My plan to turn around dairy farmers’ fortunes

Dr Ignatius Kahiu is the new chairman of New KCC, taking over from Matu Wamae, who was at the helm for over 20 years. Francis Mureithi spoke to Dr Kahiu on what he will do to turn around the institution so that it serves farmers better

Most dairy farmers are demotivated due to the fluctuation of milk prices. How do you plan to address the issue?
Our plan is to enter into long-term contracts with farmers to assure the company an agreed milk quantity. During the contract period, we shall buy milk at a set price.

But this will be possible if only our dairy farmers stop the reliance on rain-fed agriculture and embrace fodder conservation system.

Why do some processors turn to imported milk at the expense of farmers?

Most of our dairy farmers lack support services that used to be provided by the government such as artificial insemination, leading to poor genetic breeds, which result in low milk production.

Extension services are also not available at the farm gate. Farmers lack transport, coolers to preserve their milk, electricity and good infrastructure. High dependency on rain-fed agriculture has further left the industry vulnerable to changing weather conditions.

All these challenges lead to low milk production making processors rely on imports.

As a firm, we have launched an extensive countrywide programme to revamp AI services for pedigree breeds.

We have also partnered with financial institutions that have introduced products that are suitable for farmers. We are empowering farmers to grow commercial feeds and partnered with relevant service providers for delivery of affordable farm inputs.

Further, we are piloting on how farmers can be involved in wholesale selling and retailing to enable them earn more from their investments.

The cost of producing milk in Kenya is still high. Why is that so?

I can attribute this to high cost of animal feeds and farm inputs. This raises cost of production for each unit of milk at 60 per cent of the cost of feeding.

Low animal genetics and the smallholder mentality, which prohibits economies of scale, also keep the costs high. Our plan is to enter into partnership with large-scale farmers to grow hay that will be sold to the New KCC partnering farmers at affordable prices.

The company will also lobby for the removal of taxes on animal feeds to lower prices.

Since fodder-making machines are expensive, as a company, we shall appeal to both levels of government to consider subsidising or purchasing the equipment for farmers.

Co-operatives are the backbone of milk production in the country, yet a majority are struggling. What should these societies expect during your term?

We shall enhance linkages with financial institutions for them to get better credit facilities to boost their services to farmers.

We shall also partner with county governments to promote extension services and train their leaders both locally and internationally to boost their management skills.

Tanzania is your largest export market but there are several trade and non-trade barriers between the country and Kenya. How do you plan to grow the market?

I plan to lobby the relevant ministries to continue engaging with their Tanzanian counterparts to reduce, if not eliminate, the barriers that hinder free trade.

Kenya is experiencing an influx of imported milk products especially from Uganda. Does this make you worried?

I am not worried. If we increase our efficiency and lower our production cost, we should be able to forestall the influx from Uganda, which has a different production system from ours. Uganda has arable land and gets rains all year around.

It produces milk from natural pastures. It is much cheaper than our system where we are using commercial feeds to feed our animals.

New KCC has been carrying out a modernisation programme. How is it benefiting farmers?

The project entails installing state-of-the-art machines to enhance efficiency, capacity and diversify products.
Phase one and two are complete.

My focus will, therefore, be on phase three which is ongoing in Kitale, Kigano and Miritini. With ongoing modernisation, we have increased the processing capacity.

We are now able to process 500,000 litres of milk in a day, something that was not possible. Our target is a million litres, which will greatly increase uptake from farmers.