International Finance Corporation (IFC) a member of the World Bank Group and Kenya Tea Development Agency (KTDA) through its Management Services Limited (KTDA-MS) has launched a new Kshs. 420 million initiative to improve yields and income for tea farmers in Kenya. The initiative focuses on three main components; Crop and Soil Fertility Management, Farm Business Management Training, and Biomass Fuel Supply. It is expected to highly benefit 560,000 small scale tea farmers in Kenya
Biomass Fuel Strategy and Efficient Energy Use
In a bid to alleviate the environmental and social impacts of using fuel, this partnership will strengthen KTDA’s biomass fuel supply chain. Currently, KTDA-MS spends about Kshs 4.5 billion annually to power its 67 tea factories. Wood fuel, purchased mainly from third party sources at a high cost, comprises 50% of the energy cost used in factories with electricity comprising the balance. In 2015, IFC helped finance seven small hydro-power plants to generate power for the KTDA tea factories.
IFC and KTDA will conduct soil and leaf testing, and formulate the most appropriate fertilizer blends to help farmers maximize their tea harvests. This will also boost the supply from Kenyan tea farmers who on account of their tea output makes Kenya the third largest tea producing company in the world.
Farmers will also receive training on financial management to effectively manage their farms and their incomes. The farmers will also receive monthly initial payments based on volumes of tea delivered to respective tea factories. Final payments will also be made based on the performance of tea factories.
Lerionka Tiampati, KTDA Holdings Group CEO, stated that the partnership will also empower the farmers to manage their income efficiently.This he said will help them make informed decisions on how to save and invest their money. He also added that financial literacy will economically empower farmers to save, invest and diversify their income streams to mitigate hard times when income from tea declines, as happens from time-to-time.
Tania Lozansky, IFC Head of Advisory for Manufacturing, Agribusiness and Services had this to say, “IFC is committed to supporting companies like KTDA, which have the potential to improve living standards and reduce poverty for rural farmers.”
The new initiative continues a long-standing partnership between IFC and KTDA which started in 2012 when IFC first invested $12 million in the company to help expand their operations. This is good news for the farmers who last year felt the crunch of the climate change that led to a dip in profits. Also let this project not have any incidences of embezzlement or mismanagement of funds.