NAIROBI —In the rolling hills of Murang’a, where tea bushes stretch across the highlands, Kenya is betting big on a sector it considers vital to its economy and rural life.
On Wednesday, the government announced sweeping reforms meant to breathe new life into the country’s tea industry. The measures include tax reliefs, infrastructure investment, and incentives aimed at giving farmers a bigger share of the profits.
Agriculture Cabinet Secretary Mutahi Kagwe, speaking at Gacharage Tea Factory during International Tea Day celebrations, said the 2025/2026 Finance Bill would eliminate excise duty on tea packaging materials and remove VAT on value-added exports.
“These measures will make it cheaper for factories to package tea for export, and help our farmers earn more from international markets,” said Mr Kagwe.
Tea remains a pillar of Kenya’s economy. It supports more than 650,000 smallholder farmers and accounts for nearly a quarter of the country’s foreign exchange earnings. But behind the impressive numbers lies a story of low farm-gate prices, limited value addition, and growing climate pressures.
Mr Kagwe said the reforms aim to address those concerns head-on.
“Tea is not just a beverage. It is the backbone of rural livelihoods and a key part of our national identity,” he told farmers gathered for the event. “We are building a value chain that works and works fairly for those who grow it.”
One of the government’s boldest moves is to back direct tea sales. Farmers will now be able to deal directly with international buyers bypassing brokers and auction houses that have long dominated the trade.
“Cutting out middlemen means farmers earn what they deserve. Price transparency is no longer a luxury it is a right,” said Mr Kagwe.
To help producers take full advantage, the government plans to set up shared processing and packaging facilities. These will offer modern equipment and branding services, particularly for smallholder-led ventures.
Mr Kagwe urged factory owners to diversify their offerings by exploring herbal, flavoured, and instant teas — and to invest in digital marketing to reach new audiences abroad.
In a nod to mounting complaints over fertiliser access, he said the government was working with private distributors to get supplies closer to farmers.
The reforms received strong backing from the Kenya Tea Development Agency (KTDA), the body that manages tea for smallholders across the country.
KTDA chairman Chege Kirundi praised the government’s direction and outlined the agency’s own plans to encourage value addition, develop farmer-owned brands, and attract younger generations into tea farming.
“We are turning farmers into entrepreneurs,” Mr Kirundi said. “It’s about ownership of the product, the brand, and the market.”
Still, the challenges ahead are significant. Rising production costs, volatile prices, and the impacts of climate change continue to squeeze margins for farmers.
Isaac Tongola, Executive Director of Fairtrade Africa, struck a more sober tone. He cited research showing that only 20 percent of Kenyan tea farmers earn enough to meet their families’ basic needs.
“This is a justice issue,” he said. “We must recognise the true value of the people who feed and sustain us.”
Mr Tongola also raised concerns about looming compliance burdens. He pointed to the European Union’s new Corporate Sustainability Due Diligence rules, warning that smallholders risk being locked out of global markets unless they get support to meet the standards.
“These rules may be well-meaning, but they risk hurting the very people they aim to protect,” he said.
Ndung’u Gathenji, Chairman of the Tea Board of Kenya, offered a long-term vision. He said the future of tea lies in storytelling, branding, and environmental stewardship not just bulk exports.
“Let us not export leaves. Let us export Kenyan brands and Kenyan value,” Mr Gathenji said. “Sustainability begins with protecting the land, the forests, and the communities that grow our tea.”
He said the Board was working to reduce factories’ reliance on wood fuel and encourage cleaner energy such as solar, hydro, and biomass.
Plans are also under way to review the Tea Act of 2020 and create a Tea Sustainability Council to monitor progress.
At the event, Pakistan’s Commercial Counsellor, Adeela Younis, reminded the crowd of Kenya’s importance on the global stage. Pakistan is one of the biggest importers of Kenyan tea.
“We are proud partners in trade,” she said. “Kenyan tea is widely consumed in Pakistan, and we look forward to growing that relationship.”
For now, the promise of higher earnings and greater autonomy is sparking cautious hope among farmers. But as the reforms move from speeches to implementation, the challenge will be making sure the benefits truly reach the ground and the hands that pluck the leaves.
