Small-scale tea farmers under the Kenya Tea Development Agency (KTDA) are set to receive refunds for overcharged fertiliser deductions alongside their January 2025 green leaf payments. This announcement comes after an outcry from farmers regarding inflated deductions made by the agency.
According to KTDA, a deduction of KSh 3,400 per 50kg bag of fertiliser was made instead of the intended KSh 2,500, leaving many farmers frustrated. The refunds are part of a reconciliation process that will ensure affected farmers receive their due amounts by January 5, 2025.
Refunds Amid Government Subsidy Support
The overcharge occurred despite the government’s fertiliser subsidy programme aimed at cushioning farmers against rising input costs. In July 2023, the government disbursed KSh 1.4 billion for this programme, followed by an additional KSh 2 billion later in the year. These funds were intended to subsidise fertiliser costs for over 700,000 smallholder tea farmers, enabling them to access affordable inputs and boost productivity.
However, the deductions made by KTDA sparked widespread discontent. Principal Secretary for Agriculture Paul Ronoh intervened, directing the agency to refund the overcharged amounts by December 5, 2023. Despite this directive, KTDA has indicated that farmers will now receive their refunds in January, alongside their regular green leaf payment.
Fertiliser Distribution and Pricing Challenges
KTDA has justified the misstep, citing various factors affecting fertiliser pricing. The agency imported 96,988 metric tonnes of fertiliser for the current year, with the final batch of 8,000 metric tonnes expected to be delivered by the first week of December 2024.
The cost of fertiliser is influenced by several global and local factors, including:
- Natural Gas Costs: A critical component in the production of NPK chemically compounded fertilisers.
- Exchange Rate Fluctuations: The weakening of the Kenyan shilling against major currencies has increased the cost of imports.
- Supply Constraints: Global shortages in fertiliser supply chains.
- High Crude Oil Prices: Impacting transportation and manufacturing costs.
- Shipping Costs: Elevated freight charges in international trade.
The subsidy programme aimed to offset these costs, reducing the burden on farmers and ensuring competitive tea production.
Fertiliser Credit Scheme
KTDA’s fertiliser credit scheme enables farmers to access inputs and pay in instalments, with the balance deducted during their annual bonus payout. However, this year’s inflated deductions during the October bonus payment heightened farmers’ frustrations. Many were expecting the deductions to align with the subsidised rate of KSh 2,500 per bag.
Agency Commitment to Reconciliation
KTDA has assured farmers that a thorough reconciliation process is underway to determine the precise refund amounts due to each farmer. “Reconciliation shall be done to establish the refund payable for each farmer,” the agency stated in its notice.
The delay in refunds has drawn criticism from stakeholders, who argue that timely compensation is crucial to support farmers during ongoing financial challenges. Nevertheless, the agency has expressed its commitment to rectifying the issue promptly.
Supporting Tea Farmers’ Livelihoods
Tea farming is a critical livelihood for hundreds of thousands of smallholder farmers in Kenya. The government and KTDA’s collaboration on fertiliser subsidies is part of broader efforts to enhance the profitability of tea farming and improve the incomes of farmers. Subsidising production costs ensures that farmers can sustain operations amid fluctuating global tea prices and escalating input costs.
Looking Ahead
As the affected farmers await their refunds, the focus remains on KTDA to ensure the promised January payment is delivered without further delays. With the fertiliser subsidy programme expected to continue addressing high input costs, effective communication and transparency from KTDA will be vital in maintaining farmers’ trust.
The resolution of this issue will set a precedent for how such challenges are managed, underscoring the importance of accountability and efficiency in supporting Kenya’s agricultural sector.
