Directors from the 71 tea factories managed by the Kenya Tea Development Agency (KTDA) are this month set to commence meetings to review and approve the factories’ annual accounts for the financial year 2022/23 ahead of the declaration of the second and final payment to farmers next month.
“The directors will be meeting to discuss the performance of their respective factories for the year that ended in June. It is only after that they will announce the second payment rates for their specific factories,” said KTDA Management Services managing director Julius Onguso.
“We have had the twin challenges of a severe drought and a very challenging global tea market due to a lack of access to the US dollar by key tea-buying markets, but we are continuously working to make sure farmers get the best value for their hard work.”
In January, the KTDA disbursed Sh5.5 billion in a dispatch that included Sh2.8 billion as payment for December green leaf deliveries as well as Sh2.7 billion mini-bonuses for factories whose directors had passed resolutions to pay.
The payment saw farmers earn between Sh5 and Sh10 as mini-bonus per kilo of green leaf delivered to their factories for the six months ending December last year.
The KTDA operates a two-step payment model in which farmers are paid monthly, an additional interim payment (mini-bonus) and a final payment (bonus) based on the performance of each factory.
The meetings to set bonus payments come at a time when preliminary data points to a marginal drop in green leaf production as well as in sales prices at the tea auction in Mombasa.
Tea volumes delivered to the KTDA-managed factories in the year ending June 2023 dropped 8.5 percent to 1.1 billion kilos down from 1.3 billion kilos delivered the previous year, as farmers grappled with a prolonged drought that hit farm output.
Prices at the auction also recorded a slight dip of three percent with the average price per kilo in all factories standing at $2.7 (Sh394) in the 2022/23 financial year compared to $2.8 (Sh409) a year earlier.
“The directors will be meeting to discuss the performance of their respective factories for the year that ended in June. It is only after that they will announce the second payment rates for their specific factories,” said Mr Onguso.
“We have had the twin challenges of a severe drought and a very challenging global tea market due to lack of access to the US Dollar by key tea buying markets, but we are continuously working to make sure farmers get the best value for their hard work.”
