The Kenya Tea Development Agency (KTDA) has assured more than 650,000 smallholder tea farmers that all factories under its management remain financially sound, dismissing social media reports suggesting otherwise as misleading and malicious.
In a statement released Friday, the agency termed claims that some factories are borrowing to survive or facing auctioneer threats as “false and deliberately aimed at discrediting the smallholder tea sector.” KTDA urged stakeholders to disregard such misinformation, stressing that farmers continue to receive their payments promptly.
The agency explained that while factories occasionally resort to short‑term borrowing, this is only to bridge timing gaps between immediate payments to farmers and the eventual sale of processed tea. “Farmers are paid almost immediately upon delivery of green leaf, while made tea may be sold several months later, particularly during periods of high stocks. This mismatch can occasionally necessitate short‑term financing to ensure uninterrupted payments,” KTDA noted, adding that such borrowing is not routine but arises under specific market conditions, including temporary tea gluts.
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KTDA emphasised that all loans are fully secured against properly valued tea stocks, sanctioned by factory boards elected by farmers, and settled promptly once sales are completed. “All loans, whether short‑term or for development, are approved by factory boards, adhere to prudent financial management practices, and are supported by proper, auditable valuations,” the statement read.
The agency further clarified that no deductions have ever been made from farmers’ earnings for a proposed stabilisation fund. Although discussions were held on creating such a fund to cushion second payments during depressed returns, it was never implemented and no money has ever been allocated to it. KTDA described claims to the contrary as “inaccurate and misleading.”
The statement also addressed the ongoing Tea Amendment Bill before the National Assembly, confirming that KTDA has submitted proposals aimed at safeguarding farmers’ interests. The agency reiterated its commitment to transparency, accountability, and sustainable value creation under its Farmer First agenda.
“We urge all stakeholders to disregard misinformation intended to undermine confidence in the sector and reverse the gains made by smallholder tea farmers. The Agency remains firmly committed to transparency, accountability, and the continued delivery of sustainable value to over 650,000 smallholder tea farmers,” KTDA said.
By Masaki Enock
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