KTDA alarmed by falling tea prices

PHOTO | JOSEPH KANYI | FILE A farmer picks tea leaves at her farm at Gathuthi village in Nyeri county on September 16, 2013.  NATION MEDIA GROUP

In Summary
KTDA now wants the government to salvage the situation by subsidizing the cost of fertilizer and waiving taxes on tea
To address the situation, the KTDA board met on Tuesday and formed a committee to explore various options available to steer the sub-sector out of the crisis

 By MUCHIRI GITONGA
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A tea management firm is raising alarm over the falling prices of tea which it says will have a major impact on the local economy.

The Kenya Tea Development Agency at the weekend warned growers that low tea prices would affect their earnings unless the government intervenes.

The organization which manages the small-scale tea industry on behalf of more than 600,000 farmers now wants the government to salvage the situation by subsidizing the cost of fertilizer and waiving taxes on tea.

To address the situation, the KTDA board met on Tuesday and formed a committee headed by Chege Kirundi from Murang’a to explore various options available to steer the sub-sector out of the crisis.

“The situation is worrying. It has not been like that for the past four years. The prices have come down by a huge margin. We have already formed a committee headed by Mr Kirundi to look into whether we should go into direct sales or into Futures,” Chairman Peter Kanyago said.

He was speaking at Iriaini tea factory after he was re-elected unopposed as KTDA director for Nyeri county. All the four directors eligible for re-election nationally retained their seats. (READ: KTDA to start processing purple tea)

TAX IMPOSED

Mr Kanyago said Kenya’s tea was expensive at the Mombasa auction compared to that of Uganda, Rwanda, Tanzania and Malawi due to the ad voram tax imposed by the government a year ago.

“Buyers are going for the teas from these countries because they are cheaper than ours. The government should remove the duty and also set up a stabilization fund to cushion farmers since tea is a major exchange,” the official said.

Valued added tax on locally consumed tea should be removed to promote local consumption, Mr Kanyago said. (READ: Minister warns cartels over poor tea prices)

He said the government must also assist the farmers by entering new markets for tea in countries like Russia, China and the US through government-to-government negotiations.