Last week Kenya hosted the first ever African Tea Science Symposium and 22nd session of the FAO/IGG conference on Tea at the Enashipai Resort in Naivasha. This presented a huge opportunity for the country to influence the agenda and trends of global tea business for the next two years.
The industry continues to suffer due to heavy production costs and the net returns to the farmers are low and unsustainable. Though the government subsidized the cost of NPK fertilizers in June 2015 through the Ministry of Agriculture, Livestock Tea Farmers, it has not been sustainable and will not lead to low cost of production.
Stakeholders feel that the real issue is the high cost of production especially labour. A representative of one of the major tea production players attending the FAO/IGG conference says that innovative technology and mechanization of the industry could help achieve sustainability in the tea industry.
Mr Apollo Kiarii, the CEO of Kenya Tea Growers Association, notes that wages paid by the tea sector are substantially higher than those paid in other agricultural enterprises as well as in other tea producing nations in the region since they aren’t productivity based. The supply/demand balance which should set wage levels applicable to the area no longer applies, he added, which undermines the competitiveness of Kenyan tea in the global market.
High labour costs have rendered many low yielding fields unprofitable and farmers have had to be innovative by introducing mechanized harvesting as well as factory processing.
Others have uprooted old tea bushes and replaced them with higher yielding clones and improve their crop husbandry. In addition to the disproportionately high wages, employees in commercial tea sector enjoy additional benefits such as free housing, medical, education, and service gratuity which add a further 30% to the actual cost of employment which small holder growers do not experience.
Other global countries e.g. China and Sri Lanka who are competing Kenya in the tea market have embraced mechanization, which is perceived as a natural process of economic development. “Mechanisation should be seen as an innovative advantage that Kenya can exploit to get a competitive advantage over countries that are unable to introduce this due to terrain and lack of knowhow,” says Mr Kiarii.