Smallholder tea farming in Kenya accounts for about 65 per cent of the total tea production in the country, with the rest being produced by multinationals.
Over the years, Kenya’s tea sector continues to be a key forex earner for the nation as well as a catalyst for the growth of local and rural economies. Notably, the tea subsector has a history of excellence but more importantly, with tea reforms taking root and the political goodwill of the government, smallholder farmers are in for higher market dividends.
This is so because the potential that lies in agriculture as we move towards non-reliance on rain-fed agriculture is enormous.
It is important to underscore that globally, Kenya is the third leading producer of tea and the biggest exporter, accounting for 28 per cent of the world tea exports.
In 2021, the tea sector earned the country Sh136 billion in foreign exchange and in the projections for the year 2022, we estimate export earnings from tea to stand at Sh150 billion.
To the Kenyan economy, and this money mostly moving to the bottom of our economic pyramid, this means economic empowerment of great proportions.
As we entrench the tea reforms mostly targeting small-scale tea farmers, it is important to note that this sector is one of the key drivers of Kenya’s socioeconomic development. It is a key pillar of economic growth, providing a source of livelihood directly to more than 750,000 farmers, 90 per cent of whom are smallholder tea growers.
The sector also supports more than 7 million Kenyans indirectly, representing about 13 per cent of the country’s population and at the same time contributes about two per cent of the GDP and four per cent of the agriculture GDP.
Clearly looking into the role this sector plays in the economy, this spells a key area of focus towards the growth and stability of our economy. Thus, as Kenya counts on agriculture to drive the attainment of Vision 2030 while still training our guns on the 2030 Agenda, the tea sector forms the nuclear to power this engine.
Many reforms have also been introduced by the Tea Act, 2020. These are aimed at improving returns to tea farmers, especially smallholder farmers.
Over time these farmers have been incurring costs unnecessarily; they have been affected by price fluctuations and governance issues bringing efficiency in most of the chain to almost a halt. With the tea reforms taking shape, most of these cries are part of history in the tea value chain.
More specifically, the sector, under new reforms would be key in creating millions of jobs for young people in the rural areas bearing in mind the more than 5 million unemployed Kenyans and slow rural economies.
Even as the tea reforms take shape and many gains are yet to be felt, in the course of time we have noted key successes critical to the future of the sector.
Farmers are getting better returns and early payments and have a big voice in electing their leaders. This is critical in avoiding farmer exploitation and a big blow to middlemen, who have for a long time been the hallmark of corruption in the sector. Last year alone, tea revenue grew by 3.5 per cent courtesy of these reforms.
Now farmers have a voice in governance through their elected leaders, it is worth noting that the decision by the smallholder tea factories to fix a minimum reserve in July 2021 to stem the declining tea prices from an all-time low of $1.89 per kg resulted in improved prices up to an average of $2.64 in October 2022. This is a strong indicator that the reforms are on course and require more support than ever before for the benefit of farmers.
Another key milestone towards improving the lives of the tea farmers is the fertiliser to the smallholder tea growers under the Kenya Kwanza government fertiliser-subsidy programme. This will ease the burden of the farmers in a great way and be a key catalyst to the entire agricultural reforms for increased productivity of all the sectors.
CEO of Kenya Tea Development Agency Holdings Ltd
