A storm is brewing in the tea industry as a regional lobby for traders seeks to block counties from taking control of the multibillion shilling export business.
The East Africa Tea Trade Association (EATTA) has warned counties against the bid to manage and market their own produce, saying it goes against the Constitution.
The warning comes just days after the Murang’a County Assembly passed a Bill that hands Governor Mwangi wa Iria full control of the tea trade, breaking away from the norm where the Kenya Tea Development Agency (KTDA) handles that function.
Bomet has also drafted a Bill that if passed will hand the county government a similar role.
“The county officials are seeking to be legislators, regulators and aisers, and at the same time, want to undertake commercial activities that would put them in competition with electorate and create a potential conflict with the Competition Authority of Kenya Act,” said EATTA managing director Edward Mudibo.
He warned of additional levies and taxes that could impoverish tea farmers if Murang’a County takes control of tea trade.
“The county is seeking to have a portion of the ad valorem levy in the name of agricultural cess yet that is what the tea industry has been seeking to be reduced or eliminated altogether,” he said.
Bomet County Tea Bill 2015 currently before its Assembly also seeks to liberalise tea business from KTDA. If assented to law by Governor Isaac Ruto, the proposed law would give more say to small-scale farmers.
Both Bills seeks to empower the county governments to form an agency to manage tea and control the operations of producers, brokers, buyers, warehousemen, packers and managing agents (like KTDA) with EATTA arguing that this has the potential of interfering with or stifling private business.
The Tea Regulations Licensing Condition 2(d), said Mr Mudibo, bars producers from owning or running brokerage companies.
He said that the EATTA trading rule number eight bars producers from acting as brokers in any purchase or sale between members in order to avert conflict of interest.
EATTA has 200 members drawn from 10 countries (Kenya, Uganda, Tanzania, Rwanda, Burundi Democratic Republic of Congo, Ethiopia, Malawi, Madagascar and Mozambique) all actively engaged in growing, buying, broking and warehousing of tea.