Government exploring high tea earnings to match US Dollar

Deputy President Rigathi Gachagua will meet Kenya Tea Development Agency early next week in a push to increase tea earnings for small-scale farmers in response to the appreciating US Dollar against the Kenyan Shilling. 

Speaking on Saturday in Kigumo, Murang'a County, the Deputy President said that since KTDA sells tea in US Dollars, the farmers' earnings should not be constant.

Mr Gachagua was responding to concerns of Gatanga MP Edward Muriu, who said income of tea farmers had dipped despite the high exchange rate of the dollar. 

The Deputy President said the government is already seized of the matter to ensure the high exchange rate of the dollar must match in the earnings of the tea farmers.  

"I concur with Mr Muriu that if the exchange rate for the dollar is high, the same should reflect on farmers' income because the crop trades in the USD. I will convene a meeting with KTDA and explore ways of improving the earnings. We cannot have a fixed rate of payment, the price should be paid at the existing exchange rate of the dollar on the respective day," said Mr Gachagua.

As at the end of the week, the official exchange rate of the Kenyan shilling against the US dollar was Sh162. Currently, farmers earn between Sh20 and Sh25 for every kilogramme of greenleaf tea delivered. They also receive a bonus from sold tea, usually, annually, which is also varied depending on, among other factors, the quality of the sold tea. 

The Deputy President also called out the Judiciary for stopping implementation of government-led reforms in the tea subsector and delaying determination of the legal dispute filed in court in 2020.

"I appeal to the Judiciary that tea reforms were so well crafted; the public was engaged. The courts suspended implementation of regulations aimed at reforming the subsector and delayed determination of the case for over three years now," said the Deputy President.

The interim court orders issued in 2020 halted the implementation of some clauses in the Tea Act.

The orders were to remain in force pending hearing and determination of case.

But the Deputy President asked the judicial officers to consider the Kenyan farmer.

"Be true to the interests of Kenyans. Do not unnecessarily lock every thing without considering the impact on the public," said the DP.

Mr Gachagua was tasked by President William Ruto to lead reforms in tea, coffee and dairy subsectors, with the key agenda of weeding out cartels across the value chain for farmers to earn more money.

Further, the Deputy President said despite challenges in reforms, even in coffee the Government is determined to streamline the subsector for the benefit of the farmers. He said no amount of resistance will stop him from delivering on the reforms as assigned by President Ruto.