Kenya Tea Development Agency (KTDA) Holdings Limited on Friday welcomed President Uhuru Kenyatta’s order to Treasury to allocate Sh1 billion for fertilizer subsidy for farmers.
In his Mashujaa Day speech on Wednesday, Uhuru said the subsidy for tea farmers was part of his government’s 13-point new stimulus program targeting key productive and service sectors of the economy.
KTDA Chairman David Ichoho said the move was a key step towards lowering the cost of tea farming’s primary input, saying this will enhance the socio-economic welfare of farmers.
“KTDA welcomes the presidential directive for the allocation of a KShs 1 billion fertilizer subsidy for tea farmers. This directive will ensure that all smallholder tea farmers under the KTDA umbrella have access to the much-needed fertilizer at much lower costs. This will leave them with more money in their pockets while enabling them to enhance tea production,” Ichoho said.
This comes after KTDA concluded the importation and distribution of 65,000 tonnes of fertilizer, and procured an extra 21,000 tonnes locally to bridge the shortfall across Kenya.
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The order comes amid reforms in the tea sub-sector including the improved tea prices at the Mombasa auction due to the reserve price regime seeking to enhance earnings for farmers.
Tea prices for KTDA-managed factories hit an average of USD3.07 in the auction held on October 12, as the market continues to respond positively to the reserve price as production dips.
Tea prices have recovered from the average USD 1.90 it attracted in the week before the introduction of the reserve price three months ago.
Production during the same period (July-September) also dipped 9 per cent with factories producing 54.4 million kilos of tea in the three months compared to 60.1 million kilos for a similar period last year.
KTDA introduced a reserve price of USD2.43 per kilo of made tea on July 10, informed by a deteriorating market that had seen selling prices nearly slip below the cost of production.
Ichoho said, “We are encouraged by the improved prices at the auction, which means farmers are likely to earn significantly better returns this financial year.”
His remarks come a day after President Uhuru Kenyatta said that tea farmers should expect bumper returns next year as a result of the ongoing interventions in the tea sub-sector.
“This sector has been the predatory grounds for cartels for decades, but it has now been liberated and its performance has started to improve. On account of the reform measures implemented by my Administration, the price of Kenyan tea has increased by 42% in the last one year alone. It is expected that our tea farmers will receive a healthy bonus at the end of June 2022, signalling a return to the good old days of “Chai Bora; Pesa Bora,” Uhuru said.
KTDA reiterated its commitment to continue working closely with the Government and other partners to ensure current gains are safeguarded to benefit its more than 600,000 smallholder tea farmers.
