NAIROBI, Kenya – Farmers in the country have a reason to smile after the government unveiled a sweeping reform programme in the tea sector aimed at stabilising prices.
The reform programme is also aimed at improving quality and doubling tea farmers’ earnings to Sh100 per kilogramme of greenleaf by 2027.
While making the announcement, Cabinet Secretary for Agriculture and Livestock Development Mutahi Kagwe clarified that tea farmers are compensated using a two-tier payment model that consists of a monthly initial payment and an annual second payment (bonus) in response to a parliamentary question regarding tea bonuses.
Farmers currently receive between Sh23 and Sh25 per kilogramme as an initial payment, while the bonus depends on three major factors: auction prices, exchange rates and cost of manufacture.
The average auction price per kilogramme of produced tea fell from USD 2.54 to USD 2.41 during the 2024–2025 fiscal year, mostly as a result of market access issues in Iran, Sudanese strife, and currency shortages in Pakistan and Egypt, which together account for almost 70% of Kenya’s tea exports.
What are the regional disparities
Regional discrepancies were also obvious, with East of Rift factories averaging USD 2.95, while West of Rift factories recorded only USD 1.78 per kilogramme due to inferior quality teas.
Consequently, farmers in the East earned an average of Sh69 per kg of greenleaf, while those in the West received only Sh38, compared to the national average of Sh56.
Production costs also rose sharply to Sh112.96 per kilogramme of made tea, with West of Rift factories recording higher costs at Sh134.34 due to governance gaps, over-employment and inefficiencies.
How is the government addressing the issue
To address these challenges, the Ministry has rolled out far-reaching interventions, including:
1. Mandatory Greenleaf Quality Standards
2. Establishment of a Tea Quality Laboratory in Mombasa
3. Strategic Tea Quality Improvement Programme (STQIP)
4. Modernisation of factories through a Sh3.7 billion concessional loan facility
5. Removal of the Reserve Price to restore market demand
6. Crackdown on greenleaf hawking and theft
7. Governance and financial audits of struggling factories
8. Expansion into digital tea marketing platforms
9. Aggressive international market diplomacy under AfCFTA
10. Introduction of the Tea Levy Regulations, 2024, to sustainably fund the industry
The CS further revealed that the Ministry is reviewing the tea bonus payment model to allow farmers to receive bonuses on a quarterly basis instead of annually, to ease liquidity challenges.
“These reforms are meant to ensure fair, transparent and uniform earnings for all tea farmers across the country, regardless of region,” said CS Kagwe.
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