Processors are paying farmers supplying milk directly 41 per cent more than what those selling to cooperatives are getting making them the biggest earners from formal milk sales in 2024.
The Kenya Dairy Board’s report on the Cost of Milk Production in Kenya, 2024 highlighted that of farmers who sold milk through formal markets, those able to reach milk processors earned Sh65 for a litre of milk compared to the ShSh35-Sh55 per litre of milk offered by cooperative societies who were the main buyers of milk from farmers.
The price earned for every liter of milk is the biggest determinant of how profitable a dairy farm will be. Studies have shown that just a five per cent increase or decrease in milk price led to a five million shilling rise or fall in profits for dairy farmers.
The Kenya Dairy Board (KDB) report which was released last week and sampled farmers from 25 dairy-producing counties found that of the 630,000-360,000 farmers who sold their milk formally, the most successfully were those selling directly to one of Kenya’s 30 milk processors.
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“Kenya’s 689 dairy cooperatives cooperatives generally offered lower prices than other buyers. The only exception being in Meru and Tharaka Nithi, where farmers earned Sh55 and Sh54.7 respectively because the cooperatives were linked to the local processor: Meru Dairy Cooperative Union,” read part of the report.
Milk cooperatives are crucial in the dairy value chain as they pick up small milk quantities, as little as two liters, and sell the milk to processors. They also provide them with dairy farming training, link them with veterinary health care and artificial insemination services, as well as providing them access to dairy inputs and also extending them with credit.
This is all done at a fee, which varies across cooperatives and counties, and is charged for every liter of milk they collect.
“The dairy cooperative I was in charged up to Sh17 for marketing, transporting, and cooling the milk they picked from us. Today I drive 100 liters of my milk to Kinangop Dairy Limited daily and earn about two-fifths more than the farmers around me who all supply their milk through cooperatives,” said Gerald Kiuna, a North Kinangop farmer.
Before he could be able to transport his milk, however, Gerald had to visit the processor’s local office at Ndunyu Njeru to be registered as a milk supplier.
Officers from the milk processor then visited his farm to ensure he had the hygiene standards and milk storage facilities that they required of their milk suppliers. He also needed to buy a milk test that would be able to test the freshness, fat content, and lack of contaminants in his milk.
Finally, Kiuna obtained a milk carriage permit which is issued any KDB office. It requires that a farmer provide a copy of the logbook or vehicle ownership document of the car that will transport the milk, a copy of their national identity card and their PIN certificate.
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Other required information includes a copy of your business registration certificate and the business PIN certificate and a list of the business owners and or business partners and their national identity cards
Once these details are filled out you will pay a Sh1,000 permit fee and Sh600 application fee before getting a milk movement permit.
Photo Courtesy: Judy Baxter