Tea growers will this year get a reduced bonus payment compared to last year
Details obtained from the directors and farmers affiliated to the Kenya Tea Development Agency (KTDA) show that the payout, expected at the end of next month, will be lower by Sh10.
The payment is for deliveries made to factories between July 1, 2017 and June 30, 2018.
Last year, tea farmers countrywide received Sh57.4 billion as their annual bonus.
Growers in Kericho and Bomet counties were the highest beneficiaries, taking home Sh12.2 billion.
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Total revenue
During a press conference in August this year, KTDA Chairman Peter Kanyago warned that while total revenue had gone up this year, the price per kilo had gone down.
“Even as we report that the revenues in the tea sector have increased, we must tell farmers that tea prices have been down since April and now in August the price is still very low,” he said at the time.
He asked farmers not to have high expectations on their bonus payments in October as the rates per kilo would likely be lower.
Bonus payments are determined by the performance of factories and are paid out at the end of October.
The Standard has confirmed that some factories have finalised calculating the expected bonus payout, with indications confirming Mr Kanyago’s statements.
Joseph Muraya, a tea farmer in the Kiambuthia catchment of Kiru Tea Factory, blamed the agency for the reduction in payment, saying this year the growers doubled their efforts.
“At Kiru we had anticipated to get above Sh50 per kg. With increased cost of living, farmers will seek cheap loans from banks to be able to send their children back to school next January,” said Mr Muraya.
Gacharage Tea Factory Chairman Paul Kagema said the cause of the reduced payment should be blamed on the Government’s demand for taxes on profit made by the factories.
Mr Kagema said due to a case pending in court, the companies endorsed a decision to withhold some money as they waited for the outcome of the matter.
“Also, following ongoing development projects that include expansion of factories and acquisition of parcels of land for the purpose of planting trees, we have retained Sh2 per kg of green leaf delivered to factories,” he said.
He explained that in the period under review, farmers affiliated to Gacharage delivered 13,775,856 kgs of green leaf.
At Makomboki, farmers delivered 24.2 million kgs in the period under review while at Ngeere, farmers delivered 33 million kgs.
Kapasara factory in Region Seven has been rated to pay the lowest bonus at Sh19 per kilo.
In Mt Kenya region, factory boards of directors have confirmed approving bonus payment to their growers at low rates compared to the previous release.
In Murang’a, Mungania Tea Factory has so far been rated the highest with a proposed payment of 52.10 compared to last year when it paid Sh61.
Proposed payment
Nduti Tea Factory plans to pay Sh42.50 while last year it paid farmers Sh52.
Other tea factories such as Ngeere propose to pay Sh50.10, Ikumbi Sh47.20, Makomboki Sh48, Njunu Sh47.5, Gacharage 47.60 and Kiru Sh40.50.
Bonus payment for Gatunguru, Kanyenya-ini and Githambo have yet to be approved by the boards
In Nyeri, the best bonus rate is from Gitugi at Sh46, while Ragati, Chinga, Iriaini and Gathuthi will pay farmers Sh40, Sh41, Sh40, and Sh47 respectively,
Tea farmers in Zone Five, which comprises five factories in Kirinyaga County, will receive an average of Sh48 per kilo of the produce delivered as this year’s bonus payment.
The highest rate will be paid by Mununga Tea Factory, whose growers will receive Sh52.10, followed by Kimunye Sh51, Kangaita Sh48.20 while farmers from Thumaita will receive Sh48.20
The zone director, Nyaga Karua, said the figure had not yet been determined.
“We will not say exactly how much the zone will receive in total until the first week of October,” said Mr Karua.
He also said farmers would be told what led their factories to receive the shown rates after the total figure for the bonus was declared.
Additonal reporting by Lydia Nyawira
