Dairy farmers have a reason to smile following the government’s pledge to install milk coolers in the modernization programme of Kenya Co-operative Creameries (KCC) facilities in all wards countrywide.
The State has announced that the move has been motivated by the need to eliminate middlemen who buy milk at throw-away prices in rural areas and later make profits by selling the commodity at higher prices in the upper market.
Cooperatives and Micro and Small Enterprise Cabinet Secretary Mr. Simon Chelugui acknowledged that dairy farmers struggle with challenges of storage, preservation of milk, the high cost of feed and access to markets.
He said the Kenya Kwanza administration has taken immediate steps to reinstate the stalled milk coolers’ programme and the distribution of 650 milk coolers was on course.
“In our plan, we have identified the dairy and livestock economy as sub-sectors with the quickest economic turnaround time and they will become key drivers in improving food security, creating jobs and boosting exports,” he said.
Chelugui revealed that the government was working on plans to establish a milk price-stabilizing fund of close to Sh3 billion.
The milk fund is scheduled to be implemented by the New Kenya Cooperative Creameries. New KCC is 100 per cent owned by the government.
He said the funds will be used to mop up excess milk from farmers and convert the milk into long-life products to be stored in the Strategic Food Reserve. This is among the many interventions aimed at ensuring a stable and prosperous dairy subsector.
“The government will mop up the milk, convert it into powder milk, package it and store it in the Strategic Food Reserve. As soon as we get to January, even the private processors will be free to buy the same dry milk at a price the regulator will provide,” said Chelugui.
Chelugui spoke when he met dairy and coffee farmers from Bahati Sub-County in Nakuru.
The funds will be used to stabilize the price of the commodity in the market and ensure that all the milk is collected from farmers.
“The stabilization fund is an intervention the government takes to absorb extra milk. It does not take away the respective dairy process of milk,” Chelugui said.
Currently, milk production has gone up because of the good weather the country is enjoying. The CS said mopping up of excess milk is an activity the government has done before.
Mr. Chelugui noted that the Bottom-Up Economic Transformation Agenda (BETA) recognized the dairy subsector as a pivotal value chain due to its substantial contributions to the national and rural economy.
“Processors sometimes grapple with a high supply of milk from farmers due to a glut that goes beyond the intake capacity of the factories, but the funds will be used to stabilize the price of the commodity in the market and ensure that we collect all the milk from farmers,” said the Cabinet Secretary.
He added, “This is an intervention the government is taking to absorb extra milk. When we have excess milk production, some processors abandon the farmers, and therefore the government is committed to taking up this and processing for future use.”
The Cabinet Secretary stated that in future excess milk will be stored in Strategic Food Reserves (SFR) as powdered milk for future use and urged other private processors to also buy more milk from farmers for conversion into powder.
The dairy subsector faces significant challenges, including high breeding costs, disease prevalence, insufficient extension services, expensive animal feed, limited value addition, post-harvest losses, and low market access.
The New KCC has been tasked with the mandate to stabilize both producer and consumer milk prices by efficiently managing milk surpluses during the glut period by converting excess milk into a strategic food reserve in the form of dry milk powder, which can be released back into the market during dry seasons.
Mr Chelugui said Kenya has the potential to grow the dairy milk production up to four million liters per day.
The Cabinet Secretary said New KCC will buy milk from farmers at a minimum price of Sh45 per liter, to curb exploitation by middlemen and other players in the sector.
Chelugui announced that the first disbursement of Sh500 million stabilization fund was done in December and appealed to farmers to continue supplying milk to New KCC collection centers across the country.
“We received a further Shs 400 million and we are expecting another Shs 500 million before the end of January. The Government’s resolve is to protect dairy farming like any other businesses in the country. The minimum price of buying milk is fair and enables farmers to earn good returns despite the high cost of operation,” he said.
He regretted that unscrupulous traders have ruined the dairy sector prompting many people to abandon dairy farming, which has subsequently led to a significant drop in milk production in the country.
“We have local and international markets for our agricultural produce and the county and national government is deliberately working with farmers’ cooperative societies to scale up milk production,” said CS Chelugui.
Chelugui said that the government has secured a market for Kenyan milk in the Middle East.
“Lack of storage facilities is among the challenges that have hindered the production of quality and sufficient milk in Kenya. And we are working with the Ministry of Agriculture to ensure that we have the capacity of milk that meets the internal demand,” he said.
Mr Chelugui further said that farmers will access stimulus funds through cooperative societies to boost animal and crop production.
