A farmer plucking tea. Tea farmers have started receiving a Sh37.1 billion final bonus from the Kenya Tea Development Agency (KTDA) for the financial year to June this year.
The low bonus paid out to farmers by the Kenya Tea Development Agency (KTDA) has invited the wrath of the growers in some tea growing belts in the country in what has led to the death of one person and many injuries.
In an unprecedented move, irate farmers have invaded the select KTDA-managed factories, and attempted to burn them down as they engaged the police in running battles while demanding an explanation for the low payments.
More than 680,000 small-scale tea growers supply their green leaf to KTDA-managed factories spread across 21 counties in the country.
The sector has been rocked by a myriad of challenges, top of which is the glut at the Mombasa Tea Auction where 100 million kilogrammes of tea remained unsold for two years due to issues relating to quality and the reserve price set by the government under the Tea Act, 2020.
Ms Lilah Siele, a farmer in Bomet County, said the unease in the sector resulted from the frustrations farmers had been subjected to due to low income and high cost of living in the country.
“Between 1980s and the late 1990s, the farmers used to earn a lot of money from tea, especially in the annual bonus. The current earnings can hardly enable a farmer to pay his bills accumulated over time,” Ms Siele said.
Back then, tea farmers were turned into overnight and temporary millionaires as they moved around with wads of new currency notes and engaged in drinking binges and buying sprees in supermarkets and boutiques while others acquired property.
Tea growing belts were awash with stories of men abandoning their families to pitch tents in urban centres where they imbibed for days on end and, and lost almost all the money to their newly acquired lovebirds.
But that is no longer the case as the purchasing power has been eroded, the farmers no longer attract glances in social places as used to happen a decade ago.
To fend their anger and frustrations over low bonus payment, the farmers from various regions have taken to the streets in what has turned chaotic and deadly.
One youthful farmer – Robert Chepkwony – lost his life after being shot by the police at Mogogosiek factory in Bomet County while two others who sustained injuries are undergoing treatment in hospital as they protested payment of Sh20 as bonus as compared with Sh30 paid last year.
Farmers supplying their green leaf to Thumaita Tea Factory in Kirinyaga county have demonstrated against Sh46 paid by KTDA against what they claimed was Sh60 promised earlier by the factory management.
Similar protests rocked the Miciimikuru Factory in Meru County that paid Sh35 as opposed to 47 paid last year with farmers destroying 635 acres of tea bushes owned by the factory.
Last year, farmers in tea growing belts earned Sh44.15 billion in bonus according to statistics from KTDA.
A total of Sh67.7 billion was paid, with Sh23.55 billion allocated for monthly green leaf as compared to Sh62.88 billion paid in 2022.
It reflected a 7.6 percent increase in total payments to the farmers in 2023 and a 17.6 percent rise in earnings per kilogramme, but reflected a 9 percent dive in green leaf production.
In 2023, the tea sector fetched Sh140 billion to the economy as compared to Sh138 billion in 2022 and Sh136 billion in 2021.
How bonus is calculated
Bonus, also known as second payment, is arrived at by calculating the average annual sale of the produce per kilogramme per year, and deduction of operations and other overhead costs, including in the monthly payments already received by the farmers.
The difference is then paid out as a bonus to the growers usually in the month of October of every year after the factory management declares the figures in September.
Factory directors have been meeting to tabulate and confirm the amount to be paid by individual units, before the same is formally declared and published by the KTDA board members.
The board will then be expected, through the individual factories, to release the money due to farmers as this year’s bonus, which is paid as is the tradition, with the October monthly earnings to the growers.
A sample of a few of the factories whose bonus has been made public so far shows Ngere factory as being the highest at Sh62.
Kapset, Nyamache, Mogogosiek, Boito, Kobel,Kapset, Rorok, Tirgaga, Motigo, Olenguruoene and Kapkoros factories in the West of Rift are paying an average of Sh 20 per kilogram which has been ranked as the lowest in the country.
On the other hand, Ngere has declared Sh62 as bonus, Imenti and Nduti, is paying Sh60, Gathuthi Sh57,Githongo Sh56, Kinoro and Kionyo Sh 55, Kambaa and Momul Sh50 are sampled cases which are paying higher bonus rates per kilogramme.
Ms Irene Masit, a farmer in Nakuru County, said Kenya should embark on aggressive marketing of the produce both for local consumption and foreign markets.
“Farmers cannot understand why in one zone, and even in two factories that are close by, the bonus rate applied is different from the other even when the issues of high quality production in the farm have been adopted” Ms Masit stated.
She said the disparity in the payment of bonus has fuelled the unrest among farmers who feel cheated by the KTDA managers and board members.
“The low bonus payment to farmers is attributed to a number of issues in the industry, including but not limited to the reserve price set by the government under the Tea Act, 2020 which has barred factories from servicing direct orders from the foreign market without going through the Mombasa Auction” Mr Cheruiyot Baliach, a KTDA zonal director said.
Agriculture Principal Secretary, Dr Paul Ronoh, said the government was addressing the challenges facing the tea sector in the country with a view to strengthening and expanding existing markets globally.
“In the next few months, most of the issues that the farmers have raised, including low bonuses and poor prices per kilogramme of green leaf, will be addressed by government and relevant stakeholders,” Dr Ronoh said during a meeting with protesting farmers at Motigo Tea Factory on Thursday.
Dr Ronoh called on farmers to be patient and avoid destruction of properties as a means of pressing for their issues to be heard by the authorities.
Mr Enos Njeru, the KTDA chairman said farmers should stick to high standards of plucking green leaf so as to fetch premium prices in the foreign market.
“We have insisted that the farmers should adhere to the plucking of two leaves and a bud for production of quality tea that would fetch higher prices for the growers,” Mr Njeru said.
Poor sales
Mr Njeru also defended factories over low bonuses declared this year that have led to chaos in some regions.
He stated poor tea sales reported in the industry in the last two years have been occasioned by the scrapping of direct sales and setting up of reserve prices under the Tea Act, 2020.
The two demands were suspended by the government a few weeks ago in what is expected to spur sales and raise farmers’ income.
“I wish to reassure stakeholders that the figures released by the factory companies are prepared in compliance with the International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as governed by the Institute of Certified Public Accountants of Kenya (ICPAK)” Mr Njeru said.
Mr Njeru said in a statement on Friday that, “KTDA Management Services is an ISO-certified company and is bound to comply with these standards for the proper running of factory companies”
“The rate for the second payment is based on tea prices, tea volumes as well as the production and operation costs of each factory. These factors vary during the financial year and contribute to the second payment (bonus)” Mr Njeru stated.
Mr Njeru said there was a rise in tea production by 50 million kilogrammes this year in the country, as compared to last year.
Mr Erick Chepkwony, the KTDA board vice chairman said the agency was seized of the issues that have been raised by the farmers and which would in due course.
“The chaos that has rocked some factories in the past one week are unfortunate and it is important for farmers to safeguard their property and not expose it to risks of being torched or looted,” Mr Chepkwony said.
Mr Willy Mutai, the Tea Board of Kenya chief executive officer said there was a need for farmers to maintain high agronomic practices so as to produce high quality leaf.
“Farmers should know that the bottom line in posting high returns in their investment is to produce high quality green leaves that will be attractive to exporters and local consumers. It is the surest way to ensure their enterprise is commercially viable” Mr Mutai said.
President William Ruto has said his administration will assist farmers secure markets for their produce and make more money from their investments besides earning the country the much-needed foreign exchange.
