The Kenya Tea Development Agency Holdings (KTDA) has been challenged by President Uhuru Kenyatta to come up with a comprehensive plan that will guarantee value addition to 90% of the country’s tea production before it is exported. The president believes that tea growers would gain the most payback from their labor if they added more value to the tea they produced, instead of selling it raw.
“The real future for tea is value adding 90% of our tea and finding direct markets from the farm to the one consuming the tea in a cup. That will be the long-term solution and that solution lies with you to set the foundation,” Kenyatta said.
Value addition, according to Kenyatta, will help to increase employment opportunities for young people in the nation while also raising the revenue of tea producers. He emphasised that as a result of the government-initiated changes, the profits of smallholder tea farmers grew by 42.4%, from Sh44 billion in 2021 to Sh63 billion in 2022.
“This is approximately an additional Sh18.74 billion that will be paid to tea farmers courtesy of the interventions we, as a government, made to revitalise this sub-sector,” the Kenyan president added. “With this performance, the average bonus payment per kilogram of green leaf in 2022 will rise by 76% from Sh21.07 earned last year to Sh37.11 in 2022.”
Revitalising the industry
He highlighted that each tea business will pay various rates based on its performance, with some firms paying more than others, noting that the increase of 76% is an average. According to Kenyatta, the over 650 000 smallholder tea farmers and the approximately 30% of Kenyans who work in the broader agricultural sector will have more hope as a result of the tea subsector’s stronger performance this year.
The establishment of the minimum reserve price at the Mombasa tea auction in July 2021, which resulted in an increase in tea export profits from Sh120 billion in 2020 to Sh136 billion in 2022, was one of Kenyatta’s important interventions that helped the tea sub-sector earn more money.
“I am confident that once the ongoing reforms are fully implemented, the tea industry will be fully revitalised for the benefit of the tea farmers and the country. Monthly payments to tea farmers are also being done by the first week (by fifth of every month) as opposed to the third week.”
Kenyatta gave Peter Munya, the cabinet secretary for agriculture, instructions to guarantee that the fertiliser subsidy is enhanced from Sh1 billion to Sh3 billion in order to significantly increase the revenue of tea producers.