The government will help KTDA to establish an orthodox tea line at the Iria-ini tea factory in Othaya, Nyeri.
Agriculture CS Peter Munya said this will help the factory diversify in orthodox tea manufacturing. Orthodox tea refers to loose leaf tea produced using traditional methods.
The CS said the government has pledged to help farmers set up one orthodox tea line in every zone and Iria-ini has been selected to benefit from the line in Zone Four as the factory has not established one.
The move is meant to help farmers boost orthodox tea production, which fetches more money in the market than the CTC (cut, tear, curl) tea.
“KTDA intends to instal orthodox tea processing lines in 10 factories across the tea-growing regions. Towards this end, KTDA has requested a loan or grant from the government through my ministry to finance the orthodox tea diversification initiative,” he said.
Increasing the production and sale of orthodox tea will boost the financial performance of the factories and subsequent earnings by the growers, Munya said on Friday.
He visited factories in Nyeri, including Iria-ini, Gitugi and Ragati, to update farmers on the progress of the implementation of reforms in the sector.
He said the newly appointed board is keen on conducting forensic and systems audits at KTDA Holding, its subsidiary companies and all tea factories to establish malpractices, pilferage, fraud and embezzlement of funds by the previous board.
The government appointed an inspection team that has already done its work at the KTDA offices and presented its report.
Munya said the report was sent to the Directorate of Criminal Investigations, Kenya Revenue Authority, the Ethics and Anti-Corruption Commission and the new KTDA board.
The report recommended a forensic audit to help in taking action on those found to have participated in corruption and other malpractices.
“We are working in collaboration with the Kenya Tea Board and KTDA to look for independent auditors who have never worked with the KTDA before so they can conduct the audit," he said.
He said he expected the audit to reveal more rot at the KTDA and help seal all corruption loopholes that existed and where there was an excess and unnecessary cost to ensure farmers get more money.
The reforms also saw a minimum reserve price for tea set at the auction to cushion smallholder farmers against declining earnings, a move that led to a 40 per cent increase in tea price at the auction, he said.
“This translates into a revenue increase to the tea smallholder grower by Sh172 million within a period of one month,” he said.
The CS said since setting up the reserve price, tea prices have increased, with an absorption rate of 90 per cent, thus solving the problem of prices going forward.
He urged farmers to be patient and promised that they will get a boom during next year’s bonus.
This year, farmers were expecting better pay after changing board members but got the lowest bonus rate ever.
Munya also said farmers will not have to wait until October but will be paid at the end of the financial year or even earlier than that.
He also announced that the government has given a Sh1 billion subsidy so that farmers can buy fertilisers at a price of Sh2,500 down from Sh3,200.
He said fertiliser and tea will be transported through the standard gauge railway from November to reduce transportation and storage costs.
“We have agreed with the Kenya Railway that they will give concessional transport charges to lower the cost of transport,” he said.
Munya said tea will leave the factories when there is a ready market to ensure farmers are not charged the storage charges.
