Tea Farmers Get Sh2.47 Billion Payment For January Deliveries

By Jane Muia / Published February 9, 2023 | 12:17 pm

KEY POINTS

KTDA revenues hit 23.76 billion shillings boosted by reforms instituted in 2021. This represents a 3.5 percent increase compared to the 22.96 billion shillings achieved in the previous year.

KEY TAKEAWAYS

Some of the reforms creating the current balance in the sector include the setting of the reserve price which has facilitated the initial green leaf monthly payments to the smallholder tea grower from 17 shillings to between 20 and 21 shillings per kilogram.

The Kenya Tea Development Agency (KTDA) has released payments for the green leaf delivered by farmers in January this year as the agency steps to keep its promise of prompt payment to farmers.

Farmers will receive 2.47 billion shillings in payment for the 120 million kilograms of green leaf delivered to KTDA-managed factories.

‘’The payment was slightly delayed by a system hitch which has since been rectified,’’ said KTDA.

The disbursement, which will start to reflect in farmers’ accounts on Wednesday, March 9, 2023, follows the 5.5 billion shillings payment made last month for the mini-bonus and December 2022 green leaf deliveries.

Early payment to farmers is part of the ongoing reforms in the tea sector seeking to benefit both the sector and the individual farmer. KTDA promised farmers that they will receive their pay by the 5th of every month, a promise that the agency has dutifully kept.

The price stabilization framework has worked well in shielding tea growers from price fluctuations that have for a long time led to unsustainability in the industry.

In the six months ending December 31, the average tea prices for KTDA at the auction stood at 326 shillings per kilogram of made tea compared to 306 shillings over the same period in the 2020/21 financial year.

During the period, KTDA revenues hit 23.76 billion shillings boosted by reforms instituted in 2021. This represents a 3.5 percent increase compared to the 22.96 billion shillings achieved in the previous year.

KTDA has also initiated efforts to improve operational efficiencies. These include investment in small hydropower stations for cheaper power supply, diversification to orthodox teas to reduce reliance on Black crush, tear, curl (CTC) teas, and training of farmers on income diversification and management.