Tea farmers in Murang’a anticipate increased returns after their directors sign a new management agreement with the Kenya Tea Development Agency (KTDA).
The signing of the agreement, on Wednesday, brought to an end the stalemate between the management of 10 tea factories in the County and the KTDA.
Some controversial provisions in the agreement prompted the farmers to shy off from entering into the new deal with their agent, a situation which forced the Tea Board of Kenya to intervene.
A stand-off was also witnessed during the meeting of signing the management agreement after the two parties failed to agree on some areas.
A solution was arrived at later in the night when KTDA gave in to the demands of the farmers through the directors, which will allow tea factory boards, to have full authority over the finances.
The role of management of finances of respective tea factories was under KTDA, with the directors saying the new changes, some expenses would be eliminated, thus more returns to farmers.
Chairman of the Tea Board of Kenya, Mr Jacob Kahiu, lauded the signing of the five-year agreement, saying directors of the 10 factories will now control the finances, as KTDA handles the responsibilities of processing green leaf and marketing of teas among others.
Kahiu further said after the new deal comes into effect on July 1 this year, Sh. 2.5 which was levied by KTDA per Kilo, will go down to Sh. 1.5.
“The reduction of the management fee will see farmers get increased returns from the tea they have supplied to their respective factories,” noted Kahiu.
With the new management agreement, the Chairman asked farmers, to ensure they elect transparent and trustworthy directors, who will manage their finances prudently.
“Having the finances being managed at factory level, there is a need to have trustworthy directors who will not mess with farmers money,” he added.
KTDA Management Services Chairman, Solomon Maina, on his part, said Murang’a directors have emerged champions, for going through the process that has taken more than seven months.
“The management agent, will work hand in hand with the factory boards, to ensure the farmers get quality services,” said Maina.
He noted that KTDA will have to adjust its ways of operations to minimize expenses since the management fees that were being levied to farmers have been reduced.
Zone 3 board member Chege Kirundi lauded the new agreement saying for a long time, farmers have been agitating to be custodians of their money.
He noted that in the previous agreement, factories were subjected to requests for money from KTDA, an exercise he noted was not smooth.
“The new agreement will also ensure factories will not cater for salaries among other expenses for KTDA workers deployed in the facilities. Now the flow of money will be more as the factories have the sole responsibility of appointing brokers to sell their tea,” added Kirundi who is also Chairman of Kiru Tea factory.
He observed the reduced management fees to Sh. 1.5, tea factories in Murang’a, will be able to save about Sh. 2 billion per year.
On his part, KTDA Holdings Chairman, Enos Njeru, divulged that the Agency will invest in technology, to ensure farmers get the best services.
He revealed that KTDA was faced with numerous challenges in monitoring tea from factories and establishing the actual stocks of old teas in the warehouses.
“Efforts will be geared towards computerization, to monitor the unsold teas in the warehouses in Mombasa and factories,” averred Njeru.