Tea farmers across the country have a reason to smile after the government directed the Kenya Tea Development Agency (KTDA) to release Sh2.7 billion recovered from two collapsed banks.
The directive comes as a relief to farmers following the announcement of low bonus rates for the 2024–2025 financial year. The recovered funds will be paid in addition to the annual bonus.
In a communication issued by Agriculture Principal Secretary (PS) Kipronoh Ronoh, KTDA Holdings was instructed to ensure the money is disbursed to farmers and reflected in their payment slips as a government refund.
“You are hereby required to ensure that the funds are paid equitably to farmers and reflected in their payslips as GoK Refund,” PS Ronoh directed KTDA Chief Executive Officer Wilson Muthaura.
The funds were released by the Kenya Deposit Insurance Corporation (KDIC) following the intervention of President William Ruto, who officiated the recovery on September 11, 2025, and directed that the amount be remitted to farmers.
The refund is expected to cushion farmers, particularly those in the West of Rift, who were disappointed by the low bonus payments recently announced by their respective factories.
Many growers had expressed concern over declining returns despite increasing production costs and market challenges, with some reportedly opting to uproot their tea bushes.
At the same time, the PS outlined the government’s ongoing efforts to revitalise the tea sector.
These include the provision of subsidised fertilisers under the government’s subsidy programme, improving tea quality, removing VAT on tea and packaging materials to promote value addition, and supporting the modernisation of tea factories.
Dr Ronoh said that while the government continues to open new markets and invest in infrastructure for the tea industry, KTDA must also address internal inefficiencies that have affected farmer earnings.
“The low bonuses are largely due to high factory operation costs, poor governance, and malpractices. KTDA should reform itself to lower production costs and enhance transparency,” he said.
The Sh2.7 billion refund will be distributed equitably among smallholder tea farmers managed under KTDA, with payments expected to reflect in their October payslips.
The PS’s letter was copied to Agriculture Cabinet Secretary Mutahi Kagwe, KTDA Chairman Chege Kirundi, and Tea Board of Kenya (TBK) CEO Willy Mutai.
Tea factories in Bomet County recorded some of the lowest payouts in the country — Mogogosiek at Sh12 per kilogram, and Kapkoros and Kapset at Sh13 per kilogram.
KTDA defended the drop in prices, noting that it did not affect one particular region.
The agency reported that tea from the East Rift and Kiambu fetched Sh371 per kilo, a drop of Sh46 from last year. Murang’a earned Sh376, down Sh42; Nyeri Sh388, down Sh42; Kirinyaga Sh400, down Sh38; Embu Sh404, down Sh34; and Meru Sh381, down Sh46.
KTDA explained that variations in earnings occur because tea from high-altitude zones generally fetches better prices due to its higher quality, which is preferred in international markets.
“We are expanding production of orthodox teas, which fetch higher prices in niche markets, to reduce reliance on CTC teas,” KTDA said in a statement attributed to its Corporate Affairs department.
