Enhancing Kenya’s Dairy Sector Towards Economic Transformation
By John Waithaka
The Cabinet Secretary for Agriculture, Dr. Andrew Karanja, presided over the launch of the 2024 study report on the cost and profitability of milk production on Wednesday. This comprehensive report is a critical resource for Kenya’s dairy industry, offering insights into the sustainability of this key sector and its role in driving a growing economy.
The study provides an in-depth analysis of key performance indicators across Kenya’s diverse agroecological zones, production systems, and farm sizes. It examines essential aspects such as farm characteristics, milk productivity, production costs, profitability, and practical recommendations to enhance dairy farming.
In his address, Dr. Karanja expressed gratitude to the Kenya Dairy Board for their dedication to conducting annual studies over the past four years. These studies have been instrumental in tracking progress in productivity, costs, and profitability within the dairy farming sector. He also commended the Institute of Agriculture Policy and Development for its unwavering commitment to quality research in agriculture and livestock, emphasizing its crucial role in the latest report.
“The dairy industry is a vital socio-economic sector in Kenya,” Dr. Karanja remarked. “It supports income generation, employment, food security, soil conservation, and national development. This study highlights the transformative potential of the dairy sector for Kenya’s economy.”
On her part, the Managing Director of the Kenya Dairy Board, Ms. Margaret Kibogy, emphasized the sector’s readiness to handle increased production while pointing out opportunities for growth in processing and value addition.
“Yes, we are still rain-fed dependent as a sector,” she acknowledged, “but we are glad that as we prepare for increased production, there is also increased demand and consumption in the country.”
Ms. Kibogy highlighted the strides made in infrastructure, with the installed processing capacity moving from 3.5 million liters to 5.2 million liters daily. However, she noted that only 45% of this capacity is currently being utilized, leaving significant room for expansion.
“Even if we double production, the infrastructure in place can handle higher volumes of milk,” she assured. “Currently, only 85% of what we process goes into UHT milk, leaving a lot of space for high-value products like cheese. The demand for cheese and related products is very high, yet we are not fully capitalizing on this opportunity.”
She also praised farmers for embracing feed conservation, with private sector players stepping in to lower the cost of silage from KSh 19 to KSh 15 per kilogram. Plans are underway to reduce this cost further to KSh 12 per kilogram, which would make milk production more competitive and affordable.
“This is why the Cabinet Secretary’s focus on making more land available for feed production is crucial,” Ms. Kibogy added. “Lowering the cost of silage will directly translate to lower production costs, enhancing the sector’s competitiveness.”
The report revealed significant progress in Kenya’s dairy sector. In 2023, the volume of milk received by formal markets increased by 7.4%, rising from 755 million liters in 2022 to 811 million liters. The value of this milk also grew by 13%, reaching KSh 40.5 billion compared to KSh 35.7 billion in the previous year.
According to the Economic Survey 2024, milk ranks as Kenya’s fourth most valuable agricultural commodity after tea, horticulture, and cattle sales. The sector supports the livelihoods of approximately 2 million small-scale rural dairy farmers.
Recognizing the dairy sector’s potential to drive economic empowerment, the Kenyan government has included it in the Bottom-Up Economic Transformation Agenda. With its capacity for quick returns and regular income, dairy farming is poised as a key focus area for transformation.
The government has set ambitious targets to accelerate the sector’s growth, including doubling milk production from 5.2 billion liters to 10 billion liters annually, increasing dairy exports to 1 billion liters per year, raising the share of marketed production from 30% to 50%, and boosting smallholder farmers’ incomes to a monthly target of KSh 56,000 per farmer.
The government’s continued support and investment in the dairy sector, coupled with the efforts of stakeholders like the Kenya Dairy Board, are expected to unlock new opportunities for smallholder farmers while bolstering national economic growth.
The 2024 study provides critical insights and highlights areas of opportunity, from improving feed conservation and reducing production costs to scaling up processing of high-value products. With favorable weather, growing infrastructure, and a commitment to innovation, the future of dairy farming in Kenya is poised for remarkable transformation.
This report underscores the importance of evidence-based policy-making and highlights the sector’s critical role in achieving food security, economic empowerment, and sustainable development for millions of Kenyans.
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