Tea farmers are set to benefit from a Sh3.5 billion government investment aimed at refurbishing tea factories to meet international standards and enhance value addition, a move expected to secure better prices at the Mombasa tea auction.
Speaking at Olenguruone Tea Factory during the issuance of a corporation certificate granting the facility autonomy, Agriculture Principal Secretary Dr. Kiprono Ronoh said the government had prioritised farmers’ welfare. He also issued a stern warning to the Kenya Tea Development Agency (KTDA) board over alleged corruption and misappropriation of funds meant for factories. Rono announced a new payment rate of Sh26 per kilogram of tea, up from the previous Sh16.
“The government of Kenya is implementing sweeping reforms to revamp its tea sector, aiming to boost farmer earnings to Sh100/kg by 2027 by tackling low auction prices, high production costs, and increasing value addition. Key strategies include Sh3.5 billion in factory modernization, promoting Orthodox tea production, digitizing payments, and removing VAT on tea exports,” said PS Ronoh.
He noted that the Sh3.5 billion investment would go towards modernising 19 tea processing factories to improve efficiency, enhance quality and reduce production costs, ultimately raising the price paid to farmers.
Rono challenged tea factories to embrace value addition and diversification to meet international standards.
“We must do value addition of our tea before we export. This strategy shifts from purely raw exports to increasing orthodox tea production, which fetches higher prices, and promoting local value addition to meet global demand,” he added.
Under the reforms, all KTDA factories will be required to implement service-level agreements to guarantee quality services to farmers.
“Factories will now have the freedom and autonomy to conduct direct sales, which is expected to boost profitability and market access,” he said, adding, “By cutting out the middlemen, we ensure that farmers earn what they deserve. Price transparency is no longer optional; it is a necessity.”
Rono also urged factories to adopt modern technology to meet international market requirements.
“We must embrace modern and digital technology to meet the requirements of our international consumers, who are our main target as a country. The directors in our factories must be in the field to ensure we meet this,” said Ronoh.
Tea Board of Kenya official Willy Mutai echoed the PS’s remarks, calling on factories to modernise operations, invest in research and improve processing standards to strengthen their bargaining power at the auction. He said ongoing reforms focusing on quality standards, market diversification and revitalisation of the tea industry would increase farmers’ earnings and bonuses.
“The regulations will spell out payment timelines. The Act stipulates that 50 percent should be paid to farmers upfront, and the balance within three months,” Mutai opined. “This will address cash flow challenges while ensuring that farmers receive their dues promptly.”
Mutai added that the reforms place strong emphasis on value addition, targeting at least 40 percent of Kenya’s tea to be processed locally rather than exported in bulk.
“We are 95 percent exporters of packed teas, and we’re engineering to make sure that 40 percent of what we produce is value-added within the country,” he said.
The board is also pushing for consistent green leaf quality, particularly among growers in western Kenya, to attract premium buyers and improve competitiveness in the global market.
