Blow to dairy farmers as milk processors cut producer prices due to lack of market
Milk jar. Courtesy photo
Dairy farmers in Western Kenya region are counting losses after milk processors cut producer prices due to lack of market and storage facilities as a result of increased production.
Most processors have reduced the prices by Sh8 from Sh38 to Sh30 per litre sparking outcry from dairy farmers who have complained of high production costs which has subjected them to heavy losses.
Dairy farmers affiliated to the Kenya Dairy Farmer Federation (KDFF) on Wednesday said thousands of litres of milk was going to waste due to lack of storage facilities while private processors have warned of further decline in prices to below Sh30 a litre as they grapple with the challenges of excess production.
The farmers have petitioned the government to introduce raft of measures including pumping of more funds to the New Kenya Cooperative Creameries (New-KCC) to enable it to make prompt payments for milk deliveries at affordable rates.
The state owned firm is offering Sh55 per litre, but delayed payments have discouraged many dairy farmers from delivering their milk to the firm.
“Most milk cooperative societies face collapse due to exploitation by private milk processors who are offering as low as Sh30 per litre at farm gate level contrary to agreement entered with the Kenya Dairy Board and Ministry of Agriculture of Sh33 per litre,” said Stanley Ngombe, KDFF chairperson.
He said the woes facing the dairy farmers have been complicated by skyrocketing cost of animal feeds and poor quality breeds.
“Cartels have penetrated the value chain sector supplying farmers with poor quality feeds while quality of the breeds keeps deteriorating due to the exorbitant cost of Artificial Insemination or Embryo Transplant,” said Mr Ng’ombe who is also the Chairman of Lelchego milk cooling plant in Nandi County.
The firm receives an average of 12,000 daily against operational capacity of 18,000 litres but the decline in market demand for milk is forcing it to cut down on the intake to minimize on losses.
“Post-harvest losses as a result of decline in demand for milk caused by increased production, high operational costs in terms of electricity and transport charges and unsteady cost of animal feeds are some of the challenges facing the sector,” said Ngombe.
Data from economic survey indicated that the quantity of wasted milk in 2023 was 290 million litres translating to income loss to dairy farmers of Sh14.7 billion.
The dairy farmers challenged the government to allocate adequate funds to Agricultural Finance Corporation (AFC) to be advanced as credit to dairy and grain farmers among other agricultural investments.
“The government need to improve funding to the dairy sector through AFC and address challenges facing the body that are weighing down farmers’ efforts to increase their milk production and earn better profit,” appealed Mary Jeptoo from Sergoit, Uasin Gishu County.
The North Rift region has an estimated 1.2 million dairy cows and between 400,000 and 500,000 heifers.
According to report by Ministry of Agriculture, the country produced an average of 4.2 billion litres of milk in 2023 against potential of 12 billion litres due to poor animal husbandry techniques by most farmers.
