The study visit to Kenya was made for the purpose of making the initial investigation for marketing the Tarime District (in Tanzania) smallholder tea green leaf to KTDA tea processing factories in Kisii (Kenya); prior to establishing an operational green leaf processing factory in the District. The relevant specific experiences learnt included the following:

1. There were 11 tea processing factories in Region VI where Kisii is, with the 12th factory under construction; all belonging to smallholder tea farmers but operating under KTDA as a Management Agent.

2. The construction of smallholder tea processing factories is governed by the need for extra capacities after the existing ones have been exhausted; and this is linked to the coming up of “Satellite Factories” that offer the supplementary capacities to accommodate the additional smallholder tea green leaf that cannot be adequately accommodated by the “Mother Factories” .

3. The system of establishing satellite factories has helped a lot in terms of ensuring that every single green leaf produced by smallholder tea farmers in Kenya is processed into made tea, and since none of the green leaf is left out especially during rainy seasons when production is always at peak (as is always the case in Tanzania where there are only 19 factories compared with 12 factories in only Region VI of Kenya); Kenya produces over 400,000 tons of made tea per annum compared with the mere 33,000 tons produced by Tanzania. .

4. Under such a policy, there are always some factory capacities left underutilized especially in years when there is inadequate green leaf production. There was therefore a room for the green leaf from Tarime to be processed in the factories found in Kisii-Kenya; provided the KTDA green leaf quality was complied with and adhered to. With the existence and strengthening of the Regional Integration, this can be easily adopted and assist in addressing smallholder tea farming challenges related to marketing of the green leaf in Tarime.

5. The overall KTDA Policy on ensuring that 75% of the price realization of made tea goes back to smallholder tea growers is another relevant experience from Kenya that Tanzania can build on as it embarks on planning and implementing its smallholder tea development Policies and Strategies; with the view to making the country’s tea industry as dynamic and vibrant as that of Kenya or even more given the enormous opportunities it has.

The study visit to Sri-Lanka was made in June 2013 with the objective of learning from Sri-Lankan experience on how smallholder tea farmers in that country (with over 700 tea processing factories) participate and benefit from their participation in the tea sector value chain. The relevant specific experiences leant and gained included the following:

1. Tea is among the major commercial crops which occupy a strategic position in the economy of Sri-Lanka; and unlike in other countries where the crop is always grown in the mid and highland areas only, areas growing tea in Sri-Lanka vary from lowlands to highlands.

2. As in Tanzania, the organization structure of the tea industry in Sri-Lanka consists of Sri-Lankan Tea Board (SLTB) as the highest hierarchy; followed by the Tea Smallholdings Development Authority (TSHDA); and the Tea Growing Community Organizations; each with specific mandated functions in the development of the country’s tea industry.

3. As far as the participation of smallholder farmers in the tea value chain is concerned, TSHDA is responsible for their welfare. However, although the participation of smallholder farmers in terms of activity is mainly limited to green leaf production only; their participation with respect to sharing of dividends is throughout the whole value chain. As such and in accordance with the country’s tea industry policy and regulatory requirements, the smallholder tea farmers in Sri-Lanka are paid a minimum of 68% of the sale price of made tea at auctions and direct sale markets; leaving 32% to the factory owners. This policy and regulatory stance is based on corresponding ratios of investment for establishing and managing both the tea farms and processing factories.

4. The Sri-Lankan tea industry success story (with over 700 green leaf processing factories) is attributed to the active involvement of the Sri-Lankan Nationals in its development especially on investing in the establishment and management of tea processing factories. This is in contrast to Tanzania whose tea industry is controlled by the multinational companies and other foreign investors who own almost all the merely existing 19 tea processing factories. The fellows contacted during the visit gave a caution that “no country in the World can develop if it entertains or is completely dependent on multinational companies and foreign private sector in its investment promotion initiatives”.

5. As suggested and agreed upon during the conclusive session of this important study visit, the bilateral cooperation with Sri-Lanka should be taken up as a strategy for Tanzania to start disengaging its smallholder tea farmers from traditional dependence on multinational tea companies and other investors from abroad for their development. Such relevant experiences from other successful countries on transforming their smallholder tea subsectors should also be emulated for a more vibrant and prosperous tea industry in Tanzania.

The two Country Study visit reports have the detailed information on how Tanzania can benefit if its strategies to revamp its tea industry are implemented by building on success stories and experiences from the two countries.