Tea farmers will earn less this year due to the reduced commodity prices at the auction in the last six months.
According to Kenya Tea Development Agency (KTDA) national chairman Peter Kanyago, farmers should not have high expectations on this year’s pay as the prices in the market have been unfavourable over the last four months.
He said the prices started deteriorating in April.
At the same time, he noted that although revenue in the tea sector has increased, the pay-out rate to farmers per kilo of green leaf will be lower than it was last year.
“Generally, revenue in the tea sector has increased but I wish to tell the farmers that the prices have been declining,” he noted.
Last year, the 68 affiliated factories run by the agency were paid at least Sh78.3 billion, marking a seven per cent drop from the Sh84 billion farmers earned in 2016.
The average pay-out to farmers in 2016 was Sh50.26 per kilo of green leaf delivered to factories.
However, the agency did not publish the 2017 rates.
At the same time, Mr Kanyago lamented that the Kenya Revenue Authority (KRA) is overtaxing the agency with the effects being felt by the farmers.
He argued that KRA is being unfair by demanding tax on exported tea.
“I would like to appeal to the government to address the issue of taxation and ensure that tea for export is not taxed,” he said.
He also complained that KRA is also taxing farmers on interests accrued from banks, claiming they are separate from the income generated from tea sales.