President Uhuru Kenyatta. PHOTO/FILE
By JAMES KIMANI
President Uhuru Kenyatta should immediately disband the Kenya Tea Development Agency Ltd or ensure it reverts to a parastatal to protect tea farmers from exploitation by KTDA directors a lobbyist has said.
Mr Kariuki Muiri a tea farmers rights lobbyist says that agriculture is a devolved function and President Kenyatta should disband KTDA and transfer its responsibilities to counties or revert it back to a parastatal.
“KTDA has outlived its usefulness to tea farmers because instead of safeguarding their interests it has been turned into a cash-cow for KTDA directors and a vehicle to exploit and impoverish them,” Mr Muiri observed.
He said tea farmers were losing billions of shillings through the Mombasa Tea Auction as a result of lack of transparency and accountability at the auction.
Related story: KTDA to face investigations over allegations of monopolistic tendencies
Kenya Tea Development Agency (KTDA) Chief Executive Officer Lerionka Ole Tiampati, Company Secretary John Omanga , Messers Stephen Maina Githiga, Mr Eston Gakunju Gikoreh, Mr Peter Kinyua and Mr Francis Macharia in the dock during their sentencing for contempt of court. PHOTO/JAMES KAMETA
“Forty percent of tea offered for sale at Mombasa Tea Auction is sold through a private arrangement handled by KTDA marketing department where some tea buyers are given farmers wealth on a silver platter due to a crooked, opaque and corrupt system called ‘price discovery’”, he said.
He said the 40 percent of 200 million kilogrammes offered for auction through private arrangements is handled by a KTDA subsidiary called Chai Trading Limited.
Mr Muiri revealed that more than 100 million kilogrammes of tea is sold through this private arrangement by Chai Trading Limited which has even opened an Office in Dubai.
“The tea auction is the first instance where the subsistence tea farmer is conned. Multinationals and Chai Trading Ltd suppress the auction prices by bidding rock bottom prices. So as brokers are unable to sell them the tea below reserve prices,” he said.
Related story: Revealed: How KTDA is fleecing tea farmers billions through deceptive schemeshttp://www.reporter.co.ke/2018/10/16/revealed-how-ktda-is-fleecing-tea-farmers-billions-through-deceptive-schemes/
Mr Chege Kirundi a director Kiru Tea Factory Ltd. PHOTO/JAMES KAMETA
Mr Muiri said once multinationals and Chai Trading Ltd fail to get tea at rock-bottom prices during the Tuesdays tea auctions, they go to the KTDA marketing department on Wednesdays where they are offered the tea at below global market rates.
“Sri Lanka had the same problem. To sort out the mess similar to what is happening today in Mombasa; they decreed that all tea must pass through the auction. The result? Farmers in Sri Lanka today earn double what Kenyan tea farmers earn,” he added.
Mr Muiri said tea farming in Kenya is on its death bed and President Kenyatta should take drastic measures to save the sector from total collapse.
He said most factories affiliated to KTDA do not even do proper audits and as a result lose billions of shillings through underhand dealings undertaken by Chai Trading Limited.
He said to stop Kenyan tea farmers from uprooting tea, the government should consider disbanding KTDA, make it a parastatal and list it on the Nairobi Securities Exchange (NSE).
Related story: Radical changes proposed for the tea industry by President Kenyatta’s task forcehttp://www.reporter.co.ke/2018/07/18/radical-changes-proposed-for-the-tea-industry-by-president-kenyattas-task-force/
“The government should make it mandatory for all tea grown in Kenya to be sold through the Mombasa Tea Auction, including from private firms in Kericho where Kenya Revenue Authority (KRA) must be losing billions in transfer pricing,” he said.
Mr Muiri said a KTDA subsidiary called KTDA Holdings Ltd should be disbanded and sells all assets belonging to farmers and distribute the money among farmers on pro rata basis.
He said all factory boards should be overhauled for acting against farmers wishes as some of them have allowed KTDA head Office to force them to pay salaries of KTDA staff posted from Nairobi and have also agreed to pay all taxes incurred by KTDA head office in Nairobi.
He called for total liberalization of the tea sector by at least three agencies being licensed to compete with KTDA so as to give tea farmers options on who should manage their affairs.
Related story: Jobs of KTDA directors at risk as they are fined Sh 400,000 or face seven month imprisonment for contempt of court
A farmer picking tea. PHOTO/FILE
He said 2.5 percent management fees farmers pay KTDA should be reviewed downwards to one percent and the period for payment for farmers tea be streamlined to monthly instead of farmers waiting for one year to be paid bonus.
“KTDA controls over Kshs 60 billion of farmers money and must be regulated like banks because we already have Kshs 4 billion of farmers money that has been lost in collapsed banks,” he said.
He said corruption has been entrenched at KTDA where cases of insider-trading and manipulation of tenders to benefit insiders are rampant.
Mr Muiri termed KTDA elections as shambolic and opaque and called for the overhaul of the current the system of electing KTDA directors saying it entrenched cartels in the management of tea farmers affairs.
Related story: Court orders man to report to police over investigations linking him to threats against city lawyer
He said in the recently concluded KTDA elections more than 600,000 tea farmers participated in the polls to elect new directors for the 54 tea factories managed by KTDA Management Services Limited and in 37 electoral areas, candidates went in unopposed.
Mr Muiri asked the Agriculture CS Mwangi Kiunjuri, to tell tea farmers why he has not implemented the findings of a taskforce appointed by President Kenyatta to look into how to improve the tea sector four years ago.
He said the task force, comprising key players in the sector, was formed to find ways of making the industry sustainable, with a view to improving returns for tea farmers, whose fortunes have plummeted in recent years.
While traditional news reporting is losing its relevance, serious investigation now requires more than basic journalistic skills. To do this we require a lot of resources.
You can either BECOME A SPONSOR or MAKE A CONTRIBUTION
Nelson Mandela once said: “A critical, independent, and investigative press is the lifeblood of any democracy. The press must be free from state interference. It must have the economic strength to stand up to the blandishments of government officials. It must have sufficient independence from vested interests to be bold and inquiring without fear or favor. It must enjoy the protection of the constitution, so that it can protect our rights as citizens.”
If you like our journalism support us to continue bringing you groundbreaking and agenda setting stories.