The Mountain Journal
editor@themountainjournal.co.ke
A task force instituted to establish the cause of the disparity in the tea prices has recommended reduction of the production costs, among other radical interventions.
The tea pricing inquiry committee recommended an independent audit on adherence and compliance to legislation on the licensing of factories by the Tea Board of Kenya (TBK).
The 132 pages report faults the tea factories over failure to replace the aging and dilapidated and inefficient machines, with new ones to ensure better performance, reduce costs and increase efficiency in the factories.
The report outlines that the quality of tea in the east of the rift is determined by altitude, soil, climate, rains, among other factors, compared to west of the rift.
The west of the rift is characterized by massive tea hawking of green leaf, old tea clones, large volumes of green leaf against the limited factories among other concerns.
“The factories had dilapidated and inefficient machines, and labour costs where services are outsourced yet personnel are employed to perform the same roles, transport costs tear and wear, outsourcing of vehicles,” read part of the report seen by The Standard
It calls for the amendment of the Tea Act, 2020 to conform to the growth and development of the tea industry.
The 19 man committee in the report signed by the Agriculture Committee Chairman John Mutunga dated December 4, reveals in the audit established the directors held 55 board meetings in a year, instead of the recommended 19.
The TBK has mandated audits of the expensive hydropower plant projects that are ongoing in the West of the Rift with a view of establishing the approved budget, amount spent and the project’s completion dates.
The report states that the reforms should be instituted in all factories through cost reduction, prudent credit management and adherence to logically profitable investment decisions.
In the marketing of the tea, the government was tasked to make efforts to market Kenyan tea in all parts of the world, and open up new markets.
The tea factories asked to explore direct sales of their teas as opposed to relying on the Mombasa Tea Auction as the main way of selling their teas, as the Ministry of Agriculture engaged the Kenyan missions in marketing the produce abroad.
The visit across the factories received concerns ailing the sector including the negative politics, lack of value addition, lack of full automation, academic qualification of the directors, continuous sub division leading to uneconomical units among others.
The regulator is mandated to develop mechanisms to ensure factories adopt quality-based handling and processing of tea, benefit from their effort and allow the stakeholders to interact and exchange ideas.
The efforts of auditing tea factories by the Tea Board of Kenya should aim to cover all factories and any malpractice identified and confirmed prosecuted accordingly.
Several factories are riddled by severe cash flow constraints leading to inability to pay a standing loan of Sh 10.3 billion as at June 30, within a stipulated one year.
“ There were no board resolutions on the lending and borrowing as the arre=angments are done at the KTDA head office,” the report read.
At Rukuriri and Gacharage factories the report outlined there is good for post-harvest leaf management; cool weather conditions; suitable soils for tea farming; supportive and enlightened tea farming.
“The farmers are not allowed to submit tea to the factory except tea plucked on the same day; the factory and farmers did not allow green leaf hawking; with timely application of the fertilizers ,” stated the report.
Farmers from the west of the rift alleged that the auction system is riddled with corruption, manipulation and lack farmers representation.
The conflict between the KTDA, TBK and the Ministry played out with the former accusing the regulator for the bottlenecking policies that stalled the lucrative direct market and the removal of the reserve price.
KTDA further alleged that the majority of the legislative policies initiated by the two are not subjected through public participation as the law demands.
