Govt seeks rescue plan for dairy farmers

The government is this week expected to announce a rescue plan for the dairy sector following the current milk glut in the country, Agriculture Minister William Ruto has said.

Mr Ruto said the plan will be a culmination of crisis meeting held by the ministries of Agriculture, Livestock and Co-operatives to device a way forward so that the farmers do not incur any further losses.

The supply of the produce has by far outstripped its demand by processors and related dairy industries.

Mr Ruto announced the plans on Friday as it also emerged that Livestock minister Abdi Kuti had floated a proposal to Treasury to give Sh300 million to be used in purchasing the excess from the farmers.

“We have had significant consultations with the three key ministries to ensure that the dairy industry remains stable,” said Mr Ruto.

“We are going to announce measures that we will take to ensure that farmers do not incur any further losses, as long term plans are underway.”

He acknowledged that the dairy farming was a significant component of the agricultural sector and helped in managing poverty in the country.

The news comes at a time when the farmers are counting their losses with the processors not accepting their produce, and revision of prices downwards by the New Kenya Co-operative Creameries (KCC).

According to Mathira MP Ephraim Maina, the woes of the New KCC stem from the sacking of the former managing director.

“His sacking was political and that is the cause of all the problems in the company,” said Mr Maina over the weekend at a Press conference.
But industry players said that the problem needed collective responsibility.

“The problem is big and requires a collective action,” said Mr John Gethi, the general manager of Brookside Dairy, in an earlier interview with the Nation.

“About 70 per cent of the milk is being consumed raw, and these farmers do not also have good market for their produce.”

Last week, Co-operatives minister Joseph Nyagah appeared before a Parliamentary Committee to answer questions surrounding the capacity of the New KCC to handle the milk glut.

He blamed managers of the New KCC for the lack of control.

“The lack of markets for millions of litres of milk is a sabotage and deliberate incompetence by the managers.”

Mr Nyagah told the Agricultural Committee that the managers had misadvised the board of the New KCC, leading to directors making decisions based on ignorance.

“The board was misled on the true capacity of the New KCC to handle so much milk”

But, Mr Ruto disclosed that they had however been in talks with Mr Nyagah, and Mr Kuti to forge the way out of the crisis.

“We want to rescue the farmers,” he added.

The story of a sour dairy industry started in 2009, when processors lost many export markets, due to a failed supply as a result of severe drought that had hit the country.

At the onset of the rain, dairy output ballooned, leaving the processors with large volumes of milk at their disposal, which they could neither sell nor store.

According to Mr Kuti, milk production doubled on the onset of the rains making the production very complicated as major markets had already been lost.

They therefore appealed to the processors to increase their capacities, while surveillance was being increased to curb illegal imports, particularly through Port of Mombasa.

But among other long-term plans to rescue the industry are the creation of a dairy development fund.

Under the proposed fund, a levy from the processors would be gazetted to help in market promotion as well as enforce the hygienic standards.

Increased awareness to pump consumption of processed milk targeting schools, hospitals and hotels will also critical.

According to the market watchers “should the rains continue, producer prices could tank further, not only causing huge losses for farmers but also apathy that could lead to low output.”

“Farmers will be unable to maintain good animal husbandry leading to decline in production. The government should intervene to cushion the farmers,” said Mr Paul Mbuni, the national chairman of the Kenya Society for Agricultural Professionals (KESAP).

The players said only 30 per cent of the milk produced can be processed, meaning the rest goes to waste and the losses borne by the farmers.

Ironically, the export market is huge with Kenya surrounded by milk deficient countries that rely on imports from Europe and South Africa.

This, Mr Mbuni said can provide ready market for local milk if well tapped.

“The export market was doing well until the drought last year. We had to ration the supply in some and postpone others, which was unfortunate because we had assured our customers in 2008 that we had enough milk.”