Tea farmers to receive mini bonus by month-end By Kazungu Chai NAIROBI, 11 June 2014 (PSCU) – Tea farmers can now rest easy following an announcement that they will be paid the interim payment – commonly known as mini bonus – at the end of this month. The announcement was made today by the Kenya Tea Development Agency (KTDA) at a meeting of tea sector stakeholders chaired by President Uhuru Kenyatta at State House, Nairobi. The agency said the rate per kilo will be agreed on by the tea factories’ boards. President Kenyatta impressed on the Ministry of Agriculture, KTDA and other key players in the tea sector to cushion farmers from unnecessary taxes and levies to lower the cost of production and increase returns. “Tea is one of our chief foreign exchange earner and we have to ensure that our farmers are comfortable and continue producing,” President Kenyatta said. The President directed the National Treasury to meet and look at taxes – VAT and import duty – that hinder growth of the tea industry. The meeting proposed the establishment of a price stabilization fund through partnership between the Government and the tea industry. President Kenyatta said the tea sector must be protected and farmers assured that ‘whatever happens’ there is a payment below which prices cannot go. As a move to ensure tea farmers reap maximum benefit, the President said regulatory framework at the Mombasa tea auction should be improved to ensure transparency. He emphasized that implementation of the proposed electronic tea auction through public private partnership (PPP) should be fast-tracked. The President also asked KTDA to boost capacity during glut. He urged county governments in tea growing areas to work with KTDA to improve the tea agency’s capacity through roads improvement. During the meeting, Agriculture Cabinet Secretary Felix Kosgei made a presentation on intervention to address declining tea prices. On low level of value addition, Mr.Kosgei said implementation of the Common User Facility (CUF) – estimated at Kshs 3.6 billion – should start to provide incentives for investors under the public private partnership model. Currently, the tea industry is experiencing low levels of value addition at less than 10 % due to inadequate facilitation and access to technology by SMEs, the Cabinet Secretary said. “Kenya tea fetches lower prices compared to value added teas,” Mr. Kosgei said. On low excise duty charged on tea imports, Mr. Kosgei said it should be raised from 25% to 100% as charged by other tea producing countries outside the common markets to inhibit excess importation of value added tea. The meeting resolved that a standard will be set below which low quality tea will not be allowed into the country. KTDA Chairman Peter Kanyago expressed concern over tea hawking, saying it also contributed to quality reduction. Others at the meeting were Agriculture PS Sicily Kariuki, KTDA MD Tiampati Lerionka, members of Tea Board of Kenya, East Africa Tea Association, Kenya Tea Growers Association, Nyeri Governor Nderitu Gachagua who represented the Governors’ Council and Export Promotion Council CEO Ruth Mwaniki.
Posted on: Wed, 11 Jun 2014 13:15:14 +0000