Tea farmers to get second bonus pay of Sh36.26 per kilo

Posted on :Thursday , 8th September 2016

Small holder tea farmers under the Kenya Tea Development Agency (KTDA) will now get a bonus of Sh36.26 per kilo of green leaf as the second payment for the financial year 2015/2016.

This brings the total bonus payment to the farmers for the full year to Sh50.26 per kilo after an initial payment of Sh14 per kilo. Last year the farmers received a total of Sh41.61 per kilo.

KTDA Chief Executive Officer Lerionka Tiampati says the higher bonus was a result improved tea prices, increased tea volumes associated with good weather and favourable exchange rates.

“Overall this year, factories are paying an average 75 percent of total earnings to the farmers compared to 71 percent last year. This improvement reflects an overall improvement in tea quality, production efficiencies and cost management at the factory level, in addition to better prices,” Tiampati said.

There was also a slight increase in demand for tea in new markets like the US, Australia and Iran and existing markets like Egypt and Pakistan.

Cumulatively the agency will be spending at least Sh61.99 billion to pay the bonus out of Sh84 billion made in revenues.

This is the highest payment since 2011 when the farmers received a total of Sh50 per kilo of green leaf.

The green leaf volumes for smallholders reached 1.23 billion kilogrammes compared to 1.04 billion achieved last year, the highest in the history of tea production by smallholder tea farmers.

“The increase in tea production was occasioned by favourable weather conditions and good crop husbandry, re-enforced by Farmers Field Schools. During the year, rainfall increased by 17 per cent to 2091 mm from 1785 mm the previous year,” Tiampati explained.

Price of teas from smallholder tea factories at the auction averaged Sh304 ($3.01) in the 2015/16 financial year, up from an average of Sh266 ($2.63) in the 2014/15 year, a 15 percent increase.

However tea prices gradually declined during second half of the year because of the forces of demand and supply.

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