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KTDA admits poor performance as farmers protest bonus cut
Workers harvest tea in Bomet County.
Stung by backlash from more than 680,000 small-scale tea growers supplying 77 factories, the Kenya Tea Development Agency (KTDA) has admitted to poor performance in the financial year ending June 30, 2025, after bonus payments tumbled compared to the previous year.
The sharp drop in earnings has invited widespread anger from farmers across 21 tea-growing counties.
“While understandably disappointing to many, this year’s final payment (bonus) is a direct reflection of global trading conditions beyond KTDA’s control,” the agency stated on Tuesday through its Corporate Communications Department.
“The challenges we face are global and systemic, but by focusing on quality, efficiency, and innovation, together we will overcome them and secure better earnings in the future.”
The agency attributed the decline in payments to international market dynamics and unfavourable currency exchange rates, noting that the appreciation of the shilling against the dollar cut returns despite relatively stable global prices.
“In 2024, the shilling traded at an average of Sh144 to the US dollar, while in 2025 it averaged Sh129. This weaker exchange rate meant that even where international prices were stable, the amount realised in Kenya shillings was significantly lower,” the agency explained.
The agency also dismissed claims of bias against factories in the west of the Rift Valley in favour of those in the east, saying the discrepancies reflected market realities and quality differences.
In the east, factories recorded relatively higher prices: Kiambu fetched Sh371 a kilo, down by Sh46 from last year; Murang’a Sh376, down by Sh42; Nyeri Sh388, down by Sh42; Kirinyaga Sh400, down by Sh28; Embu Sh404, down by Sh34; and Meru Sh381, down by Sh46.
In contrast, the west of the Rift Valley saw steeper drops: Kericho earned Sh245, down by Sh101; Bomet Sh209, down by Sh85; Nyamira Sh266, down by Sh106; Kisii Sh246, down by Sh95; and Nandi/Vihiga Sh208, down by Sh66.
Farmers in the east will receive between Sh26 and Sh57 per kilo in bonus payments, while their counterparts in the west will get Sh10 to Sh32 per kilo – a sharp decline compared to last year.
Farmers and experts have questioned the agency’s explanation.
“KTDA owes farmers an explanation on the discrepancies in monthly prices and bonuses between east and west regions. This issue has persisted even with reforms in place,” said businessman Kiprotich Sirmah.
He called for value addition before export to boost returns from tea, one of Kenya’s leading foreign exchange earners.
Dr Michael Bongei, a strategic management expert, added that farmers’ grievances were valid.
“The issues raised by tea growers are weighty and require a fresh look at management, operational, and marketing strategies,” he said, urging KTDA and the Tea Board of Kenya to partner with county and national governments in opening new global markets.
KTDA Holdings said it was working with the government to improve farmers’ earnings by expanding value addition and diversifying international markets, including niche buyers for orthodox teas.
“Teas from certain high-altitude zones naturally fetch better prices because of quality attributes favoured in global markets,” KTDA said, though it did not clarify why Rift Valley highland teas underperformed.
The agency added that it is investing in factory modernisation and energy solutions to cut costs, reduce reliance on cut, tear, and curl (CTC) teas, and strengthen long-term sustainability.
In the financial year ending June 2024, KTDA paid farmers Sh89.29 billion for green leaf, up from Sh67.7 billion the previous year. It also distributed Sh1.04 billion in dividends to 54 factories – the highest in its history.
This year, however, earnings fell, with farmers losing between Sh0.80 and Sh19.10 per kilo on average.
