Kisumu — Kenya Tea Development Agency (KTDA) directors representing the West of Rift region have moved to calm growing anxiety among farmers following disappointment over reduced bonus payments for the 2024-2025 financial year.
Speaking in Kisumu, KTDA Holdings Vice Chairman Omweno Ombasa attributed the lower earnings to global market dynamics and recent policy shifts that were beyond the agency's control.
"We understand and share the concerns expressed by our farmers regarding the reduced payment compared to last year," Ombasa said.
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"As tea farmers ourselves, we are equally disturbed by this situation, and we find it important to clarify the underlying factors and our path forward."
Despite the decline, KTDA said total payouts to farmers nationwide reached Sh69 billion, the second highest in the agency's history.
According to Mbasa, the dip was driven by a drop in global tea prices, a weaker U.S. dollar, and reduced green leaf production. The average price of made tea fell from Sh389 per kilogram last year to Sh309, while production declined by about 12 percent. The U.S. dollar exchange rate also weakened from Sh144 to Sh129, reducing export earnings when converted into local currency.
In the West of Rift region, earnings stood at Sh245 per kilo in Kericho, Sh209 in Bomet, Sh266 in Nyamira, Sh246 in Kisii, and Sh208 in Nandi -- all reflecting sharp declines from the previous year.
Mbasa said the government's withdrawal of the reserve price mechanism at the Mombasa Tea Auction further worsened the situation, forcing factories to sell large carryover stocks at throwaway prices.
"Initially, this tea was valued at $2.40 per kilo, but after the reserve price was lifted, some sold for as low as $0.85," he revealed. "This was a major loss to our factories and farmers."
He also pointed to the Tea Act 2020, which banned direct overseas sales, as another setback. Before the law took effect, many factories relied on direct exports that fetched higher and more stable returns.
"The immediate prohibition of direct sales caused a huge build-up of unsold teas," Mbasa explained.
"When these were later offloaded through the auction, the oversupply drove prices even lower."
Despite the headwinds, KTDA says it is implementing several measures to stabilize the sector.
These include improving leaf quality, cutting production costs through small hydropower projects, and enabling factories to access bank loans at six percent interest instead of inter-factory borrowing.
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Mbasa urged farmers to remain loyal to their factories and avoid selling to unlicensed private firms offering quick-cash payments.
"These firms may promise quick money, but they destabilize organized KTDA factories and threaten the long-term stability of the tea value chain," he cautioned.
He also thanked the Government of Kenya for its continued support through subsidies, recovery of lost funds, and modernization initiatives aimed at strengthening the tea industry.
"We are committed to transparency, collaboration, and practical solutions that will restore and grow farmer earnings," Ombasa said.
"Together, we shall overcome the current challenges and secure the future of smallholder tea farming."
