Donors develop appetite for milk

Apparently impressed by its phenomenal growth, development partners are placing their bets on the country’s dairy industry.

Over the last six years, donors have loosened their purse strings to channel a steady stream of dollars to various dairy projects across the country.

Ministry of Livestock Development dairy officer Mary Mwambia says although the ministry cannot yet give a definite figure of the value of donor projects going on, it projects that they may be running into the billions of shillings.

The International Fund for Agricultural Development (IFAD) is already implementing a $19.5million (about Sh1.6 billion) smallholder dairy project in Nakuru District and also has programmes in Nyanza, Central and Eastern provinces.

There has been a notable migration of farmers, particularly those in densely populated areas like Nyeri, Kisii and Kericho, from crops to dairy farming.

“There is a trend where farmers are uprooting such crops as tea to keep cows because the dairy industry pays. Donors could be focusing on the sector because it is one way of reducing poverty fast,” said Mrs Mwambia.

Experts attribute the rising donor interest in the sector to its ability to fight poverty.

“The dairy industry is touching on livelihoods of several million Kenyans and donors have realised that it is a good vehicle to development because it provides farmers with a monthly income that banks can use to give them credit,” says Mr Moses Nyabila, the regional director of the East African Dairy Development Project (EADDP).

The EADDP is a four-year $40 million (Sh3.2 billion) programme covering Kenya, Uganda and Rwanda and is supported by the Melinda and Bill Gates Foundation. According to Mr Nyabila, Kenya is taking about half of these funds with focus on increasing production, quality and markets.

On the other hand, the United States Agency for International Development (USAID) will spend more than Sh1 billion in support of the local dairy sector between 2003 and 2012.

Through the US Department of Agriculture is in addition currently funding another $4 million (Sh320 million) project in Eastern Province.

USAID funded a four-year $6 million (Sh480 million) dairy development programme, which involved building the capacity of various players in the milk marketing chain, particularly farmers in medium and high potential areas.

Mr Mulinge Mukumbu, of Land O’Lakes Kenya, which implemented the programme, says the value of milk traded rose by 171 per cent coupled with increased milk intake by co-operative societies.

With the programme ending in 2007, USAID entered into another five-year $ 9 million (Sh720million) programme, the Kenya Dairy Sector Competitiveness Programme, (KDSCP), which among other things seeks to increase household income through the sale of quality milk.

Kenya produces only a fifth of what developed countries produce and a third of what South Africa produces.

While the national average per cow stands at six litres per day, those in countries such as New Zealand and Australia have an average of between 40 and 50 litres a day.

“The fact that everybody in the milk value chain is a beneficiary, makes the dairy industry the best instrument to raise people’s standards of living because it provides permanent jobs,” a dairy specialist Mr Macleans Egesa says.

The successful turn-around and streamlining of the industry and the emphasis on good corporate governance among dairy co-operatives has been identified as another magnet for donors.

“The government has not been interfering with the sector and the dairy co-operative societies are not only paying farmers promptly but the payments are also good,” Kenya Dairy Board managing director, Machira Gichohi, says.

A Sh26 million assistance programme from the UK’s Department for International Development has also empowered milk hawkers by formalising their trade.