Institute for Development Studies, University of Nairobi

Through the years, the agricultural sector has occupied a central place in rural Kenya. Agriculture is also a dominant sector in the Kenyan economy and it is a source of livelihood for the majority of the rural population. The sector accounts for 30-35 percent of the gross domestic product and well over 60 percent of foreign exchange earnings. Furthermore, agriculture engages nearly 80 percent of the nation's workforce and most rural households are dependent on this sector for subsistence and cash income. Evidently, agriculture is central to rural development efforts and the sector is a possible gateway to improvement in the distribution of national incomes, faster rural development necessary to bring about rural-urban balance, faster growth in employment opportunities and the generation of raw materials for the domestic industry. Indeed, in rural Kenya, agricultural growth, rural development and poverty alleviation are intertwined. Hence, in recent times, poverty alleviation has also been seen in terms of having access to productive resources and more importantly, being able to participate in the decision-making process at the global market level. This study, therefore, focuses on the linkages between commodity markets and rural livelihoods. Specifically, the study looks at how the tea market is organised, the forces that direct and influence the way the various parties conduct their businesses, the resultant formal and informal linkages, and how these structures affect the role of the tea industry in the Kenyan economy.