Mr Munya accused directors of factories under the Kenya Tea Development Agency (KTDA) of attempting to block the implementation of reforms.
“These issues are in court but once the cases are over, there will be an audit,” the Cabinet Secretary said at Mumias Sugar factory on Monday.
He later addressed Kakamega county leaders and residents, outlining measures the government has taken to revive the miller.
The reforms in the tea industry are meant to protect small-scale farmers from exploitation, he added.
The government accuses KTDA directors of protecting cartels and not having the interest of farmers at heart.
Farmers have been calling for an audit of the agency to establish its financial status.
They want the audit to be extended to the agency’s subsidiaries, including Green Fedha, Chai Trading, KTDA Machinery, KTDA Power and Majani Insurance.
“Small-scale tea growers are shareholders of the factories and have been asking legitimate questions on the financial status of KTDA. Why can’t the status of the subsidiary companies be made public too? Who are the directors of these firms?” Mr Cheruiyot Baliach, a tea farmer in Konoin, Bomet County, asked.
Mr Baliach said some factories in the South Rift bought hundreds of acres in Narok and Nakuru counties, where eucalyptus trees were planted as woodlots.
LAND IN MAU FOREST
“The managers of these factories have pieces of land in the Mau Forest water tower, which have been repossessed by the government and settlers evicted. Tea factories have lost land and money pumped into these illegal projects,” Mr Baliach added.
Despite the factories harvesting hundreds of acres of eucalyptus, it is never reflected in the expenditure presented during the annual general meetings, farmers say.
The call for an audit has also come from Kapsoit Ward Representative Paul Chirchir, who has been vocal defending farmers.
“Some factories have used hundreds of millions of shillings on hydro-electric projects, resulting in a sharp decline in earnings,” the Kericho County Assembly member told the Nation.
Mr Chirchir added that the core business of KTDA is to market tea for small growers.
“The agency and factories should not engage in ventures whose profits and losses are hidden from the public and shareholders,” the politician added.
The High Court on July 10 stopped the newly appointed committee on the implementation of tea reforms from starting its work, pending the hearing of a case filed by KTDA.
Justice Pauline Nyamweya said KTDA Holdings, through its lawyer Benson Millimo, met the threshold for an arguable case against Mr Munya.
The court added that the tenure of the team is four months but the implementation of the reforms is continuous.
According to Justice Nyamweya, unless the status quo is maintained, the case by KTDA may be rendered useless in light of the committee’s limited implementation period.
“The applicant...is therefore entitled to the leave sought to commence judicial review proceedings against the respondent,” the judge said.
In a June 25 gazette notice, the Cabinet Secretary named a 10-member team to look into reforms in the industry.
The mandate of the committee includes to manage and coordinate processes and implementing reforms, including changes in the role of KTDA in dealing with small-scale growers.
But in an affidavit, KTDA company secretary John Kennedy Omanga said the agency is a private company and that the Cabinet Secretary has no right to make changes to its operations.
Growers and other tea sector players accuse the agency’s directors of signing agreements without involving shareholders.
KTDA has signed deals to generate hydro-power, pumping vast sums of cash into the projects.
LOANS FROM BANKS
The factories, on the other hand, have taken loans from banks and other institutions to finance their operations.
The loans have also been used to buy land.
For a long time, brokers at the tea auction in Mombasa and KTDA have been making billions of shillings as producers and their families wallow in poverty.
Tea is the second leading foreign exchange earner for Kenya.
“There are very many underhand deals at KTDA that disadvantage small-scale growers, who are the main leaf suppliers,” the Mandera South MP said recently. “We demand an audit. Things must be done in the open.”
MPs Ronald Tonui (Bomet Central), Brighton Yegon (Konoin), Japeth Mutai (Bureti) and Bomet Woman Representative Joyce Korir said KTDA has no reason to underpay farmers.
“Where are the billions of shillings earned from the sale of tea in foreign markets? That money belongs to the farmer. KTDA management must be held to account,” Mr Tonui said.
Mr Mutai said the tribulations small-scale growers have been subjected to should no longer be tolerated.
He added that reforms need to be speeded up.
“It is obvious that KTDA has held farmers hostage for decades. This is the time to liberate the small grower from exploitation,” the Bureti lawmaker said.
Mrs Korir and Mr Yegon urged Mr Munya not to yield to pressure from the agency and cartels.
KTDA operations manager Moses Njagih said bonuses paid to farmers every year vary from one factory to another.
He said quality of the leaf delivered plays a big part in determining what farmers get.
“It is important to ensure only quality leaf is plucked. They should pluck two leaves and the bud per bush. Quality has always dictated the market price,” Mr Njagih told the Nation.
Source: Nation Media
Tea farmers in Nyeri county want the ministry of agriculture in conjunction with the director of public prosecution to conduct a forensic audit of finances at the Kenya Tea Development Agency.
Led by Wambugu Nyamu, a farmer at the county, the farmers claim there has been massive theft of farmers’ money, adding that the audit should be conducted on the financial status of the agency, factories, and subsidiaries.
“We as farmers are upset by revelation by KTDA that this year bonus will be lower than other years. It is our belief that all is not well at the agency and as such an audit is necessary to determine what is going on” said Wambugu.
This year KTDA has announced that the rate which they usually pay farmers at the end of the year commonly known as bonus will drop owing to the fact that they have lost close to 17 billion due to COVID-19 restrictions that have hampered the sale of their produce.
KTDA argues that the huge consignments of produced tea are still lying in their godowns and cannot be sold at traditional markets due to movement restrictions.
However, in their statement, the farmers see foul play on the part of the agency since bonus is supposed to be derived from sale of last year crop which was not adversely affected by the pandemic.
“We as farmers view this as sabotage due to new tea regulations which are not codusive to the agency we want a probe into their affairs to determine whether our money is being stolen or not” said Wambugu.
In the past, farmers have lost millions of shillings due to the collapse of banks where they had banked monies that were to pay farmers.
However, the Agency’s national Chairman Peter Kanyago is on record saying no farmers incurred loss due to the collapse of the banks since the sum had been insured.
Source: Capital Digital Media