Tea farmers get record Sh30.5b bonus from KTDA

By Macharia Kamau

Tea farmers will next month laugh all the way to the bank following the issuance of a record Sh30.5 billion in bonus payment for the 2010/2011 financial year on the back of a weak shilling and stable tea prices in the global markets.

This is nine per cent increase or Sh2.5 billion addition to the Sh28 billion paid as bonus to farmers the previous financial year.

Farmers delivering tea to the Kenya Tea Development Agencies (KTDA) managed factories will receive an average bonus payment of Sh36.40 per kg of green tea, up from Sh31.52 during the 2009/2010 financial year.

This will be in addition to Sh12 per kg that the farmers are paid every month for delivering of tea, bringing the total earnings for the farmers to Sh48.40 per kg, up from Sh43.76 during the 2009/2010 period.

Total payment to farmers will stand at Sh40.5 billion up from Sh38.2 billion earned in the 2009/2010 financial year, making it the third year in a row of impressive performance.

During the 2008/2009 financial year, the payout was Sh25.4 billion.

Lerionka Tiampati, the chief executive KTDA, said the earnings were due to stable tea prices, favourable exchange rates, efficient management of factory processes, and effective cost management through the ongoing automation of field and factory operations.

"The rise in earnings has come despite a sharp rise in the cost of electricity, fuel and imported inputs, such as fertiliser and machinery, which has caused anxiety among farmers," said Tiampati, adding that factories have recorded a six per cent increase in total revenue.

KTDA’s payment is considerably higher than that of other buyers.