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Tea growing in Kericho
Rank: Elder Joined: 7/22/2008 Posts: 2,723
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Can it survive in its current form? Can tea growing afford to pay Ksh10,000 an acre lease? I can think they might try to go fully mechanical by eliminating human tea pickers to save on labour costs so massive layoffs are on the way. https://www.nation.co.ke...6062-6052lwz/index.html
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Rank: Elder Joined: 12/7/2012 Posts: 11,937
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You can see where future land clashes will occur. In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
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Rank: Member Joined: 10/6/2009 Posts: 587
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Kusadikika wrote:Can it survive in its current form? Can tea growing afford to pay Ksh10,000 an acre lease? I can think they might try to go fully mechanical by eliminating human tea pickers to save on labour costs so massive layoffs are on the way. https://www.nation.co.ke...6062-6052lwz/index.html
@kusadikika, kshs 10,000 annual fee is a drop in the ocean. Why? Consider, Unilever Tea Company which has about 16,000 acres under tea in Kericho. If each acre carries about 10,000 tea trees, that makes a total of 160,000,000 trees. If in any given season each tree yields 4kg then total production per season is 640,000,000kg. In the tea auction in Mombasa a kg of tea fetches about kshs 250 per kg totalling kshs 40 billion!!! Rent for the land totals kshs 160 million which makes a paltry 0.4% of the total tea revenue!!That is for tea companies operating in the region. The only problem that I see is if the county government refuses to renew the leases. Both governments will lose badly revenue wise and they know it. Fragmenting these farms into smaller individual units will cut the tea production in the area to more than 60%. What to do??
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Rank: Elder Joined: 7/22/2008 Posts: 2,723
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Baratang wrote:Kusadikika wrote:Can it survive in its current form? Can tea growing afford to pay Ksh10,000 an acre lease? I can think they might try to go fully mechanical by eliminating human tea pickers to save on labour costs so massive layoffs are on the way. https://www.nation.co.ke...6062-6052lwz/index.html
@kusadikika, kshs 10,000 annual fee is a drop in the ocean. Why? Consider, Unilever Tea Company which has about 16,000 acres under tea in Kericho. If each acre carries about 10,000 tea trees, that makes a total of 160,000,000 trees. If in any given season each tree yields 4kg then total production per season is 640,000,000kg. In the tea auction in Mombasa a kg of tea fetches about kshs 250 per kg totalling kshs 40 billion!!! Rent for the land totals kshs 160 million which makes a paltry 0.4% of the total tea revenue!!That is for tea companies operating in the region. The only problem that I see is if the county government refuses to renew the leases. Both governments will lose badly revenue wise and they know it. Fragmenting these farms into smaller individual units will cut the tea production in the area to more than 60%. What to do?? @Baratang, I think you have grossly exaggerated the yield of tea per acre. You have assumed a yield of 40,000 kg per acre. From this source here: https://thesimpleleaf.wo...17/tea-yields-compared/
the actual yield is actually about 1,000kg per acre. Assuming all other numbers are accurate above the land rate of Ksh. 10 per Kg of tea is a significant increase.
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Rank: Elder Joined: 7/22/2008 Posts: 2,723
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In 2018 Williamson Tea produced about 8,000,000 kg from 4,000 acres which averages about 2,000kg per acre. Comes to about Ksh. 5 per Kg. They sold the tea at about Ksh.256 per Kg. Looks like it is not too much so maybe it is not enough to kill the industry but it is still a significant increase in cost of production that will have an effect one way or the other on the industry. https://africanfinancial...ument/ke-wtk-2018-ar-00/
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Rank: Elder Joined: 7/22/2008 Posts: 2,723
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On the other hand that is an extra Ksh. 2 billion going to Kericho County Government every year. That is good money that can transform the county or create a very rich Governor and MCAs.
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Rank: New-farer Joined: 12/13/2018 Posts: 29
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Kusadikika wrote:On the other hand that is an extra Ksh. 2 billion going to Kericho County Government every year. That is good money that can transform the county or create a very rich Governor and MCAs. This being the Kenya we know I can guess what will happen. Wanainchi will be watching as a few millionaires are created meanwhile infrastructures will continue to rot.
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Rank: Elder Joined: 3/29/2011 Posts: 2,242
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Kusadikika wrote:On the other hand that is an extra Ksh. 2 billion going to Kericho County Government every year. That is good money that can transform the county or create a very rich Governor and MCAs. @Kusadikika, And that clearly demonstrates where the rain started beating us as a people. The county Government is more occupied with collecting rent rather than being a producer of a commodity for a global market. The best option would be a shareholding arrangement where the County provides the land and enters into a long term venture. However, knowing our leaders and their short term mashamba yetu mentality, all they want is rent for eating and not long term production. Kakuzi grows avocado large scale in Makuyu and across the road the peasants grow maize and beans and always claiming Kakuzi took their land. "Things that matter most must never be at the mercy of things that matter least." Goethe
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Rank: Veteran Joined: 10/29/2008 Posts: 1,566
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Baratang wrote:
@kusadikika, kshs 10,000 annual fee is a drop in the ocean. Why?
Consider, Unilever Tea Company which has about 16,000 acres under tea in Kericho. If each acre carries about 10,000 tea trees, that makes a total of 160,000,000 trees. If in any given season each tree yields 4kg then total production per season is 640,000,000kg. In the tea auction in Mombasa a kg of tea fetches about kshs 250 per kg totalling kshs 40 billion!!! Rent for the land totals kshs 160 million which makes a paltry 0.4% of the total tea revenue!!That is for tea companies operating in the region.
The only problem that I see is if the county government refuses to renew the leases. Both governments will lose badly revenue wise and they know it.
Fragmenting these farms into smaller individual units will cut the tea production in the area to more than 60%.
What to do??
Who renews the lease on these kinds of Titles - is it the County government or is it Ardhi House Nairobi! Methinks the latter. Isuni yilu yi maa me muyo - ni Mbisuu
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Rank: Elder Joined: 7/28/2015 Posts: 9,562 Location: Rodi Kopany, Homa Bay
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My Williamson Tea shares are worthless now that the land has been taken away. These people - kunyakua from dams to tea.
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