The Kenyan government has implemented various policy interventions in the tea sector over the past four years, resulting in substantial financial gains for growers. These interventions, initiated in 2022, have led to reduced production costs, modernized processing facilities, expanded international markets, and enhanced value addition. According to the Tea Board of Kenya, over 650,000 smallholder tea farmers have benefited from the distribution of approximately 290,000 metric tonnes of subsidized fertilizer.
The government has invested KSh 850 million in upgrading machinery and processing equipment across 17 smallholder tea factories nationwide. These measures have positively impacted both direct farmer payouts and national export revenue. Average green-leaf payments to farmers rose from approximately KSh 35 per kilogram in 2021 to KSh 64 in 2024, settling at KSh 56 per kilogram in 2025. This increase in payouts has brought financial relief to growers across key producing regions.
Total tea export earnings have also seen significant growth, increasing from KSh 136.5 billion in 2021 to KSh 181.6 billion in 2024, reaching KSh 186.9 billion in 2025. Annual production figures have reflected growth, rising from 537 million kilograms in 2021 to 598 million kilograms in 2024, before recording 550 million kilograms in 2025. The government's efforts to improve the sector have yielded positive results, with growers acknowledging the financial relief brought about by improved payouts.
The government has set a target of raising green-leaf payments to at least KSh 100 per kilogram by 2027 through cost reductions and direct marketing strategies. To achieve this, regulatory and fiscal reforms implemented in 2026 further support the sector. The government eliminated Value Added Tax (VAT) on factory-sourced tea destined for local value addition, zero-rated import duties on specialized packaging materials, and disbursed a KSh 100 million grant to Ketepa to establish a shared value-addition facility.
Complementary measures, including the newly operational Tea Registration and Licensing Regulations and the Tea Levy Regulations, have enhanced trade structures across key export destinations. These destinations include Pakistan, Egypt, the United Arab Emirates, the United Kingdom, China, Saudi Arabia, Germany, and Malaysia. The government's efforts to improve the sector have not only increased financial gains for growers but also expanded market access.
Despite the progress made, growers across key producing regions have advocated for sustained oversight to safeguard earnings against rising operational costs. The next phase of sector reforms focuses on tightening factory governance, reducing grid energy overheads, expanding local blending capacities, and securing direct sales channels to maximize net returns for smallholders. This phase aims to build on the progress made and address emerging challenges.
The reforms have had a positive impact on the lives of smallholder tea farmers, with improved payouts and increased financial relief. As the sector continues to grow and evolve, the government's efforts to address emerging challenges and improve the business environment will be crucial in sustaining the growth and maximizing the benefits for growers. The sector's growth has also contributed to the country's economy, with increased export revenue and production figures.
Key points
- The Kenyan government's tea sector reforms have led to improved financial gains for growers, with average green-leaf payments increasing from KSh 35 per kilogram in 2021 to KSh 56 per kilogram in 2025.
- Total tea export earnings have increased from KSh 136.5 billion in 2021 to KSh 186.9 billion in 2025.
- The government aims to raise green-leaf payments to at least KSh 100 per kilogram by 2027 through cost reductions and direct marketing strategies.
