NYERI, Kenya, May 25 – Kenya tea development agency has dismissed the new regulations proposed by the government saying that they are begging to an end of the tea sector.
At the same time the agency has predicted low bonuses for Farmers this year following low prices at Mombasa tea auction occasioned by high production of tea in the county.
While addressing a press conference at Iriaini tea factory in Nyeri, KTDA chairman Peter Kanyari said that the proposed regulations are detrimental to the sector and will lead to international buyers shunning away Kenyan tea thus killing the industry.
“We as an agency view the new regulations as a stumbling block to the sector since for instance bringing all the tea to the auction will lead to an oversupply of the commodity in the market and as the law of supply and demand dictate prices will fall thus the farmer will earn poor pay,” said Kanyago.
He pointed out that drafters of the new regulations have also failed to take into consideration that some buyers demand specific tea at the factory level and as such they will lose their market and move elsewhere.
“New regulations dictate that all teas must be sold at the auction but we have some buyers who specifically buy from factories they will shun out teas as they are not as per their specification and move elsewhere ” said Kanyago.
He called on the government to involve specialists in the sector to draft laws favorable to the sector instead of listening to a few individuals out to finish KTDA which has been in existence for thirty years.
Kanyago predicted low bonuses for tea farmers this year saying that prices at ten auction have reduced by 2..6 percent this year.
Prices at the auction have gone down by 2.6 percent due to the fact that production this year has increased to 1.2 billion from 139 million kgs last year’s representation 29 percent increase.
He said that as a result, the agency will pay low bonuses to Farmers this year.
The government through the ministry of agriculture has proposed new regulations among them that all tea must be sold at Central auction thus eliminating private treaty sale commonly known as direct sale. The new regulations call for payment of fifty percent of all tea before buyers ship the same and also farmers must get fifty percent payment.
The new rules also seek for reduction of directors to three per factory thus reducing allowance cost.