Lack of sound management in the lucrative dairy co-operatives is to blame for underperformance and collapse of a number of the societies, players in the industry have revealed.
Like other co-operatives, members of the management committees of dairy societies are picked through elections, and more often than not, the individual with the highest votes, who may not necessarily be the most experienced in management, gets the nod to take the helm.
However, it is emerging that such elected leaders may lack basic governance skills, such as financial management which is critical in the expansion plans of the societies and future investment of the members’ funds to boost their financial and asset base.
Amid these uncertainties, better times seem to lie ahead after a leading processor announced it would train society officials on corporate governance as a critical tool for sustainable growth of the sector.
Brookside Dairy, which partners with more than 300 dairy co-operatives across the country, said the training would encompass topics on performance measurement and internal controls, to ensure that the dairy co-operatives thrive in an increasingly competitive economic environment.
“It is in the best interest of member farmers, and the industry in general, that dairy co-operatives succeed. As the main market for farmers’ milk, we want all our partner co-operatives to adopt sustainable management practices that would eventually encourage members to increase milk production,” said Mr John Gethi, Brookside’s director of manufacturing and milk procurement.
Under a partnership with the Co-operative Bank’s capacity building arm, the Co-op Consultancy and Insurance Agency, Brookside has begun training board members of the dairy co-operatives from 27 counties.
“The country’s dairy co-operatives are dynamic and play an important economic role in the lives of many people … Their success is critical to the overall growth of the dairy industry,” said Mr Gethi.