Productivity and Its Determinants in Smallholder Tea Production in Kenya: Evidence from Bomet and Nyamira Counties of Kenya

Abstract

The smallholder tea sub-sector makes an important contribution in the Kenyan economy. Although subsector has enjoyed relative growth in terms of acreage, output and number of growers, productivity has remained low. Industry trends show that there are wide differentials between actual and potential yields, indicating underlying production inefficiencies and considerable potential to improve the farmers’ income and livelihoods. This study used a semi–log productivity regression model to investigate the determinants of productivity in smallholder tea production in Kenya. The study used survey data of a random sample of 525 tea farming households collected from two leading production regions in Kenya. The results show that location specific heterogeneities, farm size, the intensity of family labor applied in tea farming, access to extension through the farmer field schools, credit utilization and the tea marketing arrangements have significant influence on tea productivity. In order to exploit the existing potential, we recommend policies that focus on correcting imperfections in the agricultural labour markets, consolidation of small tea farms, and expansion of credit and extension programs. Additionally, the policy formulation and implementation process should take into account the existent regional heterogeneities in the different tea growing areas of Kenya.