Tea farmers will receive long-awaited bonuses this year, with Central and Rift to become big beneficiaries

Tea growers in Central and South Rift will get a bigger final payment on bonuses this year, which will come as a consolation given the escalating cost of living.

The majority of them are small-scale growers who are members of the Kenya Tea Development Agency.

High Cost of Living

Inflation, a measure of the standard of living, reached a five-year high in June (7.9 percent), compared to 6.3 percent in June 2021, as agriculture inputs, transportation, and food costs skyrocketed.

This year’s strong profits are due to an increase in the average payout per kilo of green leaf, which reached Sh50.18 in comparison to Sh34.71 the previous year.

Variation in Payment

According to government data, farmers in Kiambu, Muranga, Nyeri, Kirinyaga, Embu, and Meru earned more per kilo than their counterparts in Kericho, Bomet, Kisii, Nyamira, Vihiga, Kakamega, and Nandi.

Farmers in Gitugi, Murang’a, Rukuriri (Kirinyaga/Embu), and Imenti, Meru, would be paid the most, at KES 62 per kg.

Farmers in Western and Nandi receive a lesser wage of KES 40 per kg on average.

Depreciation of Shilling

The weak shilling versus the US dollar increased farmers’ revenues by increasing the value of exports paid in foreign currency.

Since the first half of the year, the shilling has been losing value, with the Central Bank of Kenya putting it at 117.89 yesterday. It averaged 107.93 per dollar in the same month the previous year.

A kilo of KTDA teas cost an average of KES 325.54 from January to June this year, compared to KES257.13 the previous year.

Farmers’ accounts are likely to be credited this week.

Guaranteed Minimum Reserved Price

CS Agriculture Peter Munya linked the substantial revenue to the government’s minimum reserve price of ksh2.43, which helped alleviate dropping auction prices.

This is in addition to favorable exchange rates, improved tea factory management, cost reductions through production efficiency, and tea quality enhancement.

“This year’s payment is the largest awarded to tea farmers in tea-growing counties since 2016,” Munya remarked.

Final Thoughts

In contrast to prior years, when farmers received their last bonus in October, they will receive it this year in July.

Source: The Star