All tea in Kenya will be sold at the auction within the next one month according to Agriculture CS Peter Munya. The CS says all trade at the auction will be conducted electronically where all players can access the platform. He told the tea auction organizers at Mombasa to get ready because there will be no time addition as the issue of electronic trading was passed long before the tea reforms came in.
“I have told the regulator to write to the stakeholders and give them a one month notice to be ready. The regulator will go down there to inspect their readiness to start auctioning all the tea that is grown in Kenya for it will be sold in the auction,” says Munya. A tough-talking Munya accused the Mombasa tea auction organizers of moving the goalposts every time and said in a month’s time, ICT experts from the Ministry will be sent to the auction to inspect the trading platform to make sure it complies with the requirements of the Tea Act 2020. The Tea Act requires the platform must accessible to all to see what tea is being sold at the auction and at what price.
If they are not ready, the CS says there is nothing in the law that prevents the government from licensing other players. “We can open multiple auctions in the country,” says Munya. The coffee exchange in Nairobi according to the CS is not limited to selling coffee and can trade in other commodities including tea. He says the excuse the players have been giving of tea flooding the market if it is sold in the auction only is not valid since all tea produced in Kenya is always sold. “The only issue we have been experiencing is farmers earning very little but all the tea produced in Kenya is always sold so there is no problem in the market. Cartels have been controlling the prices and creating artificial price depression to make sure the farmers don’t earn the money then they (cartels) earn the money elsewhere,” quips Munya.
Meanwhile, the Ministry has embarked on development of the Regulations to operationalize the Tea Act, 2020. It has developed draft regulations on Election of persons to represent smallholder tea growers and tea traders in the Tea Board in accordance with section 7 of the Act.
There are also regulations that provides for the establishment of an Election Committee in every tea growing County to oversee elections for the Boards of smallholder tea companies in the Counties. The Committee will comprise of the County Commissioner, the CEC in charge of agriculture in the County, Company Secretaries of the factories, County Director of Agriculture or their representatives appointed in writing, two persons representing the Ministry of Agriculture, Livestock, Fisheries and Cooperatives and one person representing the Tea Board of Kenya, currently AFA-Tea Directorate.
The regulations also provides for the process of conducting elections for tea growers’ representatives to serve in the board of the tea factories limited companies. It also provides for the establishment of the boundaries’ demarcation Committee for purposes of demarcating electoral areas for election of tea growers’ representatives to serve in the board of the tea factory limited companies within ten days of the coming into effect of these regulations. The tea electoral zones will be reduced to three from six.
Other key provisions include: the Board of Directors of tea factory limited companies to be limited to a maximum five members, every tea factory limited company to ensure that all registered shareholders have the right to vote and the opportunity to participate in the elections and that not more than two thirds of the Board Members are of the same gender, the tenure of the Board Members of the tea factory limited company shall be for a maximum period of two terms of 3 years each. To ensure the gender rule is followed, tea factory limited companies will pick people during the Annual General Meeting after the elections to balance the gender depending with the outcome of the elections.
In order to operationalize the Tea Board of Kenya, the CS has also made the Tea Board (Elections) Regulations, 2020 to facilitate the election of representatives of the various stakeholder clusters of the tea value chain in the Board of Directors of the Tea Board of Kenya. This provides for the eligibility requirements for those intending to vie for the mandatory representative position in the Tea Board of Kenya, Election guidelines, and the application procedure for interested candidates, Election process, Voting process, Power of attorney for Corporate Institution growers and Modification of forms and Election Observers.
The regulations also guide on the election of the Directors of the Board to represent smallholder tea growers from the East and West Tea Blocks, large scale tea growers and tea traders. The representatives for the smallholder tea growers shall be elected by delegates nominated at the AGM of tea factory limited companies.
Smallholder tea growers shall nominate one person per factory as a delegate to represent them during election of members to the Board. The representative for large scale tea growers shall be elected by registered large scale tea growers. The representative for the tea traders shall be elected by registered tea traders. The Board shall convene meetings for purposes of elections of the representatives of smallholder tea growers, large scale tea growers and tea traders.
To facilitate public participation, the CS published a public notice on 8th January 2021 to invite comments on the Draft Tea (Tea Factory Limited Company Election) Regulations, 2021 and Draft Tea Board (Election) Regulations, 2021 under the Tea Act, 2020. Comments will be received for the next 14 days from the date after which stakeholder views will be considered for incorporation in the final document. Thereafter the regulations will be gazetted and submitted to Parliament for scrutiny in line with Statutory Instruments Act.
“Even as we commence the process of receiving comments, I wish to inform you that as soon as the Tea Act, 2020 was assented to, we initiated stakeholder engagement on the Act in a meeting held with farmers and other value chain players on 23rd December 2020. We intend to move with speed towards actualizing the reforms, particularly with regard to according farmers the opportunity to undertake elections for their representatives in the tea factory limited companies and in the Tea Board of Kenya. We project that the elections will take place in the last week of March, most probably on 16th March 2021. However, the requisite notice will be issued on the elections programme,” says Munya.
