Back to school will be plain sailing for roughly 650,000 tea farmers in Kenya who got a major boost yesterday following the announcement of a mini bonus payment for the period between July and December last year.
The Kenya Tea Development Agency (KTDA) has released Kes5.5 billion in early payments to its affiliate farmers as part of reforms being rolled out by the KTDA Holdings Board, with the money set to reflect in bank accounts starting today.
Kes2.7 billion of the sum is set aside for factories that subscribe to mini bonuses, while the remaining Kes2.8 billion will compensate farmers for December 2022 green leaf deliveries.
In the trading half, the average tea prices for KTDA at the auction rose to Kes326 per kg of tea compared to Kes306 over the same period in the 2020/2021 financial year.
“It was necessary for the [KTDA] board to make an interim payment to our farmers to assist the management of their financial affairs in the first quarter of 2023,” said Agriculture Cabinet Secretary Mithika Linturi.
Farmers will be paid between Kes5 to Kes10 per kilogram of tea produce delivered in the half year ended December.
“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,” said David Ichocho, KTDA Chairman, adding that issuing the money just before schools resume will help farmers meet their obligations.
Mr Linturi clarified that the money being used in the mini bonus has been realized from tea sales, alluding to a last year scandal where the tea agency cleared farmers’ dues using a loan that amounted to Kes18.2 billion ahead of elections.
“[The mini bonus] is not borrowed money, it is proceeds from tea sales. Last time there was an aspect of borrowing here and there but this time the money is fully from tea sales,” explained Mr Linturi.
“The government will also encourage KTDA to factories to invest in common user facilities at the Special Economic Zones including Dongo Kundu in Mombasa to grow the percentage of value added exports to 50 percent,” he added.
The ministry plans to invest in 11 new tea processing lines targeting high-value orthodox teas across a number of KTDA-managed factories in Kenya.