Farmers want dairy board to set prices of raw milk

Dairy farmers in Nakuru want the industry regulator to set prices at which processors can buy raw milk to avoid exploitation.

The farmers are seeking ways to cushion themselves against price swings following an announcement by Brookside Dairy Limited that it will pay suppliers Sh27 per kilogramme (kg) of milk from Sh32 per kg, starting March 1.

“Dear supplier, your raw milk prices have been reviewed downwards by Sh5 per kilogramme effective from March 1st, 2014,” read the statement from the company sent to farmers who deliver raw milk.

The dairy farmers want the Kenya Dairy Board (KDB) to hold talks with the milk processors to jointly set a standard price for deliveries.

“Brookside Dairy collects most of the milk from farmers in Nakuru and instead of them influencing prices, without consulting us, the dairy board should intervene,” said Joseph Ng’era a dairy farmer in Nakuru.

Farmers fear that the move by Brookside Dairy Limited – the largest milk processor in the country—would make other small processors to lower their prices.

Nakuru is one of the country’s leading producers of milk and most farmers sell their produce to hawkers at between Sh40 to Sh55 per kg, although hawking is outlawed by KDB.

Other processors are the State-owned New KCC which has a processing capacity of 700,000 litres of milk daily and commands 20.8 per cent of Kenya’s processed milk market behind Brookside’s 44 per cent.

Major processors offer farmers Sh40 per litre of raw milk, which is the highest in years.

Analysts said reducing producer prices would make farmers cut down on inputs like expensive animal feeds, leading to low milk yields.

“It will be so unfair for processors to reduce the producers’ price at this time when farmers are grappling with increased cost of production,” said Dairy Producers Association vice chairman Peter Lelei in an early interview.