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Don’t blame milk processors, counties have failed dairy farmers

In Summary

•Counties have a crucial role to play in the development of the agriculture sector. 

A dairy farmer.
A dairy farmer.
Image: EUTYCAS MUCHIRI

Agriculture is a devolved function under the Constitution. The primary role of the national government is policy making. Counties are tasked with regulating crop and animal husbandry, plant and animal disease control and fisheries.

The county docket also includes animal control, trade regulation, markets, cooperative societies, land survey and mapping, natural resource management and environmental conservation. All this have a direct bearing on the agriculture sector.

Counties have a crucial role to play in the development of the agriculture sector. They implement policies and exercise critical regulatory functions. The Constitution provides for cooperation between the national and county governments in execution of devolved functions like agriculture.

However, the agriculture sector has been struggling despite devolution bringing government services closer to the people. Agriculture is yet to achieve optimal policy and regulatory traction at the county level. Overlapping national and county functions has been partly blamed for this.

This however does not exonerate counties for failure to address many of the challenges facing the agriculture sector. As such, key sub-sectors like maize, coffee, tea, sugar and dairy have posted dismal performance. Specifically, the woes facing dairy farmers reflect failure by counties to invest in small-scale production.

Yet, the dairy industry is the largest contributor to the country’s livestock gross domestic product. The Food and Agricultural Organisation (FAO) notes that Kenya has one of the most vibrant dairy industries in Africa, dominated by small-scale producers, thus underlining its significance to food security and employment creation. Milk is also an important food item in many households.

Modern dairy farming in Kenya dates back to the 1920s. But it was not until the Swynnerton Plan in 1954 that indigenous Kenyans were allowed to engage in commercial dairy farming. After Independence, the local dairy industry recorded growth buoyed by State controls and subsidies that cushioned farmers from market shocks. 

In the 1990s, the government embarked on liberalizing the industry by doing away with controls in favor of market forces. This resulted in the emergence of a large informal milk market characterized by rampant hawking of raw milk.

Since then, the industry has continued to grapple with many constraints. The International Fund for Agricultural Development (IFAD) has identified animal disease, low quality feeds, expensive technology and inputs, poor rural infrastructure, and lack of market access as the main bottlenecks facing dairy farmers in Kenya.

These are the real issues counties should be addressing to promote development of the dairy sub-sector. To be fair, many counties have taken concrete steps toward improving milk production, notably Murang’a and Makueni, which have set up dairy processing plants.

Incidentally, demand for milk and milk products has been on the rise. Data from the Kenya Dairy Board shows that in 2018 milk intake by processors grew by seven per cent, the highest in two decades. But it should be noted that milk processors take up less than 10 per cent of total milk produced in the country with the rest sold as raw milk.

Claims that milk processors are to blame for low milk prices are not only politically mischievous but misleading. In 2018, processors absorbed 500 million liters against a total output of 4 billion liters. Milk prices depend on market forces of demand and supply. Instead of politicizing milk issues, leaders in milk producing counties should be tackling the deeper structural issues affecting production. 

In particular, counties should invest in lowering production costs, improving market access, supporting value addition and regulating crucial farm inputs like livestock feeds. Liberalization led to gradual decline of extension support including artificial insemination and other veterinary services. Counties should be actively reviving such crucial services in collaboration with the national government. 

Improving market access does not necessarily mean every milk-producing county building a processing plant. Instead, the devolved entities should support farmers to form dairy cooperative societies or revamp existing ones. Counties adjacent to each other could jointly invest in one processing plant to convert excess output into milk powder thus ensuring price stability for farmers.

In addition, counties in milk-producing zones should form production hubs with cross-linkages in processing and marketing of the commodity. They should also streamline marketing activities and build good road networks. Partnering with national government to enhance milk production value chains will see lowering of cost of inputs like animal feeds, improving physical infrastructure and better access to domestic and export markets.

Trade barriers at the local level like cess or taxes on inputs, which hike the cost of production, should be reduced or eliminated altogether. There is also need to reduce post-harvest losses especially during the rainy season when roads in many rural areas are rendered impassable. Farmers deserve all-weather road infrastructure since milk is a highly perishable commodity. 

In addition, counties should support cooperatives and businesses engaged in processing and other value addition activities. Priority should be given to quality farm inputs - livestock feeds, fertilizers, foliage and animal drugs - to boost productivity.

Under the Agricultural Sector Transformation and Growth Strategy (ASTGS), counties need to offer incentives to farmer-facing Small and Medium Enterprises (SMEs) involved in farm input manufacture, value addition and veterinary research and service provision.

In summing, counties should focus on ways of improving the income and welfare of dairy farmers instead of blaming milk processors. In any case, claims of market dominance leveled against some milk processors lack legal basis as the latter control only a small fraction of the entire market.

Focus should be on cartels that thrive on the huge unregulated market for raw milk at the expense of the farmer. The raw milk market is a raw deal for small dairy producers. Counties as the custodians of agricultural production at the grassroots, should do more to support dairy farming.

Choto is a lawyer and public affairs specialist. Email: [email protected] Blog: kingorichoto.com