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Smallholder Tea Farmers in Kenya

Smallholder Tea Plantations

The UN FAO reviews the tea trade through its Inter-Governmental Group on Tea

Rather than write about M-PESA this article got us curious about the smallholder tea farmer system in Kenya and the relationship with KTDA. Smallholders, not large corporate plantations, as it turns out are a major source of tea produced in many countries. A 2012 review of smallholder tea farmer contributions by the United Nations Food and Agriculture Organization indicated that in countries like Sri Lanka, Kenya, China, and Vietnam smallholders produce the majority tea in these countries. This is opposed to countries like Indonesia and India where smallholders produce only about 20-25%.

Smallholder plantations, in theory provide a greater share of the profits to those at a local level, though the UN FAO Intergovernmental Group on Tea study suggests there are quite a number of opportunities for improvement. Smallholders typically have difficulties commanding top prices for a variety of reasons including the lack of knowledge or capability to implement environmental, pest management, or other best practices.

KTDA Ltd and Kenyan Smallholders

A Map of Tea Production Areas in Kenya By Philippe Rekacewicz assisted by Cecile Marin, Agnes Stienne, Guilio Frigieri, Riccardo Pravettoni, Laura Margueritte and Marion Lecoquierre CC BY SA-3.0

The Kenyan Tea Development Agency got its start back in 1964 as Kenya got its independence and it became legal for locals to produce tea themselves. At the time the KTDA was charged with helping develop the industry for smallholders vs the large multinational corporations who still own plantations and produce a large percentage of tea in the region (and globally).

More recently, in 2000, KTDA became KTDA Ltd, a private company which continues to develop the smallholder tea industry. This arrangement, is just one approach found globally to supporting smallholders. KTDA Ltd operates effectively as a management firm providing best practices for smallholders in many areas as well as providing services that help smallholders command a greater share of the income. These services include everything from guidance on plucking and fertilizing through operations of factories as well as financial, sales, and marketing support.

In effect, KTDA Ltd helps organize and unite all the smallholder members to be competitive with the large industry players by increasing the portion of revenue earned from higher levels in the value chain. This includes at the manufacture and global wholesale portion of the value chain. It does this by having over 50 subsidiary factory companies to which over 560,000 smallholders both sell raw leaf and own a share of the company and resulting profits after manufacture and sale at the Mombasa Tea Auction.

The Future for Smallholder Tea Farmers

The number of smallholders worldwide looks to continue to grow for some time to come. This happens for many reasons but often its due to large corporate plantation abandonment (and subsequent re-establishment in smallholder schemes) and the purposeful dismantling of large government owned tea plantations. As the smallholder population increases it will be interesting to see how various countries approach supporting farmers in the practices and ownership methods that can help them thrive.

Tea vs Coffee Imports – Who are the superpowers?

Overall Tea Imports

The first thing to note right off is that the Russian Federation is actually the single largest importer, with nearly 400 million pounds of tea imported in 2012. This is followed by the United Kingdom at 319 million pounds and, shockingly Afghanistan at 299 Million pounds. By sheer volume the United States came in fourth with 277 million pounds. However, sheer volume of imports alone really doesn’t even begin to tell the whole story. If you look at pounds of tea imported per capita you start to see a slightly different picture. By this measure Afghanistan (yes, really) imported over 10 lbs per person in 2012 followed by the UAE (8.75 lbs), Libya (7.76 lbs), and Mauritania (6.85 lbs). The United Kingdom, which supposedly revolves around tea, came in at #7 with just over 5 lbs per capita, or half that of Afghanistan! And the United States…. well that would be #72 with 0.87 lbs per capita.

From the graphic below, which equates the imported tea per person to the number of cups it would brew you can see the United States sitting at 132 cups equivalent imported in 2012 while the top four countries have well over 1,000 each.

Tea vs Coffee: Equivalent Cups of Tea Imported per Person

Tea Importers: Cups Per Capita (by cups brewed) – Visualization Care of Tableau Public

What about Tea vs Coffee Imports?

The comparison of tea vs coffee begins to highlight the east vs west nature of coffee and tea. Whereas the more prominent tea importers appear in the Middle East and Africa, this is very different with coffee where the dominant importers are Europe, Canada, and The United States of America. Indeed on a cup equivalent of imports per capita America comes in 24th with 651 cups per capita imported. Here too, however, we are far behind. On a per capita basis, with over 4,300 cups per person, Luxembourg leads the pack followed by Belgium (4,110), Switzerland (2,530), and Germany (2,083). Just so that we can re-affirm our dominance somewhere in the coffee vs tea imports area, let it be said that on sheer volume we win, hands down with nearly 3.2 billion pounds of coffee imported with Germany in distant second with 2.67 billion pounds imported.

Tea vs Coffee: Equivalent Cups of Coffee Imported per Person

Coffee Importers: Cups Per Capita (by cups brewed) – Visualization Care of Tableau Public

Tea Imports – The Whole Story?

While it might be satisfying to think that imports is a solid measure of popularity or consumption, that really isn’t the case. In the world of tea and coffee imports and exports the numbers appear to be a bit cloudy. While we import a huge amount of coffee and tea, there are many countries, not known for growing either coffee or tea, which also export both products. This is no different with the USA. While we import over 3 billion pounds of coffee we also export 320 million. Hawaii (which produces some great coffee and tea by the way) aside, the US isn’t exactly known as a coffee or tea producing superpower. Like coffee, while we import 277 million pounds of tea, we also export another 32 million pounds. And this, of course, doesn’t even scratch the surface on the various other products made from tea.

So in the end my assumptions about Germany being a tea importing juggernaut were very much busted. This quick look at import stats indeed revealed many surprises in both the large tea importing nations by volume and per capital as well as the dichotomy between tea vs coffee importing nations.

Tea Travels: How Does Tea Get to Market?

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As we noted in an earlier blog about where tea is grown, tea comes from a large number of countries around the world, though only a relatively small number including China, India, Japan, and Kenya produce it in large scale. But we were curious, how does the tea actually get into our hands for consumption?

Tea, of course, starts with the plant, Camellia sinensis. Tea plants begin life as cuttings in a nursery before being planted in fields for commercial growing. These fields may be corporately owned or those of smallholders which makeup a substantial, if not the majority of growers around the world. (United Nations, Food and Agriculture Organization, 2012). After a flush of new growth appears, pluckers will pick leaves ranging from a bud only to a bud and two or three leaves, collecting the leaves in a basket or other container. While manual labor is used for most plucking, some tea is harvested by mechanical means.

After plucking, tea immediately begins to loose moisture and begin oxidation and must quickly get to a manufacturing plant. So the farm and the manufacturing plant must be close enough to allow raw leaves to be delivered immediately. Farmers rarely own manufacturing facilities themselves, so after tea is picked in the field it is carried to a factory on foot, car, truck, bicycle, or motorcycle depending on what happens to be at hand. This may be done by the farmer or by middlemen who purchase the raw tea leaves and transport it to the factory for processing.

Tea Chests by Flickr user mikecogh, CC BY-SA-2.0

Once at a factory the tea leaves are processed and turned into one of the major types of teas. This may be done using CTC or Orthodox methods, ultimately resulting in a finished tea product that is ready for packaging and sale. At this stage tea is packaged in large containers made of a variety of types including polypropylene, jute (vegetable fiber spun into threads), or paper sacks or in tea chests. Tea chests are made of plywood lined with aluminum foil and parchment paper to ensure they resist absorption of other aromas and, when full, may weigh 75-160 lbs while foil lined tea sacks may weigh 55-130 lbs. (TIS-GDV, 2013)

Depending on country and local arrangement, tea may be sold directly to distributors and wholesalers or may go through auction. There are well established auction houses in Colombo, Mombasa, Calcutta, and cities in other major tea producing countries of the world. In some cases the tea is actually packaged and leaving port before money has traded hands!

Shipping Containers by Flicker user wirralwater, CC BY-2.0

Packaged tea is shipped in a variety of methods although excessive handling is not desired as sacks and chests are easily damaged resulting in loss of the tea within. It is normally placed on pallets and then moved by forklift into a shipping container to be shipped around the world. When it gets to the destination port this container may be emptied and the contents re-shipped, or the container itself may be forwarded on to the end buyer.

Upon reaching the distributor or wholesaler the shipment of tea is then split up, sold in existing packaging, or repackaged into smaller sizes for purchase by retailers and in some cases direct to consumer. At this point some tea may become the base of a blended tea or may remain as is. Finally, the retailer will repackage the finished product into sizes that are manageable for consumers and sold directly or sold to other retailers, tea houses, or hospitality establishments.

Since tea does have a shelf life it is important to get the tea to retailers and consumers quickly. Some aspects of shipping can be done faster, especially with air shipping and consumer purchase direct from the grower. However, these are generally niche solutions with low volume, appropriate for specialty teas and buyers who really know what they want and are willing to deal with some added risk of placing orders with a company overseas.

So where do you buy your tea? Physical tea store, on-line retailer, farmers market, other?

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David @ Dominion Tea

Works Cited

TIS-GDV. (2013). Tea. Retrieved from Transport Information Services – GDV: http://www.tis-gdv.de/tis_e/ware/genuss/tee/tee.htm

United Nations, Food and Agriculture Organization. (2012). Contribution of Smallholders to the tea sub-sector and policies required to enhance their livelihood. Colombo, Sri Lanka: Intergovernmental Group on Tea.

Where is Tea Grown?

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We recently attended a tasting session featuring teas from around the world. The teas were outstanding to be sure, however, they represented teas from only a small portion of the world. The countries represented included China, Japan, Tibet, India, Sri Lanka, and Kenya and provided a very diverse set of teas. These included white, yellow, green, black, dark, and even purple teas. But our tasting from “around the world” barely even scratched the surface. There are a huge number of countries growing teas. In fact, more than 50 countries grow tea today including many from Asia, a good number from Africa, and some perhaps surprising locations like former Russian states, Iran, Argentina, Brazil, and yes, even the United States, though not always at a high enough to be globally competitive. While the top four growers (China, India, Sri Lanka, and Kenya) far and away surpass the others, tea production is very much a global business. The average American consumer tea is most likely from China, India, Sri Lanka, or Kenya. However, to illustrate just how global the business is, a somewhat dated report by the U.S. Department of Labor noted in 1996 that Germany, which grows virtually no tea, has consistently been one of the top countries supplying tea to the US market_{(Department of Labor, n.d.)}!

China and India account for 55% of global tea production.

Countries grouped by relative global share of tea production. Based on 2011 United Nations Food and Agriculture Organization data. http://www.fao.org/statistics.en/ (Full Tableau Visualization)

Tea as a Global Commodity

Tea is the second most consumed drink in the world, behind water, and demand continues to grow year after year. While tea is consumed in the form of loose leaf, bagged tea, and chai, innovations in ready to drink teas, and powdered tea drinks in Asia continue to drive additional growth. One of the fastest growing segments in Asia, according to Euromonitor ^{(Friend, 2013)}, is the powered tea segment with products like Xiang Piao Piao, which is a single serve cup of instant powered tea in a variety of sweetened flavors. According to the UN’s Intergovernmental Group on Tea, demand for black tea has exceeded supply since 2009. This long term demand is expected to keep the price of tea high for years to come _{(United Nations, 2012)}.

Photo of Coffee Rust – by Carvalho et al – CC-BY-SA 2.5

Where demand exceeds supply the price generally stays high until supply rises enough to meet that demand so it is reasonable to expect that more countries will see commercial tea planned and those already in the business may increase both the land area under cultivation and work to improve the yield of existing plantations. Additionally, some coffee plantations may choose to change over to tea. This is because coffee rust is increasingly impacting coffee plantations in South America and pushing down coffee production rates. Rust isn’t actually new, it’s what drove Sri Lanka to switch from growing coffee to tea back in the mid to late 1800’s. However, it is now impacting South America, parts of which are seeing the worst outbreaks of coffee rust since it took hold in the 1970’s. The U.S. Department of Agriculture is expecting significant decline in crop yields for the 2013-14 season on top of already significant declines in 2012-13 _{(U.S. Departement of State, n.d.)}

Given the growing appreciation and demand for ready-to-drink products and specialty teas in the United States, Canada, and other parts of the world we may very well have increased opportunity to experience an even wider variety of tea products from a wide variety of countries in the years to come.

[ See Related Post: Tea vs Coffee Imports – Who are the superpowers? ]

Works Cited
Department of Labor. (n.d.). ILAB – TEA. Retrieved from Bureau of International Labor Affairs: http://www.dol.gov/ilab/media/reports/iclp/sweat4/tea.htm

Friend, J. F. (2013). Global Tea Opportunities in Retail and Foodservice. World Tea East. Atlanta: Euromonitor.

U.S. Departement of State. (n.d.). Retrieved from Coffee Rust Outbreak in Central America, Southern Mexico, and the Caribbean: http://www.state.gov/e/eb/tpp/abt/coffee/index.htm

United Nations. (2012, February 29). UN News Centre. Retrieved from Global tea prices set to stay strong this year, says UN agency: http://www.un.org/apps/news/story.asp/story.asp?NewsID=41411&Cr=Food+Prices&Cr1=#.UoS9i94o601