KENYA – The Kenyan government, led by Cooperative and Micro and Small Enterprises Cabinet Secretary Simon Chelugui, has unveiled plans to establish a milk price-stabilizing fund to ensure a stable and prosperous dairy subsector.
The fund will be executed through New Kenya Cooperative Creameries (New KCC) and aims to manage milk surpluses during high production periods, converting excess milk into dry milk powder for strategic reserves.
Cabinet secretary, Chelugui announced the government’s commitment to spend Kshs. 3 billion on stabilizing milk prices amid expectations of a market glut due to favourable weather conditions boosting production since August.
“The State will spend Kshs. 3 billion for stabilization of milk prices in the wake of a glut that is expected in the market following favourable weather that has spurred production in farms. The funds will be used in mopping up excess milk from farmers and converting it to powdered milk,” he said.
Additionally, Chelugui emphasized the pivotal role of the dairy subsector in the national and rural economy, highlighting the government’s recognition of its significance under the Bottom-Up Economic Transformation Agenda (BETA).
Chelugui noted that many processors had abandoned farmers by not accepting milk, prompting the government’s intervention to ensure farmers receive fair returns despite the glut.
In addition, he highlighted that the government is considering the provision of milk coolers to dairy farmers through their cooperatives under the auspices of the New KCC.
The CS added that the government has also undertaken an ambitious modernization and expansion programme for the New KCC Plants and equipment to the tune of Kshs 2.5 billion which has increased the processor’s processing capacity from 300,000 to 800,000 litres per day.
“The dairy subsector in Kenya faces challenges such as high breeding costs, disease prevalence, insufficient extension services, expensive animal feed, limited value addition, post-harvest losses, and low market access,” he said.
“To address these issues, the government’s initiatives include subsidizing animal feed and supporting farmers with milk coolers.”
Daniel Marube, Executive Director and CEO of Cooperative Alliance of Kenya emphasized Kenya’s potential to increase milk production to four million litres per day, with the government’s support in providing coolers.
“We are now doing about 1.5 million litres per year per day. With the government promising to support the dairy farmers with the coolers, we are educating our members on how we can improve the quality and quantity of milk through upgrading our animals so that we can be able to produce more,” he noted.
He added that the biggest challenge has been the high cost of animal feed and hoped that by working with the government farmers will be able to subsidise animal feeds.