- President William Ruto recently directed all processors to increase the price of milk from the current Sh42 to Sh50
- Further efforts will be fast tracked to increase production per day from 1.5 million and 4.5 million litres
Image: AGATHA NGOTHO
The government has announced plans establish a milk price-stabilising fund of close to Sh3 billion.
Cooperatives and Micro and Small Enterprise Cabinet Secretary Simon Chelugui said the milk fund will be implemented by the New Kenya Cooperative Creameries.
New KCC is 100 per cent owned by the government.
He said the funds will be used to mop up excess milk from farmers and convert the milk into long-life products to be stored in the Strategic Food Reserve.
This is among the many interventions aimed at ensuring a stable and prosperous dairy subsector.
"The government will mop up the milk, convert it into powder milk, package it and store it in the Strategic Food Reserve,” he said.
"As soon as we get to January, even the private processors will be free to buy the same dry milk at a price the regulator will provide,” said Chelugui.
Chelugui spoke during the annual cooperative leaders consultative conference in Naivasha last week.
The regulator, the Kenya Dairy Board is expected to look at issues of quality, production, standards and even border control movement.
He said processors are grappling with a high supply of milk and the factories are not taking milk from farmers because of the excesses.
The funds will be used to stabilise the price of the commodity in the market and ensure that all the milk is collected from farmers.
“Stabilisation fund is an intervention the government takes to absorb extra milk. It does not take away the respective dairy process of milk," Chelugui said.
Currently, milk production has gone up because of the good weather the country is enjoying.
The CS said mopping up of excess milk is an activity the government has done before.
“This is not a new activity, actually, this could be the seventh intervention we are doing,” he said.
President William Ruto recently directed all processors to increase the price of milk from the current Sh42 to Sh50.
The President said the Government has agreed with the processors to review milk prices upward in the coming days to benefit farmers.
The government recently undertook an ambitious modernisation and expansion programme on New KCC plant. The project cost Sh2.5 billion.
He said it increased processing capacity of the plant from 300,000 to an impressive 800,000 litres per day.
New KCC has been tasked with the mandate to stabilise both producer and consumer milk prices by efficiently managing milk surpluses during the glut period.
The excess milk will be converted into a strategic food reserve in the form of dry milk powder, which can be released back into the market during dry seasons.
The CS said the government is considering the provision of milk coolers to dairy farmers through their cooperatives under the auspices of New KCC.
This is aimed at improving milk quality and reducing the distance farmers travel to deliver their milk to bulking and cooling centres.
“The initiative will also go a long way in milk aggregating mil in the supply areas,” he said.
"The acquisition of milk coolers is in line with the government's plan to increase milk productivity from an average of five to seven litres per cow per day. Further efforts will be fast tracked to increase production per day from 1.5 million and 4.5 million litres.”
Chelugui said New KCC will provide technical support and maintenance of coolers and raw markets.
‘This will ensure farmers have a ready market and guaranteed minimum return. In addition to averting losses at the farm level, maintaining milk quality standards and stabilising the supply of dairy products for both local and export markets,” he said.