Firm business

Kieni dairy farmers end cartels with processing company

Business

Kieni dairy farmers end cartels with processing company


A man unloads milk cans from a milk dispenser belonging to Kieni Dairy Products along Gakere road in Nyeri town on June 10, 2019. PHOTO | JOSEPH KANYI | NMG

Summary

  • Fed up with exploitation, farmers in Kieni, Nyeri have recently decided to eliminate leech brokers from the value chain by setting up their own processing company.
  • Kieni Dairy Product Limited (KDPL) has shareholders from seven cooperatives in the constituency.
  • By taking advantage of economies of scale, farmers have reduced processing costs that would otherwise have been too high for a single cooperative to bear alone.

For years around Kenya, the price of milk has been at the center of a war between dairy farmers and brokers. Farmers toil and brokers reap the bounty. This has been the fate of thousands of small farmers locked into a system that treats them dry.

Fed up with exploitation, farmers in Kieni, Nyeri have recently decided to eliminate leech brokers from the value chain by setting up their own processing company.

Kieni Dairy Product Limited (KDPL) has shareholders from seven cooperatives in the constituency. By taking advantage of economies of scale, farmers have reduced processing costs that would otherwise have been too high for a single cooperative to bear alone.

“We were geared towards acquiring more milk so that we could venture into value addition and increase farmers’ incomes,” said Isaac Mwaniki, Managing Director of KDPL.

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

As it has not yet installed any packaging machinery, the company contracted with the New Kenya Creameries Company and two other Nairobi-based companies to package the milk.

In one day, they collect about 15,000 liters but since the drought hit, the capacity has decreased by 3,000 liters.

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

“We went through a rigorous process that took us about a year and a half to reach the standards worthy of having our milk on the shelves,” Mr Mwaniki added.

Sustainable prices

He noted that some prominent processors have tricked farmers into selling them their milk at an average of 43 shillings per litre, which drops after some time without explanation.

“Farmers affiliated with this company have rejected the offer because they fear it will not be viable in the long term,” he said.

KDPL pays farmers 38 shillings per liter of milk they deliver to their respective cooperatives.

The company distributes milk through milk vending machines which sell for 55 shillings per litre.

“We focused on selling quality milk to take advantage of the market…and in this way we were able to sell milk to school, workplaces and dairies,” he said. he declares.

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

“We also aim to expand our outreach and milk collection centers from the constituency to the whole county once we build our capacity and improve our infrastructure,” Mwaniki said.

He further said that previously the dairy industry was unregulated which continues to pose a big threat to the multi-billion shilling industry as the laws are barely enforced.

“When milk can be peddled without regulation, many people start selling unpasteurized milk, which leads to adulteration of milk,” he said.

Mr Mwaniki noted that the company ensures that the milk meets the quality threshold by ensuring that the milk is pasteurized to the required standard and temperature to ensure that pathogens and bacteria are killed. and therefore cannot contaminate the milk.

The processing company has trained the farmers on how to increase their production so that they can earn optimally.

“When prices fall we adjust accordingly, but in the long term we want to invest in adding value so that in addition to producing yogurt we can sell cheese, especially in times of glut,” he said. -he adds.

Currently, milk production has declined where farmers are not producing enough volumes to sustain operations.

Mr Mwaniki said that in addition to the drought, farmers had poor diets and diets for their animals, which affected milk production.

“We have set up demonstration farms so farmers can learn and apply the lessons at home to increase milk production,” he said.

On average, farmers produce an average of five liters, which is less than the potential of a dairy cow by about 10-12 liters.

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