Tea farmers brace for lower bonuses amid calls for sector reforms

Tea farmers across Kenya are anxiously awaiting this year’s final bonus announcement, a moment that will determine the financial reward for months of hard labour. Early indications, however, suggest that the payouts will be lower than last year’s, sparking concern among growers who depend on the crop for their livelihoods.

Experts say the decline in earnings is tied to a mix of global and local factors that shape tea prices. Kenya remains the world’s leading exporter of black tea and the second-largest producer after China, yet the country continues to rely heavily on bulk exports sold through the Mombasa auction — a system vulnerable to market volatility.

Oversupply in competitor countries such as India and Sri Lanka has depressed auction prices, while economic struggles in key markets including Pakistan, Sudan, Ukraine, and Russia have weakened demand for Kenyan tea.

Exchange rate fluctuations have also influenced farmer earnings. Since tea is traded in dollars, a weaker shilling converts to higher earnings in local currency, but this benefit is offset by rising costs of imported farm inputs such as fertilizer.

Farmers have been cushioned to some extent by government subsidies that lowered fertilizer prices from KSh 3,400 to KSh 2,500 per 50kg bag. Even so, climate change remains a looming threat. Shifting rainfall patterns and prolonged dry seasons are already disrupting production, and experts warn that Kenya’s tea yields could fall by as much as 25 percent by 2050 if current trends continue.

Another challenge lies in the country’s limited progress in value addition. Almost 95 percent of Kenyan tea is exported in bulk, meaning the country misses out on premium prices commanded by specialty teas such as green, orthodox, and purple varieties. Industry observers argue that until Kenya invests in branding and product diversification, farmers will remain at the mercy of global commodity cycles.

Other tea-producing countries offer useful lessons. Sri Lanka has succeeded in branding “Ceylon Tea” as a premium global product through strict quality controls and marketing. China has diversified into multiple speciality teas, from oolong to white tea, creating buffers against the volatility of bulk pricing.

India, meanwhile, relies heavily on domestic consumption, which guarantees its farmers a steady demand base. For Kenya, the path forward could lie in building a stronger “Brand Kenya Tea,” investing in specialty markets, and encouraging higher local consumption. Currently, only about five percent of Kenyan tea is consumed locally, a stark contrast with India and China.

The Kenya Tea Development Agency (KTDA), which manages more than half of the country’s production, is also under pressure to deliver reforms. Its new leadership, under Chairman Chege Kirundi, has pledged a “Farmers First” approach aimed at lowering operational costs, ensuring transparency in auctions, and introducing innovative marketing strategies. Farmers, however, are eager to see action beyond promises, particularly in areas such as timely delivery of inputs and efficiency in factory operations.

Analysts note that responsibility for building a more resilient tea sector lies with all stakeholders. Farmers must embrace better agronomic practices to improve yields and quality, factories need to adopt efficient technologies to reduce costs, and government has a role to play in investing in infrastructure, negotiating stronger trade deals, and supporting value addition initiatives. Consumers, too, can contribute by increasing local tea consumption, thereby creating a more reliable domestic market.

While this year’s bonus is expected to disappoint, the real question for Kenya’s tea industry is whether it is ready to break free from its dependence on bulk exports and low-value pricing. With global population — and demand for tea — projected to grow, the opportunity exists to reinvent the sector.