Co-operatives drive growth of dairy sector

Sunday December 31 2017

Farmers deliver milk to Brookside Sabatia Co-operative in Eldama Ravine, Baringo County. Large processors such as Brookside, New KCC and Daima have empowered co-operatives through timely payment for milk delivered. FILE PHOTO | NMG

Farmers deliver milk to Brookside Sabatia Co-operative in Eldama Ravine, Baringo County. Large processors such as Brookside, New KCC and Daima have empowered co-operatives through timely payment for milk delivered. FILE PHOTO | NMG 

By FRANCIS MUREITHI
More by this Author

The once insignificant dairy co-operative movement, which was seen as a refuge for struggling smallholder farmers, has turned out to be the vehicle that has driven growth of the sub-sector.

According to estimates, at least five per cent of the national Gross Domestic Product (GDP) was generated from milk.

The Ministry of Agriculture’s National Dairy Development Policy says co-operatives form a key cog that turns the wheels of the dairy industry in Kenya.

Its strategy paper notes that through bulking, co-operatives have been able to reduce the cost of milk marketing and enabled farmers to realise higher returns through provision of a reliable and remunerative outlet for milk.

Brookside Dairy, which procures nearly 1.5 million litres of raw milk from farmers every day, largely owes its success to these producers. It has partnered with over 300 dairy groups where it sources its raw material.

“As a result of our partnership with dairy groups, many of them have grown to become industry giants who have extended their business beyond the primary role of marketing milk for small-holder farmers and ventured into provision of financial services,” says Mr John Gethi, Brookside Dairy’s director of milk procurement.

The New Kenya Co-operative Creameries (KCC) managing director Nixon Sigey said they had developed robust extension services covering the firm’s eight factories in Kenya.

“Feeding is the key in increased milk production. This is one challenge New KCC is addressing by training farmers  on how to conserve fodder for use during the dry spell,” Mr Sigey said.

Liberalisation of milk marketing and withdrawal of many government technical services as part of industry reforms two decades ago forced dairy co-operative societies to assume a greater role in these areas.

Today, a number of groups have also set up agro-vet services where members access inputs on credit, recoverable from proceeds of milk deliveries.

Dairy groups are also playing a role in empowerment through training.

According to Mr Sigey, New KCC is training farmers on how to get quality feed and the right ration to boost their production.

Mr Sigey said his firm is exposing farmers to local and international exchange programmes to widen their knowledge scope.

Brookside, on its part, has revamped its extension services programmes. “This year alone, we targeted nearly all our partner dairy co-operatives in our extension service programme. We carried out dairy training sessions in collaboration with these groups as a strategy of empowering members and exposing them to best practices in dairy cow husbandry,” said Mr Gethi.

Large processors such as Brookside, New KCC and Daima have in addition empowered co-operatives through timely payment for milk supplied by groups.

Mr Gethi said Brookside would continue to provide the groups with an assured market for members’ milk as part of a growth strategy between processors and dairy co-operatives.

“We have made a commitment to all our milk suppliers, including the large ones like co-operatives, that we shall continue to make guaranteed payment for every litre of milk sold to us irrespective of the prevailing or fluctuating market prices,” added Mr Gethi. 

By having a reliable source of income through assured payment for milk delivered, dairy co-operatives have had a relatively healthier cash flow status compared with other co-operatives, such as those in crop sector.

Mr Gethi noted that more farmers were improving their family income, following sustained efforts by processors and dairy groups to increase farmers’ capacity in animal husbandry through dairy training courses.

“Brookside will upscale its partnership with all dairy groups across the country to ensure that dairy remains a key driver to the economies in rural areas,” Mr Gethi said.

The official noted that dairy co-operatives can also play an integral role in the elimination of post-harvest losses along the milk value chain.

“Our partner groups have a major role to play in the reduction and eventual elimination of losses on raw milk occasioned by poor handling during milking, transportation and collection,” Mr Gethi said.

This, he said, can be achieved through training on clean milk production.

In the past, there have been concerns over weak management structures of a number of dairy co-operatives which leads to poor business planning, unrealistic and conflicting goals and targets.

To mitigate the effects of dry weather on milk production, Brookside Dairy has lined up a series of trainings for group members on feed preparation and conservation as a strategy to ensure optimum milk production across all seasons.

The new training model will see farmers from more than 25 counties access information on ways of increasing production through investment in high quality animal feed.

Mr Gethi said year-round availability of quality feeds was critical in sustaining optimum milk production on the farms and enhance the groups’ income.

“We have scheduled a number of dairy training courses for farmers across the country in the new year as part of efforts to sustain production of raw milk. We will be working with a number of strategic partners to ensure that as many farmers as possible access knowledge on ways of growing milk production,” he said.

Dairy farming is largely a volume-based enterprise.