Tea payment for farmers in December up 16.2% to Ksh.3 billion

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Smallholder tea farmers in the country are poised to receive payment for the December 2021 green leaf deliveries to their respective factories.

KTDA Holdings Chief Executive, Wilson Muthaura confirmed the disbursement of Ksh.3 billion which reflects 137.3 million kilos of green leaf delivered to KTDA-managed factories in December 2021.

This is up from the Ksh.2.58 billion that was paid over the holiday season for November deliveries.

“We are pleased to announce that the payment for the December 2021 green leaf delivery by our farmers has been made this week in line with the payment schedule change we introduced last month.”

According to Muthaura, farmers should expect their monthly payments within first week of the next month in line with the reforms that have been put in place.

Farmers have already started receiving the payments – based on respective banks’ processes and timelines.

During the auction held on November 15 and 16 on the back of the minimum reserve price regime introduced by the government, saw the rising of tea prices by 27 percent.

Tea prices at the Mombasa auction rose by 27 percent to an average of Ksh.321 (USD2.91), the highest level last year.

In July 2021, KTDA introduced a minimum reserve price of Ksh.268 (USD2.43) per kilo of processed tea in a move aimed at cushioning smallholder farmers who were affected by the deteriorating market that had seen selling prices nearly slip below the cost of production.

Tea prices between July and September, improved by 53 percent from the average Ksh.215 (USD1.90) in the week before the introduction of the reserve price in July.

KTDA Holdings chairman David Ichoho said production during the same period had plunged 10 percent with factories putting out 77.4 million kilos of made tea in the four months compared to 86.1 million kilos for a similar period in 2020.

The change in payment cycle is part of reforms being instituted by the new KTDA Holdings Board.

Other changes introduced by the board include: an increase in monthly pay to Ksh20 per kilo for growers in regions five, six and seven, and Ksh.21 for regions one to four; the successful lobbying for a Ksh1 billion fertilizer subsidy from the State; and a reduction of interest rates charged by Greenland Fedha (KTDA’s microfinance institution) to 8 percent per annum to boost affordable credit access and reduce the burden of the loans for tea farmers.

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