Agriculture Cabinet Secretary Mutahi Kagwe has unveiled a government plan to raise smallholder tea farmers' earnings from Ksh59 per kilogram in 2022 to Ksh100 by 2027. He announced it in Embu on Thursday during the release of the 2025 Kenya Tea Industry Performance Report. The initiative includes a Ksh3.7 billion concessional loan for factory upgrades.
Agriculture Cabinet Secretary Mutahi Kagwe unveiled the plan at Rukuriri Tea Factory in Embu county on Thursday, April 2, while releasing the 2025 Kenya Tea Industry Performance Report. He stated the reforms fall under the Bottom-Up Economic Transformation Agenda (BETA) to boost competitiveness, market access, and farmer earnings.
"To achieve the BETA target aimed at increasing smallholder earnings from Ksh59 in 2022 to Ksh100 per kg by 2027 of green leaf, we are implementing the following 10-point agenda and transformative measures," Kagwe said.
The government will provide a Ksh3.7 billion loan facility for factory modernisation at a 5 per cent concessional interest rate to upgrade machinery and expand orthodox tea production. Other measures include cost reductions through new management agreements that cut agency fees from 2.5 per cent to 1.5 per cent, VAT removal on tea, and zero-rating packaging materials. A laboratory will be set up in Mombasa to test for pesticide residues, heavy metals, and contaminants.
Authorities aim to tackle the tea glut and unsold stocks in Mombasa via sustainable funding for research, market development, and infrastructure. Plans also include an e-commerce platform linking producers directly to buyers, stricter surveillance against green leaf hawking, finalised quality standards, and a programme to improve low-performing factories.
The initiative addresses farmers' complaints over low earnings amid dropping bonuses in 2024/2025 and KTDA's January proposal capping monthly payments at Ksh30 per kilogram, or Ksh26 in some Rift Valley regions due to cash flow issues and global price fluctuations.
