Conduct an Internet search for a recent article (within the last 12 months) concerning

microeconomics in your country. Use the information in the article and compose a
paper that provides answers to the following:

 Provide the link to the article.

 Provide a summary of the article.
 How has the situation discussed in the article (within your country) affected your
individual household economics?
 What if anything can be changed about the microeconomic situation from the
article? Please explain.  
 Discuss why you found the article interesting.
 Explain if you agree with the author or do not agree with the article.

MICROECONOMICS OF COMPETITIVENESS

COUNTRY: KENYA

CLUSTER: TEA

introduction

Tea is grown in the Great Rift Valley, parts of Mount Kenya, and parts of western Kenya. The
equatorial climate of Kenya allows tea to be grown and harvested all year. Kenya produces the
most tea in Africa, and tea is the country's most important export crop. Following India, China,
and Sri Lanka are the next two countries on the list. Kenya is the world's fourth largest producer
of black tea, with 369 million kilograms produced in 2007.

Due to high power tariffs, rising labor costs, expensive inputs such as fertilizers, machinery, and
packaging materials and poor infrastructure in producing countries, global tea production costs
are high. The tea industry is undergoing restructuring due to rising production costs, falling
prices and increased competition among producing countries.

There are concerns about the industry's long-term viability. One is that the subsector's
regulations are less stringent and farming practices are less environmentally friendly. As a result,
the second issue is that it would be difficult to integrate these producers into export-oriented
supply chains, which would necessitate higher quality, social, and production costs on
smallholder farms remain lower than estates due to hidden family costs and the fact that they do
not bear any social costs.

Kenya needs to improve its business environment by catalyzing public-private sector dialogue
while also constructing adequate and high-quality transport and energy infrastructure. The
following specific recommendations are suggested to address these constraints;
Kenya's corporate tax rate was recently reduced as a result of tax reform. This is something to be
proud of. However, the government should think about expanding the tax base and improving tax
administration while lowering the tax burden on manufacturing inputs.

Improve Infrastructure: Increase government spending in infrastructure, energy generation,

transmission, and distribution to improve connectivity; encourage increased private financing
and investment in the infrastructure sector; develop the legal framework for energy,
transportation, and telecommunications investments; provide incentives to attract FDI; cultivate
a social attitude of respect and care for public infrastructural assets; and cultivate a social attitude
of respect and care for public infrastructural assets.

LINK: https://www.isc.hbs.edu/Documents/resources/courses/moc-course-at-
harvard/pdf/student-projects/Kenya_Tea_2009.pdf

References.

6. Prunier, Gérard. Kenya: Roots of Crisis. Open Democracy, July, 2008. Accessed April 2009.
http://www.opendemocracy.net/article/democracy_power/kenya_roots_crisis

A Fair Cup – Towards Better Tea Buying -

http://www.responsiblepurchasing.org/downloads/AFairCup.pdf