The Kenyan government is gearing up to establish a groundbreaking milk price-stabilizing fund through New Kenya Cooperative Creameries (New KCC). Cooperative and Micro and Small Enterprises Cabinet Secretary Simon Chelugui revealed that this visionary intervention aims to ensure stability and prosperity in the dairy industry, addressing challenges faced by both producers and consumers.
Stability Through Strategic Management
New KCC, a government-owned entity, is set to play a pivotal role in stabilizing milk prices, ensuring fair returns for farmers even during periods of surplus. The planned fund, with a substantial allocation of Kshs. 3 billion, is designed to efficiently manage excess milk by converting it into a strategic food reserve in the form of dry milk powder. This reserve can then be strategically released into the market during dry seasons, ensuring a balance in supply and demand.
Government’s Commitment to Farmers
During a Cooperative Leaders forum, CS Chelugui emphasized that the stabilization fund is a government intervention aimed at supporting farmers and the dairy subsector as a whole. The initiative is not intended to interfere with individual dairy processors but rather to uplift farmers during times of market glut. The government’s commitment to investing in stabilizing milk prices demonstrates a proactive approach to safeguarding the interests of farmers.
Strategic Channeling Through New KCC
Highlighting the role of New KCC, CS Chelugui emphasized that the stabilization fund will be channeled through this government-owned institution. The move aims to fill the gap left by some processors who have not been actively purchasing milk from farmers during periods of surplus. The government’s intervention ensures that farmers receive fair returns, even in the face of increased production due to favorable weather conditions.
Modernization and Expansion Initiatives
CS Chelugui further unveiled the government’s ambitious modernization and expansion program for New KCC, involving an investment of Kshs 2.5 billion. This significant financial injection has increased the processing capacity of New KCC from 300,000 to an impressive 800,000 liters per day. The move aligns with the government’s broader vision of enhancing the efficiency of dairy processing to meet the growing demands of the market.
Challenges Addressed: Breeding Costs, Disease Prevalence, and Market Access
Acknowledging the challenges faced by the dairy subsector, including high breeding costs, disease prevalence, and limited market access, CS Chelugui reassured stakeholders that the government is committed to comprehensive reforms. The initiatives include supporting farmers with milk coolers, tackling the high cost of animal feed, and streamlining the pricing and collection points for milk.
Empowering Farmers: Voices from the Ground
Echoing the sentiments of cooperative leaders, Daniel Marube, Executive Director, and CEO of Cooperative Alliance of Kenya, expressed optimism about the potential growth of milk production up to four million liters per day. Farmers, represented by Ambrose Koech from K-Piller Sacco in Bomet County, called for government support in subsidizing animal feeds and streamlining milk prices. These initiatives, they believe, will empower farmers to thrive in the evolving dairy landscape.
A Transformative Path for Dairy Prosperity
As the government’s commitment to the dairy subsector takes center stage, the establishment of the milk price-stabilizing fund through New KCC emerges as a beacon of transformative change. This visionary move not only promises stability in milk prices but also underscores the government’s dedication to ensuring a prosperous future for dairy farmers. With modernization initiatives, financial backing, and a commitment to addressing sector challenges, the government sets the stage for a dairy renaissance that benefits farmers and the nation’s economy alike.
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