Government orders KTDA to disburse US$20.9M recovered funds to tea farmers  

KENYA – The government has instructed the Kenya Tea Development Agency (KTDA) to release Kes 2.7 billion (US$ 20.9M) recovered from two defunct banks to tea farmers across the country.  

The directive comes as a much-needed relief for farmers after the announcement of reduced bonus payments for the 2024–2025 financial year. 

In a directive issued by Agriculture Principal Secretary (PS) Kipronoh Ronoh, KTDA Holdings was ordered to ensure the funds are promptly disbursed to all 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 President William Ruto’s intervention. The President officiated the recovery process on September 11, 2025, and directed that the funds be remitted directly to farmers. 

The refund is expected to cushion farmers, particularly those in the West of Rift region, who were affected by the low bonus rates announced by their respective factories. 

Many tea growers had voiced frustration over declining earnings amid rising production costs and fluctuating global market conditions, with some reportedly abandoning tea farming altogether. 

PS Ronoh also highlighted the government’s ongoing efforts to revitalise the tea sector. These include the supply of subsidised fertilisers through the national subsidy programme, enhancement of tea quality, removal of value-added tax (VAT) on tea and packaging materials to promote value addition, and the modernisation of tea factories. 

While assuring farmers of continued government support, Ronoh urged KTDA to address inefficiencies affecting 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 stated. 

The Kes 2.7 billion refund will be distributed equitably among smallholder tea farmers managed by KTDA, with payments expected to reflect in their October payslips. 

Earlier this month, KTDA reported a drop in tea earnings across several regions. East Rift and Kiambu earned Kes 371(US$2.87) per kilo, down Kes 46 from last year, while Murang’a received Kes 376, Nyeri Kes 388 US$3.0, Kirinyaga Kes 400 (US$3.10), Embu Kes 404 (US$3.13), and Meru Kes 381 (US$2.95), all registering declines from the previous season. 

KTDA explained that tea from high-altitude regions generally commands higher prices due to its superior quality, which is more sought after in international markets.  

The agency added that it is expanding production of orthodox teas, which fetch higher prices in niche markets, to reduce reliance on conventional CTC teas. 

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