The Kenya Tea Development Agency (KTDA) has reaffirmed the financial stability of all its factories, assuring over 650,000 smallholder tea farmers that payments are being made promptly, while dismissing circulating social media claims suggesting otherwise.


In a statement released on Friday, KTDA described reports that some factories are borrowing to stay afloat or facing auctioneer threats as “false, misleading, and deliberately aimed at discrediting the smallholder tea sector.” The agency urged stakeholders to disregard such misinformation.


“KTDA wishes to clarify that all factories under its management remain financially sound and continue to meet their obligations to farmers and other stakeholders in a timely manner,” the statement read.


The agency explained that while some factories occasionally use short-term borrowing, this is strictly to bridge timing gaps between payments to farmers and the eventual sale of processed tea.


Paid almost immediately


“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 such as those experienced in recent years. This mismatch can occasionally necessitate short-term financing to ensure uninterrupted payments to farmers,” said KTDA.


“Such borrowing is not routine but arises under specific market conditions, including temporary tea gluts.”


KTDA stressed that all short-term loans are fully secured against properly valued tea stocks, approved by factory boards, and settled promptly once the tea is sold.


“All loans—whether short-term or for development—are sanctioned by factory boards elected by farmers to represent their interests, adhere to prudent financial management practices, and are supported by proper, auditable valuations,” it said.


No deductions for stabilisation fund


The agency emphasised that no deductions have ever been made from farmers’ earnings for a proposed stabilisation fund. While such a fund was discussed as a mechanism to support second payments during periods of depressed returns, it was never implemented, and no funds have ever been allocated to it.


KTDA called claims suggesting otherwise “inaccurate and misleading,” noting that such misinformation misrepresents both its intent and actions.


The statement also addressed the ongoing Tea Amendment Bill currently before the National Assembly.


KTDA confirmed that it has submitted proposals for amendments aimed at safeguarding the interests of farmers, reinforcing the agency’s commitment to transparency and accountability.


“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 under the Farmer First agenda,” KTDA said.