Hit by Covid-19 and economic shocks, dairy sector limps on with promise
When the year started, the dairy industry looked promising. Kenya was exporting nearly 47,000 kilogrammes of milk products in January, a figure that rose to 82,682 in February and then to 94,795 in March, Kenya Dairy Board (KDB) Data of July 2020 show.
Then the figures tanked.
In April, Kenya exported just over 10,000 kilogrammes of milk products, at a time when international travel restrictions hit top gear. The figures looked worse for May and June, 5,169 and 5,488 kilogrammes respectively.
Even milk deliveries inside the country took a significant hit. The deliveries declined by three per cent in the first six months of 2020 compared to the same period last year.
However, the greatest drop was between April and July 2020 at five per cent.
Except for 2012, when the total annual intake of milk was 495 million litres, the annual consumption of milk, in the last ten years, has been comfortably above half a billion litres.
Statistics from KDB also show that Kenya leads in production of milk in the region, accounting for 41.3 per cent of the total milk produced in the East African Community in 2018. South Sudan came in second, contributing 27.1 per cent of EAC’s milk that year. Uganda (14.5 per cent) and Tanzania (13.8 per cent) only accounted for 28.3 per cent.
Agriculture Cabinet Secretary Peter Munya, during a stakeholder breakfast engagement forum recently, said that the country is still producing well below the Food and Agriculture Organisation (FAO) recommended per capita of 220 litres per annum.
“Kenya is one of the biggest dairy sectors in Africa producing 5.2 billion litres per annum. In Kenya, the dairy sector, plays a huge role as a source of livelihood to 1.8 million smallholder farmers. The sector offers 750,000 people direct employment with 500,000 employed indirectly. In addition, the dairy sector contributes four per cent to the National Gross Domestic Product (GDP); 12 per cent to the Agriculture GDP and 44 per cent to the livestock GDP. Its per capita consumption stands at 110 litres per annum,” said Mr Munya.
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Amid the dwindling numbers, the stakeholders came up with regulations that should see the sector revitalised, especially after a tough year. To ensure that the dairy sector remains vibrant and a preferred investment sector, the government, in conjunction with Kenya Dairy Board and other industry players, has instituted several interventions towards the sector.
Munya said they are improving the cooling infrastructure by installing up to 350 milk coolers each with a 300-litre capacity to farmer groups across the country. “This will lead to an improvement in milk quality as well as reduce post-harvest losses and thus improved profitability along the value chain,” said the CS.
Munya also said there is a consideration that will see milk prices increase, putting more money in the farmers’ pockets.
“The dairy producer is one of the key cogs that moves the dairy sector. Following an outcry by farmers on low producer prices, the President, Uhuru Kenyatta through my Ministry directed that farm gate price should not be less than Sh33 less operational costs including transport, cooling and other administrative costs. This will ensure that our farmers achieve a favourable return on their dairy farming and thus make the sector more sustainable.”
To improve on the skills of dairy players to enable them manage better their businesses, the ministry, Kenya Dairy Board and other players have stepped up capacity building of the same particularly in the area of value addition and adoption of modern technology.
To enable the processor, play its critical roles, the government supported New KCC through an injection of Sh500 million to stabilise milk prices. It further injected an additional Sh500 million to support modernisation of its facilities located in different parts of the country.
President Uhuru Kenyatta on May 23, 2020 announced a Sh53.7 billion economic stimulus package to help the economy absorb the shocks of Covid-19. “I am confident the dairy sector also being one of the sectors affected by the pandemic will greatly benefit from this.”
“Regulatory framework remains key in the development and growth of any sector. Development of investment-friendly policies and regulations remains a key role of the national government. This is aimed at creating a conducive environment for business to thrive,” Munya told the stakeholders
Dairy Board of Kenya statistics show that extensive dairy production systems in Kenya (large-scale farmers keeping up to 300 dairy cattle in paddocks and open grazing) contribute up to 15 per cent of total milk produced.
Intensive (zero grazing) systems contribute 60 per cent, with most of these small-scale farmers keeping three to five animals.
Semi intensive systems contribute up to 25 per cent. Here, animals are partly confined and grazed in fields.
Kenya’s estimated annual milk production of 5.2 billion litres is from 4.2 million dairy cattle (exotics and crosses), 14 million zebus, 2.9 million camels and 400,000 dairy goats.