Tea or Coffee?

I vaguely remember a joke from a while back on a man walking into a restaurant with an intention to have a cup of coffee and once the waiter came up, he experienced a multitude of questions

Source: The Jakarta Post

“Tea or Coffee” “with or without cream” “sugar or no sugar” “espresso or depresso” ordering water ended up being even more difficult, in summary, He ended up walking out. In Nairobi, it's not that difficult, the capital of Kenya has cafes on every corner and for those who prefer home brewing, shelves of supermarkets are filled with Kenyan made tea and coffee.

Do you ever wonder what it takes to source your coffee or tea? Well, our Farmula Big Story for the month has us exploring the plight of the industry in Kenya.

Brief History.

Tea was first introduced in Kenya in 1903 by GWL Caine and was planted in present-day Limuru. It’s commercialization started in 1924 by Malcolm Fyers Bell, who was sent out by Brooke Bonds to start the first commercial estates. Since then the nation has become a major producer of black tea. Currently, Kenya is ranked second after China in tea exports. Kenyan tea is also one of the top foreign exchange earners, alongside tourism, horticulture, and Kenyan coffee.

The task of managing the small-scale holder lies with the Kenya Tea Development Agency (KTDA). the KTDA has 66 tea factories serving over 500,000 small-scale farmers cultivating over 100,000 ha. Of all tea produced in Kenya, KTDA members produce over 60% while the rest is produced by large-scale producers. Kenya Tea Development Agency Holdings (KTDA) is a provider of comprehensive services to its farmers such as agri-extension, transportation, processing, and marketing.

Problems.

Unfortunately, the same agency which these farmers look to is proving to be a source of agony. The genesis of the problems at KTDA, started from insider trading which birthed a muddied field where politics and commerce dined together. In another article, he writes about how KTDA was established to help smallholders plant cash crops such as tea and pineapples and how it grew to become abusive and exploitative. And in his 3rd article on how British multinationals fashioned KTDA to fail tea farmers. On October 14th, Phillip Mputhia wrote in the nation on how his dealings with the agency enabled him to uncover fraudulent activities.

In different Kenyan regions.

John Paul Simiyu also writes on how the governor of Murang’a had taken to court on Monday, October 7, to sue KTDA on behalf of disgruntled farmers who were complaining that they were being fleeced of their hard-earned cash by the agency. In the petition, the county government stated that there was an unexplained a 36% drop in tea payments amounting to Ksh2.6 billion, from Ksh11.2 billion in 2018 to Ksh8.9 billion in 2019. And it's paying off.

In multiple Tea and Coffee producing regions, the plight is homogeneous across the board. For instance, in Bomet, Julius Sigei and Vitalis Kumetai write about how farmers are pushed to sell their produce to brokers and picking up hawking owning to financial pressure. It should be teatime, but there’s no party here. Not for smallholders.

Members of parliament from tea growing regions want the president to crack his whip on his cabinet secretaries as farmers suffer low prices Luke Awich writes. The leaders mainly from Mt Kenya and Rift Valley regions also faulted Agriculture CS Mwangi Kiunjuri for allowing exploitation of poor farmers at the expense of known brokers making a kill at the Kenya Tea Development Authority.

However, Njirani Muchira writes on international markets like Pakistan who are the largest importers of Kenyan tea devaluing their currency. International prices dropped from $2.98 per kg in 2017 to a low of $1.76 per kg in July. The decline in prices was blamed not only on overproduction but also on currency devaluation and instability in key markets in Asia and Africa. So, the problem of price does go beyond the border.

Nyeri Senator Ephraim Maina, also cites failure by the state to invest heavily in the agriculture sector, lack of government subsidies to farmers and, problems in traditional export markets. KTDA announced that tea farmers will take home an average Sh41.27 per kilogram of green leaf for the 2018–29 bonus payment. But the low returns have angered farmers with those from Murang’a and Nyeri demanding for restriction of KTDA. Maina, has prepared a bill to restructure the sector, called KTDA’s claim of overproduction “a joke” if that were true, other tea exporting counties would also be complaining. The farmers have also threatened to start uprooting the crop. Some already have.

In another tea producing region Eutycas Muchiri writes, “Don't uproot your trees” has been the call of the MP of Othaya Mugambi in response to the cries from his farmers that tea pickers earn more money than they do. Of the Sh15 they earn per month per kilo, tea pickers take home Sh12, leaving farmers with only Sh3. Mugambi said CSS Mwangi Kiunjuri (Agriculture) and Peter Munya (Trade) have convened a meeting with KTDA to look for ways of addressing farmers’ problems.

Moses Omusolo writes on how the tea farmers are blaming state agencies for all woes the once-thriving industry is facing. His article states “KTGA Chief Executive Apollo Kiarii said many tea producers have become victims of a model that encourages only a few stakeholders to benefit from the country’s top foreign exchange earner”. “Indeed many of the challenges that tea farmers are facing are based on lack of proper regulation and oversight of the once vibrant sector,”.

Solution?

The solution is to find a mutually beneficial solution that is good for most parties. There is no perfection but there is effort. In a publication on the Nation, there was a call for a radical surgery to be carried out on the sector. Simply saying in light of the harrowing experience of the tea farmers, the government has to be bothered about the industry being steeped in a crisis.

And not efforts like the newly published Crops (Coffee) (General) Regulations, 2019 that had been billed as the magic bullet to cure the insidious rot bedeviling the once glorious sector which ran into headwinds as several cooperative societies in the coffee-growing Mt Kenya region have flatly rejected the regulations,

Source: Standard Media

terming them counterproductive.

Efforts like that of the National Assembly Speaker Justin Muturi who directed a parliamentary committee to thoroughly investigate the Coffee Research Institute (CRI) and recommend measures to save the industry from collapse.

In the midst of this all, Polls are already due at KTDA and they seem gloomy as farmers demand change with some claiming the body no longer represents their interests. Top on the list of contentious issues is the share-based voting system which small-scale farmers say has given large-scale farmers control over the management of factories, effectively cutting them out.

Murang’a County commissioner Mohamed Barre has urged coffee farmers to elect leaders of integrity to manage the operations of their factories. Barre has said many coffee factory managers collude with thieves to defraud farmers by having their produce stolen while under their custody. And, there is the reintroduction of levies for research.

Coffee Research Institute bosses have had a difficult time justifying their push to re-introduce the two percent coffee levies before a house committee. The levy which was supporting research was scrapped to offload heavy burden from the farmer. The farmers instead want the government to fully fund research saying the void caused by underfunding CFI is disastrous to the sector. The farmers instead want the government to fully fund research.

These matters being raised are serious and need to be looked into. A proposition on how to solve the problems facing this sector include

• Quick enaction of the Agriculture and Food Authority proposed legislation, which would reform KTDA. Raise leadership quality in tea processing firms by amending the colonial Memorandum and Articles of Association.
• Voting System: Top on the list of demands is abolishing the current voting system, which is done on a quota system based on the number of shares held by farmers in the factories serving them. In its place, the farmers want a one-man, one-vote system. This should not be ignored.
• Key Issues: A key suggestion is for KTDA is do enough to ensure that farmers reap maximum returns from the crop, the agency cant sit pretty as the crisis bites. The constitution of KTDA management has to serve the best interest of all players in the tea sector, and if there is there need, let there be an overhaul, as highlighted by various voices within tea producing areas in the country.
• Supremacy Wars: Farmers’ complaints have fallen on deaf ears at KTDA over the years. Cases, where those who do not tow the agency’s line are severely punished, have been highlighted. At the factory level, KTDA is represented by directors whom factory managers are directly answerable to. This should not be the case
• Credible Process: Their nominations or vetting should be a preserve of farmers and not a few individuals as is the case at the moment. Running for the director’s seat should not be discriminatory as is the case today. Also, outsiders should not influence the voting process and outcomes. The elections should be open to any shareholder, provided the law is strictly adhered to.
• Open Forum: An open forum should also be created to allow farmers to air their sentiments on the development of the sector. The Tea Directorate appears to be dormant. Abdicating its role as a regulator, and an unbiased moderator is sending the wrong signals to the industry. It should be seen to champion the interest of all players and stop acting like a spectator. The KTDA board should be reconstituted so as to remain relevant to farmers.

Silver Lining.

• The Ministry of Agriculture has a plan to provide Sh1.6 billion financing for small-scale tea farmers to diversify from black CTC tea to orthodox type in the wake of low prices. The plan involves a funding model for smallholder tea factories to set up production units. This will help cushion farmers in times of low prices in the international market. Part of the reason tea farmers are always hit by low prices is relying on black CTC, of which the country is the number one exporter worldwide.
• Nyawira Njiraini from a member of Mutira Farmers Co-operative Society, which has been important and helpful in identifying her and other members access premium markets. The co-op is among those working with Fairtrade, an agency that helps growers get better prices for their produce. It also promotes better social and environmental standards. As the shun for coffee grows, so does her interest.

In the end, all we want is for the sector to be the beam of hope it once was for the smallholder farmers who survive on the earnings from Tea or Coffee.

Our appreciation goes to all journalists who made this newsworthy. Njiraini Muchira, Luke Awich, V. Graham, Macharia Kamau, Julius Sigei & Vitalis Kumatai, Joseph Muchiri, John Kamau, Moses Omusolo, John Paul Simiyu, Alex Njeru & Reginah Kinogu, Eutycas Muchiri, Brian Okinda, Francis Wanyanga, David Mwere, Alice Waithera, Njeri Njuguna and G.K. Kang’au, Agatha Ngotho and Gerald Andae.