A worker picking tea/ SCIENCE PHOTO LIBRARY
NAIROBI, Kenya Jan 10- Kenyan tea farmers are set to receive Sh3 billion as payment for the December 2021 green leaf deliveries.
According to the Kenya Tea Development Agency the payments will be disbursed to smallholder tea farmers through their respective factories.
Some green leaf farmers have already started receiving the payments – based on respective banks’ processes and timelines.
The Sh3 billion accounts for the 137.3 million kilos of green leaf delivered to KTDA-managed factories in December 2021; up from the Sh2.58 billion that was paid last month for November 2021 deliveries.
In a statement, KTDA CEO Wilson Muthaura confirmed that payments were made in line with the payment schedule change introduced last month.
”Farmers can expect to be receiving their monthly pay promptly within the first week of the following month, in line with the reforms that we have put in place,” Muthaura said.
Last month, the tea agency resorted to changing the payment cycle for its farmers to the first week of the following month, from the third week, translating to faster access of payment by the farmers.
The previous payment cycle denied farmers financial empowerment to meet their end-of-month financial obligations such as salaries, rent, payment for supplies, among others.
”Consequently, the delay in payments saw cash-strapped farmers sometimes resorting to leaf hawking to unlock earlier access to money,” he added.
Changing the payment cycle to the first week is among new reforms the new KTDA Holdings Board has introduced which also include the introduction of the reserve price for tea from KTDA-managed factories of $2.43 per kilo of processed tea in July last year.
Since July 2021, prices at the KTDA tea auction have risen from $1.9 – before the introduction of the reserve price – to an average of $2.92 at the last auction.
Other changes introduced by the board include: an increase in monthly payments to Sh20 per kilo and Sh21 for growers depending on the region.
The board also successfully lobbied for a Sh1 billion fertilizer subsidy from the State; and a reduction of interest rates charged by Greenland Fedha (KTDA’s microfinance institution) to eight percent per annum to boost affordable credit access and reduce the burden of loans for tea farmers.