Wazua
»
Club SK
»
Politics
»
Tea growing in Kericho
Rank: Elder Joined: 7/22/2008 Posts: 2,716
|
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
|
|
|
Rank: Elder Joined: 12/7/2012 Posts: 11,921
|
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
|
|
|
Rank: Member Joined: 10/6/2009 Posts: 587
|
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??
|
|
|
Rank: Elder Joined: 7/22/2008 Posts: 2,716
|
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.
|
|
|
Rank: Elder Joined: 7/22/2008 Posts: 2,716
|
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/
|
|
|
Rank: Elder Joined: 7/22/2008 Posts: 2,716
|
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.
|
|
|
Rank: New-farer Joined: 12/13/2018 Posts: 29
|
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.
|
|
|
Rank: Elder Joined: 3/29/2011 Posts: 2,242
|
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
|
|
|
Rank: Veteran Joined: 10/29/2008 Posts: 1,566
|
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
|
|
|
Rank: Elder Joined: 7/28/2015 Posts: 9,562 Location: Rodi Kopany, Homa Bay
|
My Williamson Tea shares are worthless now that the land has been taken away. These people - kunyakua from dams to tea.
|
|
|
Rank: Elder Joined: 12/9/2009 Posts: 6,592 Location: Nairobi
|
Tea is very lucrative. I hope the politicians will stop messing with it. Wherever these takatakas pass, nothing survives.
BBI will solve it :)
|
|
|
Rank: Veteran Joined: 11/13/2015 Posts: 1,615
|
Ngalaka wrote: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. Renewal of leases is for both govts. For leaseholds county govt has quite a say e.g. the NSSF tassia plots can't get titles because nairobi county gave conditions like provisions of roads sewers before it can approve the subdivision. The National and County Governments, before approving the extension of lease, are required to seek recommendations from the following officials; The County Executive Committee Member responsible for land; The County Government Surveyor; The County Government Physical Planner; The Land Administration Officer of the Commission; and Any other relevant authority.
|
|
|
Rank: Member Joined: 5/17/2008 Posts: 488
|
Meanwhile our key markets of Iran and Pakistan are increasingly becoming unreliable....the former wants to increase tax on our tea while the latter is looking for cheaper sources.
Not yo mention the rising popularity Rwandan tea.
|
|
|
Rank: Elder Joined: 7/22/2008 Posts: 2,716
|
wukan wrote:Ngalaka wrote: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. Renewal of leases is for both govts. For leaseholds county govt has quite a say e.g. the NSSF tassia plots can't get titles because nairobi county gave conditions like provisions of roads sewers before it can approve the subdivision. The National and County Governments, before approving the extension of lease, are required to seek recommendations from the following officials; The County Executive Committee Member responsible for land; The County Government Surveyor; The County Government Physical Planner; The Land Administration Officer of the Commission; and Any other relevant authority. Someone correct me if I am wrong but my understanding of the case in Kericho is that the 99 year lease since 1920 is over so that the land at this moment in time belongs to the county of Kericho. The Ksh. 10,000 per acre lease is not being offered to the multinationals as a lease renewal for another 99 years but is instead being offered as a "kukomboa shamba" year to year. The only company that has secured a long term lease at this point is Del Monte with the Kiambu Government. No? What is the fate of the following other companies? Tata Magadi- I know Ole Lenku wants 17,000 per acre per year. Carbacid Williamson Tea and Kapchorua East Africa Portland Cement Kakuzi Sasini KWS. How much land rate does KWS pay to Nairobi County Government?
|
|
|
Rank: Elder Joined: 12/7/2012 Posts: 11,921
|
Part of these many increments of rates is for the companies to refuse and you know what next will follow. In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
|
|
|
Rank: Veteran Joined: 11/13/2015 Posts: 1,615
|
Kusadikika wrote:
Someone correct me if I am wrong but my understanding of the case in Kericho is that the 99 year lease since 1920 is over so that the land at this moment in time belongs to the county of Kericho. The Ksh. 10,000 per acre lease is not being offered to the multinationals as a lease renewal for another 99 years but is instead being offered as a "kukomboa shamba" year to year.
The only company that has secured a long term lease at this point is Del Monte with the Kiambu Government. No?
What is the fate of the following other companies?
Tata Magadi- I know Ole Lenku wants 17,000 per acre per year.
Carbacid
Williamson Tea and Kapchorua
East Africa Portland Cement
Kakuzi
Sasini
KWS. How much land rate does KWS pay to Nairobi County Government?
The fate of the other companies is with the county assemblies. They can impose land rates on them when passing the finance bill if they are short of cash. Government also pays rates for gazetted forests, government land with no titles in townships, public land including rural public land including the chief's office. I would think KWS are exempt. Most county govts don't bother to collect rates from government yet they charge individuals so much for those 50X100 plots.
|
|
|
Rank: Elder Joined: 3/18/2011 Posts: 12,069 Location: Kianjokoma
|
wukan wrote:Kusadikika wrote:
Someone correct me if I am wrong but my understanding of the case in Kericho is that the 99 year lease since 1920 is over so that the land at this moment in time belongs to the county of Kericho. The Ksh. 10,000 per acre lease is not being offered to the multinationals as a lease renewal for another 99 years but is instead being offered as a "kukomboa shamba" year to year.
The only company that has secured a long term lease at this point is Del Monte with the Kiambu Government. No?
What is the fate of the following other companies?
Tata Magadi- I know Ole Lenku wants 17,000 per acre per year.
Carbacid
Williamson Tea and Kapchorua
East Africa Portland Cement
Kakuzi
Sasini
KWS. How much land rate does KWS pay to Nairobi County Government?
The fate of the other companies is with the county assemblies. They can impose land rates on them when passing the finance bill if they are short of cash. Government also pays rates for gazetted forests, government land with no titles in townships, public land including rural public land including the chief's office. I would think KWS are exempt. Most county govts don't bother to collect rates from government yet they charge individuals so much for those 50X100 plots. Rates for govt land???? 
|
|
|
Rank: Veteran Joined: 11/13/2015 Posts: 1,615
|
Lolest! wrote:wukan wrote:Kusadikika wrote:
Someone correct me if I am wrong but my understanding of the case in Kericho is that the 99 year lease since 1920 is over so that the land at this moment in time belongs to the county of Kericho. The Ksh. 10,000 per acre lease is not being offered to the multinationals as a lease renewal for another 99 years but is instead being offered as a "kukomboa shamba" year to year.
The only company that has secured a long term lease at this point is Del Monte with the Kiambu Government. No?
What is the fate of the following other companies?
Tata Magadi- I know Ole Lenku wants 17,000 per acre per year.
Carbacid
Williamson Tea and Kapchorua
East Africa Portland Cement
Kakuzi
Sasini
KWS. How much land rate does KWS pay to Nairobi County Government?
The fate of the other companies is with the county assemblies. They can impose land rates on them when passing the finance bill if they are short of cash. Government also pays rates for gazetted forests, government land with no titles in townships, public land including rural public land including the chief's office. I would think KWS are exempt. Most county govts don't bother to collect rates from government yet they charge individuals so much for those 50X100 plots. Rates for govt land???? If only govt paid its CILOR payments regularly we would see a return of the basic municipal services from county govts Quote:
Calculation of contribution in lieu of rates
(1) The contribution in lieu of rates payable in respect of public land shall be calculated at the same rate as that levied by the local authority on rateable property in the same rating area (as defined by the Rating Act) (Cap. 267) as that in which the land is situated.
(2) The contribution in lieu of rates shall be payable on such date or dates and in such instalments as may be determined by the Minister, who may fix different dates and instalments for the different bodies mentioned in rule 2.
(3) If during any financial year any land, before the date fixed by the local authority for payment of rates in that year, becomes exempt from payment of contribution in lieu of rates by virtue of rule 4 or rule 5, no contribution shall be payable in respect of that land for that year.
|
|
|
Rank: Elder Joined: 7/22/2008 Posts: 2,716
|
|
|
|
Rank: Elder Joined: 7/22/2008 Posts: 2,716
|
|
|
|
Wazua
»
Club SK
»
Politics
»
Tea growing in Kericho
Forum Jump
You cannot post new topics in this forum.
You cannot reply to topics in this forum.
You cannot delete your posts in this forum.
You cannot edit your posts in this forum.
You cannot create polls in this forum.
You cannot vote in polls in this forum.
|