KENYA – Directors representing the 71 tea factories under the Kenya Tea Development Agency (KTDA) are gearing up for crucial meetings aiming to pave way for the declaration of the second and final bonus payments to farmers.
According to KTDA Management Services Managing Director, Julius Onguso, the impending gatherings will involve the review and discussion of the annual accounts for the financial year 2022/23.
“It is only after that we will announce the second payment rates for the specific factories,” Juilis highlighted.
The KTDA’s dual payment model entails monthly interim payments (mini-bonuses) and final payments (bonuses) based on each factory’s performance.
In January, the KTDA disbursed a total of US$3.76 million (Kes5.5 billion), which included US$17.7 million (Kes2.8 billion) as payment for December green leaf deliveries and an additional 18.4 million (Kes2.7 billion) as mini-bonuses for factories whose directors had passed resolutions to pay.
This distribution translated into farmers receiving between Kes5 and Kes10 as a mini-bonus per kilogram of green leaf delivered to their respective factories for the six months ending in December the previous year.
However, the forthcoming bonus payment discussions come at a challenging time, as preliminary data reveals a marginal decline in green leaf production and sales prices at the tea auction in Mombasa.
Green leaf deliveries to the KTDA-managed factories for the year ending in June 2023 dropped by a significant 8.5 percent, with only 1.1 billion kilos delivered, down from the 1.3 billion kilos recorded in the previous year.
This decline attributed to the prolonged drought that severely impacted farm output, leaving many farmers struggling to maintain their yields.
Additionally, tea prices at the auction experienced a slight dip of three percent. The average price per kilogram in all factories stood at US$2.7 (Kes394) during the 2022/23 financial year, compared to US$2.8 (Kes409) in the preceding year.
“We have had the twin challenges of a severe drought and a very challenging global tea market due to the lack of access to the US Dollar by key tea-buying markets, but we are continuously working to make sure farmers get the best value for their hard work,” Julius said.
As the meetings unfold, farmers across Kenya will be closely watching the decisions made by the KTDA factory directors regarding the second bonus payment.
Their livelihoods and the future of the tea industry hang in the balance as they hope for fair compensation amid adverse market conditions and climate challenges.
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