Farmers own high yielding cows thanks to leasing model

Five years ago, Alphonse Kimemia would never have dreamt of owning the high yielding Fresian cow. The breeds were a preserve of the rich and the large scale dairy farms. He had to contend with his low milk yielding local breeds that would on average produce two litres of milk.

But a novel idea to lease Alphonse the superior cow breed in exchange for his milk output has been the spark that has lifted him and the over 40,000 farmers from poverty since its inception in 2005.
Having been chaperoned by Swiss foundations Swiss Concept through K-Rep Group in 2005, it sets out to train farmers on best livestock management practices like deworming, right feeding and animal husbandry. The project also set out to insure the cows, so as to deliver cows that farmers then pay for with the earnings from the extra milk.

Under the cow leasing model, farmers interested must form into a group of 15, with three sub-groups of five, of which one can get a leased cow, and the other four must act as guarantors. The leasing farmer pays a deposit of 15 per cent of the cow’s price, and then pays the balance in 12 monthly installments.
The cow leasing became so popular especially among smallholder farmers that at one time in just 10 months the scheme had managed to lease out 4,734 cows, up and taking the total value of cows leased out through the programme to over Sh400m.

Farmers knew too well how much they stood to gain with this model, which they would never have managed to on their own. Fresian cows, which yield some 35 to 40 litres of milk a day, typically cost from Sh40,000 to as high as Sh120,000, making them far beyond reach for many smallholders. Fresians normally live for 12 to 14 years.

“This is why when we heard of these ambitious project, we knew that this was the only way in our lifetime we would ever stand to own these superior cows that we knew would be our only way out of poverty. We don’t have large tracts of land where we can practice any other form of farming. Livestock keeping has been our only source of income. But the cows we traditionally kept were not promising,” said Alphonse.

The programme became so successful that K-rep launched an independent subsidiary Juhudi Kilimo to run the business, and expanded its lease agreements to include greenhouses, beehives, goats, rabbits and poultry.
The project has offices in certain areas of the country like Nyamira, Kisii, Kitale, Eldoret, Nkubu, Muranga and Litein where trained officers visit farmers to check they have at least a quarter acre of land to grow fodder for the cow. They also provide training on how to care for the cow and how to maximise milk yields.

This support helps ensure farmers’ ability to meet their repayments, which includes interest at 16 per cent. The scheme also allows for a two month grace period in payments if the cow gives birth meaning the farmer can no longer raise money through selling the milk.

The structure has seen Juhudi Kilimo achieve a repayment rate of 95 per cent. JK also insures the cows with CIC Insurance, for which the farmer pays 4 per cent of the price of the cow. For farmers in Muranga who have already bought 2 or more cows through the programme, the next step has been investing in biogas equipment, to create gas for cooking from the cow manure.

“I have seen lives transformed and attitudes towards farming change in my area. Having been among the pioneer members of the project, we faced a lot of criticism from our fellow members. But we were determined to take risks and we are glad the risks have paid off. I have never regretted joining the programme,”said Rispa Waciuri who now has managed to buy 3 Fresian cows under the project.

Rispa who traditionally managed about three litres a day with her traditionally cows, now gets over 90 litres a day which she sells to the government owned New Kenya Cooperative Creameries and to local milk vendors.

Together with other farmers they have moved to not only solidly securing school fees for their children, but also into community based projects. “We have now halfway into finishing a local dispensary from the proceeds we get from milk sale. We have an arrangement with other farmers where a particular percentage of the money we get we devoted to welfare. We also have our SACCO,” Alphonse said.