Kenya Tea Development Authority (KTDA)
The Kenya Tea Development Agency Limited (KTDA) was established in 2000 and is owned by 54 tea companies which, in turn, have 620,000 smallholder tea farmers as individual shareholders. The tea companies collectively own 66 tea processing factories. KTDA emerged from the privatization of the Kenya Tea Development Authority. KTDA benefits from policies that create a conducive growth of an inclusive business in the tea sector.
KTDA offers comprehensive services for smallholder tea farmers. The services offered include inputs and agri-extension, transportation, processing, marketing, and access to finance. These services are delivered by KTDA and its subsidiaries. Farmers receive monthly payouts to meet their needs as the growing season is under way. KTDA's dividend payout policy requires to distribute 30% of their profits to its small farmer shareholders. KTDA's revenue in 2020 was about USD 738 million. However, continued high production in the region coupled with global oversupply exert pressure on the tea price.
The farmers get prices 12% above the average price of tea sold at the Mombasa auction. They typically earn 70% of their income from tea production and receive 75-80% of the final tea price, a higher pay out than farmers in neighbouring countries.
KTDA invested in reducing the effects of the tea price drop by investing in small hydropower stations for cheaper power supply, diversification to other teas to reduce reliance on Black CTC teas, and farmers’ training on income diversification and management.
Extension support services are creating systemic changes in the socio-economic lives. 820 Farmer Field Schools increase production and employ good agricultural practices. This improves product traceability, certification to enhance quality, marketability, and the price of tea.