News and knowhow for farmers

Government tea reforms lead to record 40% price rise

2018 06 09 Kenya Tea CT 33

By George Munene

According to Agriculture Cabinet Secretary Peter Munya the average prices of smallholder teas have jumped 40 percent at auction owing to the minimum reserve price put in place by the government in July this year.

The recorded increase is from an average of Sh209.38 to Sh293.13 per kilogram from the sales of July and part of September 2021. This translated to increased revenue of 172 million shillings within a one-month period.

The government through KTDA at the beginning of July set the minimum reserve price for processed tea at the Mombasa auction at Sh268. This unprecedented move was aimed at cushioning smallholder farmers. 

Related News: Eldoret company develops tea picking device halving production costs

Related News: Njeru Industries shakes up tea buying with fast payments

While introducing the reserve price, the KTDA board and the Agriculture CS noted that tea prices had declined below production cost making it difficult for smallholder producers to make a profit from their tea.

“The payments made to smallholder tea growers through Kenya Tea Development (KTDA) factories declined from Sh58.76 per kilogram in 2016-2017 to Sh36.64 a kilogram in 2019-2020. Reforms within the tea sector are vital in arresting this worrying trend,” Munya pointed out.  

The CS further added that KTDA through the Agriculture ministry has requested a fertiliser subsidy worth Sh1 billion which will reduce fertiliser cost from Sh3,073 to Sh2,473 per kilogram bag.

Related News: Bomet County begins direct tea sales to Iran, offering farmers improved prices

The tea sub-sector earns the country over Sh120 billion annually and is the primary source of livelihood for over 650,000 farmers supporting over 6.5 million people.

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