More losses for farmers as KCC cuts milk prices and bonuses

By John Njiraini

Dairy farmers will incur more loses after the State-owned New Kenya Cooperatives Creameries (New KCC) reduced the price of milk for the second time in a month.

But it is good news for consumers, as the company also cut retail prices for the commodity.

The largest milk processor in the country yesterday cut the amount paid to farmers for milk deliveries by Sh2, due to a continuous increase in production, for lack of adequate processing, and storage facilities.

This means farmers will receive Sh21, down from Sh23 for milk delivered. Only three weeks ago the company had reduced the price from Sh24 to Sh23.

"Farmers should understand it is important to reduce the price instead of giving them a lot of money, and failing to take their milk," said New KCC chairman, Matu Wamae.

Upsurge in delivery

He added the bonuses paid to farmers for bulk delivery would also be adjusted downwards, as the company struggles to deal with an unprecedented upsurge in milk deliveries from 400,000 litres per day in November, to over 680,000 litres.

Prices for consumers have been reduced by an average of Sh4 per half litre. This means a 500 ml packet of milk that retailed at Sh30 will now cost Sh26.

The reduction comes only a day after Livestock Minister, Mohamed Kuti, said the Government could not save farmers from likely losses, because processors have no capacity to absorb all the milk.

According to Wamae, the new changes have been necessitated by the increase in milk production, due to the heavy rains that pounded various parts of the country late last year.

"Milk production has exceeded our processing capacity, and we are taking prudent measures to ensure we can adequately deal with the situation," he said.

The reduction will be bad news for farmers who are already entangled in confrontations with the company for allegedly turning them away with their milk.

Close factories

According to Wamae, the company has not turned away any farmer, but it had been forced to close its factories for routine maintenance.

He added the company has been forced to operate its machines overtime to process the excess milk, which had caused constant breakdowns.

‘‘We have been overwhelmed by the milk production, but we are improving our efficiencies to address the current challenges," said New KCC acting Managing Director, Milcah Mugo.

She added plans were underway to increase processing capacity at the Kiganjo powder factory by 20,000 litres per day, and instal an instantiser at the Eldoret factory to produce instant powdered milk.

The company is also targeting at recapturing its export market particularly in the Middle East.