Tea farmers in the country will miss out on the first interim payment, commonly known as mini-bonus which is normally paid in April and May.
Kenya Tea Development Agency (KTDA) Chairman Peter Kanyago said farmers in tea growing regions in Kiambu, Nyeri, Murang’a and Meru will not be paid the usual interim payments due to depressed international tea prices.
Other farmer who will be affected are those in zones 8, 9, 10, 11, 12 and include the whole of Rift Valley and areas like Kericho, Bomet, Kisii Nyamira and Kakamega.
Mr Kanyago also advised farmers in the country to prepare for reduced tea earnings for the year 2013/2014 second “bonus”, which is usually paid toward the end of October and early November.
He attributed the negative situation to increased supply and reduced demand in the international markets.
“Tea prices have gone down globally and to preserve cash flow in the industry, farmers will not be receiving their pay as is usually the case every year,” he told The Standard.
He said tea buyers in the auction are offering $2.5 (Sh216) per kilo of made tea as compared to $3 (Sh259) per kilo offered in the previous season.
Kanyago, who spoke after he met factory directors at Ragati Tea Factory to discuss first half accounts, attributed the poor offers to overproduction due to favourable weather and reduced demand as a result of instability in traditional markets.
“The tea business has not been very good in Egypt, Sudan and Pakistan, which have been in turmoil,” he said.
The announcement may not go well with farmers who over the years expect the mini-bonus around the end of April. They use the money to pay second term school fees for their children.
James Mwangi, a tea farmer in Nyeri’s Irian-ini tea factory in Othaya, said the move by the KTDA was likely to have serious repercussions on farmers.
John Nderitu, another tea farmer, said they will now be forced to seek loans from banks, which charge exorbitant rates.
“The monthly payment of Sh14 per kilogramme of green tea is not likely to sustain us for long. We have always expected payment towards May as we await the main bonus,” Mr Nderitu said.
Kanyago said KTDA was seeking new markets in the Far East to cushion farmers from the instability in the traditional markets in future.