A row that began at the kitchen table of tea farmers has reached the gates of government offices. After a wave of complaints from growers who received notably smaller bonus payments this financial year, the Ministry of Agriculture has ordered a full audit of all loans taken by tea factories run under the Kenya Tea Development Agency, KTDA. The move is meant to give farmers clear answers about where money has gone and whether management choices aggravated already tough market conditions.
What the government has asked for
Principal Secretary in the State Department for Agriculture, Dr Kipronoh Ronoh, told the Tea Board of Kenya to begin a comprehensive audit immediately. The review must determine how much each factory borrowed, how the loan proceeds were used, the precise terms and conditions, and the current outstanding balances for every factory. The findings will feed into a ministry assessment of financial sustainability and possible operational reforms. The Tea Board was given 14 days to submit a detailed report.
Why this matters to farmers
More than 680,000 smallholder tea farmers who deliver leaf to KTDA-managed factories have reported significantly smaller bonus payments compared with the previous year. For many families the bonus is not an extra indulgence but a critical part of annual income used to pay school fees, buy inputs and settle household bills. Farmers say they need transparency on the factories financial position so they can understand whether falling payouts were caused by external market forces or internal decisions about borrowing and costs.
KTDA response and immediate cost controls
Following the government directive, KTDA moved quickly to show it is tightening spending. The agency suspended all staff travel, off-site meetings and training activities across its subsidiaries until further notice, and said any exceptions must be cleared in writing by the Holdings Board through the Group CEO. The memo was framed as a governance and cost control measure while the audit proceeds. Farmers and critics see it as a necessary first step, though many say the suspension must be followed by deeper changes.
The market explanation and the role of the exchange rate
KTDA has publicly pointed to shifting international market dynamics and currency movements as the root of lower payouts. While global tea prices were described as broadly stable, KTDA said the stronger Kenya shilling against the US dollar reduced payments in local currency. The agency reported the exchange rate averaged about Kes 144 to the dollar in 2024 and strengthened to about Kes 129 this year, a movement that cut returns when converted to shillings. For farmers who are paid in shillings, that currency swing translated into smaller bonuses on the ground.
What the audit could reveal
An audit focused on loans will not only list numbers. It can show whether borrowed funds were used for capital investment, working capital, debt refinancing or recurring overheads. It can also expose whether loan terms are onerous and whether repayment schedules are sustainable given the factories cash flow. If the audit finds misaligned priorities, it will create political and commercial pressure for restructuring, renegotiation of loan terms, or leadership changes in the factories. Conversely, if external market forces are confirmed to be the main cause, the audit can help craft targeted relief and risk management measures to protect farmers in future shocks.
What farmers and the public want to see
Farmers are asking for three things. First, clear accounting that explains how every shilling borrowed was spent. Second, an explanation for the decision making that led to borrowing at particular terms. Third, reforms that ensure bonuses are protected when possible and that governance prevents wasteful allowances and unnecessary expenses. Many smallholders say they will accept tough market explanations only if the financial records and governance practices prove sound. Otherwise they want leadership held to account.,
Possible next steps and a simple checklist for transparency
If the Tea Board delivers a timely, full report, the ministry can move fast to recommend corrective action. Steps that would restore confidence include public release of summarized audit findings, clear plans to renegotiate or refinance unsustainable loans, tighter rules on allowances and travel, and a farmer-facing dashboard showing factory-level performance and payments. Those measures would not only answer the immediate outcry but also strengthen the tea value chain for the long term.
A moment for reform
This is a moment that will test the sector. Smallholder tea farmers have tended Kenya tea through generations. When their incomes fall without adequate explanation, anger spreads fast. An audit that is comprehensive, transparent and acted upon can turn this crisis into an opportunity to modernize governance, protect farmer income and rebuild trust. Done poorly, the fallout risks deeper harm to livelihoods and to one of Kenya most visible agricultural brands. The outcome will depend on whether leaders choose transparency and accountability or a slower, closed process that leaves farmers guessing.
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