KIRINYAGA, Kenya, May 8 – Smallholder tea factories in Kirinyaga have appealed to the Government to find alternative funding for Kenya Tea Development Agency Management Services (KTDA-MS) and similar agencies instead of levying farmers.
Factory directors raised concerns with Section 53 (1) (2) of the Tea Act 2020 which levies farmers one per cent on the net sales value of tea sold.
They said the provision would affect farmers’ income negatively and urged the government to relook at the contested clauses in line with its Bottom-up economic approach which empowers the low-income-earning members of the public.
The directors resolved to retain the current status of factory management agreements with KTDA-MS until contested clauses in the Tea Act 2020 are addressed.
Speaking during a meeting with the agency in Sagana, their spokesperson, John Mithamo who is also a KTDA board member for the zone said farmers will suffer if the contested clauses are adopted.
“The provision on governance and direct sale of tea should be among other clauses in the Tea Act that require revision,” he said.
Mithamo observed that the agency pays dividends to factories and farmers will lose and may be subjected to unnecessary procedural management of their money if one per cent of their sales went to other parties.
He wondered why it was only tea growers who were being subjected to such levies.
The tea factory directors tasked a select team from Kirinyaga to reexamine the current management agreement with KTDA-MS within seven working days, make the necessary changes and forward to the agency for further engagements.
KTDA Holdings chairman, David Ichoho said the agency paid farmers Sh585 million dividends, being money that was generated by its subsidiaries.
Forty factories from different parts of the country have so far signed management agreements with KTDA-MS which are aimed and improving relationships and ensuring that farmers earn more from their leaf.
A key change in the new management agreements is the reduction of management fee from 2.5 per cent per gross turn-over to 1.5 percent.
Under the reviewed treaty, the agency has introduced key performance indicators to monitor performance on a continuous basis.
