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{
"id": 1618642,
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"content": "PAYMENT OF ANNUAL BONUSES TO TEA FARMERS"
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{
"id": 1618643,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1618643/?format=api",
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"type": "speech",
"speaker_name": "Tigania West, UDA",
"speaker_title": "Hon. (Dr) John Mutunga Kanyuithia",
"speaker": null,
"content": " Hon. Speaker, pursuant to Standing Order No.44(2)(c), Hon. Dorice Donya requested for a Statement on 12th March 2025 regarding payment of annual bonuses to tea farmers. The Ministry of Agriculture and Livestock Development responded as follows to the issues in the raised Statement. The first issue was on the criteria used to determine the rates of annual bonuses paid to tea farmers across different regions and factories in Kenya. The rates of annual bonuses paid to tea farmers in different regions and factories in Kenya are determined by the factory boards. The rates are usually calculated at the end of each financial year after all the revenue and costs have been determined, financial statements prepared and audited by external auditors. The financial statements and proposed bonus rates are then presented to factory boards for approval in consultation with the factory stakeholders or shareholders, or growers. Tea bonus is dependent on the following factors: One, price realisation at the tea auction. Price is dependent on the quality of tea produced by each factory, which is determined by the quality of tea leaves, post-harvest handling, and manufacturing practices at the factory. The price is also influenced by the historical tea buyers’ perceptions regarding quality consistency in a specific tea factory. Other factors include the prevailing demand and political situation in the markets, as well as the effects of global economic shocks, and thus the average price varies from one factory to another. Two, the cost of production. This varies from factory to factory depending on the various cost items within the factory, like transportation costs to Mombasa, labour and administrative costs, and energy. Factories with efficient machinery and operations have lower production costs and higher net income, and vice versa. The second issue was on the reasons behind the significant variation in bonus payments to tea farmers in the country. The response is such that the variation in bonus payment to tea farmers by different factories in the country is determined by the price realised at the tea auction and the cost of production. Details of bonuses paid to farmers are contained in the response that was shared by Hon. Donya under Table two. I think Hon. Donya has it. The average total The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
},
{
"id": 1618644,
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"text_counter": 71,
"type": "speech",
"speaker_name": "Tigania West, UDA",
"speaker_title": "Hon. (Dr) John Mutunga Kanyuithia",
"speaker": null,
"content": "payment increased by 12 per cent from the average of Ksh59.02 in the Financial Year 2022/2023 to Ksh65.95 in the Financial Year 2023/2024. The total payment to the farmers increased by 34 per cent from Ksh67.6 billion in the Financial Year 2022/2023 to Ksh90.5 billion in the Financial Year 2023/2024. The third issue was on the measures the Ministry of Agriculture and Livestock Development is taking through relevant agencies such as the Tea Board of Kenya and the Kenya Tea Development Agency (KTDA) to ensure that all farmers receive fair, uniform and transparent bonuses based on their production levels. Tea factories in the west of the Rift Valley generally fetch lower prices in comparison to those in the east of the Rift Valley because of differences in the quality associated with the farmers' husbandry practices. Additionally, most of the factories in the west of the Rift Valley have loans that were used to establish satellite factories that attract high interest rates in comparison to factories in the east of the Rift Valley. Cognisant of the above issues, the Ministry of Agriculture and Livestock Development has put in place various programmes to improve the livelihood of smallholder tea farmers by improving average payment from Ksh50.18 per kilogramme of greenleaf in 2022 to Ksh100 by 2027. The following measures have been put in place: One, the Strategic Tea Quality Improvement Programme (STQIP). The programme entails: 1. Conducting blind testing of teas from all licensed tea factories for evaluation and ranking. 2. Selecting the 15 lowest-ranked tea factories in quality for inclusion in the Quality Improvement Programme. 3. Sensitising farmers and the factory management on the standards of greenleaf. 4. Undertaking on-site capacity-building trainings with tea makers for black CTC and orthodox teas. The programme is expected to improve the quality of tea produced by factories to above-average or premium-quality teas, which are expected to fetch better prices in the market. Two, the standard for the quality of green leaf for processing by tea factories. The Ministry and other relevant industry players have developed a guideline or standard on the quality of green leaf plucked and delivered for processing by tea farmers to the factories. The guideline prescribes the minimum standard on green leaf quality to be processed by all tea factories and will bridge the quality and price differences between the west of the Rift Valley and the east of the Rift Valley factories, once implemented. The Tea Board of Kenya is sensitising tea farmers and factories on green leaf quality standards in collaboration with county governments. Three, the establishment of a laboratory for quality analysis and tea testing. The Tea Board of Kenya is in the process of establishing a quality analysis laboratory in Mombasa that will validate the quality and safety of tea in regard to the following: 1. Physical-quality parameters, microbiological parameters, heavy metal containment, contaminants and pesticide residues and emerging contaminants. 2. Scientific verification of teas offered for sale in the auction to determine the evaluation based on quality by checking the nitrogen, polyphenols and ash contents. 3. Sensory evaluation of tea as part of quality assurance activities to complete the scientific testing of tea to be used in determining the price. The civil works for the laboratory are complete and are awaiting equipment and other resources for operationalisation. Fourth, the provision of subsidised fertiliser as an intervention. The Government allocated Ksh2 billion fertiliser subsidy to reduce the price of a 50-kilogramme bag of fertiliser to Ksh2,500. This has enhanced productivity and quality of tea in the country. The fertiliser, The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
},
{
"id": 1618645,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1618645/?format=api",
"text_counter": 72,
"type": "speech",
"speaker_name": "Tigania West, UDA",
"speaker_title": "Hon. (Dr) John Mutunga Kanyuithia",
"speaker": null,
"content": "which is imported by KTDA is distributed to farmers in all tea growing regions, which is over 190,000 metric tonnes in the last two years. The fifth intervention is in terms of regulating and controlling costs. To mitigate the high cost of production, factories have put in place cost mitigation measures like mini hydro investment projects that are financed through debt and equity at various stages of completion. Factories have also signed new management agreements with the KTDA that include, among others, reduction of management agency fees from 2.5 to 1.5 per cent of the gross sales value and absorption cost…"
},
{
"id": 1618646,
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"text_counter": 73,
"type": "speech",
"speaker_name": "Hon. Speaker",
"speaker_title": "",
"speaker": null,
"content": "Dr Mutunga, too long. Can you paraphrase?"
},
{
"id": 1618647,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1618647/?format=api",
"text_counter": 74,
"type": "speech",
"speaker_name": "Tigania West, UDA",
"speaker_title": "Hon. (Dr) John Mutunga Kanyuithia",
"speaker": null,
"content": " I only took two minutes, Hon. Speaker. That is the final issue. I was saying that it has reduced from 2.5 to 1.5 per cent of the gross value and absorption costs of seconded staff by the management agency. The final issue was on the timeliness with which the Ministry will address the disparity to ensure that tea farmers across the country are treated fairly. The response is that the Ministry has developed guidelines on minimum leaf quality standards to address the declining quality of tea. The guidelines will be operationalised this month. Additionally, the STQIP, which is a five-year programme, has been ongoing for the last two years and is aimed at assisting tea farmers with lower quality of tea to improve to meet the market standards. The programme will ensure that factories manufacture tea of higher quality as desired by the market, and the achievement of this programme is expected to improve the price of tea from the affected factories within a period of one year, considering market dynamics of supply and demand. Further, establishment of a laboratory for quality analysis and tea testing is expected to be completed in 2025. Thank you, Hon. Speaker."
},
{
"id": 1618648,
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"text_counter": 75,
"type": "speech",
"speaker_name": "Hon. Speaker",
"speaker_title": "",
"speaker": null,
"content": "Hon. Dorice Donya, that is a response to your Statement. Are you satisfied?"
},
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"id": 1618649,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1618649/?format=api",
"text_counter": 76,
"type": "speech",
"speaker_name": "Kisii County",
"speaker_title": "Hon. Dorice Donya",
"speaker": null,
"content": " Thank you, Hon. Speaker. Even the Chairman knows that what he has given is the same as understanding that airtime bundles expire. I have never understood why they expire. The Chairman knows that the farmers cannot get contented with what he has stated, because they have said it is the factories which determine the prices of tea bonuses. I do not know what I will do about it, but I am not satisfied."
},
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"id": 1618650,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1618650/?format=api",
"text_counter": 77,
"type": "speech",
"speaker_name": "Hon. Speaker",
"speaker_title": "",
"speaker": null,
"content": "Do you have any supplementary question to ask him?"
},
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"id": 1618651,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1618651/?format=api",
"text_counter": 78,
"type": "speech",
"speaker_name": "Kisii County",
"speaker_title": "Hon. Dorice Donya",
"speaker": null,
"content": " Yes. Why can the Chairman, through the Ministry of Agriculture, not do a survey to the factories, and enquire how best they can help the farmers in determining the prices of bonuses? When our farmers in Kisii were told that the tea is tested, they tasked me to go to Kiambu, Murang’a and Kericho and buy their tea leaves and tea bags. They made the tea with those tea leaves, they tasted it and it was the same. Until today, they have not known the difference of their tea and the tea from the mountain. They literally tasted it with their mouth. It is the same."
}
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