Kenia: Government Announces Sh3 Billion Milk Price-Stabilizing Fund
The primary objective of the fund is to address excess milk production by mopping it up from farmers and converting it into long-life products, which will then be stored in the Strategic Food Reserve. This measure aims to stabilize milk prices in the market and ensure that all produced milk is collected from farmers.
Chelugui highlighted that the excess milk will be converted into powdered milk, packaged, and stored in the Strategic Food Reserve. Once January arrives, private processors will have the opportunity to purchase the dried milk at a price regulated by the government.
The move is part of various interventions to maintain stability and prosperity in the dairy subsector. Chelugui emphasized that the government has previously undertaken similar interventions, and the current initiative reflects the seventh intervention to address excess milk.
The funds will contribute to stabilizing milk prices and supporting dairy farmers during periods of surplus production. President William Ruto has also directed processors to increase the price of milk from Sh42 to Sh50, with an agreement in place to review milk prices upward in the coming days.
Additionally, New KCC, having undergone a Sh2.5 billion modernization and expansion program, will play a crucial role in managing milk surpluses and stabilizing prices. The increased processing capacity from 300,000 to 800,000 liters per day positions New KCC as a key player in addressing excess milk and contributing to the strategic food reserve.
The government is considering providing milk coolers to dairy farmers through cooperatives, aiming to enhance milk quality, reduce transportation distances, and increase milk productivity. This initiative aligns with the broader plan to elevate milk productivity from an average of five to seven liters per cow per day. New KCC will provide technical support and maintenance of coolers, ensuring a ready market, guaranteed returns, and adherence to milk quality standards.
