Uganda's government has committed 310 billion shillings, about $83 million, to revive a tea industry whose export earnings have fallen by a third in four years and whose farmers have begun uprooting their bushes as prices fell.

The Minister of State for Agriculture, Fred Bwino Kyakulaga, set out the package at a tea processors' retreat in Fort Portal, in western Uganda. Of the 310 billion shillings, 152 billion is earmarked to bail out processing factories and 112 billion to clear debts the sector owes to tea-seedling suppliers, with the balance for subsidised fertiliser, according to reports of his remarks.

Little of the money is available yet. The government has released 8 billion shillings this financial year to begin distributing fertiliser, and officials said the full package is expected in the 2026/27 budget.

The intervention follows a steep contraction. Uganda's tea export volumes fell 22.4 percent between 2021 and 2024, from 77,104 tonnes to 59,860 tonnes, while export earnings dropped 33.9 percent to $56.1 million, according to figures reported by Ecofin Agency. That earnings fell faster than volumes points to the sector's central weakness, which is price.

Ugandan tea is among the cheapest sold at the Mombasa auction, where most of East Africa's crop is traded. Kyakulaga said the price had recovered to about $1.40 a kilo, a fifth higher than a year earlier, with roughly 90 percent of the offered tea finding buyers. Even so, that remains well below the $2 and more a kilo that neighbouring Kenyan and Rwandan tea has fetched at the same auction.

The pressure has been sharpest at the farm gate. Green-leaf prices in the producing districts of western Uganda had fallen to as little as 200 shillings a kilo, from 500 shillings, leaving many of the country's roughly 60,000 smallholders below the cost of production, and some have cut down their tea and planted bananas instead, according to earlier reporting on the crisis.

Growers and processors at the retreat said money alone would not fix the sector. Grace Kyomugisha, board chairperson of the Kayonza Tea Factory, welcomed the fertiliser support but said factories remained undercapitalised, running old machinery under heavy debt. Victoria Ashabahebwa, who chairs the Uganda Tea Association, said the industry also needed extension workers dedicated to tea and better access to financing. Patrick Tiberondwa, who manages McLeod Russel's Kiko Tea Estate, said labour shortages were compounding the strain.

For now, the rescue is weighted toward the sector's balance sheets rather than the farm-gate price that drove growers away, and most of the money will not arrive until next year.

Sources: The Independent, Uganda moves to regulate tea industry with new laws, Shs310 billion boost; Plus News, Uganda Moves to Regulate Tea Industry with New Laws, Shs 310Bn Boost; Ecofin Agency, Uganda Targets Tea Sector Revival with $83 Million Plan; Food Business Africa, Uganda's tea industry in crisis as farmers abandon plantations over plunging prices.