Cooperatives and MSMEs Development Cabinet Secretary Simon Chelugui has refuted reports indicating that the New Kenya Co-operative Creameries Limited (NKCC) is one of the government entities up for privatization.
The CS instead says the dairy processor is being strengthened by the government because it offers lifeline for a majority of Kenyan farmers, especially as a buyer of last resort.
According to Chelugui, there is a four-year cabinet decree on the same and it is yet to be invalidated.
“On March 29, 2019, the Cabinet resolved to remove the New KCC from privatization programme. That resolution still stands and it can only be reversed by a similar Cabinet resolution,” the CS affirmed
The CS says he will write to National Treasury on the issue quoting the 2019 resolution. In his letter to Treasury, Chelugui indicated that he will list reasons why the cabinet of the time thought KCC does not fit into the privatization programme.
“On the issue of privatization, Chair, CEO and the board of management unless another cabinet memo is brought, as far as cabinet is concerned that is the position,” He assured the leadership of the dairy processor in a meeting Thursday evening in Naivasha.
“I am not saying privatization is bad, but we want to complete the establishment and position KCC strategically and then offer it to the market,” he said
Chelugui further disclosed that if the government were to sell the New KCC, the first offer will be to the farmers through their respective cooperative societies.
In the 2019 memo, the cabinet cited the role of KCC in the dairy sector and highlighted the processor as the buyer of the last resort. The cabinet also underscored New KCC’s position in making government intervention in addressing the dairy sector issues such as price stabilization.
“You see, we have given you Ksh. 500 million and we have set the price of milk at Ksh.45. Others are at Ksh.33. Those are private agencies who ask farmers to take it or leave it. As government, we cannot do that because we are conscious of the cost of production,” he said
The Cooperatives and MSMEs Development Cabinet Secretary had joined the Board of Directors of the New KCC for a meeting called to deliberate the processor’s new strategic plan.