REVAMPING AGRICULTURE

SIASA: Dairy sector in need of long term reforms

Why would an overly delicate market like Kenya’s allow an overflow of milk and milk products from foreign markets?

In Summary

• One major problem with this sector is that it has been largely informal, and there have not been any spirited efforts to formalize it since independence.

• Even the Kenya Dairy Board website cannot provide essential and updated data about the total production and consumption of milk in Kenya.

Workers pour milk delivered by farmers at Olkalou Dairy cooling plant due to oversupply
Workers pour milk delivered by farmers at Olkalou Dairy cooling plant due to oversupply
Image: FILE

In the last few years, dairy farmers in Kenya have been complaining about price fluctuations of their commodity. In some areas such as Nyandarua, there were reports that farmers opted to pour their milk instead of selling it at a loss.

One major problem with this sector is that it has been largely informal, and there have not been any spirited efforts to formalize it since independence. Due to this, information about the sector is little and scanty. Even the Kenya Dairy Board website cannot provide essential and updated data about the total production and consumption of milk in Kenya.

The data on Kenya Dairy Board —which was last updated in 2016 — shows Kenya produces 5.2 billion litres of milk per year. This is the total summation of milk from cows, camels, goats and sheep. Cow milk has a total production is 4.2 billion litres.

On the other hand, Kenyans are said to be the largest consumers of milk in sub-Saharan Africa. The per capita consumption of a Kenyan is 120 litres per annum. So mathematically, if you take the 2016 figure of our milk production, our population and milk consumption of every Kenyan, you realise farmers do not meet the demand of milk in Kenya. Why then do milk prices deteriorate when the demand still exists? 

Whenever milk prices deteriorate, the first excuse is that there is too much importation from Uganda. I don’t dispute the fact that milk production in Uganda is cheaper than in Kenya and, therefore, the competitive advantage.

Despite the advantage, Uganda farmers are yet to meet the demand for milk in Uganda and their milk export to Kenya wouldn’t be very significant. This brings us to the conclusion that the supposed milk imports may not be from anywhere near East Africa.

What happens is that the government allows profit-oriented traders to import excess milk from Europe, which is way cheaper than milk produced in Kenya and her neighbours in East Africa.

So, which long term government policies can be initiated to help stabilise the dairy sector? One, the government must help farmers reduce the cost of production. Even, before we go to Europe to shop for best practices, the government honchos in the Ministry of Agriculture should be curious about why milk production is cheaper in Uganda than in Kenya.

Tied to the cost of production is also increasing the yield per cow. For instance, Germany is the largest producer of milk in Europe. In 2018, they produced 33.1 billion litres and this milk came from about 4.2 million dairy cows: An average of 8,100 litres of milk produced per cow per annum.

In Kenya, we are approximated to have 9.1 million dairy cows, twice the number in Germany. Unfortunately, however, our milk production is not even a quarter of Germany’s. 

What do we lack then, that Germany has?

One, our farmers could be doing a lot of work to feed very many cows and only produce milk that can be produced by one cow. In Germany, through a superior science of breeding, despite the reduction of the number of farms by 50 per cent in the last 20 years, the total milk production increased.

This is because of the intensification of milk production per cow. For instance, the German Holstein cow can produce an average of 10, 000 litres of milk per year while our best breed in Kenya can only produce an average of 3,000 litres per year. 

The second measure, in the current situation, our farmers can meet the demand of the market and the government should, therefore, cut the imports. The dairy sector is delicate and needs special protection from the government.

For instance, even in the European Union, dairy farmers are protected by issuing tariffs and quotas for any foreign milk products. Why would an overly delicate market like Kenya’s allow an overflow of milk and milk products from foreign markets?   

The President's intentions in addressing the dairy sector woes are genuine but minimalistic. To revolutionise the industry, he ought to initiate far-reaching reforms ranging from the economic side of the sector to the scientific one. 

The writer is currently a Master student in Public Policy at the Willy Brandt School of Public Policy, Germany