Kenya’s Tea Reforms Face a Tough Test: Turning Higher Leaf Prices Into Better Farmer Incomes

For Kennedy Kemboi, a seven-acre tea farmer in Baraton, Nandi County, the recent increase in the price of green leaf has provided some relief, but the cost of keeping his farm productive remains a constant concern.

The farmer says the price has risen to Sh26 per kilogramme, giving him enough room to pay workers and retain some income for household needs. He is now waiting for subsidised fertiliser as the government seeks to lower production costs across the tea-growing regions.

But Kemboi says the price farmers ultimately receive is only part of the problem. His factory is still servicing a Sh1.2 billion loan, a burden he says affects the annual bonus paid to growers.

“If the declared bonus is Sh20 per kilo, we end up receiving Sh12,” he said, calling for government intervention to help clear the factory’s debt.

In Nyamache, Kisii County, tea farmer Teresa Moraa says the income from tea remains insufficient to meet basic household expenses. She wants factory payments to rise to at least Sh50 per kilogramme to help farmers meet costs such as school fees.

Their concerns capture the central challenge facing Kenya’s tea industry as the government rolls out reforms intended to improve farmer earnings, reduce production costs and increase the amount of value retained within the country.

Tea is among the priority agricultural value chains under the government’s economic transformation programme, with reforms targeting problems ranging from low farm-gate earnings and high production costs to declining auction prices, weak governance, limited value addition and heavy dependence on traditional export markets.

The Tea Board of Kenya says the reforms are aimed at increasing production, improving and stabilising farmer incomes, expanding access to markets, creating employment and increasing value addition within the industry.

Agriculture Cabinet Secretary Mutahi Kagwe, speaking at the Seventh African Tea Convention in Nairobi, said the government wants to build an industry that is productive, transparent, climate-resilient and commercially competitive while delivering better returns to farmers.

Tea remains a major source of income for hundreds of thousands of rural households, making the performance of the sector closely linked to livelihoods in the country’s tea-growing regions.

According to Tea Board of Kenya figures, the average green leaf payment rose from Sh35 per kilogramme in 2021 to Sh64 in 2024 and Sh56 in 2025. The government has set a target of at least Sh100 per kilogramme by next year, with officials pointing to improved quality, lower production costs, value addition, more competitive selling channels and stronger farmer representation as some of the measures expected to support the increase.

Tea production also rose from 537 million kilogrammes in 2021 to 598 million kilogrammes in 2024 before falling to 550 million kilogrammes in 2025. Export earnings increased from Sh136.5 billion in 2021 to Sh181.6 billion in 2024 and Sh186.9 billion in 2025.

The government has meanwhile invested Sh850 million in machinery and equipment for 17 smallholder tea factories, while more than 650,000 farmers have received about 290,000 tonnes of subsidised fertiliser since 2022.

Other measures include tax changes intended to support tea value addition, including the removal of VAT on tea purchased from factories for value addition and zero-rating of packaging materials used for tea value-added products.

A Sh100 million grant has also been provided to Kenya Tea Packers to establish a common-user facility for value addition.

Market diversification has emerged as another major component of the reform agenda. Kenya is seeking to strengthen established markets such as Pakistan, Egypt, the United Kingdom and the United Arab Emirates while expanding into markets including China, North America, Russia, Iran, Germany and Malaysia.

Kagwe has also identified product innovation, quality and traceability, climate resilience and improvements to the tea auction and trading system as key areas for the industry’s future.

But farmers and industry stakeholders say reforms will have to address governance and the distribution of value across the tea chain if they are to translate into meaningful improvements at farm level.

Charles Otwori, chairman of Nyamira Professionals Association and a tea farmer, said growers remain dissatisfied with their earnings and have raised concerns about the management of farmer-owned tea companies.

The Kenya Tea Development Agency manages 54 tea companies whose smallholder farmers are shareholders and supply their factories with green leaf.

Beyond governance and farm-gate prices, industry leaders are increasingly arguing that Kenya cannot rely indefinitely on selling large volumes of bulk tea at international auctions.

Robert Koech, chairman of the East Africa Tea Trade Association, said the industry needs to move towards products and systems that capture more value, including brands, blends, extracts, ready-to-drink products, traceability and sustainability credentials.

Thushara De Silva, chairman of the organising committee of the Nairobi tea convention, similarly argued that African countries continue to export much of their tea in bulk before it is blended, packaged, branded and marketed elsewhere.

For Kenya’s tea farmers, the debate ultimately comes back to the amount of money generated by millions of kilogrammes of green leaf harvested from their farms.

Government reforms have begun targeting production costs, factory efficiency, market access and value addition. The harder test will be whether those changes can create a more predictable and substantially higher income for growers such as Kemboi and Moraa.

As Kenya seeks to reposition one of its most important agricultural exports, farmers are making it clear that the success of the reforms will not be measured only by export earnings or production volumes, but by what eventually reaches the people who grow the tea.