Thread by @MarvinGakunyi

Former KTDA Worker Raphael Mworia Speaks

Thread...
I worked for 12yrs in @KTDATea between 1995 and 2007. I joined when KTDA was a parastatal under the Min. Of Agriculture.
Come the year 2000, KTDA was privatised. This was after concerted effort by farmer representatives.

A background of this privatisation is necessary because it informs a lot on the current raucous engagement playing out in the public space.
KTDA was set up in 1964, by taking over the functions of Special Crops Development Authority (SCDA)...

which had been set up before independence to encourage cash crop farming amongst African farmers after political independence seemed inevitable. When the uptake of the envisaged cash crops failed or was slow, tea growing was spreading so fast,...

...the government had no clue what was going on. (If you know someone from Muranga, ask them what role Rubia, Kiano and a few other visionaries played, smuggling tea stumps from Tanzania)

All the early tea factories set up starting from 1957 with Ragati in Mathira, Nyeri were funded by CDC and all loans paid by the farmers who delivered tea to that factory.
Other factories came up fast and furious in Kiambu, Meru, Muranga, Kericho, Kisii.

The factories were then managed by Brooke Bond, Eastern Produce white management staff because there was a belief then that tea manufacturing was too complicated and technical for the African mind. This went on until late 60s and early 70s.

Some bold African managers came on board and cut the ties with the British multinationals that had a stranglehold on the tea value chain right from farm to cup.

By then the world tea auction operated from London and producers had to ship their teas there before their tea could be offered for sale.
The bold African managers in KTDA, had other nationalistic ideas. The exponential growth of small-holder tea growing was on their side.

In a decade or so, majority of tea exports were coming from the native farmers. The multinationals were not expanding their production due to land constraints and their farms were stocked with old stump tea bushes while KTDA-managed farmers were planting more productive...

...tea clones coming from the world class Tea Research Foundation of Kenya (TRFK).
All these factors made KTDA a force to reckon with, not just in Kenya because they had already annihilated their multinational competitors locally, but a world force.

Everybody around the world wanted to emulate KTDA. Similar production, ownership and co-operative-like arrangements were borrowed by third world nations around the world.
At some point KTDA was getting funding directly from World Bank to tarmac tea roads...

...but a bit of territorial and mandate fights between KTDA and the PWD saw that programme shelved. If that had gained traction, Kenyas tea growing regions would have been all tarmacked by the 1980s.

Instead for years tea farmers paid to County Councils a road levy until the 2000s when they took control of that levy and repaired their local roads.
Meanwhile in the mid 70s Brooke Bond,

who owned the local tea packing factory in Kericho that we know today as KETEPA were creating artifical shortages in the local market as part of the multinationals vs. smallholder muscle flexing exercise.
Thankfully the then President,

Mzee Kenyatta may have had a soft spot for KTDA managers and 'nationalised" KETEPA, then called the Central Packing Factory. Every tea producer in Kenya would be required by law/decree to supply the local Kenyan market with a mandatory

uniform percentage of their production to KETEPA. At the end of the year, all money made by KETEPA as profit would be shared by the suppliers of the tea. It was a co-operative essentially. That arrangement lasted well into the 2000s when the multinationals just stopped supplying

KETEPA and infact became their competitors by locally packaging their own brands. KTDA had no choice but to buy out the minority shares the multinationals held in KETEPA. Today KTDA owns KETEPA. Is it secretly owned by KTDA or it was necessary?
In the meantime, KTDA had grown

"horns" and was mobilising African and Asian tea producers to boycott the London Tea Auction. They succeed and the Mombasa Tea Auction managed by all tea producers in Africa under the East African Tea Trade Association

(EATTA) was becoming a reality and London was dead as a global tea centre of any relevance. Other major tea auctions were in Limbe, Colombo, Kolkata, Coimbatore, Jakarta, Cochin but Mombasa had the most producers and buyers participating.

Having consolidated their unwritten powers, KTDA then moved their focus towards efficiency and most of the 80s, 90s and 00s were busy expanding the production capacity of farmers by building more tea factories. Todate they manage 66 factories owned by some 500,000 small holder

tea farmers.
Somewhere along the road, some KTDA Managers saw opportunities to integrate this business conglomerate both horizontally and vertically. That is what a good business manager does. Increase revenue streams. So KTDA got into warehousing, insurance, property management

, power generation, fabrication of machinery, packaging and tea trading. All these businesses that KTDA got into were being provided by private individual and KTDA doing it was alright especially if they demonstrated value to the shareholders.

The reason KTDA got into the busines of business away from the business of tea management was due to pressure from farmers who felt the 5% management fee paid by the Tea Factory Companies was too high when you consider that another 49 companies are paying the same.

That fee was reduced to 2.5%. Farmers also demanded their tea brokers to review downward the brokerage fee they paid to the Mombasa- based brokers who connected their tea to the world markets.

Today KTDA owns or manages on behalf of farmers a company that fabricated almost all the machinery used in the factories, warehouses in Mombasa, a tea trading company, a tea packaging company, a power generation company, an insurance brokerage company, a money lending company.

All these companies were established with the altruistic vision of shielding farmers from opportunistic private companies, many of which owe their present day success to KTDA farmer's custom.
None of these companies were established with a view to hiding any money.

Many were set up as last resort options after private suppliers colluded to exhort inflated business deals. At various times, the Board and Management would make a decision to get into that line of business to shield the organisation and farmers from extortion or unfair market

practices. How are they a secret?
Sometime in the late 90s, the World Bank prescribed for Kenya a bitter pill called Structural Adjustment Programme (SAPs) that required some painful actions. One of the actions was to stem continued haemorrhage of public finances into

non-performing parastatals by selling or privatising them. They were many.
Some mischievous people included KTDA in that list. A few other parastatals that were financially sound were also included. They were successfully privatised.
Smallholder farmers using their

vocal opposition politicians of the day and other means were able to convince the government that KTDA did not belong in that list of hemorrhaging parastatals. They had very simple questions for the government- show us how much the government had put into KTDA or

the 45 factory companies owned by farmers then. The government had no proof. The farmers also asked for any evidence of any subsidies, grants, loans from Treasury to small holder farmers. It turned out that salaries for KTDA the parastatal, assets that KTDA the parastatal had

were all funded by private individuals (farmers). Infact a levy supported and paid for by small scale farmers existed for just supporting another two parastals (Tea Board of Kenya and Tea Research Foundation). Isitoshe (as if that was not enough), even the extension services

comprising of tens of Agricultural officers had long been seconded and paid for in full by small holder tea farmers. Their offices, enhanced salaries, vehicles, etc were the farmers burden.
The case of privatising KTDA was easily ruled in favour of not privatising due to

overwhelming evidence of who the real owners (financiers) of the parastal were. Any doubting Toms within the Privatization Secretariat had their nationalistic fibres played like a guitar when it was made openly clear that the scheme to privatise KTDA was actually not the

Government's agenda but the big bad tea multinational wolves out to kill an African success case study. Plans to privatise KTDA were quickly dropped.
The farmers regaled in that victory but also saw an opportunity that their leaders utilised to be rid of government controls.

Although they were exempt from State Corporation Act strict requirements so as to allow business-like decision-making, the leadership saw a chance to make a clean break from state shackles. Since they had proved that no single coin beyond guaranteeing loans came from GOK and

since they had proven that any assets KTDA had were actually bought using farmers money in the form of a management fee, wouldn't it be a good idea if the privatisation was effected but instead of a financial consideration going into government coffers, the farmers would just

take what they already owned. A formula was created where a private company was created called Kenya Tea Development Agency Ltd (KTDA Ltd) owned by all 45 factory companies in existence then and careful not to disturb or disorient the world tea buyers who were immensely fond of

the brand and quality associated with Kenya Tea Development Authority (KTDA). In hindsight this privatisation and brand retention should have taken a clean break with a new name, ethos, etc but apart from removing the blue number plates and cutting an already weakened umblical

cord connecting Chai House to Kilimo House, nothing much changed.
While a parastatal, KTDA was always a favourite whipping boy for power brokers and power peddlers. Due to its size any procurement was always going to attract too much attention.

Be it the annual procurement of 75,000 + metric tonnes of 26:5:5 NPK fertilizer or fleet renewal or a shift from sisal to jute to polyester bags or a shift from wooden tea chests to multi-ply paper sacks or from fermenting troughs to continuous fermenting machines or from open to

sealed containerised transport; any move KTDA made could kill or revive a whole industry because of the volumes involved. That is one of KTDA's sins.
I remember my then CEO, Eric Kimani asking me from across his table if I understood why we were always getting unfavourable

headlines every fertiliser importing season? He asked me to find out for myself the real reasons and not the reasons that the media advanced. I never got a chance to report back to him my findings but I did find out and it all became very clear. There were just a handful of

manufacturers in the world who could handle the KTDA order and each had a representative/franchise holder in Kenya who would fight tooth and nail to secure the order. The cat fights by these brokers aided by a pliable media made for an interesting annual circus that suddenly went

quiet as soon as the ships docked with the cargo in readiness for the next match in a years time.
One of the areas that KTDA has received undeserved bashing for is the marketing of teas. Every one in Kenya is an expert in marketing and has a secret market they know somewhere.

KTDA is the only one in the room with no clue what to do. But for 5 decades plus, they have progressively sold 1 million kgs growing to 250 million kgs and paid farmers without fail despite the weather vagaries and World Market dynamics.
Sri Lanka is our biggest competitor in

the world export market while India and China are the biggest tea producers but also the biggest consumers. Kenyans only consume 0.44kgs per capita while Ireland for instance consumes 3kgs per capita! So despite our best effort, we can hardly consume more than 5% of our

production.
While every country in the world protects their local producers, you will be shocked to learn that your last tea purchase could have contained Indonesian or Malawian teas because your local packer makes a tidier profit from blending and packaging cheaper low quality

imported teas. That is ok because somewhere out there we have people craving Kenyan teas. However geopolitics, climate change, subsidies, consumption patterns, economic performance in other nations and regions all play a part in determining the amount of money a farmer earns any

year.
Tea is plucked 6 days a week all round the year. There are no futures markets for tea, quality is determined by seasons, drought cycles and global politics. Neither Kenya Government nor KTDA or any of our home-grown marketing mavericks have control on any of these factors

It is very convenient to walk into Harrods of London or a specialty food store in New York and taking a selfie with a 500gms pack of teas retailing at 5 dollars and proclaiming for all to hear how the Government, Brand Kenya,

Magical Kenya, Investment Promotion Council and of course KTDA, have all failed to get that 5 dollar market for our 250 million kgs of tea! Talk is cheap.
But there is a way out, we can all agree that the tea farmer deserves 5 dollars for his hard work. We can also agree never

to pay him less than 5 dollars but who will subsidise the real market price vs. the wishful 5 dollar price? It can only be funded by public finance/national treasury. Corn, alfalfa and potato farmers in the US enjoy such benefits. We can do it too in our dreams.
Has KTDA

slept on the marketing job? Maybe. Have they found alternative markets away from the traditional Egypt, Pakistan, Sudan, UK markets? Yes they have made inroads in Russia, Iran, etc. They have even diversified into orthodox, green, white, purple teas. They have sought new markets,

tried to be a tea trader with a foothold in Dubai but all these effort have not borne fruits to the extent that farmers expect. Not much has changed in their monthly or annual payslips.
Can the new crusaders change that for the better? Yes they can. If similar allocations

that are given to tourism can be given to tea marketing, I believe a change can be seen. (Tea earns more foreign exchange than tourism). If as many tea expos are held as tourism expos are held in a year and with as high representation of government officials as seen in tourism,

I believe some new markets can be captured. But guess what, only a meagre budget is available to the Tea Directorate for marketing. This is the biggest forex earner in the country, the biggest employer too. KTDA has been left to do its own marketing. Maybe that will change when

it is returned into the government fold.
Muranga County has the most smallholder tea in Kenya. Not Kericho or Bomet or Meru or Kiambu. Muranga is also the hotbed of smallholder tea politics. Kanyenyaini Tea Factory's market reputation was thrashed and used as a political

weapon during the multi-party politics of the 90s due to difference between individuals. This is replicated all over the country. Nothing has changed todate. Muranga is still a hotbed of smallholder tea politics.
It is very easy to become a MCA, MP,

Women's Rep or Governor if your KTDA -bashing is well timed to coincide with just the right global or regional politics that adversely affects tea prices. Just time your entry with the latest slump in world prices or the cyclical low bonus payouts and ghafla bin vuu (suddenly),

you are elected into a political seat of your choice!
One of the biggest threats facing KTDA and the tea industry in Kenya is the continued fragmentation of tea farms. The loudest farmers who demand 5 to 10 dollars for their hard work own less than 500 bushes of tea.

These same farmers do not own the most productive bushes either. Infact they produce about .75kg from each bush as compared with the quiet farmers who get 3kgs from each bush annually. A farmer with 500 bushes of tea and producing less than 0.75kgs per bush per annum cannot make

a living from tea. Even if such a farmer were to be productive and get 3kgs from each bush the most they can earn annually is Kshs. 45,000 which translates to Kshs. 3,750 per month assuming Kshs.30 greenleaf payments per kilo. No one can make a living that way. KTDA will not

stand up and demand consolidation of tea farms to an optimal size because we have economic rights enshrined in our constitution and any citizen has total freedom to engage in whatever economic activities they want. The Tea Directorate will not recommend alternative use of that

land because it will be misconstrued as arrogant. The new crusaders and activists will look for a scapegoat to blame for the poor returns. The easiest scapegoat is certainly corruption in KTDA. The river always passes where its path is unobstructed.
Someone has to decide and

loudly proclaim the optimum number of tea bushes that can sustain a rural family. When this is done I believe the number of smallhder tea farmers can come down to as low as 300,000. What alternatives do the 260,000 un-viable farms and farmers have?

That is hard work. We do not need to get into that now. Bringing in government control will not change this reality. 10 dollars per kilo will not change this reality.
KTDA is not a blameless organisation, they have more sins than you will hear from the crusaders and activists.

KTDA has refused to leverage the logistical muscle it posseses. There is no other organisation that can organise a shipment from Mombasa port and in less than 24hrs has delivered a tonne of fertilizer at your door-step.

No courier, no military, no UN agency has that network and experience. That expertise is a national asset that can be replicated in many other sectors and not just from the port to upcountry but from any part of Kenya to the any port.

KTDA's other failing is focusing on tea too much. Diversification to KTDA means moving from Black CTC teas to Orthodox, to Oolong to Green to Purple teas. What about Rooibos that can grow in marginal areas? What about Coffee? What about Cocoa?

When Coca Cola sweetened drinks faced the threat of alternative and healthy beverages, they dove and entrenched themselves into those sectors and today they are market leaders in water, juices, etc.

One of the most popular flavours in the world is vanilla. It is a vine that grows in the tropics. If every of the 560,000 KTDA farmers planted vanilla as a hedge, the Vanilla World Auction Centre would be at Chai House! Vanilla growing is dominated by Madagascar and

Uganda has joined in and made a success of it. How many other plants, nuts, fruits do you know that KTDA could use its model to dominate the world with? Who has stopped them from growing sugarcane or beetroots?
The network of 560,000 farmers all living and farming in the

Highlands above 1500 m.a.s.l. means that an entry into any crop growing can succeed. Be it vanilla, bamboo for biomass, tomato tree, cabbages, anything. How they have never ventured into any of this is a mystery.
Because of high energy bills,

KTDA has grown to be the biggest private tree grower as well as a proponent of mini-hydros. These interventions are all aimed to cutting down on energy bills. So it is surprising that KTDA did not see it fit to explore and stake a claim when coal was discovered in the country.

With over 100 industrial boilers running every day of the year, any discussion about coal would require KTDA on the table. Instead of mining concessions going to foreign companies, they should have been at the forefront on this one. I consider this a huge lost opportunity.

KTDA's crimes of omission or commission include being too static, too conservative, too risk averse (understandably because its farmers money), overly self-sustaining, no government loan guarantees, stagnant leadership, leadership staying too long, recycling of leaders,

independence that looks and feels like arrogance, inward looking, showing the middle finger to detractors, being averse to external help, getting its way for too long, using courts to get its way, etc. You get a feeling like KTDA suffers from a family curse. Maybe.

History annals have a long record of corruption in the organisation. Before corruption became common there were cases of officers who imported boilers loaded with personal effects including furniture, there were cases of Managing Directors who were more powerful than

Agriculture Ministers, there were cases of theft of green leaf by buying centre clerks, it is common knowledge that elections for directors are interfered with in many places.
The individuals running away with corruption in KTDA are not the rule but the exception.

They are Kenyans. A microcosm of ourselves as a nation. They must be dealt with.
However if the activists and crusaders are using KTDA as a stepping stone into local, regional or national politics, it is a sad day when we stand and watch a national heirloom being destroyed to

satisfy the ego and ambition of a few.
It is a sad day too if rumours that multinationals are behind such an agenda all in the name of unfinished business and grudges from 1970s or even as a measure to assuage their imminent loss of community land in Kericho, Nandi and Nyamira

Counties. It will be sad.
It is a sad day too if in the guise of necessary government controls we destroy an industry that has been in existence and self-sustaining for 70yrs.
There are 42 different taxes that tea farmers bear on their shoulders. The government can remove them

and change the farmer's fortune with one pen stroke. The new crusaders and activists can lobby for these taxes to be reviewed urgently. Tomato farmers or cabbage farmers do not pay such taxes. Neither do maize farmers. Why should tea farmers carry the country on their shoulders.

Is it because it is one of the few viable cash crops?