The Kenya Tea Development Agency (KTDA) has disbursed a Sh5.5 billion mini bonus to small-scale tea farmers in the country, aimed at cushioning them from the rising cost of living.
Agriculture Cabinet Secretary (CS) Mithika Linturi said that in December 2022 during the KTDA Annual General Meeting (AGM), he requested the board to consider making a mini bonus payment to the farmers in January so that they can be able to pay school fees considering that schools reopen later this month.
Linturi said KTDA has the overall management authority of 71 factories and the government has committed to helping the management improve the earnings of the tea farmers.
“The tea sector is key to the growth of our economy as it contributes two percent of the Gross Domestic Product (GDP) and four percent of the agricultural GDP, with the sector supporting 650,000 farmers whose factories are managed by KTDA,” he said.
Linturi explained from the information that they are getting, tea production increased in the months of November and December 2022 as a result of the fertilizer subsidy program that the government has been undertaking.
“As the government, we will continue working to ensure that the cost of production is brought down so that there is a great benefit to our farmers,” said the CS.
He highlighted that the government is sourcing for funds to finance the construction of 11 lines that will be able to process orthodox tea which fetches more money in the world market.
This move will ensure that Kenyan farmers are able to make more money from their tea.
“It is also the commitment of the government within this year to increase value addition to our teas so that we are able to get to at least 50 per cent, this will help us reduce the amount of unprocessed tea that we export,” said Linturi.
He said they are inviting private sector players to invest in value addition, even as the government prepares itself to build common user facilities in the special economic zones, especially in Dongo Kundu, where value addition to the tea can be done.
“Once those common user facilities are done, those who cannot be able to put up the value-added lines can be able to access the government facilities and pack their tea and export it,” explained the CS.
Linturi added embassies are ambassadors for Kenyan tea and they are trying to encourage them to continue looking for markets for Kenyan tea and other produce.
“Our greatest tea markets are Pakistan and Egypt and we still feel we can be able to get a greater share of the market by trying to explore other markets,” he said.
KTDA Holdings Chairman David Ichoho said from the disbursed money, Sh2.7 billion is the payment with respect to mini bonuses for the factories, whose directors passed resolutions to pay mini bonuses to their farmers.
Ichoho said that the balance of Sh2.8 billion will go towards paying farmers for the December green leaf delivered to factories.
“Farmers will be paid between Sh.5 and Sh10 as a mini bonus per kilo of green leaf delivered to their factories for the six months up to December 31, 2022. The Sh2.7 billion mini bonus payment represents 449 million kilos of green leaf delivered to KTDA-managed factories over the six-month period,” said Ichoho.
He said that during the same period, average tea prices for KTDA at the auction stood at Sh.326 per kilogram of made tea compared to Sh306 over the same period in the 2020/2021 financial year.
