06 Jan

The government has announced plans to accelerate the value addition of tea to attract new markets as demand for value-added tea continues to grow globally. Agriculture and Livestock Development Cabinet Secretary Mithika Linturi said the best tea prices for farmers would be best achieved through value addition. Linturi was speaking in Mombasa on Tuesday after touring the Gold Crown Foods Company in Shimanzi and the Chai Trading Company Limited located at the Kenya Tea Development Agency (KTDA) Miritini Complex in Mombasa. “The government is keen on agro-processing, value addition and manufacturing that is why we want to work with tea stakeholders to see that we are able to accelerate value addition on our tea to be able to fetch better prices for our farmers,” said Linturi. Pakistan and Egypt have been traditional tea markets for Kenya and have been buying about 60 per cent of all the tea produced in Kenya. However, recently the tea market in those countries has been negatively affected, according to Linturi. Other global markets have been demanding value-added tea that the Kenyan government is now keen to tap into those other markets. “We want to start exporting finished products in the next year or so and that is why the government is keen on supporting investors to achieve this. We need to start planning early as our main markets (Pakistan and Egypt) are facing some challenges” said Linturi “The only way we can do so is by inviting private investors to come and put in money to do it because the demand is too high and we cannot meet it.” Through this, the CS said, the sector will also be able to create employment opportunities for the country as he alluded to the fact that the tea sector has employed a vast majority of Kenyans in rural areas. Stakeholders in the industry had raised concerns over a number of challenges they face in value addition for tea with the main challenge being the issue of taxation on packaging material. “We have a challenge in accessing high-quality packaging paper, the tax imposed on it of 35 per cent is very high,” said Peter Kimanga, the director of Global Tea and Commodity Company. “We need to address the policy and taxation regime in the country which will facilitate us to value add more for export,” he added. Kimanga said that Kenya was not being competitive in the global tea market considering that other tea-producing countries are able to value add in a better way with a friendlier tax regime. “We need to urgently address these concerns to expand our markets to those countries that want value-added packaged tea,” he said. Linturi promised that the government will do what it takes to ensure that Kenya starts exporting value-added tea. He promised to present the matter to the president in the next cabinet meeting for discussion. “I commit I will make the right presentation to the cabinet and the President so that the government can make the right decision on this matter,” he said. Linturi threw shade at the former regime of President Uhuru Kenyatta, saying that it brought in a lot of controversies in the tea sector. He however promised that not the President William Ruto-led administration had taken over and the sector will be streamlined for the betterment of the farmers and all other stakeholders. Former Agriculture CS Peter Munya last year ordered the audit of KTDA and all its subsidiaries over mismanagement by the ousted directors that had led to dwindling tea prices over the last five years. The agency was also allegedly forced to borrow money to pay tea farmers their bonuses at the end of the last financial year ending June 2022. “I have formed a working group committee on all policy issues touching on the sector to look at them so that we are able to build consensus. Give us time so that we can put this discussion on the high-level government meeting to address the matter,” he said. KTDA CEO Wilson Muthaura who accompanied Linturi on the tour requested the government to intervene in international markets that they were unable to penetrate due to tariff barriers. He added that KTDA will soon announce what it will be doing to come up with Kenya’s brand of value-added tea which he said they hope will too become an international brand. “Much concentration has been on Pakistan and Egypt, but there is a bigger market out there for value-added tea. As KTDA we support this and we have been doing much towards this,” said Muthaura. 

Source: The Star