By: Isaac Thuku @MountKenyaTimes
- “Farmers have been accruing debts and one of the reasons is the high-interest rates. With the ongoing reforms in the tea sector, one is to lower interest rates,” he said.
- Munya said they are in the process of streamlining Kenya Tea Development Agency Holdings (KTDA) by making it leaner in size and more effective to manage so as to cut operation costs.
- He said the rot at KTDA was deeply rooted, and its cleaning needs time. This year, top KTDA directors were ousted as part of the reforms, with the government calling for their audit to establish their involvement in the rot in the tea sector.
The government has said tea farmers will start getting improved bonuses by next year once the new tea reforms are fully implemented.
Agriculture Cabinet Secretary Peter Munya gave the assurance Tuesday while addressing farmers at Mataara tea factory in Gatundu North, adding that there has been some slight improvement in tea bonuses this year after the implementation of some of the reforms.
The CS cited the recent monthly tea pay per kilogram, which increased by Sh5 from Sh16 last year to Sh21 this year.
However, bonus pay reduced by an average of Sh2 per kilo this year in almost all the tea factories compared to last year, causing uproar among tea farmers.
“We know there was an issue with bonuses, which is being addressed. However, we have to admit that there has been some slight improvement in the monthly tea pay. However, the full impact on pay will be felt by next year once we have fully implemented the reforms,” he said.
Big part of the bonus paid to tea farmers is said to be taken to recover accrued loans, with Munya saying the interest rates in future will be lowered to 5 percent.
“Farmers have been accruing debts and one of the reasons is the high-interest rates. With the ongoing reforms in the tea sector, one is to lower interest rates,” he said.
Munya said they are in the process of streamlining Kenya Tea Development Agency Holdings (KTDA) by making it leaner in size and more effective to manage so as to cut operation costs.
He said the rot at KTDA was deeply rooted, and its cleaning needs time. This year, top KTDA directors were ousted as part of the reforms, with the government calling for their audit to establish their involvement in the rot in the tea sector.
“Most of them have since gone to court and filed several cases. Until then is when we can begin implementation of the reforms. We hope the cases will be determined in a months’ time to give us time to begin the implementation of the reforms, “said Munya.
On the Ministry’s preparedness to help tea farmers this rainy season, the CS announced that KTDA has procured 86,288 metric tons of fertiliser on behalf of smallholder tea growers for application to their tea bushes.
He said the fertiliser will help improve the quality of their tea produce and make farmers get good tea grades able to fetch good prices in the international market. He said the fertiliser will be subdivided at Sh2, 3473 per 50kg bag, compared to Sh3, 073 retail prices.
“Fertiliser prices were increased by 54% from Sh1, 996 in 2019 to Sh3, 073 in 2021 per 50Kg bag. In order to cushion the farmers against the high cost of fertiliser, KTDA through the Ministry has requested the Government for fertiliser subsidy amounting to Sh1 billion, which will reduce the cost of fertiliser by Sh600 per 50Kg bag,” he said.
The CS maintained that the government will continue conducting a complete forensic Audit in all KTDA owned factories.
Munya said the comprehensive investigation will be used to determine why tea prices were dropping in the previous years, despite international prices remaining constant.
Munya said the reform agenda in the tea sub-sector was in top gear and farmers are receiving better payments.
Small-scale tea farming accounts for more than 65 percent of the country’s total tea production, with the other portion produced by multinational companies.
Official data shows that the tea sub-sector in Kenya supports over 6 million Kenyans directly and indirectly.
KTDA Chairman David Ichoho on his part said the agency has embarked on bringing down production costs in all its factories in a bid to help farmers get more money regulations.