Enterprise

Farmers explore co-operative in turning around milk supply

Progressivedairy

An employee of Elburgon Progressive Dairy Farmers Cooperative Society sanitises a milik truck. PHOTO | FRANCIS MUREITHI NMG

Summary

  • The venture was started in 2010 as a self-help group to fight poverty and help members survive the harsh economic reality.
  • The farmers started supplying as little as 700 litres of milk to the Brookside Dairy Ltd under the umbrella of a self-help group but five years later it was registered as Elburgon Progressive Dairy Cooperative Society.
  • The consistent supply to the milk processor has seen the farmers get better returns and now own two modern cooling stations which can handle up to 5,000 litres of milk.

When a group of about 100 dairy farmers in the agriculture-rich Elburgon, Nakuru County, came together little did it know that the idea would develop into a thriving business.

The venture was started in 2010 as a self-help group to fight poverty and help members survive the harsh economic reality.

The farmers started supplying as little as 700 litres of milk to the Brookside Dairy Ltd under the umbrella of a self-help group but five years later it was registered as Elburgon Progressive Dairy Cooperative Society.

The consistent supply to the milk processor has seen the farmers get better returns and now own two modern cooling stations which can handle up to 5,000 litres of milk.

In 2019, the society received Sh853,000 from Brookside Dairy Ltd reward scheme and last year they were paid more than Sh1 million despite the coronavirus pandemic.

They also have a standby generator to mitigate power outage woes, boosting their output. A modern laboratory helps them test the quality of milk before it is dispatched to Ruiru.

"We have a well-equipped laboratory and a qualified technician who ensures quality milk standards are maintained," says Johnston Sang.

The processor, he says, buys the milk from the farmers based on quality and not quantity. The society milk butter content is four percent

"We started with 122 farmers who supplied their produce to leading processor Brookside Dairy and are paid Sh42 per litre based on quality," says Mr Sang.

The society, he says, now delivers more than 4,000 litres to the Ruiru-based processor.

"Our farmers no longer sell to hawkers and other middlemen who exploit us by buying our milk at throwaway prices,” Mr Sang notes.

“We have a ready-made market with the assurance of payment which is wired into our banks by 10th of every month.”

The prompt payment of their milk has motivated more dairy farmers to deliver more milk and this led to the setting up of another cooling station at Muchorwe at Kuresoi North in Nyota ward, Nakuru County where more than 120 farmers deliver 1,500 litres of milk daily.

"We collect 1,500 litres of milk daily up from 500 litres when we started in July 2020. We started with 44 farmers but today we have 122 farmers and the number is still increasing by the day. Our target is to hit 7,000 litres before the end of this year," Mr Sang tells Enterprise.

The farmers also bought the land where a Sh1.2 million cooling plant is located.

"We bought half an acre at Sh1.1 million and we hope to increase the acreage as we want to build a feeds centre to give our farmers quality animal feeds,” Mr sang says, adding that the society has nine employees and has nine board members who have been trained on good corporate governance.

The society has Artificial Insemination Services (AI) donated by the Nakuru County government. They also have a well-equipped agro vet shop where farmers buy goods through a checko-ff system.

"The farmers can now access loans in financial institutions as the marketing of milk through Brookside Dairy Ltd guarantees market, assures payments and this has transformed their lives as they have restocked their herd and built modern houses, drill boreholes and bought motorbikes among other development ventures," says Mr Sang.

However, the farmers say one of the main challenges they face is the fluctuating prices of farm gate prices.

Brookside's director of milk procurement and manufacturing, John Gethi, has advised many dairy farmers to join co-operatives to benefit from the processor's pricing incentives currently in place.

ECONOMIES OF SCALE

Farmers, he says, should make good use of the expected rains by planting forage crops to help adequately feed their valuable animals consistently.

"Brookside will continue to support all its dairy groups through the provision of a guaranteed market for their milk," Mr Gethi notes, underlining the role of dairy co-operatives in the aggregation and transport of milk along the value chain.

Mr Gethi says that farmers who are members of these groups stand to benefit from economies of scale.

"Supplying milk in groups, such as Elburgon Progressive Dairy Society, has enabled farmers to better manage their costs of production, with co-operatives shoring up the benefits of economies of scale," says Mr Gethi.

"The involvement of co-operatives along the dairy value chain has also enabled farmers to better manage transaction costs involved during the marketing of raw milk." Kenneth Kimosop who supplies milk to the society says the prompt payment has transformed his life as a transporter of the milk.

"I ferrt 4 00 litres per day and I earn Sh1,200. I also deliver 30 litres of milk daily and I was paid Sh33,000 which I used to buy a new cow to increase my milk delivery," says Mr Kimosop.

Hilary Cheruiyot says he delivers between 50 an 70 litres of milk daily and hopes to increase to 150 litres.