This archive report was first published on 4 October 2019.
Kenya's tea farmers have faced a dismal financial year, with earnings plummeting to their lowest level in six years. According to the Kenya Tea Development Agency (KTDA), farmers affiliated to the agency will earn Sh69.7 billion in the review period, down from Sh85.7 billion the previous year.
The decline in earnings is attributed to low international prices during the review period, resulting from a glut in the international market and an increase in the cost of production. KTDA Managing Director Lerionka Tiampati noted that the lower prices, coupled with reduced production in the year to June following poor weather, squeezed farmers' earnings and bonuses.
Kenya is the world's leading exporter of black tea, and the crop is one of its top foreign exchange earners, along with tourism, flower exports, and remittances from the diaspora. However, the country's tea-producing countries have registered increased production, making it challenging for Kenyan farmers to compete.
Out of the Sh69.77 billion revenue, farmers will receive Sh46.45 billion, with the remaining Sh23.3 billion covering the costs of the factories and KTDA management fees. This means farmers will receive about 67 percent of the earnings, with the average payment per kilogramme of green leaf delivered being Sh41.27, down from Sh52 last year.
