Why Tea Farmers East of the Rift Valley Earn More

Daftar Isi

Overview of Kenya’s Tea Sector

Kenya's tea sector plays a significant role in the country's economy, serving as the third leading foreign exchange earner. Last year alone, it generated Sh181.7 billion from exports and supported approximately 600,000 smallholder farmers across the nation. The sector is structured into large-scale producers and smallholder farmers, with the latter predominantly operating under the Kenya Tea Development Agency (KTDA). This private company, owned by the farmers themselves, manages 54 factories nationwide where the tea is processed before being auctioned at Mombasa.

Regional Disparities in Tea Production

Despite the overall success of the tea industry, there are notable regional differences in the earnings of farmers. Farmers located in the East of the Rift Valley (EoR), particularly in the Mt Kenya region, tend to earn more than their counterparts in the West of the Rift Valley (WoR), which includes areas in Western and Rift Valley provinces. While WoR farmers supply 70% of the tea sold at the Mombasa Auction, their produce often fetches lower prices compared to EoR tea.

Factors Influencing Tea Prices

Several factors contribute to the price differences between the two regions. According to the Tea Board of Kenya (TBK), production costs in WoR factories are 31% higher than those in EoR factories. Additionally, major buyers such as Pakistan and Egypt have shown a preference for EoR tea, enhancing its competitiveness at auctions. The TBK also points to the declining quality of tea from WoR, which has been attributed to changes in government policies, including the introduction of a reserve price to guarantee minimum earnings for farmers.

Agro-Ecological and Human Factors

Natural geographical factors, such as altitude, soil quality, and climate, play a role in the disparity in tea quality between the two regions. KTDA notes that these conditions can affect the quality of tea produced in WoR. Furthermore, human influences like poor crop husbandry, suboptimal plucking standards, and inconsistent post-harvest handling contribute to the lower quality of tea from this region.

Challenges Faced by WoR Farmers

Farmers in the WoR face several challenges that impact their earnings. These include substandard green leaf quality due to poor crop management, a shortage of laborers, and cartel control over wages, which reduces efficiency and increases costs. Inconsistent access to fertilizers and other farm inputs further exacerbates the problem.

Tea Pricing at the Mombasa Auction

The pricing of tea at the Mombasa Auction involves a thorough evaluation by brokers based on the quality of the tea. Parameters such as the physical appearance of the leaves, liquor properties, and overall flavor are considered. Teas are then classified into grades ranging from “best” to “plainer,” which directly affects the bidding price. The lower quality of green leaf from WoR farmers often results in their teas falling into the lower grade categories.

Improving Green Leaf Quality

To address the issue of low green leaf quality, the TBK recommends professional crop management, proper plucking techniques, and careful handling of the leaves before they reach the factory. Surveillance by the TBK indicates that green leaf quality in WoR is often below the desired minimum of 60%, highlighting the need for improvement.

Government and Industry Initiatives

In response to the quality issues, the government removed the reserve price in October last year, aiming to incentivize better quality production. Additionally, the state is providing Sh3.7 billion in concessional financing to smallholder tea factories to modernize their equipment and expand the production of orthodox teas, which could help reduce costs and improve farmer earnings.

KTDA is also working on ensuring that quality assessments occur at multiple stages of the manufacturing process, from the factory to the final packaging, to ensure that high-quality tea reaches buyers. These efforts aim to bridge the gap between the EoR and WoR regions and enhance the overall competitiveness of Kenyan tea in international markets.