By Jane Pettigrew
Since 2000, Kenyan farmers have been running their own tea business independently from government. How did the privatisation come about and is it now benefiting the farmers? Jane Pettigrew has this update.
Kenya is well known for its strong, punchy, black CTC teas that are one of the most important ingredients in breakfast blends around the world.
But today, Kenya is also producing silver needle white teas, large leaf green teas, golden tippy orthodox black teas, green fannings, oolongs and a new ‘purple tea’. These new specialty teas have started to become available since the government-run Kenyan Tea Development Authority (KTDA) became the privately owned Kenyan Tea Development Agency (KTDA Ltd) in 2000.
The change in the management structure of the tea industry had a wider significance and was part of Kenya’s shift towards becoming a multi-party democracy. Gaining more private control of tea production ran parallel to acquiring more personal control of other aspects of everyday life and 2010 saw the introduction of a new constitution for the country that included a clause aimed at stopping corruption and demanding greater accountability. KTDA Ltd had the same goals.
The major changes that took place in 2000 came as a result of several years of agitation against corruption and mismanagement of the tea industry. One of those fighting hard to protect farmers’ rights and pay and to ensure that they had a greater say in the management of tea factories was Samuel W’Njuguna. He set up WAFE, War Against Farmers’ Exploitation, and championed the small-scale tea farmers for years. As a result he was harassed and imprisoned without bail on numerous occasions by the government and eventually in 2002, as reported in Africa News Service on June 1, 2004, “Samuel Muciri W’Njuguna sued the attorney-general on behalf of the government seeking bail pending arrest in what he considered as consistent police harassment and breach of his fundamental rights as enshrined in the Constitution”.
W’Njuguna won in a historic Bail Rights case which overturned the country’s laws and he continued to campaign for a multi-party political system. It was his tenacity and determination that had led to the privatization of the KTDA and his daughter, Joy Njuguna, is continuing to support the cause of the tea farmers by promoting and selling their teas through her recently-established US based company, Royal Tea of Kenya.
Kenya’s specialty teas
KTDA Ltd today looks after the rights of more than 562,000 small tea farmers, each of whom is an individual shareholder, and 65 tea processing factories in all tea growing regions of Kenya. The idea of producing value-added specialty teas as well as the world-famous CTC black teas evolved gradually as KTDA Ltd began to recognize the growing demand for large leaf, non-teabag teas. With some initial help from David Walker (specialist in the production of African CTC and orthodox teas) and Nigel Melican (tea industry technical & marketing consultant), the farmers started producing tippy black orthodox teas and large-leafed greens. Since then, elegant, down-covered whites, long, wiry-leafed oolongs and catechin-rich ‘purple’ teas have been added to the range.
Although Kenya had produced some orthodox teas in the past, the rollers and other necessary machinery had long since been abandoned and major reconstruction and rehabilitation work had to take place before orthodox manufacture could begin. Now the factories are still producing bulk CTC teas for their markets in Pakistan, Egypt, the UK, Afghanistan, Yemen and Sudan (and currently being expanded into Russia, The Arab Emirates, and Iran), but they are also reaching into new markets in Australia, the US, the UK, Canada and Europe with the orthodox teas.
Royal Tea of Kenya
In her younger days, Joy Njunguna had very little interest in the teas that were being grown on her family’s ancestral land in the highlands of Kenya. Despite the fact that her father was so involved in the politics of tea, Joy’s ambitions lay elsewhere and while being educated in the UK and in India, she thought of tea as a rather old-fashioned, somewhat boring beverage. And although Samuel tried to instill in his children a love of the land and a thirst to understand where and how different crops were produced, life in rural Kenya held little interest for Joy.
But her attitude changed one day when the regular package of strong black CTC Kenyan tea from her father arrived at her home in the US. As was her habit, she sent some out to friends and acquaintances and brewed some strong and milky, just as her aunt had taught her, to serve to visitors at home. One coffee drinker in her circle exclaimed that drinking this powerful, full-flavored, robust tea was the equivalent in tea-drinking terms to suddenly switching from black and white television to full color and declared that Joy absolutely had to do something about selling this tea.
When Joy first mooted the idea to her father, he told her that the tea industry was not for her, that it was a world full of problems, that it was very political, very tough, and that it was not a suitable career for her. He pointed out that KTDA Ltd needed economists, politicians, and technical experts. She didn’t have any of those qualifications (she does however have a degree in political science), had never shown an interest in the past and so how did she expect to be able to jump in now!
But she had made up her mind and in 2010, teamed up with Ardith Blumenthal and Shirlene Davis to form a company, Royal Tea of Kenya, that would promote Kenya CTC and specialty teas into the US and beyond. But they had to convince KTDA Ltd that they were serious and capable of helping to gain wider recognition for the teas. The timing was perfect since Ardith was just about to set off for Kenya to spend time with the charity she had set up 5 years earlier called Covenant Child, to supports disenfranchised children and fund orphanages, health care, and education. She met Joy’s father and the board and executive of KTDA Ltd, they liked and trusted each other and so the project began. The plan was to reach out into new markets, bypass the Mombasa auction and sell direct to customers. Royal Tea of Kenya was to be the sole broker and importer of the specialty whites, greens, oolongs, purples, and black teas.
Interest in Kenyan teas begins to grow
The first few months were tough and unproductive. Cold calling and emails received very little positive feedback. In April 2011, KTDA Ltd executive board came to the US for a pivotal meeting with Joy at which they asked her, “Are you really going to follow this through?” They had heard plans like Joy’s before but had seen them all fall through. Now they needed to be convinced that she and they could work together to make a difference, to sell more of the Kenyan teas and to get more money into the farms and factories.
Having made a promise to 562,000 farmers, Royal Tea of Kenya geared up ready for World Tea Expo in Las Vegas in June where business was brisk and new customers started placing orders. The same happened in Philadelphia in September and since then Joy has secured several very big deals with companies that would never have found Kenyan teas for themselves through the auctions. At one point in late 2011, Royal Tea of Kenya had exhausted the supply of white tea and, as a consequence of the opening up of new markets, KTDA Ltd is rolling out plans to increase the total acreage under tea, to improve systems and work structures, to invest in new equipment and machinery, and to increase capacity and output of the specialty teas from more factories.
Since privatization and the consequent improvement in efficiency and effective management, the farmers are beginning to see their incomes going up. They are paid twice for their work. The first payment is for green leaf delivered into the factories; the second is in the form of a bonus that is paid at the end of the financial year and is based on individual farmers’ annual deliveries and on the performance of the individual factory companies. For the financial year 2008 to 2009, the total bonus paid was KES25.4 billion (US$2.54 million). For 2009-2010, the bonus paid was an unprecedented total of KES38.2 billion and, for the first time in the history of the Kenyan tea industry, farmers earned an average of KES43.02/kg.
The KTDA Foundation and RTK Foundation
As part of its on-going work to support the livelihoods of 3 million people, KTDA Ltd has its own Foundation, a not-for-profit organisation that funds schools, clinics, economic programs, environmental conservation, water and sanitation projects and infrastructure improvement.
When Joy Njuguna’s colleague, Ardith Blumenthal, visited the KTDA in 2010, Royal Tea of Kenya realised that they too could make a contribution to farmers’ lives by putting money back into a special fund that would support the same sort of activities as the KTDA Foundation. The idea of the RTK Foundation was conceived in April 2011, exactly one year to the day after KTDA Ltd established their Foundation, with the aim of raising funds for education, health and environmental initiatives for the farmers families. As Joy Njuguna explained, “Through its environmental goals of agro forestry and tea, the RTK foundation has attracted new partners including a collective of socially conscious media entrepreneurs, UN directors and environmental experts who are already working in Kenya to alleviate rural poverty through agro forestry and afforestation efforts. Recently, the RTK Foundation has agreed to work closely with the KTDA Foundation on environmental education and water management. This is a common goal for both organizations as it has been discovered that there are some tea growing areas in Kenya where, if climate change mitigation measures are not taken seriously, these areas will not be able to grow crops or tea in 50 years.”