Farmers primed to receive Sh5.5b as December tea pay, mini-bonus
Small scale farmers affiliated to Kenya Tea Development Agency (KTDA) will receive Sh5.5 billion mini bonus starting today, Agriculture Cabinet Secretary Mithika Linturi and the agency board announced yesterday.
Linturi said the 2022 mini bonus, the highest compared to other years, comes less than two weeks before the opening of the schools and thus will enable farmers to pay school fees amidst their depressed buying power.
“This is a reprieve to farmers especially at this time they are taking their children back to schools. My ministry brokered for the release of the money to ensure farmers are able meet their financial obligations,” said Linturi. The main bonus KTDA said is expected to be paid in July, one month after the end of the 2022/23 financial production year.
“A few weeks ago, I requested the KTDA board to consider paying farmers a mini-bonus this January as part of enabling them to pay school fees and boost their depressed purchasing power. Uplifting the status of the farmers is part of President William Ruto Government aspirations to support farmers,” he added. Funds to cater for these payments, he added, have been generated through the sale of tea over the period under consideration.
The CS denied claims that KTDA has borrowed money to pay farmers, insisting the proceeds have been realised from sales of tea for the last six months. He stated that the Government will continue deepening reforms in the tea industry with a view to ensuring farmers benefit from their sweat. The payment is an increase of 83.3 per cent from Sh3 billion paid to farmers in early 2022.
KTDA chairman David Ichoho explained that the disbursed money is payment to their smallholder tea farmers for the December 2022 green leaf deliveries, inclusive of mini-bonuses for the half year ending December 31, 2022.
Based on respective banks’ processes and timelines, Ichoho explained that farmers will receive payment into their accounts starting today.
Businesses in tea growing towns are expected to boom in the coming weeks as traders move their wares in anticipation of high prices.
The KTDA boss explained of the amount, Sh2.7 billion is payment with respect to mini bonuses for the factories whose directors passed resolutions to pay mini bonuses to their farmers. The balance of Sh2.8 billion will go towards paying farmers for the December green leaf delivered to factories.
Farmers will be paid between Shh5 and Sh10 as a mini bonus per kilo of green leaf delivered to their factories for the six months up to December 31, 2022. Three tea factories in Embu County and one in Murang’a County respectively –Mungania, Rukiriri, Kathangari and Ngere will pay farmers the highest payment of Sh10 per kilogramme.
Gathuthi and Gitugi tea farmers in Nyeri County will receive Sh8 for every kilogramme. Some of the lowest paying factories include Kimunye, kinoro, Ndima, Weru, Mununga, Thumaita Kiegoi and Kionyo among others.
Factories in Murang’a county cumulatively are the highest earners recording Sh431 million followed by factories in Bomet and Nakuru counties at Sh 403.8 million.
“We are pleased to announce that the payment for the December 2022 green leaf delivery by our farmers has been made this week, together with the mini bonus for the period July to December, 2022. Farmers have been waiting for this payment and we have made it right before schools open, to enable our farmers meet their back to school obligations alongside other personal obligations.
“As part of the reforms, we promised our farmers that they will receive their pay by the 5th of the month, a promise we have dutifully kept. We have delayed slightly this month to enable us to compute the proper amounts to pay to farmers.” said Mr. Ichoho.
He added the Sh2.7 billion mini bonus payment represents 449 million kilos of green leaf delivered to KTDA-managed factories over the six-month period. During the same period, average tea prices for KTDA at the auction stood at Sh326 per kilogram of made tea compared to Sh306 over the same period in the 2020/2021 financial year.
The agency chief executive officer Wilson Muthaura confirmed that only farmers in factories in Zones 1 to 9 will be receiving the mini bonuses.
While those in Zones 10 to 12 traditionally hold off from paying, instead making a singular payment as part of the final payment (bonus) later in the year.
Early payment of farmers’ dues is part of reforms being instituted by the KTDA Holdings Board, the introduction of the reserve price for teas from KTDA-managed factories of US$2.43 (Sh300.591) per kilo of made tea.
Other changes introduced by the board include an increase in monthly pay to Sh20 per kilo for growers in regions five, six and seven, and Sh21 for regions one to four and importation of fertilizer and the successful lobbying for a fertilizer subsidy from the State.