Kenya’s smallholder tea farmers are set for a record payout of KES 44.15 billion for their supplies in the fiscal year ending June 30, 2023, giving the agriculture sector a positive jolt.
The Kenya Tea Development Agency (KTDA), which represents about 600,000 farmers at 54 factories, plans to distribute the bonus over the next two weeks. It comes as the farmers also receive payments for tea supplied this month.
The payout will boost total earnings for farmers in the year by 7.6% to a new high of KES 67.7 billion, compared with 62.89 billion shillings at the same period last year. Improved tea prices on international markets, where the average selling price climbed 9.6% to 341 shillings per kilogram, drove the earnings growth.
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Farmers will receive an average KES 59.02 for every kilogram of green leaf sold, a 17.6% jump from KES 50.18 last year.
Despite challenges like drought, farmers in Kericho and Bomet counties stand to get the largest share of KES 16.1 billion because they supplied 305.4 million kilograms of tea in the cycle. Factories in Kapkoros, Tirgaga, Olenguruone and Motigo will pay out approximately kes 4.9 billion, the highest subregional figure.
Production declines hit regions unevenly. Output slid 15.2% in Kiambu county and 14.3% in Kericho and Bomet, while falling 8.5% in Kisii and Nyamira counties.
Experts cite increased sales volume, cost management and favorable foreign exchange rates for the record payout. Sales of orthodox tea leapt to 10 million kilograms from 3 million kilograms.
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But the earnings jump happened despite a 9% drop in green leaf production to 1.145 billion kilograms, the lowest since 2019.
Adverse weather like drought cut tea production to 535,000 metric tons from 537,800 metric tons in 2021.
The record payments show the resilience of smallholder farmers facing challenges like climate change. Reforms like guaranteed minimum prices at auction have helped, as has the exchange rate.
More government and stakeholder collaboration is needed to ensure sustainable growth in this critical economic sector. The payout offers hope for Kenya’s agriculture.
