Tea farmers to earn more as KTDA set to instal 13 processors

Chairperson David Ichoho said the agency plans to instal 13 plants that will be fully operational by the end of the year.

He said KTDA has held talks with the President who pledged to support the plan with Sh800 million that will go towards procurement of eight processing plants.

One plant, Ichoho said, costs about Sh100 million and that more funds will be sourced to have five more plants instalLed.

He confirmed orthodox teas that include oolong, green, white or black tea, have a high demand. He said the agency has sourced for a market requiring more than two million kilograms annually against a local production of about 500,000kg. 

Most factories managed by KTDA rely on production of tea commonly known as Cutting, Tearing and Curling (CTC) that generates lesser returns as compared to orthodox tea.

"Our plan is to increase our production of orthodox tea because the demand is high and some factories have already procured the machines using their own resources,” Ichoho said.

He noted that more than 95 per cent of the locally produced tea is exported while only five per cent is consumed locally, which he said exposes the produce to global market fluctuations.

He cited the political instabilities experienced in countries such as Pakistan and Iran that are some of the biggest consumers of Kenyan tea.

Other factors that affect the sale of tea include fluctuations of the dollar as the produce is sold in the currency.

Ichoho revealed that KTDA is also working on expanding the tea market and that it will use the African Continent Free Trade Area to tap into the African market that has a population of over 1.4 billion people.

“If we are able to open tariff and non-tariff barriers and approach individual countries diplomatically, we will be able to expand our market,” he said.

In 2021, the country ranked third among the largest tea producers globally after China and Sri lanka.

He however noted that the cash crop has been affected by the drought experienced in the country in the last few years, and that production declined by 10 per cent by end of last year.

“In the last six months, we produced 542,000 kilograms of tea compared to the 605,000 we produced between January and June 2022,” he said.

He said the sector, however, has a bright future and that farmers made Sh19 billion more last year from the crop after being paid about Sh63 billion.

He further confirmed that 75 per cent of all tea earnings were paid to the farmer and expressed confidence that the figure will go up with time.

“Some farmers in some parts of the country would previously receive as little as Sh2 per kilogram in annual bonuses, but we paid between Sh38 and Sh62 per kilogram last year.”

The chairperson noted that since the agency reduced the interest rate for loans issued to farmers through GreenLand Fedha — a subsidiary company owned by KTDA— more farmers have been applying for credit facilities.

In December 2021, KTDA slashed the interest rate from 21 per cent to eight per cent in a move meant to increase access to affordable credit for smallholder tea farmers.

Consequently, GreenLand Fedha managed to issue loans amounting to Sh7 billion in the last six months, meaning Sh1.2 billion were issued every month.

Ichoho said this while meeting tea farmers from Murang’a county who were celebrating the gains made out of the reforms implemented in the sector at Mbugiti area in Gatanga.

He reiterated that KTDA is committed to ensure farmers are empowered and dignified through good governance of the agency.

-Edited by SKanyara