The Economic Survey attributes gains to formation of dairy co-operatives that eased farmer operational costs.
Report observed that 38 dairy co-operatives were formed last year spurring investments in milk processing.
Dairy production is set for better times.
Improved marketing saw milk production rise by 5.6 per cent last year to 650.3 million litres.
The Economic Survey 2017 attributes the gains to formation of dairy co-operatives that eased farmer operational costs by eliminating middlemen, mainly transporters, in favour of direct delivery to processors.
It says processors received 452.2 million litres, a 3.4 per cent rise, as milk cooling plants, mainly funded and set up by counties and constituency development funds, boosted supply.
The report observed that 38 dairy co-operatives were formed last year alone, spurring investments in milk processing and packaging that enabled farmers earn higher incomes.
The survey says despite the raging drought, dairy farmers earned Sh5.6 billion up from Sh5 billion in 2015.
Some 58 co-operative societies transformed into multi-purpose societies enabling them to offer farmers value-added services, among them, subsidised sale of animal feeds, low-interest loans and savings products.
Involvement of farmer-co-operatives in dairy processing also saw a rise in diversified milk products — yoghurt and fermented milk — of 2.5 per cent as the overall dairy products grew by 3.2 per cent.
Dairy production is set for better times, especially after imported animal feeds manufacturing ingredients such as maize germ and sunflower cake were zero-rated to boost uptake by farmers.
Association of Kenya Animal Feeds Manufacturers chairman Robert Ithieme though called for strict inspection of all animal feeds to ensure processors adhere to best practices.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
