The government has moved in to mitigate the current crisis that is threatening to disrupt the Ksh87 billion tea sector.
Agriculture Cabinet Secretary Andrew Karanja, through a gazette notice on Friday, November 15, formed a 21-member taskforce to investigate the underlying causes and impact of unsold tea in Kenya.
“It is notified for the general information of the public that the Cabinet Secretary for Agriculture and Livestock Development has appointed a Taskforce to investigate the underlying causes and impacts of accumulation of unsold tea and propose short, medium and long term solutions,” the gazette notice read in part.
The creation of the task force comes at a time when news emerged that Kenya has over 100 million kilos of unsold tea at the Mombasa Tea Auction. The value of the unsold tea stands at close to Ksh32 billion.
This puts Kenya, which is the world’s second-largest market for black tea, in a precarious position as the minimum global tea stock requirement is 40 million kilos. Kenya’s tea sector continues to grapple with a high influx of tea stocks carried over from previous years, reaching three times above international requirements.
Of significance is that this was the first time such high tea volumes were being rolled over. Traders and the government blamed this on market mismanagement and cartels in the industry.
As a result of the high production and low-quality tea, Kenya suspended the $2.4 minimum reserve price, thus leading to traders buying a kilo of tea below two dollars. This has led to Kenya’s tea losing its value on the market. This is in contrast to Rwanda, which now fetches the highest price at $4.02 per kilo.
The task force is set to be chaired by Nicholas Munyi Kagua and it will consist of 14 members and a secretariat of six members. It is set to perform regulatory functions, policy assessment and recommendation, development and implementation of an action plan, propose practical solutions, and a performance review of Kenya Tea Development Agency (KTDA) factories.
Further, the task force will examine the effect of the minimum reserve price and its delay in payment and analyze the storage conditions of tea. It will also explore the causes of tea price disparities in the East and West Rift regions and investigate additional influences on sales in the Mombasa Tea Auction.
The task force is set to work for a period of sixty days and shall have to submit a report of its findings within 14 days of the expiry of its term to the agriculture CS. The secretariat of the office shall be based at Kilimo House.
The constitution of the task force comes at the back of Deputy President Kithure Kindiki’s pledge to bring reforms in the administrative and policy areas of the tea sector. The DP was speaking at the Kenya Tea Summit in Mombasa where he assured that over 800,000 tea farmers will get value for their sweat.
“600 million kilograms of tea are produced in our country every year, and this production will be further enhanced through strategic policy and administrative interventions, including the provision of subsidized fertilizer, to ensure that all stakeholders, and particularly the farmers, receive value from their hard work,” Kindiki asserted.
