A smallholder tea farmers company has poked holes in the Tea Industry Regulations, 2020, citing some of them as unconstitutional.
Agriculture Cabinet Secretary Peter Munya released the regulations last week and gave stakeholders 14 days within which to present their views.
In a brief that will be presented to the ministry, Kenya Tea Development Agency (KTDA) dismisses some the rules, terming them unconstitutional and punitive.
KTDA says the Agriculture and Food Authority (AFA) has been given too much power that will result in bureaucratic tendencies, thus stifling the sector’s growth.
Rule 10 (7) requires a factory to have 250 hectares of planted tea before renewal of their licences—a requirement KTDA says will pose challenges to factories.
The rule, KTDA said, “implies that farmers must give up land to the factory. This is unconstitutional since it interferes with an individual’s right to own property.”
And rule 10 (12) requires a tea manufacturer to build a factory within three years of issuance of a licence, or risk losing the permit.
This, KTDA said, meant farmers will not have enough time to accumulate the needed equity to build satellite factories “and the spirit and intention of this regulation is therefore punitive.”
And while Mr Paul Ringera, a director at Githongo Tea Factory, found some of the rules good, he cautioned that some would work against the sector.
“The ministry should exercise caution so that farmers who are being protected are not disadvantaged. For instance, the rule requiring factories to procure transport services through AFA will render our drivers jobless,” he said in a telephone interview Monday.
Since the agency procures farm inputs such as fertilisers on behalf of farmers, there have been claims that KTDA manipulates prices.
Regulation 10 (19) states that before a factory is issued with a licence, it will have to satisfy AFA that it has a policy providing for competitive procurement of goods and services including, but not limited to fertiliser, machinery and equipment, warehousing and transportation of tea.
According to KTDA, if the rule comes into force, the management of factories will be interfered with.
“AFA will have to approve procurement of fertiliser, machinery, equipment, transporting and warehousing of tea. Procurement will not be centralised and factories will have to make their arrangements for procuring farm inputs and will thus not enjoy the current economies of scale, which will be expensive,” the agency notes.
The far-reaching reforms seek to clip the powers of the agency, which has been blamed for dwindling farmers’ earnings.
KTDA has been accused of lording over the 69 tea factories it manages, going as far as appointing company secretaries for them, and manipulating election of factory directors.
While KTDA was directed to pay farmers 50 per cent of the value of tea delivered in factories, direct sale of tea was outlawed, with all teas required to be auctioned at the Mombasa auction managed by the East African Tea Trade Association.
Through direct sales, KTDA has been accused of offering favourable prices for the commodity to preferred buyers, affecting farmers’ earnings.
