The National Assembly Tuesday night passed the much-awaited Tea Bill which will see the revival of Tea Board of Kenya and adoption of new regulations to govern the cartel-soaked sector. Debate on the Bill, which passed the Second Reading Tuesday, was concluded at 11pm and will have to now go through the Third Reading where it is only scrutinised for clarity. The Tea Bill, sponsored at the Senate by Kericho Senator Aaron Cheruiyot, was at the National Assembly for the final passing. “We really thank God for the journey so far. This is huge,” wrote the Senator last night. If the Bill is signed into law, tea brokers, buyers and auction organisers will have to ensure that the proceeds from the sale of tea is paid within 14 days and the factory will now pay 50 per cent of receipt of the sales to the farmers. This will mean that Kenya Tea Development Agency (KTDA), which has been holding a huge chunk of the proceeds for a year, will no longer have access to the tea billions since the money will now be controlled at the factory level. The balance of the money will be paid at the end of the financial year. On Tuesday evening, Laikipia Woman Rep Catherine Waruguru accused KTDA of squandering farmers’ money with unending court cases. At the moment, the agency has filed various cases to oppose new regulations proposed by Agriculture Cabinet Secretary Peter Munya. An earlier attempt this week to have management agents such as KTDA sit at the Tea Board was dropped and the crucial one-man-one-vote in the election of directors, which had been omitted, leading to uproar by farmers, was reinstated and passed. The Tea Research Foundation, which used to carry our research on the sector, will also come back in the proposed law. The law will also give the Cabinet secretary powers to prescribe regulations for the registration of management agents, such as KTDA, and the appeal process.
Opaque agreements Management agents will no longer enter into an agreement with a tea factory without the approval of the agreement by the Tea Board. KTDA has previously been accused of taking powers of the factory boards and running the farmers’ companies by entering into opaque agreements. In the KTDA agreements, the agent provides the factories with a company secretary and thus controls the election of the directors by disqualifying candidates through a pre-qualification process. The CS will also have powers to prescribe regulations for the tea auction. At the moment, the sole tea action, East African Tea Trade Association, has taken CS Munya to court for prescribing regulations to govern the tea sector. Farmers will now be able to monitor their tea through the value chain. Electronic trading platform In the passed Bill, the auction organiser will establish an electronic trading platform that is accessible to all players in the value chain. This will remove the opaque practice where farmers hardly know how their produce is sold. The Kenya Tea Sector Lobby group has hailed the passing of the Bill as “significant and a huge triumph to the tea farmers”. “This is a big step towards making sure that we save the farmer from exploitation by cartels. We shall keep our eyes on the ball until the Bill is signed into law and then we embark on the crucial process of streamlining the value chain,” said Mr Irungu Nyakera, the Kenya Tea Sector Lobby chairman. With the passing of the Bill, the National Assembly will now compile a report and send it to the Senate for approval and concurrence. If there are disagreements, the Speakers will appoint a mediation committee which will report to both Houses and the Bill will then be sent to the President for signing. Source: Nation Media
A worker picking tea leaves in one of Kenya's plantations Tea farmers countrywide but especially smallholders could look forward to better fortunes after the Tuesday night passing at Committee Stage of the Tea Bill which is the brainchild of Kericho Senator Aaron Cheruyoit. The Bill which originated in the Senate was first intended to basically revive the Tea Board of Kenya to help regulate the sector and help market Kenya's tea abroad. But with a separate push by the government to regulate the sector through subsidiary legislation by Cabinet secretary Peter Munya having fallen by the wayside after a Senate vote, the bill was the only bullet remaining for the sector. The government thus annexed the bulk of the rejected subsidiary legislation into Cheruyoit's Bill which has been pending at the National Assembly since Senate passed it last year. The National Assembly Tuesday night sitting that extended late into the night passed the Bill through the committee stage with amendments that favour farmers in the sector and tighten management narrowing the avenues for pilferage. The Bill now goes to the Third Reading where it is only scrutinised for clarity. “We really thank God for the journey so far," Cheruyoit said after the NA vote. The law if it finally comes to fruition will require prompt payment of the farmers proceeds with half within the month of sales and the other half within the next few months. It will end farmers wait for their money which sometimes meant they endured up to 26 months to get full payments with what has come to be called Bonus coming in October of every year. The law will also tighten the management of tea factories owned by Smallholder farmers 69 of them in 16 counties in the country. The factory units which are run as autonomous companies but managed by the farmer-owned Kenya Tea Development Agency (Ktda) Ltd will directly manage their accounts and elections a key contention by farmers who felt that a centralised management system was maliciously used to weed out rebels from becoming directors. Also to come under government regulation will be the Mombasa Tea Auction with brokers, buyers, and the auction organisers - the East African Tea Trade Association) - subject under new rules. A new Tea Levy is to be imposed on all tea sales at the Auction to finance the TBK and the semi-autonomous Tea Research Foundation. Tea buyers will also be required to promote local value addition according to the Bill which borrowed extensively from the rejected Crops (Tea) Rules and Regulations proposed by Munya. However, the passage of the bill will most likely open more court rows between the government and industry players some of whom feel that the government was unfairly seeking to enter a sector it left to private players in 2000. There are currently multiple high court cases challenging the government's attempt to get its hands into the tea sector. Source: Standard Media
In Summary • Peter Kihungi, a tea farmer from Kanyenya-ini in Kangema subcounty, said the Bill will save farmers from poverty. • The Bill went through the Second Reading in Parliament on Tuesday. Tea farmer Peter Kihungi from Kanyenya-ini in Kangema addressing journalists on Wednesday. Some farmers from Murang’a county have appealed to MPs from all tea-growing areas to support a Bill to regulate the sector currently in Parliament. They said it was time the leaders showed their support for farmers who have been suffering from low payments and mismanagement of the tea sector. Peter Kihungi, a tea farmer from Kanyenya-ini in Kangema subcounty, said the Bill will save farmers from poverty. The Bill went through the Second Reading in Parliament on Tuesday. “We are asking MPs who were not present when the Bill went through its Second Reading to ensure they are present during its Third Reading,” Kihungi said. He said the Bill has presented a glimmer of hope to farmers who had given up when senators floored the tea regulations early last month. Senators said parts of the Bill were not in the interest of county governments yet agriculture is a devolved function. The regulations would amount to over-regulation of the sector and stifle growth, the senators argued. Governors complained that they had been left out of the process that falls under their functions. But Kihungi said once passed, the Bill will transform the Tea Board of Kenya that is currently a subsidiary of the Agriculture and Food Authority into an independent parastatal. The Tea Board will then regulate the tea sector and receive funds from the national government. This, he said, will ensure that farmers are paid their dues on time regardless of the fluctuations of the global market. The Bill will also ensure that farmers are paid 50 per cent of their payments 14 days after the sale of their tea, making it impossible for Kenya Tea Development Agency to hold onto farmers’ money. Farmers have lamented that the agency holds a huge chunk of their money until the end of the year when they are paid the annual bonuses, leaving them to survive on loans which they receive from the agency’s affiliate companies. Kihungi also asked governors to keep off the process if they are not willing to support it, saying that they should not become an impediment to farmers’ interests. He said despite formulating no law to better the lives of millions of thousands of tea farmers across the country, governors have opposed all efforts to streamline the sector. “Last term, Murang’a MCAs drafted a tea bill that aimed at streamlining the sector and the county government came out saying that it was the mandate of the national government to formulate such laws,” Kihungi said. He wondered why they are opposed to the laws fronted by Agriculture CS Peter Munya yet they have done nothing to solve the chaos in the sector. The farmer told governors from tea zones in the Mt Kenya region to either support the fight for farmers’ emancipation or stay away. “We know that they are paid by KTDA to frustrate any efforts to streamline the tea sector when they should be fighting for farmers’ interests.” Muraya Gatu, another farmer, said the tea Bill will save them from the cycle of debts that they live in as they struggle to support their families. Tea farming, he said, is demanding and requires the attention of the farmer all year long. This makes it difficult for a farmer to engage in other money making venture yet the returns are meagre. “The most important thing that MPs can do for tea farmers is to ensure the bill is passed into law so that we don’t have to beg for our rights,” he said. Source: The StarTea factories risk Sh10 million fine for buying and ferrying produce from unregistered small-scale growers in a proposed law that seeks to weed out hawking. Amendments made to the Tea Bill of 2018 in the National Assembly introduces penalties for factories that buy the commodity from unregistered farmers or dealers. Those in breach face a fine of Sh10 million, a 10-year jail term or both. The penalty is expected to limit against tea hawking and theft of the crop in farms, which has ultimately hurt farmers’ earnings. “A person commits an offence if the person manufactures tea for sale in contravention of this Act, buys, sells, offers for sale, transports or has possession of tea, which to the person’s knowledge or belief has been grown, manufactured or processed otherwise than in accordance with this Act, is from a non-registered grower or dealer of such crop,” says amendments to the Tea Bill. “A person who commits an offence under subsection (1) shall be liable, on conviction, to a fine not exceeding ten million shillings or to imprisonment for a term not exceeding five years, or both.” Tea Bill of 2018 was passed by Senate last year and is now before the National Assembly because it also affects the National government. Theft of the tea leaves through break-ins at factories and illegal plucking on the farms are some of the biggest challenges facing the sector. Farmers in Bomet and Kericho counties have been grappling with theft of tea at night since last year as thieves target the green leaves that are in turn sold to other factories. Brokers have also been buying the crop from farmers on the cheap for sale to factories, depressing farmers pay. The stiff penalties come amid growing concerns of farmer exploitation where tea growers continue to grapple with diminishing earnings due to exploitation by unscrupulous traders and factories. Lawmakers have also directed that tea growers provide all information to the factories to weed out those who have scaled up to growing the crop on large-scale. The proposal is meant to kick out cartels buy tea from farmers and sell it to factories, purporting it has come from their farms. Farmers who will fail to provide updated information that includes the size of their farms risk a Sh1 million fine or two years in jail if found in breach of the requirement. Tea sector has in recent years hit lows mainly on diminishing returns to farmers with the State targeting the giant Kenya Tea Development Agency (KTDA) in reforms meant to increase farmers’ earnings. President Uhuru Kenyatta earlier in the year ordered an overhaul of the giant KTDA that manages 69 tea factories — processing and selling tea on behalf of the 612,000 small-holder growers affiliated to it. Lawmakers have also set their eyes on plantation tea farmers and imposed a Sh2 million fine or two years in jail on all growers who fail to register their factories with the yet to be established Tea Board of Kenya.