Tea farmers celebrate reduction of management fee

KTDA holding board member Mr Enos Njeru addressing tea growers at Rukuriri tea factory in Embu. [Boniface Gikandi, Standard] Tea farmers have celebrated the reduction of the management fee paid to the Kenya Tea Development Authority from 2.5 per cent to 1.5 per cent of the net sale of their produce. The reduction of the fee of the net sale of tea in both auction and direct markets is in conformity with the Government Tea Act 2020. KTDA Board Member for Zone Six, Mr Enos Njeru, said this was part of the reforms endorsed by the farmers. He said in 2024/2025, farmers will not be levied the fee. Njeru spoke during the annual general meetings at the Rukuriri, Mungania, and Kathangariri factories in Embu County last week. He said all the 71 factories under the KTDA posted a reduction in the management fees; thus, farmers got more bonus payment. Last year, the Rukuriri factory management fee was Sh28.2 million compared to Sh59.6 million in the previous year, followed by Kathangariri at Sh20.2 million, up from Sh39.7 million. "Reduction of the management fees has been celebrated by the farmers, coupled with other reforms on factories being in charge of their finances and procurement responsibilities," said Njeru. Gatunguru Factory Chairman Mwangi Kaguma said the reduction played a major role in the industry, as the growers were previously overburdened by the high charges. In the year under review, Kaguma detailed that the factory paid KTDA MS Sh 23.8 million for the management services, down from the previous 51.3 million. Mogogosiek Tea Factory in the west of the rift paid Sh49.8 million, up from Sh87.7 million of the previous year. The annual payment was Sh1 billion compared to the previous Sh1.6 billion. "We are ready to resist any attempt being sneaked through the Tea Amendment Bill to increase the management fee to two percent," said Kaguma during the factory AGM. On strategies to increase production of quality tea and marketing, Njeru said the factories have embraced value addition, as the factories registered reduced production of green leaf, following the effects of climate change. Njeru said in Embu County the three factories have invested millions of shillings in upgrading the equipment to achieve reduced cost of production and perfect value addition programmes. "As the leaders, we are improvising on cost reduction to ensure the farmers get the highest returns, as demonstrated by the Rukuriri factory that paid the highest bonus in Kenya of Sh 57.50 per kg that was processed in the year under review," said Mr Njeru. He added that a tea consumption campaign will be intensified in the country as a strategy to give farmers a better payment. Rukuriri, Mungania and Kathangariri factories working with experts are installing orthodox tea processing lines and automatic weathering machines, eyeing the perfection of the value addition of their tea to satisfy the international markets. In Embu, tea farmers produced 54.6 million kgs of green leaf and earned Sh3.1 billion in the year ended June 30, compared to 61.2 million kgs of green leaf and Sh3.8 billion last year. Rukuriri factory chairman Joseph Rwanjau said they are installing the orthodox and automated machines, focusing on providing the market with quality products based on the market survey. This year Rukuriri factory paid the highest bonus of Sh57.50 per kg for the 18,751,307 kg of green leaf processed between July 1 last year and June 30. "Based on the existing competition among other tea producers, the factories have innovative ways to remain in the global market," said Rwanjau.

Tea farmers celebrate reduction of management fee

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