Tea farmers welcome directive on fertilizer subsidy as tea prices rally

Tea farmers welcomes directive on fertilizer subsidy as tea prices rally

The Kenya Tea Development Agency (Holdings) Limited (KTDA) has today welcomed President Uhuru Kenyatta’s directive for the allocation of Ksh.1 billion by the National Treasury towards fertilizer subsidy for farmers.

In his Mashujaa Day speech on October 20, President Kenyatta directed the National Treasury to allocate Ksh.1 billion in support of fertilizer subsidy for tea farmers as part of his government’s 13-point new stimulus program targeting key productive and service sectors of the economy.

Commenting on the directive, KTDA Chairman, David Ichoho, said the move was a significant step towards lowering the cost of tea farming’s primary input, adding that its impact will enhance farmers’ socio-economic welfare.

“KTDA welcomes the presidential directive for the allocation of a Ksh.1 billion fertilizer subsidy for tea farmers. This directive will ensure that all smallholder tea farmers under the KTDA umbrella have access to the much-needed fertilizer at much lower costs. This will leave them with more money in their pockets while enabling them to enhance tea production,” said Ichocho.

This comes after KTDA concluded the importation and distribution of 65,000 tonnes of fertilizer, while an additional 21,000 tonnes have been procured locally to bridge the shortfall between the required volumes and that which was imported. 

The directive builds on gains already being made in the tea sub-sector, through the ongoing reforms agenda, which include the increase in the price of tea at the Mombasa auction courtesy of the reserve price regime whose aim is to enhance earnings for farmers. 

Tea prices for KTDA-managed factories hit an average of Ksh.340.94 (USD 3.07) in the auction held on October 12, 2021, as the market continues to positively respond to the reserve price amidst a production dip.

Prices have recovered from the average USD 1.90 in the week before the introduction of the reserve price three months ago.

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Production during the same period (July-September) has also dipped 9 percent with factories producing 54.4 million kilos of tea in the three months compared to 60.1 million kilos for a similar period last year.

KTDA introduced a reserve price of Ksh.269.94 (USD 2.43) per kilo of made tea on July 10 this year, informed by a deteriorating market that had seen selling prices nearly slip below the cost of production.

Commenting on the progress realized since the introduction of the reserve price, Mr Ichoho said: “We are encouraged by the improved prices at the auction, which means farmers are likely to earn significantly better returns this financial year.”

His sentiments come a day after President Uhuru Kenyatta said that tea farmers should expect bumper returns next year as a result of the ongoing interventions in the tea sub-sector.

“This sector has been the predatory grounds for cartels for decades, but it has now been liberated and its performance has started to improve. On account of the reform measures implemented by my Administration, the price of Kenyan tea has increased by 42% in the last one year alone. It is expected that our tea farmers will receive a healthy bonus at the end of June 2022, signalling a return to the good old days of “Chai Bora; Pesa Bora,” said the president.

KTDA has reiterated its commitment to continue working closely with the Government and other like-minded partners in ensuring that the gains being made are safeguarded and extended to its over 600,000 smallholder tea farmers.

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Lawrence Baraza is a prolific writer with competencies in Digital Media, Print, and Broadcast. Baraza is also a Communication Practitioner currently spearheading Digital content on Metropol TV's Digital Desk.

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