Tea farmers to receive Sh21.6b bonus this week

Thursday, October 28th, 2021 00:00 | By
A small scale tea farmer picks tea. Photo/PD/File

Small scale farmers affiliated to Kenya Tea Development Agency Management Services Limited (KTDA-MS) will receive a second payment of Sh21.57 billion for the financial year ended June 30, 2021.

This second payment, popularly known as bonus, will be available before the end of the week having been released after conclusion of meetings by factory directors from the 54 KTDA-managed factories held between September 20 and October 1, 2021.

However, the funds will be lower than the Sh27.62 billion paid in the 2020 production year.

Lower margins

For the year ended June 30, 2020, total payment for the year was Sh51.85 billion, but this year the figure hit Sh43 billion.

Every month, small scale farmers are paid Sh21 per kilogramme of green leaf.

“The decline in second payment has largely been affected by low production and lower prices occasioned during the year.

However, since the setting of reserve price in June this year, we expect revenue to the farmers will improve next year,” said KTDA chair David Ichoho to Business Hub on phone.

He said the price of tea currently being offered by KTDA factories at the Mombasa tea auction to ranged between $2.43 (Sh269.73) and $1.9 (Sh210.9) in June this year.

Factory meetings are normally held to review the audited 12-month accounts of their factories and declare the second payment rate.

In urban trading centres located in tea growing regions traders have already started leasing premises hoping to reap from the farmers income with commercial sexual workers said to have booked hotels in anticipation of good business.

Farmers had expected high bonus following recent reforms enacted by the Government especially the set reserve price at the Mombasa tea auction.

To this, Agriculture Cabinet secretary Peter Munya said farmers should instead wait up to next year when the reforms will be fully implemented.

“We are aware farmers were expected to earn a high bonus this year. The reforms we started last year are yet to be fully implemented but we assure consistent actualisation of the same will lead to impressive income,” Munya said.

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