Nairobi: Tea farmers have a reason to smile after the government injected Sh3.5 billion to refurbish tea factories to meet international standards and also enable them to do value addition on tea for better prices at the tea auction center in Mombasa. Speaking at Olenguruone Tea Factory during the issuing of a corporation certificate to the factory to enable it to operate autonomously as a factory, PS of agriculture Dr. Kiprono Rono noted that the government had prioritized farmers' welfare even as he issued a stern warning to the KTDA board over corruption and misappropriations of tea funds meant for factories.
According to Kenya News Agency, PS Rono announced Sh26 per kilo as the new price payable to farmers, which is an improvement from the initial Sh16 per kg. '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 Rono.
The government is investing Sh3.5 billion to modernize 19 tea processing factories to improve efficiency, improve quality, and lower production costs, which will boost the price per kg payable to farmers. He challenged tea factories to do value addition and diversification as a means to cope with 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 new reforms, Rono stated that all KTDA factories will be required to implement service-level agreements to ensure farmers receive high-quality services.
'Factories will now have the freedom and autonomy to conduct direct sales, which is expected to boost profitability and market access,' he said. 'By cutting out the middlemen, we ensure that farmers earn what they deserve. Price transparency is no longer optional, it is a necessity,' he added. He urged tea factories to ensure they meet international standards even as he commits to ensuring all factories have modern technology.
'We must embrace modern and digital technology to meet the requirements by our international consumers who are our main target as a country. The director in our factories must be in the field to ensure we meet this,' said Rono.
Willy Mutai from the Tea Board of Kenya echoed the sentiments by the PS, urging factories to embrace modernization, invest in scientific research, and enhance processing standards to boost their price negotiation power at the auction market. He believes that the combined efforts on reform, which entail reform on quality standards, market diversification, and revitalization of tea industries, will boost the bonus and earnings by the farmers.
'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 explained. 'This will address cash flow challenges while ensuring that farmers receive their dues promptly.'
He added that the reforms also prioritize value addition, with a target of ensuring that at least 40 percent of Kenya's tea is value-added locally rather than exported in bulk form. '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 equally emphasizing the need for consistent green leaf quality, particularly among western Kenya growers, to attract premium buyers and improve market competitiveness.