Nairobi — In response to the current milk glut in Kenya, the government has allocated Ksh 500 million to New Kenya Cooperative Creameries (KCC) for the purchase and processing of excess milk. This funding release aims to convert the surplus milk into powder form for storage as part of the strategic food reserve, thereby preventing waste and loss due to surplus production.
According to Kenya News Agency, the El Niño rains have resulted in an anticipated surplus of over 50 million liters of milk between now and January 2024. This is in addition to the country’s normal milk production. Chelugui explained that the cost of purchasing this excess milk from farmers is estimated at Ksh 1.5 billion. The funds will also serve as a stabilization fund to ensure farmers have a market for their produce, thereby preventing losses at the farm level and benefiting the entire dairy value chain. This intervention is expected to maintain a minimum milk price of Ksh 45 per liter for the time being.
The Cabinet Secretary also highlighted the government’s efforts to enhance the processing capacity and efficiency of New KCC through a moderation program. This program includes a Ksh 3.8 billion modernization plan for key dairy plants to improve intake capacity at various locations and upgrade facilities as part of phase III of the project. This follows the completion of phase II, which involved the enhancement of facilities at Nyahururu, Kiganjo, and Nyambene.
Additionally, Chelugui noted that the government has introduced subsidy programs for BT cotton seeds and fertilizer, indirectly supporting dairy feed production. Recognizing that animal feeds account for about 60% of the total cost of milk production, the government has removed taxes and levies on imported raw materials for animal feeds to lower production costs.
Reassuring dairy farmers of the government’s support, Chelugui emphasized the commitment to ensuring the stability of the dairy industry in line with broader agricultural goals. The dairy industry in Kenya, which accounts for 14% of agricultural GDP, supports smallholder dairy farmers and benefits over 4 million people along the dairy value chain. The country’s total annual milk production is approximately 5.2 billion liters, with a significant portion processed by over 35 registered processors and the remainder going through informal markets.
The dairy sector’s significance in Kenya is underscored by its contribution to agricultural GDP and the high per capita milk consumption in the country, which remains the highest in Sub-Saharan Africa.