Tea farmers earn record bonuses but must contend with high living cost

Tea farmers in Kenya are set for a higher final payment on bonuses this year which comes as a relief in the wake of rising cost of living.

Most of them are small scale farmers affiliated to the Kenya Tea Development Agency.

Inflation, a measure of the cost of living, rose to a five-year high in June (7.9%), compared to 6.3 per cent in June 2021 with the prices of farm inputs, transport  and food skyrocketing.

The tight school calendar has also kept parents on their toes with school fees being a major spending. 

Kenya Tea Development Agency (KTDA) this week moves to pay a final bonus of Sh37.11 billion.

This is in addition to the monthly payments totaling Sh25.78 billion, taking the total payout for the financial year 2021/22 to Sh62.89 billion, the highest ever paid to farmers in a year.

It is an increase of Sh18.7 billion or 42.4 per cent from Sh44.15 billion paid last year.

Payment was Sh51.94 billion in 2020, Sh46.45 billion in 2019 and Sh62.36 in  2018.

This year’s high earnings comes with increased average payment per kilo of green leaf which averaged Sh50.18 compared to Sh34.71 last year.

Farmers in Kiambu, Muranga, Nyeri, Kirinyaga, Embu and Meru earned more per kilo compared to their peers in Kericho, Bomet, Kisii, Nyamira, Vigiga, Kakamega and Nandi, official data shows.

The highest paid are those from Gitugi in Murang’a, Rukuriri (Kirinyaga/Embu) and Imenti in Meru where farmers will get Sh62 per kilo.

In Western and Nandi, farmers are getting a lower pay of an average Sh40 per kilo.

The weak shilling against the US dollar partly played in pushing up the farmers earnings as exporters usually paid in foreign currency benefited.

The shilling has been loosing since the first half of the year with Central Bank of Kenya quoting it at a mean of 117.89 yesterday. During the same month last year, it averaged 107.93 per dollar.