The government is set to reform the dairy sub-sector through modernization of the New Kenya Cooperative Creameries (KCC) factories and expansion of its market, Deputy President Rigathi Gachagua said on Tuesday.
Mr Gachagua also said the Government will help the New KCC to acquire new market for its milk products within the national and county government institutions and school-feeding programmes in learning institutions.
“The New KCC is a government-owned entity and is the vehicle that will sort out the dairy farmers. It is the organisation that serves the farmer, is not a profit-making entity. Milk sector had been affected by conflict of interest and state capture for long,” said Mr Gachagua.
Speaking during a visit to the New KCC milk processing plant in Dandora, Nairobi, the Deputy President said the Government will introduce far-reaching reforms which will increase returns for milk farmers and that farm-gate prices will shoot up to at least Sh60 per litre.
He said the measures are part of the Government’s efforts to transform the dairy industry and empower the state-funded entity so that the company can process milk for local consumption and for the foreign markets.
The DP is set to hold a conference bringing together all the milk stakeholders to come up with strategies to transform the sub sector.
Emphasizing that the intention is to turn-around the company to profitability, the Deputy President said government aims to double the processed milk to over three million litres per day for higher returns to farmer.
In return, he said, this will double to eight per cent the contribution of the subsector to the nation’s Gross Domestic Product.
Mr Gachagua said he will work with the New KCC Board of Directors to explore new markets for its milk among the government institutions.
“We are going to create market for New KCC in government institutions. If there is a good market, the company will increase prices. Other private companies will also increase prices because of competition in the market,” he said.
Mr Gachagua noted that the State-owned entity is a player to cushion the farmers and the consumers against market forces like fluctuation of prices.
He underscored that the agriculture sector has provided jobs to many households in the country as it directly contributes 22 per cent to the Gross Domestic Product and 27 per cent indirectly through linkages with other sectors.
With a capacity of 4.5 million litres per day, he said there were possibilities for the farmer to deliver milk to the government-owned processor instead of exploitative brokers.
“Doubling the deliveries also means we are not only improving our food security, but also multiplying direct jobs from the current 750,000 to over 1.5 million. This is rather urgent in contributing to sorting out unemployment,” he said.
He also urged the company to lead in diversification to more valuable products beyond the powdering of milk and traditional products.
The DP was accompanied by Cabinet Secretary for Co-operatives And Micro, Small And Medium Enterprises (MSMEs) Development Simon Chelugui, New KCC Board Chairman David Maina and the Company Managing Director Nixon Sigei.
Also present were MPs James Gakuya (Embakasi North), Benjamin Gathiru aka Major Donk (Embakasi Central), Maina Mathenge (Nyeri Town), Joseph Cherorot (Kipkelion East).