Agriculture Cabinet Secretary Andrew Karanja has announced the formation of a 15-member task force. This task force has been entrusted with investigating the underlying causes of the tea accumulation at the Kenya Tea Development Agency (KTDA) warehouses and recommending both short-term and long-term solutions to the crisis.
The task force, which will be chaired by Nicholas Munyi Kagua, has been given a mandate of 60 days to conduct its investigation and propose practical solutions. However, the team’s term may be extended, according to a Gazette Notice dated November 15. The task force’s findings will be submitted to the Cabinet Secretary within 14 days after the expiration of the 60-day period. The final report will include recommendations for policy changes, legal and regulatory frameworks, and guidelines for sustainable solutions to the challenges currently facing the tea sector.
The unsold tea crisis has escalated in recent months, with an estimated 100 million kilos of unsold tea accumulating in KTDA warehouses in Mombasa as of July 2024. The problem has persisted since last year, leading to significant financial strain on farmers and the tea industry at large. A major contributing factor has been the minimum reserve price set at Sh313.31 per kilo of tea in 2021, which was intended to safeguard farmers’ earnings but has inadvertently led to reduced sales as buyers have been reluctant to purchase tea at these set prices. In August 2024, the government suspended this minimum reserve price, hoping it would unlock more purchases and help reduce the unsold stocks.
The task force’s mandate is wide-ranging. It will investigate several critical issues, including the impact of the minimum reserve price on tea accumulation, the delayed payments to farmers, warehousing conditions and charges, and the quality and shelf life of unsold tea. The team will also explore the regional disparities in tea pricing, particularly the significant differences between the East Rift and West Rift regions, and make proposals for addressing these gaps.
A key focus of the task force’s work will be evaluating the roles of regulatory bodies and other agencies along the tea supply chain. The team will assess whether there are any unfair trade practices contributing to the accumulation of unsold tea and delayed payments. Moreover, the task force will examine the performance of the KTDA factories, with a view to recommending improvements to enhance their efficiency.
Private tea factories in the West Rift region will also come under scrutiny, with the task force tasked to investigate their effect on tea prices, quality, and trade. The increasing number of tea blenders participating in the auction will also be assessed, as the team looks into their influence on the current state of the tea trade.
In addition to its internal investigations, the task force will engage with stakeholders from across the tea sector, including farmers, processors, marketers, and government agencies, through meetings and public forums. These interactions will help ensure that the task force’s findings are informed by the experiences and concerns of those directly involved in the tea trade.
The formation of the task force comes at a critical time for Kenya’s tea sector, which has faced several challenges in recent years. These include fluctuating global tea prices, changing market dynamics, and internal inefficiencies that have led to the build-up of unsold tea. The task force’s work will be instrumental in identifying the root causes of these challenges and offering a way forward for an industry that is vital to Kenya’s economy.
As the task force embarks on its investigation, the hope is that its recommendations will help resolve the ongoing tea trade crisis, ensuring that the industry remains competitive and sustainable for all stakeholders involved. The outcome of this task force could have far-reaching implications for Kenya’s tea sector, not only in addressing the current crisis but also in laying the groundwork for more robust and resilient tea trade practices in the future.
