Harvest Earns Record Bonus for Kenyan Workers

Fall brings a harvest bounty to tea workers worldwide and this year Kenyan smallholders are rejoicing at a $293 million payout, the largest on record.

Payments from the 65 Kenya Tea Development Agency (KTDA) factories are based on productivity. The bonus is up $24 million or 9 percent compared to last years when approximately 500,000 workers split $269 million. Payments are calculated on the basis of the total annual earnings of a worker.

In Assam celebration of Durga Puja in the Barak Valley will be more subdued. Garden workers there are receiving a two percent increase over last year. The bonus varies by garden with workers at Rosekandy, Kalain and Bminnakandi and Narshingpur in Hailakandi received 20 percent, those at Silcori 19 percent. A 20 percent ceiling was established in the country’s 1951 Labour Act.

Gardens in Karimganj district have just started disbursements which began as early as Sept. 20 this year.

In northern India the Darjeeling Tea Association (DTA), citing absenteeism and labor unrest, announced that its members could not all afford to pay a 20 percent Puja bonus this year. Gardens are ranked in Darjeeling and those in categories A, B and C would get the full 20 percent while workers at Grade D gardens would get only 17 percent.

DTA president H.R. Chaudhary, who was quoted in the newspaper The Standard, said production has declined for several reasons. “The production cost has increased by 45 percent because of inflation and hike in wages by about 33 per cent. As a result, we might not be able to pay the annual bonus at last year’s rate.”

The costs for producing Darjeeling are hovering around $7 per kilogram and the maximum selling prices for the best organic tea is $8 kg, he explained.

In Kenya payments will average 35-cents per kilo, up from the 30-cents they received for last year’s crop. This is in addition to the 11.5-cents per kilo farmers are paid monthly for delivering tea to KTDA managed factories. Total compensation for Kenya’s growers will is $385 million, the third consecutive annual increase. In 2008 total compensation was $244 million.

Kenya is the world’s largest exporter of black tea. KTDA members account for about 60 percent of tea production.

In calendar 2010 Kenya produced 399 million kgs of tea, earning $933 million (97 billion shillings) to become the most profitable export category in that country.

"The rise in earnings has come despite a sharp rise in the cost of electricity, fuel and imported inputs, such as fertilizer and machinery, which has caused anxiety among farmers," KTDA Chief Executive Lerionka Tiampati told The Times of India, adding that factories have recorded a six percent increase in total revenue.

Source: The Standard, Reuters, Times of India