Kenya is one of the largest producers of milk in Africa. Large scale dairy farming accounts for 20 per cent of national milk production and small scale farming 80 per cent.
The largest single milk processor is the New Kenya Co operative Creameries. Smaller factories do roaring businesses in Nairobi, Limuru, Nakuru, Kitale and Eldoret. Milk production and processing of products such as yorghut, butter, cheese, ghee and powdered milk have increased significantly in recent years.
The dairy sub-sector plays a critical role in the livelihood of many Kenyans. The sub-sector is also a significant contributor to the country’s GDP. The revival of the dairy industry in 2003 led to improvement in milk production and marketing.
Milk production in Kenya is dominated by small scale producers mainly in the Rift Valley, Central and Eastern provinces. Various production systems, which mainly rely on rain-fed agriculture, are used. The current dairy cattle population is estimated at four million. Total milk production is estimated at about 4.8 million tonnes — cow milk estimated at 4.5 million tonnes, goat milk 150,000 tonnes and camel about 50,000 tonnes.
Marketing milk is done through the formal and informal sectors. The formal comprises 27 milk processors, 64 mini-dairies, 78 cottage industries, 1,138 milk bars and 757 primary milk producers. The milk marketed through the formal sector has increased in recent years. This has been a result intervention taken by the Government and other stakeholders.
Kenya exports substantial quantities of milk and milk products to the region. Intra-regional trade in dairy products in the East African Community has continued to gain momentum and benefits the Kenyan dairy industry. The main products exported are long life milk and powder milk. Dairy imports have gone down over time as Kenya becomes increasingly more self-sufficient in milk and milk products. However, specialized milk products are imported from New Zealand and the European Union.
Since 2003, the Government introduced several measures:
• Restructured and improved capacity building of the Kenya Dairy Board
• Revived and strengthened New KCC and other farmer organizations like Agricultural Finance Corporation and cooperatives
• Reviewed dairy policies and regulations
• Improved milk producer prices and payment of milk producers
• Encouraged the private sector to mobilize resources
• Monitored dairy imports
The interventions resulted in stronger producer organizations, which were able to market dairy produce and increased access to extension services among others. This made the sector a much sought-after investment destination.
Consequently, production and marketing of dairy produce increased, with the annual milk production rising from 2.8 billion litres in 2002 to four billion litres in 2009 and intake by processors from 143.5 million litres in 2002 to 406 million in 2009, representing a 180 per cent increase.
Some key legislative measures undertaken during the period include the review of import and export procedures for dairy produce that led to diminished imports and a sharp rise in exports. The quantity of milk and milk products exported rose from 100,000kg in 2001 to 10.9 million kilogrammes in 2008. But due to drought, export figures dropped to 5 million kilos in 2009.
The main milk processing plants have increased exports to the East African Community, COMESA, the Middle East and West Africa. Consequently, prices have improved tremendously from an average of sh8 a litre in 2003 to Sh25 a litre in 2009, an increase of 213 per cent. As a result many Kenyans, especially the youth have turned to dairying.
In 2008, post-election violence disrupted dairy activities in most parts of the Rift Valley, a major milk producing area, resulting in cattle theft, farmer displacement abandonment of routine livestock management practices. This led to a sharp drop in milk production and marketing in the affected areas.
Although the country has the capacity to process about the million litres a day, a large percentage is for fresh pasteurized milk which has a short shelf-life. The market for fresh pasteurized milk is also fairly constant and cannot be easily expanded in the short run. The Kenya Dairy Board and the Ministry of Livestock Development have sought a sustainable short, medium and long-term solution to overproduction:’
The Government has given S11300 million ($3.75 million) to mop up excess processed milk. It will also give a grant to offload the expected accumulation of long-life milk stocks. The New KCC has been supported to refurbish and commission a LIED’ plant in Eldoret and a condensed milk plant in Naivasha, and to procure, install and commission an additional milk drier.
Milk powder will be incorporated into the National Food Strategic Reserve, which will help the uptake of excess produce that can be offloaded into the market during times of scarcity.