The Kenya Tea Development Agency (KTDA) earnings are set to take a hit after the new tea regulations came into force on Monday.
The new regulations propose that service payment to management agents should not exceed 1.5 percent of the net sales value of the tea sold at the auction, down from the current 2.5 percent.
Tea factories are also beneficiaries as they would receive proceeds from tea auctions immediately while brokers with direct or indirect commercial links with a tea factory are barred from offering brokerage services to the factory.
This as a standoff between the KTDA and the government is looming after the Agriculture Cabinet Secretary said the government will appeal a recent High Court ruling that stopped the newly appointed committee on the implementation of tea reforms from carrying out its duties.
The new tea regulations are to be implemented over the next seven months.
KTDA lawyer, Benson Millimo had challenged the process used to pick the members to form the National Steering Committee on The Implementation of Tea Reforms.
The lawyer argued that some of the persons appointed in the committee had publicly pronounced themselves adversely against KTDA; had cases in court on matters relating to the operations of the company; while others had broken contractual relationships with the applicant.
The lawyer argued that the said committee members have not only openly disclosed open bias against KTDA but are also conflicted and unfit to preside over any issues relating to the company.
He also argued that there isn’t an existing law empowering CS Munya to form such a committee; adding that no law grants him power to appropriate public funds vested to the Agricultural Food and Fisheries Authority – as was contained in the Gazette Notice.
In her ruling stopping the implementation of a Gazette Notice by Agriculture CS Peter Munya, Lady Justice Pauline Nyamweya said: “…the application had met the threshold of an arguable case and is therefore entitled to the leave sought to commence judicial review proceedings against the Respondent.”
She directed that the matter will come up for mention on 21st September 2020 for further directions.
CS Peter Munya had on the 25th of June 2020 Gazetted a Notice appointing an eight-member committee to, among other tasks, evaluate the policy, regulatory and administrative reforms in the Tea Value Chain announced by CS Munya.
The team comprises veteran tea broker Jacob Kamau Kihiu who will chair the committee, former PS Irungu Nyakera, former MP Magerer Lang’at, Fredrick Muthuri Muriithi and Nation Editor John Kamau as members.
Other members are former Tea Board director David Chomba Gachoki, Catherine Nyamboke Mogeni who hails from a family of large-scale tea farmers and Wanja Michuki, daughter of late former Minister John Michuki.