Kenya Tea Development Agency Management Services (KTDA- MS), recently announced a 21% improvement in second payments (popularly referred to as ‘bonus’) to smallholder tea farmers for the year ending July 2015. The improved payments, which have already been released to farmers, are as a result of more volumes of tea sold, a strengthening dollar against the shilling and improved tea prices at the global markets.
This comes as a relief to the sector that last year faced declines in earnings as a result of overproduction, which caused a glut in the global market and forced down tea prices.
Tea bonus rates paid to each of the tea factories were itemised in the daily press. Each factory had a specific rate (bonus) which it pays to its farmers based on the factory directors’ approval. To understand how these rates are arrived at, it is important to understand the relationship between the Agency and its managed factories.[Read More]