Abstract:
Liberalization in Kenya started in 1990’s and continued ro date with far reaching effects on various sectors of
Kenyan economy. The aim of this study was to investigate socio-economic effect of liberalization of small scale
tea sector. The study sought to: Determine how liberalization has affected the living standard of the farmers, to
investigate the impact of liberalization of tea sector on the competitiveness of small scale tea farmers and
analyze the effect of liberalization on the performances of KTDA managed tea factories. A case study design
was used in the study. The target population was 380 from which a sample of 38 was selected. In collecting data ,
a questionnaires was used. Descriptive statistics were computed. The findings revealed that Liberalization has
exposed the smallholder and factories stiff competition due to entrants of new firms into the tea business.
Factories have been ‘forced’ to streamline their operations to cope with completion. Effects of liberalization to
farmers is mixed: On the positive farmers have been relieved of monopolistic tendencies of KTDA such as
unilateral price determination and farmers have had a much bigger say in the management of tea factories.
Negative effects include: Declining bonuses that farmers used to earn
