The total average payment rate per kg of Greenleaf rose from Sh48.40 in 2010/2011 to Sh50.01 in 2011/2012.
adding that KTDA’s small-scale tea farmers were among the highest paid in the world.
— CBK Governor, Professor Njuguna Ndung’u.
By Macharia Kamau
The Kenya Tea Development Agency will pay Sh45.3 billion to tea farmers towards end of this year.
KTDA has paid an initial Sh11.3 billion to farmers that supply it with green leaf and plans to payout the second tranche of Sh34 billion in November. This second payment is popular as ‘bonus’ payout in tea growing regions.
The increase in earnings by farmers followed increased earnings for the tea industry last year, which was in part due to a favourable exchange where the weak shilling favoured exporters.
Revenues for the entire tea industry reached Sh109 billion the period to December last year, making it the largest foreign exchange earner in the country.
KTDA Holdings Chief Executive Officer, Lerionka Tiampati, attributed the results to better tea prices in international markets and favourable exchange rates. He also said effective cost management by the tea factories, efficient management and higher tea production contributed to better earnings. The agency markets tea from 54 factories that receive tea from over 560 000 farmers.
KTDA, however, warned that climate change could affect production in the coming years, which could with time see farmers’ earnings decline.
Mr Tiampati said tea growers were affected by a frost bite early this year that resulted in the withering of the crop and poor harvests.
He added that dry spells experienced in the country were becoming more and more extreme, which poses a threat for the crop that is grown in cooler Kenyan highlands.
Other challenges that the industry faces include high cost of production, unpredictable exchange rates and decreasing farm sizes.
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