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Ruto to manufacturers: Give us value for our tea
President William Ruto has asked manufacturers to invest in improving the value of tea.
Speaking during the inauguration of Vision20by30 by the Kenya Association of Manufacturers in Nairobi the President challenged manufacturers to aid the government in creating more value for the sector.
Ruto said manufacturers are failing farmers by not adding value to what they toil all year round to produce.
“We are getting peanuts for our tea and many other people who don’t have a single bush of tea are making more money than us,” he said.
Tea is one of the country’s high earns, generating 1.29 billion dollars in revenue in 2021.
However the President says, the revenue from tea exports can be increased to between KES 200-300 billion through value addition.
“There is absolutely no reason why we are selling our tea unprocessed 95 percent in a space where we have the biggest competitive advantage,” he said.
Ruto added that he is engaging with tea marketers to understand how the government can aid in accelerating the creation of value addition in the sector.
“If it is required of me to invest in a common user facility to add value to our tea, then the government of Kenya is going to invest in a common user facility,” he added.
The government is putting up a common user facility at Dongo Kundu that will be used by all the stakeholders in value addition of the tea before it is exported.
Kenya is among the top tea producers alongside China, India, and Sri Lanka.
However, most of the countries that import Kenya’s tea normally buy it without having value added in order to blend it with teas from other regions.
For instance, Pakistan which is a top buyer of the beverage procures more than half of the commodity in its original form as it was processed at the factories.
In Kenya, smallholder tea farmers contribute 56% of the country’s total output. Over 6.5 million Kenyans benefit directly or indirectly from it, including at least 620,000 smallholder farmers throughout the country.
Recent research has issued a warning that low producer prices could drive smallholders away from the tea industry and into more lucrative ventures.
However low farm gate pricing, subpar extension services, constrained market channels, and limited access to capital and technology are some of the problems smallholders face.
The Tea Board of Kenya stated in a report published in August that the volume of Kenya’s tea exports decreased by 16 percent in the first five months of 2022, painting a grim picture of the sector.
According to the directorate, Kenya exported 211 million kg of tea during that time, down from 253 million kg during a comparable period in 2021.
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