For many years, farmers have pushed in vain for their milk to be paid based on quality as opposed to quantity.
Well, while a majority of the processors are reluctant to implement the model, one has taken the new path, heralding good times for farmers in the New Year and beyond.
Happy Cow, a milk processing firm in Nakuru, is pioneering a system that is paying farmers based on quality, rather than quantity for every produce delivered.
The company is working with two smallholder dairy cooperatives, namely the New Ngorika Milk Producers Limited and Olenguruone Dairy Farmers Cooperative Society, which collect the milk from farmers at Sh37 per litre.
Producing high quality milk is earning the farmers more as the company uses a system called Quality Based Milk Payment (QBMP) to reward them.
How the system works
Quality of milk delivered is tracked from the 50-litre can delivered to individual farmers (5 to 7) based on results of a laboratory analysis.
The lab results are used by the firm to plan targeted extension services that the farmer needs to improve and maintain quality. Farmers participating in the system have to label and own their cans.
The can number is used to track quality and trace the source of the milk. Cans qualify for bonus every month and to continually be awarded the bonus is an important mission that requires a lot of attention and effort by both the farmers and the extension team.
VIBRANT AND COMPETITIVE DAIRY SECTOR
Happy Cow is working closely with SNV Kenya, as they seek to develop a vibrant and competitive dairy sector, which awards milk based on quality.
Through the Kenya Market-led Dairy Programme initiative, areas covered include dairy production and farm management, on-farm fodder management as well as milk quality among others.
Many farmers were unable to meet quality standards set by the Kenya Bureau of Standards and Happy Cow, but the latter has come up with various initiatives to motivate farmers.
To begin with, a laboratory has been set up at Happy Cow that enables testing of milk supplied. Second is the grouping of farmers at the collection points to enhance faster milk collection, weighing and grading.
Also, there is separation of morning and evening milk during deliveries for efficiency.
In awareness meetings with farmers’ representatives, the company announced that it will offer a premium bonus of Sh2 for a litre of Grade A milk and Sh1 as a standard bonus for Grade B, while milk below the required quality standard does not get a bonus to serve as penalty.
Parameters used for quality assessment include antibiotic residues, adulteration (water addition), Total Plate Count (TPC) (or bacteria count) and total solids.
To facilitate the computation of the payments, the four parameters are awarded percentage scores based on what the processor feels has more weight.
The score include TPC Grade A, 30 per cent, TPC Grade B 0 per cent, TPC Grade C 30 per cent and antibiotic negative 30 per cent while adulteration and total solids are awarded 20 per cent each.
SCORES AND BONUSES
For the cans that get over 70 per cent, they are awarded the premium bonus, while the least percentage score for the standard bonus is 40 per cent. Below 40 per cent, no bonus is awarded and this serves as the point for intervention by the extension team.
The bonus is paid by the company business profits, with the payment being channelled to farmers through their cooperatives.
This system was designed to improve milk quality, enhance farmers’ earnings and reduce rejection rates at the cooperatives, which lead to loss of revenue for both the processor and farmers.
However, challenges abound. For example, Happy Cow is grappling with poor infrastructure (roads), high initial cost of the cooling centres, inadequate reliable sources of water, very few trained milk graders, existence of informal milk marketing channels and lack of raw milk traceability.
The wide use of plastic containers, which are impossible to clean and low levels of discipline and ethics in the value chain, add to the challenges. Happy Cow uses the milk to make products like cheese and yoghurt.
It is time other dairy processors adopt the quality based system for the sake of farmers. This is doable, Happy Cow shows.
Teresia is based at the Department of Dairy Food Science and Technology, Egerton University.
Milk; The Numbers
Farmers produce 5 billion litres annually
- Official records show that Kenya produces up to 5 billion litres of milk every year, making it the leading producer in East Africa.
- The dairy industry contributes 14 per cent of the agricultural gross domestic product.
- The industry employs hundreds of people that include farmers, milk hawkers, handlers and processors.
- Informal milk trade, however, dominates the market with approximately 86 per cent of milk sold in the country being unpasteurised. This poses huge health risks to consumers.
- Milk prices in the country fluctuate between Sh26 and Sh40 per litre depending on the weather and availability of forage.
- Bid to set farm gate prices at Sh45 per litre flopped last year after the government opposed the move noting it will make the local industry uncompetitive.