Reduced Earnings for KTDA

KENYA

Ongoing dry weather and relatively low world prices mean that Kenya’s tea earnings will probably be down for the financial year for 2016/2017. Peter Kanyago, KTDA chairman, explained; “While there are still a few months remaining in the year, there is a slim likelihood that we shall beat last year’s record.”

Kanyago said that farmers and factories were being challenged by high production costs, fluctuating exchange rates and auction prices, reduced individual holdings, and the high cost of credit. He called on KTDA directors to continue farmer education and training, particularly in sustainable agriculture, in order to ensure growth for the future.

In recent years, earnings have improved for KTDA and during the 2015/2016 financial year, farmers took home Sh44.72 billion ($4.35 billion) in second payment, an average of Sh36.26 (35-cents) per kilo of green leaf compared to Sh27.61 paid out the previous year. But the ongoing drought in Kenya means that production is likely to decrease by around 12% compared to last year’s figure.The record high for 2016 was 473 million kg, and estimates for 2017 stand at only 416 m.kg.

But Kanyago said, “All 560,000 smallholder farmers working together under KTDA umbrella have given us a lot of leeway in negotiation both locally and globally,” said Kanyago. “Fundamentally, through KTDA arrangement, our farmers enjoy economies of scale and shield each other against economic and political shocks.”