STATUS & OUTLOOK OF THE DAIRY INDUSTRY IN KENYA

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1 STATUS & OUTLOOK OF THE DAIRY INDUSTRY IN KENYA BY: MARGARET KIBOGY, MANAGING DIRECTOR, KENYA DAIRY BOARD 14 TH AFRICA DAIRY CONFERENCE & EXHIBITION: 22 ND - 24 TH AUG. 2018: NAIROBI

2 OVERVIEW OF KENYA DAIRY BOARD Kenya Dairy Board is a statutory body established in 1958 by the Dairy Industry Act Cap 336 Mandate is to Regulate, Develop and Promote the dairy industry in Kenya

3 OVERVIEW OF KENYA DAIRY BOARD S MANDATE Regulation Development Promotion Premise inspections Licensing Surveillance on quality and safety of dairy produce Import and export permits Capacity building of stakeholders Dairy data, research and development Organization of stakeholders Standards development and review Trade facilitation Consumption promotion campaigns Export promotion School milk promotion

4 DAIRY PRODUCTION SYSTEMS IN KENYA The major dairy production systems in Kenya are Extensive 15% Large scale farmers keeping up to 300 dairy cattle in paddocks and open grazing. Intensive (zero grazing) 60% Most of these are small scale farmers keeping 3-5 animals. Semi intensive - 25% Animals are partly confined and grazed in the fields.

5 FARM LEVEL MILK PRODUCTION AND MARKETING Estimated annual milk production is 5.2 billion liters from: 4.2 million dairy cattle (exotics and crosses) 14 million zebus, 2.9 million camels and 400, 000 dairy goats 80% of the milk is produced by the smallholder farmers Approximately 30% is processed into various milk products

6 MILK BULKING AND COOLING Dairy farmers are organized into over 450 groups (cooperatives, companies, federations and self help groups) Private sector and national and county governments have invested heavily in expanding the milk cooling infrastructure National Government has a programme to procure and distribute over 900 milk coolers for distribution to dairy farmer groups Key challenge is utilization of milk cooling capacity

7 MILK PROCESSING Dairy processing in Kenya consists of large processors and a high number of smaller and medium operators. Though the number of licensed dairies is higher, about 40 dairies are actively producing and availing their products through the normal retail channels in a significant manner. Fresh liquid white milk is the predominant milk product produced in Kenya, accounting for the 60-70% of the total production. High value products including flavored milk, yoghurt, cultured milk (known locally as maziwa lala), butter, ghee and cream are produced by a majority of the medium to large scale dairies. Most of the smaller specialist dairies produce yoghurt, cheese and ice cream, exclusively or with a few other products

8 KEY CHALLENGES Farm level issues Bulking and cooling Processing and marketing High cost of production Low productivity Seasonality of production Fluctuations of producer prices Increasing competition for land use Limited skills Low utilization of coolers Poor organization of dairy farmers Competition by the informal sector Poor road access in some areas which affects collection and delivery times High cost of processing Low utilization of processing capacity Limited cold chain during distribution and retail Growing competition in the market

9 INTERVENTIONS TO BOOST PRODUCTION, PRODUCTIVITY & MARKET ACCESS Devolution of dairy development activities to County governments- local based approaches may be beneficial as each county has its own distinct needs and interventions are immediate, practical and appropriate Promoting ease of business through Licensing of dairy business units via digital platforms Continuous Quality Assurance activities aimed at ensuring compliance to standards on milk handling across the dairy value chain

10 INTERVENTIONS TO BOOST PRODUCTION, PRODUCTIVITY & MARKET ACCESS CONT. Encouraging and supporting youth based dairy agri- business initiatives Encouraging and supporting development of fodder management strategies- fodder production (including cultivation of indigenous grasses and fodder trees) and conservation technologies such as silage Encouraging investment in dairy production and marketing in previously untapped areas Encouraging value addition and new product development Promoting export markets for Kenyan dairy products

11 INTERVENTIONS TO BOOST PRODUCTION, PRODUCTIVITY &,MARKET ACCESS CONT. capacity building of dairy groups through development and review of dairy training curriculum Conducting generic milk consumption and safety promotion campaigns encouraging uptake of the school milk program in counties to drive dairy development mainstreaming socio- economic (cross cutting) perspectives in agricultural development such as gender equity

12 FUTURE OUTLOOK Projections by FAO show that by 2050 Kenya will face unprecedented growth in the demand for food Population will grow to approximately 96 million (up from 46 million today) More population will live in urban centres (approximately 43% of the population) GDP per- capita projected to grow from the current USD 1,455 to USD 6,500 in 2050 Demand for milk will increase from the current 4.8 billion litres to 13.3 billion litres per year Need to double the dairy cattle population or improve productivity to meet this demand

13 FUTURE OUTLOOK CONT. Big 4 agenda and role of the dairy industry The dairy industry will play a major role in delivering the big four developmental "agendas of government by contributing to food security and manufacturing pillars ; Increasing milk production and productivity to meet national consumption demand for milk and milk products Increasing the volumes of processed milk from the current 600 million litres to 1 billion litres by 2022 Improving access and adoption of school milk in the country (has potential to absorb 156 million litres of processed milk per year if fully implemented at ECD level) Improving market access in the domestic and export markets

14 FUTURE OUTLOOK CONT. Future consumption trends for milk and milk products Increased demand for quality and safe processed milk and milk products Increased production and demand for long life milk products (there is increased investment and market opportunities for long life milk which has overtaken production of pasteurized milk) Increased demand for high value milk products such as yoghurt whose production and market demand has doubled in the last five years Improved efficiency in processing, distribution and supply of milk and milk products

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