KTDA releases Sh21 billion tea bonuses to farmers

Agriculture Cabinet Secretary Peter Munya (L) with KTDA Chairman David Ichoho (R) during a press briefing on the progress of Tea reforms. [Wilberforce Okwiri, Standard]

More than 600,000 farmers across the country will smile their way to the banks this week.

The Kenya Tea Development Agency Management Services Limited announced that it has released Sh21.6 billion as tea bonuses to farmers, for the financial year ending June 30, 2021.

In a statement Wednesday, KTDA said farmers can expect to receive the payments by the end of the week.

It is the second such payment to be made by the agency, following a series of meetings by tea factory directors, held between September 20 and October 1, 2021.

“Sh600 per 50 Kg bag of fertilizer will be reflected in the payment in a bid to pass on the Sh1 billion fertilizer subsidy by the government directly to the farmers,” KTDA Chairman David Ichoho said.

Ichoho appealed to farmers to re-invest their earnings in increasing farm production quality, in a bid to make their businesses more sustainable.

The Sh21 billion bonuses is however one of the lowest-paid out in recent years.

Last month, Ichoho acknowledged the low margins saying: “The payment rate margin will be the same or slightly lower than what farmers received last year as bonus. But, we are optimistic that next year’s pay will be more following the introduction of the reserve price in July this year.”

Sales volumes, quality of tea by individual factories, prices at the auction, and how factories have managed their operations help determine bonuses, allocated to each farmer.

Individual factories consider the revenue generated from tea sales, other income including interest from investments and dividends from KTDA Holdings.

Tea farmers deliver their produce to 54-KTDA managed factories.