Farming for the West
In recent weeks, tensions have been rising in the Rift Valley regions against mechanisation of tea picking and the job losses encountered. At least 60,000 workers have been laid off due to the newly introduced equipment and cost cutting measures taken by the firms.
These measures have left the workers enraged and they have been holding demonstrations in the different counties. Some of these protests have been violent ones and they have incurred damages for the multinationals.
What is in dispute, however, is the diminishing returns of colonial-era tea business against rising value of real estate on which Kenya’s most productive lands lie.
A riotus mob has been attacking the tea farms and burning the plucking machines that led to the closure of Ekaterra Tea Company’s South Rift farms.
The large-scale tea producers in Kericho and Bomet counties have lost close to Kes170 million in the ongoing violence against multinationals by the armed groups opposed to the introduction of plucking machines claiming that mechanizing plucking has resulted in job losses. They have been attacking the tea farms and burning the plucking machines.
In solidarity the tea firms suspended all work activities subsequently till the matters are resolved by the authorities and all the 16,000 employees of the multinational tea company will not report to work until the security situation is addressed by the government and other stakeholders.
Kericho’s governor Dr Eric Mutai also addressed the issue urging the people to desist from taking matters into their own hands. He also acknowledged that “fully deploying the tea plucking machines would lead to massive massive job cuts and increase in poverty in the region.”
On top of that, the county governments want to revise the land rates from the Kes254 per acre, which were terms negotiated before Kenya’s independence, to at least a reasonable Kes5000 considering the market prevalence is about Kes7000 per acre. The leases were also changed from 999 years to 99 years by the National Land Commission.
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The firms are also faced with allegations of sexual harassment of their employees by the people in the management roles. This is as per the recently released BBC documentary titled Sex for Work: The True Cost of Our Tea. The documentary saw senior officials in Unilever Tea Kenya and Finlays Tea Kenya exposed for their heinous acts.
In the background, Kenya’s willingness to forgo its most arable land in exchange for the American currency for imports is being tested by climate pressures. About 23 of Kenya’s 47 counties are classified as arid or semi-arid lands (ASALs) and only about 18 percent of the country’s land area is agriculturally productive: the central and western highlands, split by the Rift Valley. This zone has a temperate climate often experiencing medium to high rainfall. Kenya is warm and humid in the coastal region with very dry arid interior usually marked by low and unevenly distributed rainfall over much of the tropical country.
As Kenya faces increasingly global market upheavals on dollar scarcity even at export destinations, rallying call by civil society to rework contracts to seal loopholes that have allowed tax avoidance through complex ownership structures, the comparative advantage of the declining source of forex is being questioned.
Over the years, the $1.32 billion from tea and coffee exports have been dwarfed by a faster growing source of dollars—the rising number of Kenyans living and working in the diaspora—who are clocking in $4.027 billion reducing the significance of agricultural exports in the country’s economy.
Local jobs that had been political capital in the vast tea areas have been on a decline as low margins in the global markets push tea companies towards greater efficiency that has meant switching to mechanised harvesting of greenleaf much to the chagrin of locals rendered jobless with no alternative incomes.
As the conflict between politicians, local agitating groups and the tea farmers ferments, there are imputed claims of transfers of the lands and properties whose state of their leases remained unknown and without consultations with the local community representatives.
These and other unsaid factors have seen some multinational companies sell their tea estates to other companies with Unilever Tea Kenya finalizing their sale to Ekaterra Tea in 2021, a company with a diverse tea brands’ portfolio which is owned by private equity firm CVC holdings.
Currently, James Finlay Kenya Limited is in the process of completion of its sale to Browns Investments PLC, a Sri Lankan private company which is a subsidiary of LOLC holdings.
These major Tea multinationals predated Kenya’s independence and were largely influenced by its prospects as a profitable crop by the European settlers and companies willing to undertake its production. Tea was first introduced in Kenya in 1903 by GWL Caine and was planted in present-day Limuru.
In 1914, Tom Rutter, who was incharge of Brooke Bond identified Kenya as an ideal place for Tea growing. He opened a branch in Mombasa and in 1924 the company bought 1000 acres of land and commercialized the growing of tea.
They soon moved to Kericho after they established the first major factory in 1927 and from then on vastly expanded their activities beyond the tea industry. In 2004 Brooke Bond merged with Liebig and they changed their name to Unilever Tea Kenya limited.
On the other hand, James Finlay was the oldest company among the producers as it was established in 1750 in Scotland, UK. The company was in the textile industry before acquiring tea estates in Asia and by the 1920’s it was the world’s largest tea grower. In 1925 the company bought 20,000 acres of land in Kericho which marked the beginning of their tea estates in Kenya.
Unilever (formerly Brooke Bond) and Finlays established a virtual monopoly over the tea industry in Kenya between 1929-1939 by great market domination since at the time Africans couldn’t practice any cash crop farming. Africans were only allowed to start growing tea in restricted quantities from the 1950’s.
Despite us getting independence, the British multinationals controlled a major stake in our own sovereign industries.
