Tea farmers finally get mini bonus

The Kenya Tea Development Agency (KTDA) has released Sh1.5 billion in mini bonus to farmers in Mt Kenya region following a presidential directive three weeks ago.

Making the announcement at a press conference in Nyeri, KTDA chairman Peter Kanyago said the pay-out will be hit Sh2 billion once the agency receives the approval to pay farmers from the boards of nine factories in Kericho and Bomet.

“We have received the approval to pay a mini bonus at a rate of three shillings per kilo from boards of tea factories in Meru, Embu, Nyeri and Murang’a,” he said.

Also to be paid are farmers affiliated to Kapsara factory in region seven, Mr Kanyago said adding that the money was credited to farmers’ bank accounts on Thursday.

The tea management agency had in March announced that it would not pay the mini bonus due to cash flow problems facing the industry following plummeting prices of tea since July 2013.

As pressure from growers across the country for the firm to pay the mid-year bonus grew, industry stakeholders met at State House where the President announced that farmers would be paid the money to enable them meet their obligations.

Mr Kanyago said payment of the mini bonus in June had allowed the factories’ cash flow to improve. KTDA had to borrow to pay the mini-bonus for those factories whose cash flow had not improved.

The official said the government had also agreed to remove Value Added Tax on tea that is consumed locally and other taxes in order to widen the local tea market.

As a long term measure to cushion the industry from such crisis, Mr Kanyago said stakeholders and the government would establish a stabilisation fund to be paying farmers a minimum price at any given time.

He said the government was keen on constructing a value addition centre in Mombasa under a public-private-partnership.