By Patricia Njoki and Vincent Misango
Introduction
The tea sector is a leading economic driver, ranking third in foreign currency earnings with the country’s Black CTC tea accounting for 24 per cent of the world tea exports. Its contribution to overall GDP is 2 per cent and 40 per cent to agricultural GDP. The industry has over 800,000 tea growers, employing 6.5 million people directly and indirectly. The tea sector value chain from green leaf to the consumer consists of tea farming, processing, packaging and distribution. This value chain has unexploited job creation opportunities, hence its inclusion in the Bottom-Up Economic Transformation Agenda (BETA) priority cash crops. However, the sector is affected by limited value addition and product diversification, management issues and declining tea quality, which lowers its competitiveness. As a BETA priority cash crop, the government aims to enhance its production, value addition and export market. This blog explores the tea value chain and proposes recommendations aimed at job creation.
Status of Job Creation in Tea Value Chain Progress in the tea value chain
Jobs creation through tea farming
Tea is cultivated in 21 counties with smallholder farmers (650,000 farmers) accounting for 60 per cent produce while estate farmers produce 40 per cent in 25 farms. The small and medium farms employ over 3 million people while large farms employ over 100,000 in activities such as manual and machine tea pickers, pruners, farm managers and casual labourers. Tea farming acreage has constantly increased from 2019 to 2023, translating to more demand for labour in tea picking. However, the average yield of marketed tea fluctuated for the period exhibiting highest performance in 2020 (Figure 1).
Figure 1: Tea production (2019-23)
Expanding jobs creation through tea value addition and marketing
Green leaves are collected, transported and locally processed into black and specialty teas. Tea farmers are divided into small-scale and large-scale farmers are managed by Kenya Tea Development Agency (KTDA) and Kenya Tea Growers Association (KTGA), respectively. KTDA operates 72 factories whereas KTGA operates 39 factories and 7 licensed cottage tea factories focusing on specialty teas such as purple tea, Orthodox, Oolong, white and green teas employing about 2,000 people. Green-leaf drivers, tea clerks and buyers, tea sorters, spreaders, packers, tea factory loggers, machine operators and factory workers are engaged here.
The export market consumes the largest share at 99 per cent as at 2023 with over 85 global markets across Europe, Middle East and Asia. Currently, there are four exporters, namely KTDA, Finlay’s, Williamson tea and East African Tea Trade Association, and also wholesalers, retailers, tea vendors, hawkers, and brokers. Moreover, the value of the marketed tea over the last five (5) years has been on an upward trend as shown in Figure 2.
Figure 2: Marketed tea in Ksh millions
Challenges to Tea Sector Value Chain
Limited resources
The potential of tea value chain in job creation is limited due to budget constraints. Investment into cottage industries, modern processing equipment, capacity building of farmers through digital extension and onsite officers, and subsidy of farm inputs and Kenya tea brand promotion into new markets is required.
Institutional operational inefficiencies
Management of smallholder farmers under KTDA has suffered rampant wrangles affecting efficiencies. Poor governance practices and conflict of interests has affected quality of farmers skills impacting on tea quality, processing and marketing of tea lowering farmers’ incomes.
Limited research and development (R&D)
Minimal investment in R&D restricts innovation in areas such as specialty tea products, tea-based cosmetics, and agro-tourism. Furthermore, limited access to modern
processing equipment and ICT tools slows the adoption of global best practices, lowering competitiveness and employment opportunities in high-value segments.
Potential of Tea Sector and Associated Job Creation
In MTP IV, the government has committed to advancing tea cottage industries, diversifying into specialty teas, establishing R&D and value addition hubs, implementing incentives, creating shared facilities of common user facility at Dongo Kundu special economic zone (SEZ), providing processing equipment to tea cooperatives and adding 10 orthodox tea lines in smallholder factories. These efforts will contribute to job creation.
Product diversification
Tea is increasingly used in food products such as tea-infused alcoholic beverages, tea- flavoured yoghurts, and baked goods. Furthermore, its antioxidant and antibacterial properties have made it a sought-after ingredient in cosmetics and household products. Soaps, shampoos, conditioners, and lotions enriched with tea extracts are driving growth in the manufacturing sector, thus creating employment in product development, processing, and marketing.
Domestic cottage industries
Promotion and advancing of tea cottage industries will stimulate ready market for both speciality tea and green tea. Investments into the industries at the national and county level clusters stimulates job creation from farm level to processing to tea blending, branding and marketing.
Agro-tourism
Establishment of tea farm tours and tea-tasting events aligns with the Kenya Vision 2030. This creates opportunities to engage the youth in different roles such as tour guides, brand ambassadors, drivers, engaging in supportive activities such as Airbnb businesses, and other adventurous activities within the tea farms environs.
Expansion into emerging tea market
Though Kenya is top exporter of tea, relying on its traditional markets, government initiatives are in place to tap emerging tea markets abroad. This will increase the number of exporters and tea packing industries.
Conclusions and Recommendations
The tea sector significantly contributes to Kenya’s economy and employment opportunities. However, its full potential remains untapped, hence the following recommendations.
Increase infrastructure funding: The government through tea directorate to consider investing in infrastructure by establishing cottage tea industries at the national and county clusters to raise the productive capacity leading new job opportunities.
Strengthening institutional operational frameworks: The Ministry of Agriculture in collaboration with other stakeholders in the tea value chain to align institutional frameworks to enhance quality tea production, hence increasing farmers income and Kenya’s tea export market.
Investment in research and development: The Tea Research Institute in Kenya to enhance development of specialty tea products and other tea product diversifications to tap in the premium markets, thus stimulating new job opportunities.
