KTDA farmers dividend drops to Sh649 million

Smallholder tea farmers affiliated to Kenya Tea Development Agency (KTDA) will this month receive Sh649 million as dividends from their respective factories.

The dividends are proceeds from different subsidiaries that are managed by KTDA Holdings Ltd for the financial year ending June 30, 2019.

KTDA made a profit of Sh2.8 billion last year, which was a 12 percent increase from Sh2.5 billion that it recorded in the previous year.

In 2018, the company paid Sh691 million dividends to farmers with the review period payout going down by 1.16 per cent, which is mainly attributed to a decline in tea earnings.

“The tea factories, through resolutions of their directors, have resolved to pass the dividends received from KTDA holdings directly to the farmers who are the shareholders of the tea factories that own KTDA (H) Ltd,” said the company in a statement.

“In observance of corporate governance rules, the pay slips farmers will receive from their respective factory companies will now show the actual dividend payments accrued from the subsidiaries, separate from normal monthly payments for the delivery of tea,” added the statement.

The payment comes hot in the heels of accusation by the Ministry of Agriculture, which has blamed the agency for lack of transparency in the payment of revenues to farmers, leaving producers in the dark on the actual dividends they earn.

The payment of dividends comes at a time when some of the companies have frozen the payment owing to difficult financial times occasioned by Covid-19, as they seek to preserve cash for future use.

The agency’s major subsidiary is KTDA Management Services that manages the tea factory companies. This is the entity that makes the bulk of the money for the company.

However, it is staring at a gloomy future after the government, through the new tea regulations, cut the service fee that it levies the factories from 2.5 to 1.5 percent.