- Title: KENYA: Kenya's dairy sector faces milk glut
- Date: 22nd February 2010
- Summary: NAIROBI, KENYA (FEBRUARY 17, 2010) (REUTERS) COWS IN A MILKING SHED MAN FITTING MILKING UNIT ON TO A COW'S UDDER MILKING UNIT ON COW'S UDDER VARIOUS OF MILKING MACHINES VARIOUS OF COWS IN PENS EATING (SOUNDBITE) (English) RUTH MUCHENE, DAIRY FARMER SAYING: "I think some milk from the Rift Valley... I think they had more rain this time .... it is getting its way to N
- Embargoed: 9th March 2010 12:00
- Keywords:
- Location: Kenya
- Country: Kenya
- Topics: Industry
- Reuters ID: LVAC61F4KABHW8HPBITW52L3JU2
- Story Text: Kenyan dairy farmers suffer huge losses as they produce a surplus of milk that the government's national dairy processor is unable to handle.
Surplus milk production has stretched the capacity of Kenya's dairy processors causing milk to go to waste and fuelling a milk glut that has exposed farmers to huge losses.
Dairy facilities have been forced to pour away thousands of gallons of stale milk into sewers as farmers continue to bring in their supplies.
The glut has been partly blamed on the government owned New Kenya Co-operative Creameries (KCC), which is said to have failed in playing its role as a market stabiliser.
Kenya's anti corruption commission is carrying out investigations into New KCC after reports emerged that hundreds of millions of shillings budgeted for buying extra equipment for Ultra Heat Treatment and milk drying could have been misused, reducing the organisation's planned amount of milk intake.
"This is just the beginning and, for instance, this milk you see here was just part of what we had already been brought in. What is still in the farms is much more. This could be a loss of up to 10 million," said one farmer who had brought in gallons of milk to a plant in the country's Rift Valley, where dairy farming is a lifeline for thousands.
Before the current glut, heavy rains in the Rift Valley and other parts of the country increased pasture and led to better yields for dairy farmers. This followed a prolonged drought towards the end of last year that had lowered supplies.
Increased supply has surpassed demand and the wholesale and retail prices of milk have fallen to attract consumers to buy more milk.
Ruth Muchene a farmer on the outskirts of Kenya's capital Nairobi, has experienced the effect of the milk glut at first hand because there has been a drop in the price of milk she is able to sell.
"I think some milk from the Rift Valley... I think they had more rain this time ... it is getting its way to Nairobi and that has affected the prices, we used to get 30 shillings for a litre but now we are getting 25," she said KCC was originally a farmers' co-operative but collapsed due to mismanagement. Private investors bought the firm from receivers in 2000 for 447 million shillings. The government bought the processor three years later for 547 million and renamed it New KCC. The government said it took over KCC because most dairy farmers did not have a profitable market for their milk.
Muchene is among farmers appealing to the government to solve the current crisis.
"The government can get a way of getting all this milk put to some use. It can help the farmers because when you pour (away) milk it is very painful and it's also a big loss - just imagine how much it takes one to produce a litre of milk," said Muchene.
The anti corruption commission has also accused cartels in government of colluding with traders to cause the glut by importing cheap milk powder.
A privately owned milk processor, Broookside warned on Wednesday (February 17) of a more severe milk glut in May at the last month of the long rains season, if the government is unable to take in the current surplus or increase exports. - Copyright Holder: REUTERS
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