Explainer: Why tea farmers east of the Rift Valley earn better  

The tea sector is the third leading foreign exchange earner for Kenya, bringing in Sh181.7 billion from exports last year, and supporting an estimated 600,000 smallholder farmers countrywide, according to the Tea Board of Kenya (TBK).

How is Kenya’s tea sector structured?

The tea sector is structured into large-scale producers and smallholder farmers. While large-scale farmers have the muscle to access the market, the majority of smallholder farmers operate mainly under the Kenya Tea Development Agency (KTDA)- a private company owned by the farmers- which operates 54 factories countrywide. 

The farmers take their produce to these factories, from where it is processed and taken to the Mombasa Auction for sale. A smaller number of smallholder farmers supply their produce to large-scale producers as out-growers, and the tea follows the same process to market.

Among the smallholder farmers, those located in counties classified as WoR (counties in Western and Rift Valley) supply 70 percent of the tea to KTDA, as those based in EoR (counties in the Mt Kenya region) supply 30 percent of the tea quantities.

Why do farmers’ earnings vary from one zone to another?

Different players have indicated a number of reasons causing tea from Mt Kenya counties to fetch higher prices than the produce coming from Western and Rift Valley. The TBK, which regulates the sector, cites a number of reasons, mainly high production costs among factories in the WoR, where it costs 31 percent higher compared to EoR factories.

Read: Williamson, Kapchorua shares rally to all-time highs

It also says that Pakistan and Egypt, the major buyers of Kenyan tea, have had a preference for tea from the EoR, thus making it competitive at the Mombasa auction. The regulator also cites low quality of tea from WoR as being responsible for the produce fetching low prices, noting that the region’s quality has particularly dropped since 2021 when the government introduced a reserve price to guarantee farmers minimum earnings.

“Some of the directors required factory managers to compromise green leaf standards from tea farmers on account of the guaranteed reserve price,” TBK says.

Are agro-ecological conditions a factor in earnings?

KTDA, which represents the majority of smallholder farmers, also says natural geographical factors like altitude, soil, and climate causes the quality of tea in WoR counties to be lower than that of the counties in EoR, thus causing the disparity in prices.

The agency also blames human influences of agronomy, such as plant husbandry, varieties, plucking standards, plucking cycles, and post-harvest handling of the leaf for lowering tea quality in the WoR. Other factors cited by the KTDA are buyer preferences, demand, and supply forces vis-à-vis the different varieties of tea available in the market, and the quality of made tea, such as poor size of grade, mixed grading, and presence of fibre.

Farmers from the WoR blame substandard green leaf due to poor crop husbandry, shortage of pluckers, and cartel control over labour, which reduces harvest efficiency and increases costs, and inconsistent access to fertiliser and farm inputs for earning less than their EoR counterparts.

How does tea pricing happen at the Mombasa Auction?

Valuation of tea offered for sale at the Mombasa Auction is done by brokers following tasting to ascertain its quality.
The tea tasting parameters of interest include the physical appearance of the tea in terms of the degree of blackness, evenness and blackness of the particles forming the grade, as well as its liquor properties of brightness, colour, briskness/astringency, strength and flavour, the TBK explains.

The teas are then classified as “best”, "good", "good medium", "medium", "lower medium", and "plainer", and it is from these grades that the tea is valued to provide a bidding price.

“The lower quality of green leaf plucked by farmers in the WoR explains the reasons why most of the teas in the Region fall within the category of "medium" to "plainer" category,” the regulator says. 

What can a farmer do to improve the quality of green leaf which is the first stage? 

While there exist factors farmers may be unable to address in pursuit of boosting tea quality, actions such as professional crop husbandry, plucking the required leaves, and handling the green leaf carefully before delivering to the factory can boost tea quality.

The TBK observes that its surveillance shows green leaf quality standards in the WoR are less than 50 percent in most instances, against the desired minimum of at least 60 percent. 

What is being done to improve the quality of tea from the WoR? 

The government says the removal of the reserve price in October last year was one of the actions aimed at boosting the quality of tea from Western and Rift Valley, where cases of a drop in quality were witnessed in recent years, causing stockpiles of unsold product.

The State is also providing a Sh3.7 billion concessional financing to smallholder tea factories to modernise their equipment and expand production of orthodox teas as a way to cut costs, since high production costs eat into farmers' earnings.

KTDA also says its plan is to ensure that the quality of tea is assessed from the factory, during the manufacturing process, and once packed into a lot, even before it gets to tea brokers and buyers, to ensure that it gets to the final stages in good quality.
[email protected]