Commodities

KTDA factories to report earnings

tea

KTDA will this year let each factory announce its earnings, a departure from the previous tradition where the agency announced a cumulative figure for all the entities. FILE PHOTO | NMG

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Summary

  • The decision comes at a time when the Ministry of Agriculture has enacted new regulations that give more independence to the factories that are owned by KTDA Holding.
  • A number of factories have already started declaring their second payment to farmers with the process expected to have been completed last week allowing farmers to get their earnings from October 22.

Kenya Tea Development Agency (KTDA) will this year let each factory announce its earnings, a departure from the previous tradition where the agency announced a cumulative figure for all the entities.

The move, the Business Daily has learned, is aimed at making the 69 factories more independent of their parent company by having them announce their own payouts to the growers.

The decision comes at a time when the Ministry of Agriculture has enacted new regulations that give more independence to the factories that are owned by KTDA Holding.

“We shall let each factory announce their numbers this year as we are not going to do a centralised announcement as it has been the case before,” said a senior manager from KTDA who sought anonymity.

A number of factories have already started declaring their second payment to farmers with the process expected to have been completed last week allowing farmers to get their earnings from October 22.

The second payment is normally paid at the end of the financial year in June, with the earnings based on the performance of the factories.

The first payment is made every month where farmers are paid close to Sh18 per kilo on the quantities that have been delivering to the factory.

The ministry has started reforms that will see a number of changes in KTDA managed factories, although this has faced resistance especially from the agency.

For instance, the KTDA owned factories, which are managed by farmers, will from November 1 get relief as the agency will now be required to meet the salaries of people seconded to the factories as opposed to the current position where each factory meets the cost.

Tea brokers, buyers and the auction organiser will ensure that the proceeds from the sale of tea are remitted to the tea factory accounts within 14 days from the date of the sale, less the agreed commissions.

The remuneration paid to a tea broker by factory limited company for services rendered will also not exceed 0.2 percent of the gross sales by the dealer as the government moves to save cost that the factories incur as it seeks to increase growers returns.