Business

It is time to have level-headed discussion in tea sector

Fredrick Odhiambo

The local tea industry is, yet again, in the grip of labour anxiety that if not well handled could snowball into a prolonged sector paralysis.

On one hand are the Kenya Plantation and Agricultural Workers Union (KPAWU) officials who are agitating for double-digit wage increases, while on the other hand are multinational companies that have been urging sober negotiations on the matter.

Caught in between are thousands of tea farm workers who stand to lose the most from the impasse.

The country’s foreign exchange inflow of more than $1.46 billion (Sh147 billion) annually is also at stake.

There is need for the national and county governments, unionists and political leaders to come to the negotiating table and chart a sustainable path for the industry.

Economic impact that the tea industry has on Kenya’s economy is immense, hence the need for clear-headed reflections on its long-term future.

According to Kenya Tea Growers Association data, more than 200,000 Kenyans work on tea plantations across the country, in turn supporting 1.8 million people through their income.

Status quo

The impasse over wages in the sector, however, illuminates a simple fact. The status quo is unaffordable.

With monthly pay of up to Sh17,000 prior to this year’s wage increases, Kenyan tea workers already earn more than the government stipulated minimum wage of Sh13,000.

Statistics also show that they take home more than their counterparts in the coffee and other agricultural sectors. But by awarding eight per cent wage increases in 2014 and 2015, multinational tea companies which employ more than 40 per cent of the sector labour force have sought to meet the workers’ aspirations halfway.

It is important for the union officials to also tone down on their demands for salary reviews to avoid lifting their members’ expectations to unrealistic levels.

Profit margins

Even at the current wage levels, tea multinationals have been struggling to stay afloat as their profit margins narrow by the day.

There will always be jobs in Kenyan tea sector but no industry stays static, and we have to recognise that more efficient producers are already giving Kenya a run for its money in the global tea auctions.

We need proper debate about the future shape of the tea industry and how to secure jobs for the next generation of Kenyan tea workers .

The cost pressure has been building, making it ever more urgent for the country to address its labour industry structure as workers’ wages alone have shot to more than half of big tea farm’s annual turnover.

Past experience, however, shows that labour disputes widen the wedge between the employer and the worker. The way forward for the industry is level-headed discussion.

Genuine concessions on both sides are the only assurance to a more sustainable future for the industry.

-The writer is a communications lecturer.

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