Farmers allied to the Kenya Tea Development Agency Holdings (KTDA) have seen their earnings rise 42.4 percent to Sh62.8 billion in the year ended June when the price of the commodity rose by double digits.
The company had paid the farmers Sh44.15 billion a year earlier. The latest payout is the highest the growers have received in the last five years.
The earnings boom is attributed to the increased tea selling prices in the year to an average per kilogramme of $2.76 from $2.18.
The 26.6 percent price jump was helped by the government’s introduction of a minimum tea price per kilogramme of $2.43 for KTDA tea starting July last year.
The reserve price was implemented after the price of the commodity fell below the cost of production, hurting farmers’ earnings.
The minimum price has served as a floor for tea prices, allowing producers of higher quality produce to obtain even better prices.
KTDA paid Sh62.36 billion in 2018 and Sh46.45 billion, Sh51.94 billion and Sh44.15 billion in 2019, 2020 and 2021 respectively.
The farmers produced 3,000 additional tonnes of tea from various regions in the country. The marginal increase was from 1.251 million tonnes in 2021 to 1.254 million tonnes in the subsequent year.
Farmers in Kericho/Bomet were the greatest beneficiaries earning Sh15.3 billion in the period under review.
Kiambu growers followed making Sh13.2 billion and those in Embu earned Sh8.9 billion.
The largest tea business in East Africa was challenged by President Uhuru Kenyatta to initiate an elaborate plan that will ensure value addition to 90 per cent of the tea grown in the country before it is exported.
The president in a statement noted that the average bonus payment per kilogramme of green leaf rose by 76 percent to Sh37.11 in the review period from Sh21.07 the year before.
He directed the cabinet secretary for agriculture Peter Munya to increase threefold the fertilizer subsidy from Sh1 billion to Sh3 billion.
The demand for tea on the world market has declined in recent weeks owing to the ongoing summer in major overseas countries, cutting down consumption of the beverage and forcing traders to go for cheaper commodities.
