Tea farmers to earn KES 35.5bn

KTDA Chief Executive Officer Lerionka Tiampati said farmers will earn on average, KES 31.61 per kilo of green leaf delivered.

The Kenya Tea Development Agency (KTDA), has announced a KES 35.5bn in farmers’ earnings for the 2013-2014 financial year, an average of KES 31.61 per kilo of green leaf delivered.

This represents a 30.8pc drop from KES 51.3bn paid out in the 2012 – 2013 financial year.

A part of the KES 35.5bn total earnings has already been paid to farmers as initial payment which is done on a monthly basis over the financial year at a rate of KES 14 per kg of green leaf delivered. The balance which is released as Second Payment, commonly referred to as the bonus, will be paid out in October 2014.

The KTDA’s Chief Executive Officer (CEO) Mr. Lerionka Tiampati said the drop in earnings was as a result of oversupply of tea in the market, leading to fluctuating global tea prices.

“The favorable weather conditions experienced in 2013 through to 2014 led to an oversupply of tea triggering a significant reduction in prices,” said Mr. Tiampati.

Tea growing areas experienced favorable weather conditions leading to a bumper crop in the year ending June 2014 with over 1.1 billion kilograms of green leaf produced during this period translating to 256 million kilograms of made tea.

A bumper harvest depressed the market, leading to low earnings
A bumper harvest depressed the market, leading to low earnings

Although farmers’ earnings were lower than the previous year, Mr. Tiampati said tea volumes sold were good and majority of farmers would still meet their costs of production and make some profit.

However, Mr. Tiampati said the agency had taken steps to communicate with farmers affiliated to it regarding the impact of low prices on their earnings. He said farmers fully understood that their earnings would be lower this year due to factors beyond the control of the industry.

The low prices has seen a majority of listed tea companies register significantly reduced profits as they struggle with oversupply against limited demand.

“We are doing our best to manage the costs of production even as we closely monitor the market trends,” he said.
Truck off-loading tea leaf