Kenya’s Ministry of Agriculture is set to establish a tea fund to mobilize resources towards efficient and effective price stabilization in the sector.
Peter Munya, cabinet secretary in the Ministry of Agriculture, Livestock, Fisheries and Co-operatives said the fund will be used to cushion tea farmers from market volatility, input subsidy to smallholder tea farmers and support the construction of warehousing facilities at the factory level.
Concept note
The fund will consist of monies appropriated by the National Assembly, tea levy, from a source approved by the Kenya Tea Board and through grants and donations made to the board. In addition, the fund will operate for a period of two years before any withdrawal to allow it to grow.
In addition, the government had developed a concept note on the establishment of a Common User Facility (CUF) and incentivizing value addition of tea to spur value addition and product diversification in the sub-sector. Traders operating within the CUF will enjoy incentives such as duty and Value Added Tax (VAT) exemption on inputs amongst other incentives provided for under the Special Economic Zone framework.
Tea is a major cash crop that is grown in Kenya. According to Tea Board of Kenya, the country produces over 450 million kilograms of tea annually, out of which 91 percent is exported and nine percent is consumed in the local market. The tea industry contributes around 4 percent of the country’s GDP and 26 percent of the country’s export earnings.
