Kagwe Defends Tea Levy as Kenya Records 93 Per Cent Tea Sales at Auction

Agriculture and Livestock Development Cabinet Secretary Mutahi Kagwe has defended the recently introduced Tea Levy, saying it is helping secure the long-term future of Kenya’s tea industry as tea uptake at the auction reaches a record 93 percent.

Speaking in Kirinyaga County, Kagwe dismissed claims that the 0.8 per cent levy has contributed to an oversupply of tea, noting that the latest auction performance demonstrates strong market demand for Kenyan tea.

“Tea uptake has increased to 93 per cent compared to the levels witnessed three years ago. It is therefore not true that the Tea Levy has caused a glut,” he said.

The Cabinet Secretary said the levy is a strategic investment intended to finance tea research, international marketing, climate resilience programmes, and value addition initiatives that will strengthen Kenya’s competitiveness in global markets.

Kagwe clarified that the levy is not deducted from farmers’ earnings but is charged to tea buyers. He said the funds will be used to expand Kenya’s presence in emerging export markets while supporting innovation across the tea value chain.

“Where will the money to promote Kenyan tea in international markets come from if we refuse to support the Tea Levy? Let us be honest, it is not the farmer paying this levy, it is the buyer,” he said.

He noted that Kenya must continue investing in research to address the growing challenge of ageing tea bushes, which have contributed to declining yields and reduced leaf quality in some tea-growing regions. Developing high-yielding and climate-resilient tea varieties, he said, will be critical to sustaining production and maintaining Kenya’s position as the world’s leading exporter of black tea.

As part of the government’s value addition agenda, Kagwe officially handed over the KSh360 million Japanese Sencha Green Tea Processing Factory in Kangaita to local tea farmers. The facility, donated by the Japan International Cooperation Agency, had remained idle since 2019 due to an ownership dispute.

The Cabinet Secretary said resolving the dispute would allow farmers to benefit from the investment while opening new opportunities in the premium specialty tea market.

The Kangaita factory is the only facility in Africa producing authentic Japanese Sencha green tea, positioning Kenya to diversify beyond conventional black tea exports and target high-value international markets where specialty teas command significantly higher prices.

Kagwe said value addition remains central to the government’s strategy of increasing export earnings, creating employment, and making agriculture more attractive to young people.

“The children of tea farmers must also benefit from this industry. Value addition creates industries, creates jobs and ensures the next generation sees agriculture as a profitable enterprise,” he said.

According to the Ministry of Agriculture and Livestock Development and the Tea Board of Kenya, the Tea (Levy) Regulations, 2026 came into effect on May 1 after being gazetted in April under the Tea Act, 2020.

Under the regulations, exporters pay a levy equivalent to 0.8 per cent of the auction value of exported tea or the customs value for direct exports. Tea imports are subject to a levy equal to 100 per cent of the value of imported made tea, a measure the government says is intended to protect local producers from low-cost imports.

The government maintains that revenue collected through the levy will be reinvested in research, market promotion, innovation, and farmer support programmes, with the goal of improving productivity, expanding export opportunities, and increasing returns for Kenya’s tea growers.