Price wars crippling small milk processors


By Carol Njenga.

KBC Radio_KICD Timetable

Small milk processing companies in the country may have to look into ways to diversify their products to keep up with the stiff competition being experienced in the sector.

Githunguri Dairy Cooperative Society chairman Ndichu Mukora says over production of milk in the country has seen prices fluctuate affecting returns for both farmers and small milk processers.

The dairy industry accounts for 14 percent of the agricultural GDP and 6 percent of the country’s GDP.

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The industry is estimated to generate 1 million jobs at farm level, an additional 500,000 in direct waged employment and another 750,000 jobs in support services.

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Official data shows that the volume of milk sold grew 10.9 per cent to 600 million liters last year, raking in 20.7 billion shillings.

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While rising production has seen retail prices reduce to the benefit f the consumers, over production of milk in the country means gate delivery prices have also decreased resulting to low returns for the farmers.

Farmers in the country have been protesting against the move by big milk processing firms to cut milk prices terming it as exploitative.

Mukora says the current competition in the sector may prompt to look for other ways to break even financially.

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Mukora says the Cooperative Society is diversifying and investing in its line products in order to remain relevant.

He says the society has made a plea to the Kiambu County government to lower money levied on processed milk from the current 30 cents per liter to 10 cents per liter to improve earnings for farmers.


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