16 Mar

Farmers in the Mount Kenya region will now receive Sh5 more per kilo of tea delivered to factories monthly as the Kenya Tea Development Agency (KTDA) moves to increase their pay and end the March mini-bonus payout.The growers will receive Sh21 per kilo of the green leaf up from the current Sh16 monthly advance payment.The new payment mode will be implemented this month.“The Board has reviewed the initial green leaf payment rate from Sh16 to Sh21 per kilo of the leaf with effect from January 2021,” reads a memo to factories in the East of Rift Valley.The East of Rift Valley region comprises Murang’a, Embu, Meru and Kirinyaga counties.The increase follows a directive by the Agriculture Cabinet Secretary Peter Munya issued last year to KTDA to pay farmers 50 per cent of the total value of the green leaf that they have delivered to the factories with the remainder, normally referred to as a bonus, to be paid within the financial year.The move is part of radical changes proposed to rid the tea giant of cartels that have stifled the multibillion-sector that has seen farmers earn less through underpayments.On Friday, through an Executive Order, President Uhuru Kenyatta directed the Attorney General to conduct an inquiry into the workings of KTDA and the activities of its directors.The inquiry will look into the “alleged statutory and regulatory compliance breaches allegedly committed by KTDA and its directors,” including “potential price and auction manipulation, abuse of dominance, insider trading, wastefulness and breach of directors' fiduciary duties.”

According to KTDA chairman Peter Kanyago, the increment in monthly pay ends the Sh5 mini-bonus issued out in March for produce delivered to factories between July and December.“We have increased the pay by Sh5 to increase the monthly pay... this means they will no longer enjoy the mini-bonus as the cash flow will not allow,” he said.He further stated that the final payment in October, referred to as bonus, will be reduced compared to previous years.“They (farmers) should expect less money in bonus payment because they will have already consumed part of the monies and we are paying them a lot more,” he added.Further, the agency noted that it was making the payout increases amid low prices for the commodity at the Mombasa auction.According to a report by KTDA, tea prices had dipped by 13.3 per cent in the last seven months owing to over production that has been favoured by good weather.

No pay rise At the same time, farmers in the West of Rift Valley will not enjoy the pay increase and will continue to earn between Sh16 and Sh18 per kilogramme of green leaf.“For this other region, there will be no change in payment per kilo because what they receive is already above 50 per cent of their annual final pay,” a KTDA insider, who requested anonymity as they are not authorised to speak on behalf of the agency, told Business Daily.The western counties include Bomet, Kericho, Vihiga, Trans-Nzoia, Nandi, Kisii and Nyamira. Their earnings have trailed those of the eastern regions in the past decade.The price of tea is based on a number of attributes, which consumers use in deciding the value of the commodity. Some of the parameters include the aroma and taste.Where the produce is grown geographically plays a key role in determining the quality, which informs consumers’ preferences.

Source: Business Daily