Fresh reforms promise high returns for milk farmers

With Kenya in the midst of an economic fallout, the government hopes to raise farmer incomes with a jolt of market-friendly reforms in the dairy sector.

The case for the new rules is straightforward: They promise farmers a guaranteed minimum price on milk sales, ensuring that dairy investment yields favorable returns.

By keeping a close watch on milk imports, the regulations offer farmers protection from unfair trade practices, competition and dumping besides supporting the government efforts to guarantee food security and self-sufficiency.

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Over time, concerns over low and fluctuating producer prices have made investment in the sector unprofitable, unstable, and uncompetitive.

While unveiling the new measures that are billed to breathe new life into the dairy industry, Agriculture Cabinet Secretary Peter Munya said: “Today marks a milestone in the regulation of the dairy industry in the country. The government recognizes that a proper regulatory and policy framework is critical for the growth and development of any sector,”

According to the Kenya Dairy Board, Kenya needs to produce one billion liters of milk annually to meet demand both locally and abroad.

The industry, however, grapples with several challenges including seasonality of production, low output, poor quality, costly and inaccessible animal feeds and lack of adequate regulatory framework among others.

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The drafting of the new regulations started in 2009 seeking to change a colonial era regulation — the Dairy Industry Act — that became law in August 1958. Since then, the Act has been subject to 13 amendments, the latest in 2006.

Agriculture CS said in the reforms, counties will be required to consolidate and maintain a database of dairy farmers, dairy herds, and milk production. The information, he added, will inform planning and decision-making at the national level.

The regulations will also guide on produce traceability and recall to enhance consumer protection and safety. This will apply to the production, collection, transportation, processing, distribution, and retail of dairy produce, added the CS.

In February last year, the government gave a directive on a minimum farm gate price of Kes33 per kilogram of milk delivered.

“I commend the processors for implementing the directive to the letter. Going forward, the ministry through the board will conduct frequent studies and consultations on the cost of milk production to inform biannual milk pricing reviews,” added Mr Munya.

Mr Munya also urged milk processors not to introduce extra costs that may diminish the profit margins for farmers.

“Producer groups and entities shall further disclose monthly payout prices and deductions made to determine farm gate prices. I envisage the dairy sub-sector becoming a robust economic and investment sector soon,” said Mr Munya.

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