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Disband tea agency, urge MPs

Wednesday September 17 2014

A farmer picking tea. KTDA has released a Sh1.5 billion in mini bonus to farmers in Mt Kenya region following a presidential directive three weeks ago. The farmers will be paid at a rate of Sh3 per kilo. PHOTO/JARED NYATAYA

A farmer picking tea. A new report suggests an increase in the labourers pay to boost economic growth. FILE PHOTO | NATION MEDIA GROUP NATION

Two members of the Agriculture committee of Parliament now want the Kenya Tea Development Agency disbanded, after it Wednesday announced the lowest bonus to be paid to farmers in six years.

Mr Alfred Keter (Nandi Hills) and Ms Millie Odhiambo (Mbita) said the agency was giving farmers a raw deal, and called on the tea factories to start marketing their own produce directly.

Mr Keter claimed that the marketing system used by the KTDA was skewed in such a way that tea from the western region was bought at a lower price than that from the Mt Kenya region.

On the bonus payout announced for tea farmers this year, growers who sell their produce to Ogembo Tea Factory will be paid Sh8.50 per kilogramme, the lowest, while the highest will be paid to farmers from Imenti Tea Factory.

“The above differences are alleged to be so because of the quality of tea per kilogramme in the two regions.

“However, it is hard to believe that you can have the entire Mt Kenya producing the best quality of tea such that the lowest in Mt Kenya cannot be compared with the highest quality in the western Kenya region,” Mr Keter said.

QUALITY OF GREEN TEA

But the agency, announcing the payout, said the factory rates were determined by the quality of green leaf collected and how well the individual companies were managed.

“Imenti was the highest paid because of a higher grade of tea and investment in its own hydro-power generation. The lowest was partly due to a bloated staff,” KTDA chairman Peter Kanyago said.
The average pay to farmers will be Sh17.61, down from Sh31.7 a year ago, a decline of 24 per cent.

The agency said the drop in earnings paid to farmers across the country was as a result of low international tea prices triggered by a market glut.

An oversupply of close to 197 million kilogrammes globally has dampened demand and eroded the commodity’s value significantly.

This means there is no respite in sight for already suffering farmers after they missed their half year pay.

“We are now selling only up to 80 per cent of the tea offered at the market because of reduced demand,” KTDA chief executive officer Lerionka Tiampati said.

END OF OCTOBER
The payments will be released at the end of October.

KTDA is the largest player in Kenya’s tea sector, accounting for 60 per cent of the market with plantation firms Unilever holding, (8.6), Eastern Produce (7.8), Finlays Tea (5.6) and Williamson Tea 4.8 per cent among others.   

The agency said it would reduce the 2.5 per cent management fees it charges farmers annually.

Last year, fees to management stood at Sh1.663 billion. The officials, however, could neither disclose by what margin it would reduce nor give a timeline.