Milk processor Brookside Dairy has increased the price of milk per kilo paid to farmers by Sh7 in what is expected to spark a pricing war among processors.
The Ruiru-based processor yesterday said it would pay farmers up to Sh35 per kilo of milk delivered, up from Sh28.
Two weeks ago, Agriculture Cabinet Secretary Peter Munya directed State-owned New KCC to pay farmers Sh33 per kilo of raw milk. Brookside Director of Milk Procurement and Manufacturing John Gethi said the new rates will be backdated to mid-January as the processor seeks to consolidate its leadership position in the country’s milk market.
“The new prices are an incentive to our farmers to invest in climate-smart dairy practices such as the establishment of fodder crops and pasture grasses during what appears to be an extended rainfall season,” said Mr Gethi in a statement.
He said investment in fodder production would address the challenge of seasonality by ensuring consistency in milk production.
“With the enhanced producer prices, we are urging all farmers to redouble their efforts towards sustainable farming by being deliberate in the planning for the cheaper option of farm-produced animal feeds,” said Gethi.
The new move is expected to be a major boon for the firm’s 300 contracted dairy co-operatives across the country.
Brookside has an installed processing capacity of 1.5 million litres of milk per day and operates over 60 raw milk cooling stations spread in 27 milk producing counties. Farmers have for long been pushing for better prices amid shrinking earnings despite increased output.
Industry data shows that while retail prices for milk went up by 57 per cent in the nine years to 2018, farmers who delivered milk to processors saw their earnings increase by a slower rate of 26 per cent.