Kenya launches major tea reforms to raise farmer pay to US$0.77/kg by 2027 

KENYA – The Kenyan government has rolled out a comprehensive tea sector reform package aimed at lifting smallholder earnings to Kes 100 (US$0.77) per kilogramme of green leaf by 2027 through improved quality, stable prices, and structural changes. 

Agriculture Cabinet Secretary Mutahi Kagwe told the National Assembly that the ministry has introduced multiple measures, including rigorous enforcement of green-leaf standards, the creation of a new Tea Quality Laboratory in Mombasa, and a nationwide Strategic Tea Quality Improvement Programme. 

A Sh3.7 billion concessional loan facility will fund factory modernisation, while the reserve price at the Mombasa auction has been scrapped to boost demand. Authorities are also stepping up the fight against green-leaf theft and illegal hawking. 

Additional initiatives include governance and financial audits of underperforming factories, adoption of digital tea-marketing platforms, stronger promotion under the African Continental Free Trade Area (AfCFTA), and the Tea Levy Regulations 2024 to ensure sustainable financing. 

Kagwe announced plans to shift from annual to quarterly bonus payments to ease household cash-flow pressures. “These reforms are structural, not cosmetic. Our goal is to guarantee every tea farmer a dignified and predictable income regardless of region,” he told MPs. 

Currently, farmers receive a monthly base payment of Kes 23–25 per kg plus an annual bonus that varies with auction performance.  

In the 2024/25 financial year, average Mombasa auction prices fell to US$2.41 per kg of made tea from US$2.54, largely due to foreign-exchange shortages in Pakistan and Egypt, conflict in Sudan, and trade restrictions in Iran — markets that together take around 70 percent of Kenya’s exports. 

Regional disparities remain stark. Factories east of the Rift Valley averaged US$2.95 per kg, while those west of the Rift fetched only US$1.78, resulting in farmer payments of Kes 69/kg in the east versus Kes 38/kg in the west.  

The national average stood at Kes 56/kg. Production costs have also risen sharply, reaching Kes 112.96 (US$0.87) per kg nationally and Kes 134.34 (US$1.04) in western factories, driven by inefficiencies and high staffing levels.  

Kagwe stressed that reviving underperforming factories is central to lifting returns. The wide-ranging reforms seek to address both domestic inefficiencies and external market shocks, ensuring long-term stability and higher incomes for Kenya’s more than 600,000 smallholder tea growers. 

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