Stakeholders in the tea sector will on Thursday, meet the Ministry of Agriculture to negotiate the possible increase of farm gate prices.
Tea farm gate price is what farmers are paid for every kilogram of green leaf tea that they supply to the factories.
“We have been in discussions with the farmers and other stakeholders about increasing the prices and we have sent the deliberations over to the Minister for the final decision,” Anthony Butera, the Director General of Ocir-Thé told Business Times yesterday.
Currently a kilogram of green leaf is sold at Rwf86 but farmers want it to be increased to at least Rwf110 per kilogram. Sources said that private factory owners want the prices to be capped at Rwf90 per kilogram.
However Butera said Ocir-Thé, the institution that regulates the tea industry, has recommended an increase from Rwf86 per kg of green leaf to between Rwf95 and Rwf100 per kg depending on the farmer’s production per hectare.
The increase will mean that the cost of production per kilogram will not exceed what farmers earn from each kilogram produced.
The total number of farmers in the country who supply factories range between 40,000 to 60,000 and last year they supplied 85 million kilograms which totaled to 20,500,000 tones of made tea.
Tea is one of Rwanda’s leading foreign exchange earner, mainly sold through the weekly Mombasa auction market .