Poor prices of orthodox tea are to blame for the cuts in this year's second payout to farmers, the management of Miciimikuru tea factory in Meru County has said.
On Friday, farmers affiliated to the factory rejected a Sh35 bonus payment announced by the management, down from Sh47 last year, and held protest marches at the facility.
During the protests, part of the factory's 635-acre tea estate was badly damaged when it was set on fire by unknown people.
The farmers are angry that their factory is the lowest paying compared to neighbouring factories, which have declared bonuses of more than Sh50 per kilo.
In Meru and Tharaka Nithi, the Imenti factory declared Sh60.30, Githongo Sh56, Kinoro Sh55, Kionyo Sh55, Kiegoi Sh51 and Weru Sh50.50.
While the government has encouraged factories to diversify into orthodox tea, Miciimikuru, one of the pioneers, has not sold its processed tea for a year after the only local buyer encountered challenges.
Orthodox tea refers to tea that is produced or processed using a traditional method that includes plucking, withering, rolling, oxidising and drying.
According to the factory's board chairman, Stephen Kathiri, the income from their orthodox teas enabled them to pay a bonus of Sh47 last year.
“Since last year, we have not sold orthodox tea and are stuck with 786,000 kilos worth Sh353 million at the warehouse. This has negatively affected our cash flows leading to lower pay,” said Mr Kathiri, adding that the factory was selling most of its orthodox tea to Cup of Joe Ltd.
“By the time we stopped processing orthodox tea, we were producing 1.5 million kilos per year. Orthodox tea was fetching up to $5 per kilo hence making good money for the factory.”
In addition, Mr Kathiri said the farmers' income was also affected by the ongoing repayment of a Sh183 million loan taken by a previous board.
"The loan was taken in dollars and when the dollar appreciated against the shilling, we had to pay very high interest. However, the loan will be completed in February next year," he said.
The Miciimikuru factory chairman said they were investing in new machines to improve the quality of CTC tea as some of their equipment was outdated.
“So far, we have automated sorting and withering processes by acquiring new machines. We also want to diversify our income sources within the factory estate to cut on operations costs. I urge farmers to be patient as we address the issues,” Mr Kathiri said.
The farmers, however, accused the board of withholding information about the loan and the state of the factory's machinery.
Mr Mwenda Mungania, a farmer, said they would not accept a bonus lower than last year's, yet they had supplied quality teas.
"We are demanding a special AGM in 14 days to get answers on why our factory is paying the least bonus in the region. If the board cannot give us answers, we will remove them from office," Mr Mungania said.
Ms Agnes Nkatha, a farmer, said the directors had promised good bonus pay but delivered the poorest in the region.
"We secured loans hoping to pay with the expected bonus payment. How will we clear our loans with the Sh35 they are offering?" she asked.
Miciimikuru factory was acquired in 1994 by smallholder farmers from Eastern Produce Company, having been established in the 1960s.
The factory processes up to 23 million kilos of CTC tea and also relies on neighbouring Igembe factory to handle excess produce.
