KTDA factories on notice for low pay

Kapsara Tea Factory in Cherangany, Trans Nzoia County. FILE PHOTO | NMG 

By GERALD ANDAE

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Summary

• Mudete and Kapsara factories have been given a 14-day ultimatum to pay farmers outstanding amounts, failing which the regulator will determine the next course of action.
• The two factories have been paying farmers less than 75 per cent of the returns, which goes against the 2016 recommendations by a tea taskforce.

Factories managed by the Kenya Tea Development Agency (KTDA) are among the firms that have been given a 14-day ultimatum to pay farmers outstanding amounts, failing which the regulator will determine the next course of action.

The Tea Directorate gave the directive to Mudete and Kapsara factories saying they have been paying farmers less than 75 per cent of the returns, which goes against the 2016 recommendations by a tea taskforce.

Others are private factories which the regulator said did not meet the required threshold in payments to farmers, including Kipkebe, Kaisugu, Kabianga and Kiptagich tea estates.

“… You are hereby asked to take corrective action on the above issues and indicate when the factory is paying up the difference to growers earnings to at least 70 per cent,” said the directorate in a letter sent to them.

“In this regard, you are required to correct the issues raised and provide a plan to pay the difference in 14 days from the date of this letter,” added the directorate.

The directorate is conducting a survey on the factories to check on compliance, and so far it has carried out the exercise in nine factories where none of them met the requirement. The audit will be carried out in all tea firms.

Kapsara Tea factory underpaid farmers by Sh7 per kilo basing on the auction factory price, where farmers earned Sh35 per kilo instead of Sh42, the directorate noted.

According to the regulator, Kaisugu factory paid farmers Sh28.50 in financial year 2016/2017, which is 30 per cent of the returns that they made, Kabianga factory paid Sh27, which was 60 per cent of the revenue while Kiptagich Tea Estates paid Sh28 representing 50.9 per cent of the factory’s earnings.

READ: Tea factories want divorce from KTDA over low bonus

This comes at a time when the KTDA has been struggling with dissent from farmers in Kericho County, who want to leave the agency, citing low payments.

Last year, the KTDA paid farmers Sh78 billion as second payment, which was lower than Sh84 billion that it paid the previous year.

Kapsara was one of the factories that earned less out of the agency’s factories located in seven regions. The agency has before defended the earnings per factory saying it is determined by the volume of tea that is supplied as well as efficiency in production.

KTDA represents more than 600,000 small scale farmers.