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August 20, 2008

Kenya's small scale tea growers hard hit by high inputs prices

Small-scale tea farmers want to uproot their bushes, blaming the Kenya Tea Development Agency (KTDA) for a litany of woes, including depressed earnings. On its part, KTDA blames politics, world markets and global trends, which have pushed up exchange rates and costs.

Agriculture minister William Ruto has in the last month been to Meru, Othaya and Karatina, among other tea-producing areas, beseeching farmers not to uproot their bushes. He has asked them to be patient as government worked out interventions to ease their pain.

Last month an MP raised a question in Parliament, demanding to know what the government planned to do to avert a crisis should tea farmers follow their coffee counterparts in uprooting, or abandoning the crop altogether. High cost of inputs and dwindling revenues were forcing farmers out of their fields, Maina said. The question attracted contributions from both sides of the House, all expressing concern and sympathy for the farmer.

Two strong opinions have boiled over the tea debate. On one side, leaders from tea-growing areas strongly feel it was high time the government got involved to salvage the farmer before it is too late. In 2006, farmers earned Sh47 billion ($684 million) from tea. This dropped to Sh3 billion ($44 million) last year. This year should be worse, given the all-time high and worsening fertilizer, transport and labour costs.

“Across the board (from food crops, horticulture to cash crops) farmers are cutting back on acreage under cultivation due to rising costs. Tea farmers can only abandon or uproot the crop because it was already on the farm,” says a former KTDA director, Mr Murimi Githui.

MP Maina, whose constituency, Mathira, rides on small-scale tea, coffee and milk incomes, warns if nothing is done urgently, the tea sector risks collapsing, as happened to coffee in the second half of the 1980s. “Today, world coffee prices are good, but Kenya has no coffee to sell, because the farmer left the farm two decades ago. The Government and the World Bank prescriptions killed the farmer instead of propping him up. Agriculture cannot thrive on commercial loans from commercial banks,” says the MP.

Coffee production has dropped from 130,000 metric tonnes in the 1987/88 season to a low of 48,000 metric tonnes in 2005/2006. “The World-Bank supported interventions have failed to rehabilitate the coffee farmer,” Maina argues. “We fear tea is headed that way, unless we move away from credit facilities designed for shylock businesses.” Farmers, he adds, “need long-term credit facilities, with realistic repayment moratoriums to allow for recovery.”

Maiina advocates for KTDA reverting to state corporation status so that the government negotiates appropriate interventions on behalf of farmers. “Any responsible government is obligated, even under World Trade Organisation rules, to put in place special protections for vulnerable sectors, even for a limited recovery period. Others feel blending and branding tea is the way to go to attract premium prices in world markets, besides cutting down on overheads and corruption in the value chain.

“If the Government intervened, through the Kenya Tea Board, to help KTDA access funds to expedite value adding processes, that would be more helpful than turning KTDA into a parastatal again. Today, Kenyan tea is sold like cement, in bulk, to be used to blend brands from other countries. Kenya has no own brands,” Githui said.

Minister Ruto has been cautious not to give a direct undertaking that the demands for making KTDA a state corporation would be granted. He said: “It will not solve the problems ravaging the sector. Competition would achieve better services and (higher) prices in the sector.”

The Standard

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