The Kenya Tea Development Agency (KTDA) has dismissed claims circulating on social media that tea factories are financially distressed, insisting that all factories under its management remain financially sound and are paying farmers on time.
In a statement issued in Nairobi on Friday, January 2, 2026, the agency said allegations that factories are borrowing to stay afloat or facing threats from auctioneers are “false, misleading, and deliberately aimed at discrediting the smallholder tea sector.”
KTDA urged stakeholders to disregard such claims, saying they are intended to undermine confidence in the industry.
“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 agency said.
KTDA explained that where factory borrowing occurs, it is limited to short-term facilities used to address timing gaps between payments to farmers and the eventual sale of processed tea.
The agency noted that farmers are paid almost immediately after delivering green leaf, while made tea may take several months to sell, particularly during periods of high stocks.
“This mismatch can occasionally necessitate short-term financing to ensure uninterrupted payments to farmers,” the statement read, adding that such borrowing is not routine and only arises under specific market conditions, including temporary tea gluts.
The agency emphasised that all borrowing facilities 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,” KTDA said.
KTDA also addressed claims surrounding a stabilisation fund, firmly denying that any deductions have ever been made from farmers’ earnings for such a purpose. While acknowledging that the idea of a stabilisation fund was discussed in the past, the agency said it was never implemented.
“Accordingly, no monies were deducted from farmer payments, nor were funds from any other source allocated to such a scheme,” the statement said, describing claims to the contrary as inaccurate and misleading.
The agency further noted that it is aware of the Tea Amendment Bill currently before the National Assembly and has submitted proposals aimed at protecting farmers’ interests.
KTDA said it remains committed to transparency, accountability, and delivering sustainable value to more than 650,000 smallholder tea farmers under its Farmer First agenda.
