•Milk prices in the country have dropped by Sh6 from Sh32 to Sh26 despite stability in production.
Milk prices in the country have dropped by Sh6 from Sh32 to Sh26 despite stability in production.
But Margaret Kibogy, the Kenya Dairy Board managing director yesterday explained that milk prices are determined by forces of demand and supply.
She said the supply of milk in January was higher than previous years due to the short-rains experienced in the month of November to December. This, she added, is also attributed to the interventions by the National and County governments in training farmers on feed conservation, animal and water management.
“Today, many farmers have silage or fodder to feed their animals, hence a stability in the supply of milk despite the dry season being experienced in the country,” said Kibogy during an interview with the Star.
Current milk production is at 5.2 billion litres annually with 3.9 billion litres produced from cows, while 1.3 billion litres is from goats and camel. Kenya is the highest consumer of milk and milk products in Africa at 110 litres per person per annum against the international per capita of 220 litres per person per annum.
Monthly consumption is at approximately 75 million litres per month for the country, with 1.8 billion litres of milk consumed at home and some for the calves. Out of the remaining 2.1 billion litres, 640 million litres is processed while 1.5 million litres is traded informally. The deficit of 200 million litres annually is imported mainly from EAC.
Kibogy however assured Kenyans that the board is regulating importation of milk and is currently not allowing any imports apart from the specialised imports like those for therapeutic, infants and the ones that are blended for industrial purposes as Kenya is not able to produce this.
“We are doing this by putting in place high tariffs to discourage importations,” she said. Kenya Revenue Authority charges an import duty of 60 percent, the government charges VAT of 16 per cent and there is also a seven percent import levy by the Kenya Dairy Board, which they are proposing to increase to 10 per cent.
“We are also looking at how farmers in Kenya can become competitive. We have realized that feeds are the highest contributor of the high cost of production. So we want to see how we can bring down the cost of feeds so the cost of producing a liter of milk is low,” she said.
According to a report by Tegemeo Institute on assessing the cost of production in the dairy sector, the cost of producing a litre of milk is between Sh19 to Sh22.
“As an industry, we want to bring it down to Sh14 per litres in order for our farmers to become competitive in the EAC market,” she said.
She said in the event there is a milk glut in April due to the good rains as predicted by the weatherman, milk will be converted into milk powder and stored under the Strategic Food Reserve. “We encourage farmers to continue producing the milk because they will still get the market,” she said.