A new bill aimed at reforming the tea sector and giving farmers more say in decision making, among other radical reforms, is set to be tabled in Parliament.
The Bill proposes Kenya Tea Development Agency (KTDA) being reverted to its old status of Authority as the industry regulator.
The Kenya Tea Development Authority Bill 2018, which is being fronted by Gem MP Elisha Odhiambo, aims at creating a new framework to ensure inclusive growth and development for the tea industry by increasing revenues for farmers and streamlining management.
According to Odhiambo, KTDA was transformed into a private monopoly without due considerations. The change of KTDA to an agency, he argues, weakened supervision of the agency’s management by farmers who own the tea factories, leading to major governance compromises that have led to exploitation of farmers through payment of levies and fees, not to mention loss of funds through inflated project costs.
The bill cites numerous cases of mismanagement, loss of money in collapsed banks (Imperial Bank and Chase Bank), conflicts of interest, contempt of court cases as well as fraud and misappropriation of farmers’ money, to put a case against the current KTDA, which is led by Managing Director Lerionka Tiampati.
In turn, Odhiambo says this has caused poverty among tea farmers in the country. A Food and Agriculture Organisation (FAO) report shows 50% of small holder tea farmers in the country live below the poverty line despite privatization promising better life and earnings for them.
In some parts of the Rift Valley, FAO says poverty levels are at an alarming 76% among tea growers. As the farmers wallow in poverty, KTDA is understood to be putting up a multi-billion highrise building in Nairobi city centre on Koinange Street which some feel may not immediately benefit the suffering tea farmers.
“What’s happening in the tea sector is a major rip-off that must be brought to an end through proper and well thought-out streamlining of the management and that can only be achieved through the establishment of an authority which will be answerable to Parliament in its operations,” says Mr Odhiambo.
To streamline tea operations, the Government in 2015 formed a task force on the tea industry, which made radical recommendations on turning around the sector. Among them was reforming KTDA’s governance model to deal with conflict of interests where directors of tea factories also sit at KTDA and where procurement is armtwisted to have them also supply the organisation various services and goods often at inflated costs.
A case in point is that of Sasini Tea Managing Director Stephen Maina Githiga, who is fighting remain as director of both KTDA and Kiru Tea Factory in Murang’a, yet it’s a clear conflict of interest.
Also, there are various cases in courts against KTDA directors on various issues that have not been given direction even as the organisation continues to lose billions and farmers suffer.
The new Bill comes as the government continues to hold onto the Taskforce Report on tea industry. The taskforce, chaired by Mr Kagiri Kamatu, came up with radical proposals that could have changed the way the highest export-earning industry operates.
Among its proposals was the restructuring of KTDA and review of its contracts with farmers; reduction of levies and the establishment of a regulator for the industry, years after a similar body was scrapped.