return of middlemen and the control of the hundreds of billions emanating from the sector. We should not let this happen.
By William Ombeko, a farmer and agronomist based in Western Kenya
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