Purple Tea plants at the Tea Research Foundation of Kenya in Kagumo in Kirinyaga County. PHOTO | BONIFACE MWANGI
Stakeholders want the government to set up a scheme to cushion farmers against volatile prices of farm produce.
They are calling for guaranteed minimum returns as a measure against unpredictable prices.
Some
experts are, however, cautioning that the scheme is not “the most
viable initiative” to farmers’ poor earnings saying increased subsidy on
farm inputs would have a bigger positive impact.
“What
happens when the international prices fall below the set minimum? It is
not sustainable and is also prone to corruption. It could also work
against farmers as they could only get the minimum when the prices are
good,” said Kenya society of agriculture professionals chairman, Mr Paul
Mbuni.
“We need to look at cost of production and not at the peak end of the market.”
The
government last month indicated that it would set up a fund to
stabilise tea prices and cushion farmers against declining incomes
following global glut of the green leaf.
Sectors that
have called for guaranteed minimum returns are coffee, cotton and
pyrethrum growers. Some farmers and political leaders have also been
agitating for such a scheme to cushion earnings in the unpredictable
international market.
“We are going to roll out a price
stabilisation fund to cushion farmers from price fluctuations,”
Agriculture Cabinet secretary Felix Koskei told a tea stakeholders
forum. The meeting was organised by the Senate committee on agriculture.
The minister, however, did not provide details on the
size of the fund, where the money would come from, or how the fund
would be administered.
Stakeholders in the tea sector
are the latest to join the chorus for setting up guaranteed minimum
returns to improve performance of agriculture and ensure farmers enjoy
good earnings.
Tea has experienced steady decline in
prices leading to one of the worst bonus payouts in the industry’s
history. The poor income was blamed on low prices in the global market
arising from oversupply of the cash crop.
“The
guaranteed minimum returns would require that farmers are paid against
their yields. The problem of administration would be monumental, with
the possibility of unscrupulous individuals seeking to gain from it. I
would not go for it but subsidies,” said Eprahim Wachira, an
agriculturist.
Fictitious accounts
Guaranteed
minimum returns was abandoned in 1970s following massive mismanagement
as the administrators had to deal with fictitious accounts and other
logistical challenges.
Mr Mbuni said the political
agitation for guaranteed minimum returns would lead to loss of benefits
as each of the regions seeks to access such funds.
Instead
of introducing the scheme, the experts said the government should
improve infrastructure and provide credit while subsidising inputs to
boost production of crops and hence farmers’ earnings.
International
tea and coffee prices have been declining in the last few years setting
off alarm bells over the future of the two commodities that are the
livelihood of about three million Kenyans.
The
pyrethrum segment has gone through a lean period leading to near
collapse and the setting up of guaranteed minimum returns is one of the
recommendations meant to prop up its revival.
Tea
prices dropped by a massive 38.6 per cent between January and October
last year, triggering a call by stakeholders for government intervention
through a review of levies to cushion the farmers’ earnings.
The
prices have not recovered sparking fears that farmers may abandon the
crop. Some factories have paid a paltry Sh8 per kilo in bonus payment.
Coffee
prices have gone through a steady decline in six years, recording only
slight improvement this year. This is a dim prospect for the industry
that has only recently recovered from the 1990s slump.
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