Kenya’s small-scale tea farmers forecast 10% output jump

Friday, 20 April 2018 00:00 - - {{hitsCtrl.values.hits}}

Previous year’s crop hit by drought
Small-scale farmers produce about 60 pct of Kenya’s tea output
KTDA has also invested in engineering, microfinance ventures

Nairobi (Reuters): Tea production by small-scale farmers in Kenya is expected to jump 10% in the year to the end of June, as output recovers from a drought that hit production in the previous financial year, their agency said on Friday.

In the first six months of 2017, Kenya Tea Development Agency (KTDA) produced 233 million kg (514 million pounds) of tea, down 21% from a year earlier.

That year, poor rains at the tail end of 2016 had led to a drought that hurt the East African nation’s agriculture.

“In terms of output, we are 10% ahead of the same period last year. So this year we are going to be better,” said Lerionka Tiampati, KTDA’s managing director.

“I think we will be probably 10% above roughly. Output will be better this year than last financial year,” he told Reuters in an interview.

KTDA accounts for an average 60% of the country’s total tea output.

It is owned by 54 companies, which have over 600,000 farmers as shareholders, and manages 68 tea factories across Kenya.

In addition to tea production, KTDA has ventured into small-scale power production to run its factories, with extra output being sold to the national grid.

KTDA Holdings also has subsidiaries that have investments in engineering, microfinance, insurance, tea blending and marketing, and warehousing.

Tiampati said 200,000 farmers were now regular borrowers from its microfinance institution.

“We negotiate the best rates ... to ensure our farmers can access easily without having to look for collateral. They are already supplying leaf to the factories - that is their collateral,” he said.

Kenya is the world’s leading exporter of black tea, which is one of its major foreign exchange earners.

Overall, it forecasts a 3% rise in output to 452 million kg in the 2018 calendar year, with export earnings projected to rise 5% to 135 billion shillings ($ 1.34 billion).

In the year to the end of June 2017, farmers under KTDA earned 78 billion shillings, a 7% drop compared to a year earlier.

Tiampati declined to give an earnings forecast for the year to end-June.