KTDA releases Sh2.5b to smallholder tea farmers

Kenya Tea Development Agency (KTDA) has dispatched money to banks to smallholder tea farmers for the green leaf they delivered last month. The agency said farmers should be able to access the money from today.

Farmers are to receive Sh2.47 billion being payment for 120 million kilogrammes of green leaf delivered to KTDA-managed factories. The payment which was slightly delayed by a system hitch which has since been rectified follows Sh5.5 billion payment made last month for the mini-bonus and December 2022 green leaf deliveries.

The financial boost comes at a time the farmers have lauded the ongoing tea reforms and called on government to fast-track the enactment more changes to revive the once lucrative sub-sector.

Farmers from Kiambu, Murang’a, Kericho and Kisii counties said the reforms have improved their earnings, increased transparency in the management of tea affairs and given previously marginalized groups a voice. This stamp of approval comes barely a month after President William Ruto tasked his deputy, Rigathi Gachagua, with overseeing reforms in the tea, coffee and milk sub-sectors.

Easier for women

Betty Chelang’at, a tea farmer from Rwandit in Kericho County said the reforms have now made it easier for women to participate in the management of KTDA tea factories. Her factory, Momul Tea factory, now has two women directors, a first in its history.

“Before reforms it was almost impossible for a woman to become a tea factory director. We now have two women directors; Gladys Cherono and Betcy Koskei,” she said. Her view is shared by Francis Ngugi, a tea farmer from Kagwe, Kiambu County who observed that the reforms have empowered ordinary farmers by giving them a chance to lead their tea factories.

“They removed voting per shares, now we are voting one-man, one-vote. That has made me very happy because an ordinary man like me can now vie and get elected. Previously I could not,” he said.

According to the farmers, reforms have increased transparency at the Mombasa tea auction as well as in the management of KTDA tea factories.

“Previously, you were considered bothersome if you tried asking question about tea prices. These days you can easily talk to either managers or directors about such matters,” said Dominic Marita, a farmer from Ogembo, Kisii County.

Prior to the enactment of Tea Act (2020), a farmer’s voting strength depended on the number of shares one held at the tea factory, meaning that a few large farmers could determine who became a factory director with little or no input from the rest.

With brokers now bidding via an online platform that is accessible to all stakeholder, it is now easier for the farmers to monitor trading activities at the Mombasa auction. The farmers said they were happy that the percentage earnings for brokers at the auction have been reduced to 0.7 per cent of total sales down from the previous 2.25 per cent.  “You can now know in real time who has bought your tea and at what price,” said Samuel Nguro, a tea farmer from Kiru, Murang’a County.

Reforms in the tea sub-sector have resulted in improved earnings, according to the farmers. Ogembo Tea Factory, for instance, has seen the latest monthly payment jump from Sh17 to Sh20 per kilo of green leaf while that of Momul Tea Factory jumped from Sh18 to Sh20. Similar improvements were reported in Kiambu and Murang’a where Kagwe and Kiru tea factories paid out Sh21 per kilo of green leaf in their latest monthly payout.

Improved earnings

A tea factory manager who spoke on condition of anonymity attributed the improved earnings to the introduction of a minimum reserve price at the auction where each factory is not allowed to sell made tea below a specified minimum price. “The biggest gain that we’ve had from the current reforms is minimum price. That guarantees that the tea we sell is able to meet production cost and generate some income. Previously, any time there was an upsurge in crop production, prices would dip,” he said.

Additionally, the reforms have seen tea factories pay farmers in a timely manner with factories issuing payments not later than the 5th of every month. “Previously we used to receive our payment around 28th or 29th of the following month. This made it difficult to even pay labourers,” said Chege Gichimu, a tea farmer from Kagwe in Kiambu county.