Kenyan farmers spend about 60 per cent more money in milk and other dairy production as compared to their colleagues in the East African region.
According to the Ministry of Agriculture, Livestock and Fisheries, the cost of producing one litre of milk range from Sh20 to Sh25 compared to Sh10 in neighboring countries; Tanzania and Uganda.
This has been attributed to the nature of our dairy sector which is more labour intensive as compared to neighboring countries which have cheaper and adequate animal feeds ingredients including maize, wheat, sunflower cake and cotton seed cake.
In Uganda and Tanzania, production of maize is relatively cheap compared to Kenya where fertiliser and other components like electricity, water, and fuel are more expensive.
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Kenya also lacks other adequate livestock feeds ingredients such as soybeans, cotton seed cake, wheat and sunflower cake.
Livestock feeds attract higher taxes in Kenya compared to neighboring making locally produced feeds more expensive.
For example, farm-gate prices of milk stands at a minimum of Sh35 per litre while half a litre of processed milk stands at between Sh50 and Sh60 respectively. In Tanzania and Uganda, half a litre of milk goes for less than Sh50 and Sh40 respectively.
Land shortage and inefficiencies along the animal feeds production chain in preservation of fodder are also major challenges in the region. This is further compounded by supply of substandard animal feeds by unscrupulous traders, thus affecting productivity of livestock.
However, according to the ministry, new strategies are being fast-tracked to lower the cost of production while encouraging farmers to start producing their own feeds by sourcing and using the right components.
In Kenya, smallholder dairy farmers dominate the industry at the production level. There are more than one million smallholder dairy farmers, according to surveys done by the Smallholder Dairy (Research and Development) Project (SDP), contributing more than 70 percent of gross marketed production from farms.
Driven by growing urban demand, the national annual per capita milk consumption is expected to grow at an annual rate of about three per cent for the next ten years, to reach 139 liters by 2022, according to USAID-KAVES Dairy Value Chain Analysis 2014.