Kenya Dairy Industry Sheds Light on Market Challenges, Opportunities

Wilson Kyalo, Chairman of the Lower Eastern Dairy Cooperative Alliance in Machakos Kenya, has built his dairy farm from one cow to 100 cows over 40 years.

In December, I had the privilege to serve as a volunteer consultant with the USAID Farmer-to-Farmer (F2F) program in Kenya.
I spent two weeks working with the Lower Eastern Dairy Cooperative Alliance (LEDCA ) in Machakos Kenya, 60 km east of Nairobi, developing a strategic business plan.

Attending farmer field days, visiting dairies, handling bags of seed and feed at ag retail outlets, digging into financial statements, and interacting with the co-op board provided some insights to the developing dairy industry in Kenya and market opportunities.

Kenya Dairy Industry

More than 80% of Kenya’s rural population is engaged in agriculture, yet it contributes only 25% to the national GDP. Farming is characterized by low production and limited economic returns.

The Kenya dairy sector contributes 5% of the country’s GDP, and the country is one of the largest producers of milk in Africa.
With 90% of the nation’s milk production coming from small scale dairy farmers, the dairy industry in Kenya is faced with various challenges:

  • High cost of milk production
  • High cost of collection per unit of milk
  • Low quality of raw milk delivered to the milk processor
  • Fragmented supply chains
  • Seasonality of milk supply
  • Low quality feeds and feeding systems
  • Dairy animal genetics with low productivity
  • Expensive farm inputs
  • Poor animal husbandry
  • Poor management of dairy marketing systems

Small Scale Dairy Farmers are Improving Production

Despite the challenges, I saw many examples of improvements coming to the industry:

1) Training provides education, hope and change. Wilson Kyalo, Chairman of the LEDCA, has built his dairy farm from one cow to 100 cows over 40 years. As a result of Kyalo’s training and influence in the dairy industry, other dairy farmers have followed suit. Jonah Malika, for example, left his business in Machakos and has built his dairy farm to 35 cows. Malika’s success caused aspiring dairy farmers from the nearby region to seek out his advice, prompting him to build a training center. The farmers pay 500 Kenya shillings per day (approximately $5) to receive training on dairy animal genetics, forage production, and other agronomic practices.

2) Collaborating for market power. In addition to group training, small scale farmers are leveraging the power of groups to source inputs such as seeds, feed, and animal health products, as well as aggregating milk to sell to the community. Many of the farmer groups have aspirations of expanding production and providing milk processing, transportation, and marketing of additional dairy products. The fast growing population in nearby Nairobi will provide a ready market.

3) Improved dairy nutrition. Dairy farmers are quickly realizing the importance of feeding their dairy cows to improve production. I was impressed to see alfalfa being grown, the importance placed on fodder production and storage, and the use of quality dairy feed concentrates.

This was my second volunteer assignment with F2F and is one of nearly 500 assignments that focus on improving approaches to local agriculture practices, expanding production of quality food crops, and nutrition in Ethiopia, Tanzania, Kenya, and Uganda where Catholic Relief Services (CRS) implements F2F. The program, funded by the U.S. government, has been running for nearly 30 years.

CRS is partnering with five U.S. institutions to tap into the rich diversity of the U.S. agriculture community: the National Catholic Rural Life Conference, Foods Resource Bank, National Association of Agricultural Educators, American Agri-Women, and the University of Illinois’ College of Agricultural, Consumer and Environmental Sciences.

The volunteers travel to East Africa for anywhere from one to six weeks.

“We are certain that this program will be beneficial not just to the farmers in East Africa but also to the volunteers from America,” said Bruce White, CRS’ director for the program. “It’s going to make the world a little bit smaller and a whole lot better for everyone involved.”

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