Statement by the Cabinet Secretary for Agriculture, Livestock, Fisheries and Co-operatives, Hon Peter Munya, EGH
I was delighted to join the global tea industry fraternity in celebrating the International Tea Day on May 21, 2021. As recognised by the UN General Assembly in December 2019 when designating this day, the tea industry supports millions of people and is indeed a key driver of socio-economic development in tea-producing countries.
In Kenya, the tea industry plays a significant role in rural development, poverty reduction and food security.
Since the first tea seedling (Camellia Sinensis) was introduced into our country in 1903, leading to its commercialisation in 1924, the industry has witnessed monumental growth.
Nearly a century now since its commercialisation, the industry is a source of livelihood for over 600,000 farmers and about 6.5 million other Kenyans who are directly and indirectly engaged in the value chain. This represents approximately 13 percent of the national population. The industry is one of the leading foreign exchange earners and contributes four percent to the GDP and 22 percent of total exports.
I take note of the call by the UN General Assembly for an urgent need to raise awareness of the importance of tea for rural development and sustainable livelihoods, and to improve the tea value chain to contribute to the 2030 Agenda for Sustainable Development.
Further, I recognise the objective of the International Tea Day, of promoting and fostering collective actions in favour of the sustainable production and consumption of tea, and raising awareness of its importance in fighting hunger, malnutrition and poverty.
To this end, the Government of the Republic of Kenya, in collaboration with industry stakeholders, has been pursuing a deliberate reform agenda whose principal objective is to reposition the tea industry for a sustainable and profitable path. The primary focus in the reform has been to facilitate transparent and accountable processes in the value chain, with a view to according the most important player in the industry - the farmer - the opportunity to realise fair and sustainable returns.
The enactment of the Tea Act 2020 is a key milestone in the reforms agenda. The Act provides a raft of regulatory mechanisms for ensuring order, transparency and accountability in the tea value chain.
Among its key highlights is the recognition that farmers are the real owners of the industry and must be given the opportunity and an appropriate environment to participate in making key decisions about their investments. It was also recognised that some players in the value chain were participating in practices that are detrimental to farmers' interests, including burdening them with unnecessary costs, some of which are deliberately designed to benefit a few players at the expense of the principal stakeholders.
There was also recognition that the trading platform, the Mombasa Tea Auction, did not provide a fair and transparent price discovery mechanism, and has instead been a closed club whose operations are known to a few mandarins for selfish interests. It is upon this realisation that a requirement was put into law through the Act, for digitisation of auction operations, to accommodate more players on the trading platform and eliminate rampant collusion.
While some hurdles remain in the way of the implementation of reforms in the tea industry, I am happy to note that farmers, who are the principal shareholders in the smallholder tea factory companies, have recently taken back their power and organised Extra-Ordinary General meetings, during which they exercised their democratic right to elect leaders of their choice into the boards of the respective companies.
In exercise of its regulatory mandate and in pursuit of national interest and the desire to secure the position of the Kenyan tea industry in the global market, the Government has provided the requisite advisory and facilitation to farmers.
It is also notable that the Tea Act 2020 establishes the Tea Board of Kenya and the Tea Research Foundation of Kenya to provide a dedicated oversight, promotion and research for the national tea industry.
The requisite preparations are underway to fully operationalise the two agencies to enable them to undertake their responsibilities effectively in facilitating the tea industry.
For the second year running, we have marked the International Tea Day against the backdrop of the Covid-19 pandemic. Last year, initial lockdowns at the advent of the pandemic slightly slowed down the distribution and marketing logistics. However, the industry adapted very quickly to the new normal and is currently in a stable state.
Despite the pandemic, tea production was significantly enhanced by 24 percent in 2020 to stand at 569 million Kgs against 458 million Kgs recorded in 2019. Similarly, the total export volume for the year was four percent higher at 518 million Kgs in 2020 compared to 496 million Kgs recorded during the previous year. Total export earnings from tea was also slightly improved at Ksh120 billion in 2020 against Ksh117 billion in 2019.
The domestic absorption of tea remained at more or less the same level of 2019 at 41 million Kgs. I am certain that with the reforms that we are currently pursuing, farmers will soon receive much better earnings.
In conclusion, I wish to salute tea farmers in Kenya who continue to produce and supply quality tea to consumers across the world as they also contribute immensely to the socio-economic wellbeing of our beloved country.