Low tea bonuses spell doom to South Rift residents

A tea basket on a tea farm in Tetu, Nyeri. [File, Standard] A wave of frustration is sweeping across the South Rift as tea farmers, local cooperatives, and businesses grapple with the devastating effects of this year's low tea bonuses announced by the Kenya Tea Development Agency (KTDA). The dismal payouts have left many farmers disillusioned, with some abandoning the crop altogether in search of more profitable ventures. Roy Langat, a tea farmer from Litein in Bureti Constituency, has become the face of the crisis after uprooting half an acre of his one-acre tea plantation. Langat said he could no longer sustain his family through tea farming after receiving only Sh55,000 in bonuses this year. "Out of my bonus, Litein Tea Factory deducted Sh17,000 for fertilizer, while another Sh28,000 went to Green Fedha, KTDA's microfinance arm, to repay a loan I had guaranteed for a friend. There are many other deductions in my payslip that make tea farming no longr viable. I would rather venture into dairy farming," he said. The financial blow to farmers has also trickled down to local savings and credit cooperatives (SACCOs), which rely heavily on annual tea bonuses for loan repayments. Simba Chai SACCO Chief Executive Officer, Wesley Ngeno, said the steep fall in bonuses has put SACCOs in a financial dilemma. "Ordinarily, we lend farmers based on the previous year's bonus, with a variation margin of plus or minus ten percent. This year, the drastic drop has left SACCOs exposed, forcing us to make nearly 100 percent loan loss provisions as required by law," said Ngeno. He revealed that Simba SACCO had extended over Sh10 million in loans to tea farmers and other stakeholders. "With the current situation, farmers with existing loans will not qualify for new credit facilities because of arrears. It means they will face financial hardship for the next one year as they try to recover," said Ngeno. He urged the national government to urgently provide subsidies or a relief package to cushion farmers from the economic shock caused by low bonuses. Momul Tea Factory Director, Isaiah Langat, called for transparency in tea grading and pricing. He urged the Tea Board of Kenya (TBK) to conduct blind tea tests to ensure that tea from the West of the Rift Valley is fairly valued. "We export at least four containers of tea directly to the United Kingdom. The same tea that fetches 2.4 U.S. dollars per kilogram at the Mombasa Tea Auction earns us 2.9 dollars through direct sales, where we avoid unnecessary brokerage, insurance, and transport costs imposed by KTDA," said Langat. He accused powerful cartels within the tea sector of manipulating factory rankings and keeping Chairmanship and other leadership positions within KTDA dominated by individuals from the East of the Rift. "Even high-performing factories like Momul are consistently ranked lower than their eastern counterparts despite producing superior tea," he noted. The economic impact of the low bonuses has also been felt by other sectors, including the transport industry. Public Service Vehicle (PSV) operators who depend on increased travel activity during the tea bonus season have reported declining revenues. "Ordinarily, September is our peak travel period as farmers receive their bonuses, but that has not happened this year," said Mr. Japhet Koskei, Chairman of 2MK Travellers Sacco. Responding to the outcry, Agriculture Principal Secretary Paul Ronoh attributed the 2024-2025 tea bonus decline to global market shocks, a stronger shilling, rising production costs, and the clearance of accumulated tea stocks at reduced prices. Speaking during the launch of the Nyota Program at Kericho Township Technical Training Institute, Dr Rono said the government has rolled out several measures to stabilise farmer earnings and improve tea quality. "These include the establishment of green-leaf quality standards, operationalisation of the new Tea Quality Analysis Laboratory in Mombasa, and rollout of the Strategic Tea Quality Improvement Programme (STQIP) to support factories producing lower-quality teas to meet global standards," said Rono. The PS further directed KTDA to release Sh2.7 billion recovered from collapsed banks to tea farmers by mid-October to ease liquidity challenges. He added that the government will continue implementing the Sh3.7 billion modernisation fund announced by President William Ruto to support factory upgrades and production of high-value teas. Rono also cited several government interventions to support farmers, including fertiliser subsidies reducing prices to Sh2,500 per bag, a Sh2 billion refund on earlier fertiliser costs issued in December 2024, and the removal of taxes on tea and packaging materials through the 2025 Finance Bill to promote value addition. "By 2032, we are confident that Kenyan tea will fetch Sh100 per kilogram, ensuring sustainable incomes for our farmers," he said. However, for now, many farmers like Roy Langat say the once lucrative tea industry has lost its shine - and unless urgent action is taken, the livelihoods of thousands across the South Rift may continue to wither alongside their neglected tea bushes.

Low tea bonuses spell doom to South Rift residents

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