The Kenyan government has rolled out a new reform program aimed at revitalizing the tea sector, with a bold goal to double tea farmers’ earnings to Ksh.100 per kilogram of green leaf by 2027. The initiative, announced by Agriculture Cabinet Secretary (CS) Mutahi Kagwe on Wednesday, December 3, 2025, is designed to stabilize tea prices, improve quality, and ensure fair payment distribution across the country.
Currently, tea farmers receive between Ksh.23 and Ksh.25 per kilogram as an initial payment, with the annual bonus payment depending on auction prices, exchange rates, and the cost of production. Under the new reforms, the government plans to review the bonus system, allowing farmers to receive bonuses quarterly, addressing liquidity challenges that have long plagued the sector.
“These reforms aim to ensure fair, transparent, and uniform earnings for all tea farmers, regardless of their region,” CS Kagwe said.
Key Reforms in the Tea Sector:
Some of the key interventions in the new plan include:
Factory Modernization: A Ksh.3.7 billion concessional loan will be used to modernize tea factories to improve efficiency.
Quality Standards: Mandatory greenleaf quality standards will be enforced, and a new tea quality laboratory will be set up in Mombasa.
Strategic Tea Quality Improvement Programme (STQIP): This initiative will improve the overall quality of Kenyan tea.
Governance & Financial Audits: Struggling factories will undergo governance audits to address inefficiencies and over-employment.
Tea Levy Regulations (2024): New regulations will sustainably fund the tea industry.
Additionally, the government has removed the reserve price to help restore market demand, launched a crackdown on greenleaf hawking and theft, and is expanding the use of digital tea marketing platforms to reach international markets.
Sector Challenges and Market Conditions:
Despite these reforms, the sector has faced challenges in recent years. The 2024/25 financial year saw average auction prices for Kenyan tea drop to USD 2.41 (Ksh.311.81) per kilogram, down from USD 2.54 (Ksh.328.63) the previous year. This decline was largely due to forex shortages in key markets like Pakistan and Egypt, political instability in Sudan, and restricted access to the Iranian market—countries that together account for about 70% of Kenya’s tea exports.
There are also significant regional disparities in earnings, with East of the Rift farmers earning an average of Ksh.69 per kilogram of green leaf, compared to just Ksh.38 for farmers in the West. These discrepancies are attributed to lower-quality tea in the western regions, which impacts the prices farmers receive.
Production costs have also risen sharply, now averaging Ksh.112.96 per kilogram of made tea, with costs in the West of the Rift even higher at Ksh.134.34. These increased costs are linked to governance issues, over-employment, and inefficiencies in the management of factories.
Addressing Regional Inequities:
The government has taken note of regional disparities in earnings, particularly the differences between tea-growing areas on either side of the Rift Valley. The East Rift, which includes counties such as Murang’a, Nyeri, and Kiambu, consistently records higher prices due to better quality tea. On the other hand, tea farmers in the West Rift, covering areas like Kericho, Nandi, and Bomet, have long struggled with lower returns.
In response, the National Assembly’s Agriculture and Livestock Committee has been tasked with investigating these regional price disparities and has promised to table a report with recommendations to address the issue.
