- The Sh3 billion payment reflects 137.3 million kilos of green leaf delivered to KTDA-managed factories in December 2021
- The previous payment cycle denied farmers financial empowerment to meet their end-of-month financial obligations
The Kenya Tea Development Agency (KTDA) has disbursed Sh3 billion as payment to its smallholder tea farmers for the December 2021 green leaf deliveries to their respective factories.
According to the agency, farmers have already started receiving the payments – based on respective banks’ processes and timelines.
The payment follows KTDA’s decision last month to change the payment cycle for its farmers to the first week of the following month, from the third week, translating to faster access of payment by the farmers.
The Sh3 billion payment reflects 137.3 million kilos of green leaf delivered to KTDA-managed factories in December 2021; up from the Sh2.58 billion that was paid last month for November 2021 deliveries.
In a statement, KTDA CEO Wilson Muthaura confirmed that payments were made in line with the payment schedule change introduced last month.
''Farmers can expect to be receiving their monthly pay promptly within the first week of the following month, in line with the reforms that we have put in place,'' Muthaura said.
The previous payment cycle denied farmers financial empowerment to meet their end-of-month financial obligations such as salaries, rent, payment for supplies, among others.
''Consequently, the delay in payments saw cash-strapped farmers sometimes resorting to leaf hawking to unlock earlier access to money,'' he added.
The change in payment cycle is part of reforms being instituted by the new KTDA Holdings Board which also includes the introduction of the reserve price for teas from KTDA-managed factories of $2.43 per kilo of made tea in July last year.
Since then, the prices of KTDA teas at the auction have rallied from $1.9 - before the introduction of the reserve price – to an average of $2.92 at the last auction.
Other changes introduced by the board include: an increase in monthly payments to Sh20 per kilo for growers in regions five, six and seven, and Sh21 for regions one to four.
Other changes include the successful lobbying for a Sh1 billion fertilizer subsidy from the State; and a reduction of interest rates charged by Greenland Fedha (KTDA’s microfinance institution) to eight per cent per annum to boost affordable credit access and reduce the burden of the loans for tea farmers.