KTDA Directors To Commence 2nd Payment Meetings

ByElijah Ludenyi

Sep 8, 2023
KTDA Directors To Commence 2nd Payment Meetings

Last updated on March 2nd, 2024 at 05:51 pm

  • Factory directors of 71 KTDA-managed factories convene to review and approve annual accounts for 2022–23.
  • Second and final bonus payment to farmers in October depends on these meetings, considering a drop in green leaf production and tea prices.
  • KTDA addresses challenges, including drought and market fluctuations, through cost-cutting, alternative energy sources, and diversification.

Factory directors of the 71 KTDA-managed factories are scheduled to hold meetings this month to evaluate and endorse the annual financial reports for the 2022–23 fiscal year.

These meetings carry significant weight as they precede the declaration of the second and final bonus payment to farmers in October, with the outcome determining the payment structure set to run from September 11 to 22.

A formal announcement of the second payment rates will follow.

In a recent press release by the Kenya Tea Development Authority (KTDA), it was disclosed that these meetings come at a time when preliminary data indicates a slight decrease in both green leaf production and tea auction prices in Mombasa.

KTDA Management Services’ Managing Director, Mr. Julius Onguso, reported that the green leaf delivered to KTDA-managed factories during the year ending June 2023 witnessed an 8.5 percent decline to 1.146 billion kilos.

This dip is in stark contrast to the 1.253 billion kilos delivered by farmers the previous year.

Additionally, tea prices at the auction recorded a modest decrease of 3 percent, with the average price for all KTDA-managed factories standing at Sh 393.1 (USD 2.69) for the year 2022-23 compared to Sh 404.2 (USD 2.76) in the previous year.

Mr. Onguso clarified, “The directors will convene to assess the performance of their respective factories for the fiscal year ending in June. It is only after this assessment that they will announce the second payment rates for their specific factories.”

He also acknowledged the challenges faced by the agency in the market, with key tea-buying nations like Pakistan and Egypt grappling with a severe US dollar shortage, which had a significant impact on sales.

Notably, Kenya experienced a severe drought within the financial year spanning June 2022 to July 2023, resulting in reduced green leaf output on farms.

In response to these challenges, the agency has implemented various measures, including aggressive cost-cutting, exploring alternative energy sources, and diversifying into different tea types, all aimed at safeguarding farmers from adverse climatic and market fluctuations.

Initiatives such as investing in small hydropower stations for more affordable power supply and installing solar power farms within the factories have been put in place.

Furthermore, eleven factories have established orthodox tea processing lines to reduce reliance on Black CTC teas, while more than five others are in the process of establishing orthodox processing facilities.

To support farmers in diversifying their income sources and enhancing financial management, the KTDA Foundation is actively involved in training programs.

These initiatives encourage farmers to explore alternative income streams such as livestock rearing and establishing various businesses such as agro-vets, posho mills, soap making, and beekeeping, among others.

In January of this year, the Kenya Tea Development Agency (KTDA) disbursed a Sh.5.5 billion bonus payment for the half-year ending December 2022 to smallholder farmers affiliated with its factories.

These measures and strategies reflect KTDA’s commitment to navigating challenges and ensuring that farmers receive the best possible returns for their hard work.