Enterprise

Kieni dairy farmers cut off cartels with processing firm

dairy

A man offloads milk cans at a milk ATM belonging to Kieni Dairy products along Gakere road in Nyeri town on June 10, 2019. PHOTO | JOSEPH KANYI | NMG

For years, around Kenya, the price of milk has been at the centre of a war pitting dairy farmers against brokers. Farmers toil and brokers reap the bounty. That has been the fate of thousands of small-scale farmers yorked in a system that milks them dry.

Fed up with the exploitation, farmers in Kieni, Nyeri recently decided to eliminate the leeching brokers from the value chain by forming their own processing firm.

Kieni Dairy Product Limited (KDPL) has shareholders drawn from seven cooperatives in the constituency. By leveraging on the economies of scale, the farmers have brought down processing costs that would have otherwise being to big for any one cooperative to bear alone.

“We were geared towards acquiring more milk so that we can venture into value addition and increase farmers' earnings,” Isaac Mwaniki, KDPL’s chief executive officer said.

Once the milk is collected in their respective cooperatives located at Watuka, Lamuria, Endarasha, Thuruthuru, Mweiga, Gataragwa, and Nairutia, it is delivered to the processing firm for pasteurisation.

Since it has not yet installed packaging machines, the firm has entered into a contract with the New Kenya Creameries Company and two other Nairobi- based firms to package the milk.

In a day, they collect around 15,000 litres but since the drought struck the capacity has reduced by 3,000 litres.

Besides the plain milk, the firm processes yogurt with its brand, Highridge, retailing at Sh80 per 500ml, Sh45 for 250ml, and Sh35 for a 150ml container.

"We have undergone a rigorous process that has taken us about one and a half years to match up to the standards worthy of having our milk on the shelves," Mr Mwaniki added.

Sustainable prices

He noted that some leading processors have been duping farmers into selling their milk to them at an average of Sh43 per litre which falls after a period of time with no explanation.

“Farmers affiliated to this firm have rejected the offer because they fear it will not be sustainable in the long haul,” he said.

KDPL pays farmers Sh38 per litre of milk they deliver to their respective cooperatives.

The firm dispenses milk in Milk ATMs which retail at Sh55 per litre.

“We have focused on selling quality milk to leverage on the market… and this way we have managed to sell milk to school, work premises, and milk parlors,” he said.

The processor aims to register a union that will increase its footprint in the dairy sector in order to attract donations from both the national and county government.

"We also aim to widen our scope and milk collection centres from just the constituency to the entire county once we have built capacity and enhanced our infrastructure," Mr Mwaniki said.

He further stated that earlier on, the milk industry has not been regulated which continues to pose a great threat to the multibillion-shilling industry as laws are hardly enforced.

“When milk can be hawked without regulation, a lot of people start selling unpasteurised milk which gives way to adulteration of milk,” he said.

Mr Mwaniki noted that at the firm they ensure that the milk meets the quality threshold by ensuring that milk is pasteurized to the required standard and temperature to ensure that pathogens and bacteria are killed and thus cannot contaminate the milk.

The processing firm has been training farmers on how to increase their production so that they can earn optimally.

“When prices plummet, we adjust according but in the long run we want to invest in value addition so that besides producing yogurt we can sell cheese, especially during glut,” he added.

Currently, milk production had gone down where farmers are not producing enough volumes to sustain operations.

Mr Mwaniki said besides drought, the farmers had poor feeding regimes and diets for their animals which have affected milk production.

“We have set up demo farms for the farmers to go learn from and apply the lessons at home to increase milk production,” he said.

On average farmers are producing an average of five litres which is below the potential of a dairy cow at about 10 to 12 litres.

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