When you want to tax milk

Mwalimu-G

Mwalimu-G

Elder Lister
BARNABAS BII June 1, 2024News
Frustration as millions of litres of milk go to waste over lack of market, storage
Milk worth millions is going to waste in the North Rift region due to a lack of market and storage facilities.
The quantity going to waste is expected to rise beyond the 290 million litres recorded last year across the country as dairy farmers grapple with market challenges.
The tribulations facing dairy farmers have been complicated by delays by the New Kenya Cooperative Creameries (New KCC) to pay them for the last four months, amounting to millions and the move by private processors to cut the intake by more than half owing to lack of capacity for the excess produce.
Dairy farmers affiliated with the Kenya Dairy Farmer Federation (KDFF) on Friday said thousands of litres of milk were going to waste due to a lack of storage facilities, as private processors have lowered the farm gate prices to below Sh30 a litre as they grapple with the challenges of excess production.
“Most milk cooperative societies face collapse due to delayed payments by the New KCC and exploitation by private milk processers who are offering as low as Sh20 per litre at farm gate level contrary to agreement entered with the Kenya Dairy Board and Ministry of Agriculture of Sh33 per litre,” said Stanley Ngombe, KDFF chairperson.
Deputy President Rigathi Gachagua announced the release of Sh600 million last week to New KCC to pay dairy farmers for milk deliveries.
“I know the problem of delayed payments by New KCC for milk deliveries but I want to tell you that we have released Sh600 million to pay farmers,” said the DP last week while in Eldoret.
Nation spot check
A survey by Nation.Africa indicated that the money is yet to be wired into the farmers’ accounts as they continue to cope with the challenges of maintaining their dairy animals.
“It is now three days and there is no money in our accounts. The government should honour its pledge and release the funds to New KCC to enable it to pay us,” said James Songok from Kerita, Uasin Gishu County.
The New KCC is purchasing a litre of milk at Sh50, as compared to Sh42 offered, but it has not paid dairy farmers for the past four months.
Data from an economic survey indicated that the quantity of wasted milk in 2023 was 290 million litres, translating to income loss to dairy farmers of Sh14.7 billion.
“Dairy cooperative societies are experiencing heavy losses due to milk spoilage with private processors reducing prices and cutting down the intake by half causing untold frustration to farmers,” said Mr Ngombe.
The DP has in the past disclosed plans to introduce reforms to modernize the New KCC) factories and expand its market share to build capacity for dairy farmers.
Among the strategies is for the giant milk processors to acquire new markets through the school feeding programmes sponsored by the national and county governments.
According to the DP, the reforms will empower dairy farmers to increase milk productivity and earn better returns by pushing the cost of milk to Sh60 per litre at the farm gate level.
“Our aim is to turn-around the company to profitability by doubling the processed milk to over three million litres per for higher returns to the farmer,” said the DP when he toured the New KCC milk processing plant in Dandora, Nairobi early this year.
According to interviewed dairy farmers, the cost of animal feed remains the most expensive input in dairy production, accounting for 60 per cent of the total cost and affecting constant milk production.
“Our training is homegrown fodder silage making and other cheaper protein sources. Feed conversation is critical in managing seasonality of weather patterns,’ said Jonah Kemboi from Saos, Nandi County.
The state milk processor is partnering with Uasin Gishu County to support cooperatives to enhance production and school milk programmes.
Governor Jonathan Bii said the devolved unit was keen to revive cooperative societies to improve milk production.
“We are working on a program to coordinate key value chains to enhance productivity and increase household incomes and create employment especially among the youth,” said Mr Bii.
According to data from the county Department of Agriculture and Livestock, the current annual production stands at 220 million litres from 340,000 herds of livestock.

@Kasaman karia no muranyua?
 
Like with many other food items, the problem lies in market malfunctions and not the inability to produce food. In this case, farmers are producing more than the market can absorb, and they are selling it at an affordable 30 shillings per litre. On the other hand, consumers cannot afford to purchase the quantities they need due to the high retail prices of about 100 shillings per litre. The processes in between the farmer and consumer cost a whooping 70 shillings per litre, preventing both parties from fully enjoying the benefits of the product. If the in-between processes could be forced to cost less, farmers would have enough markets and citizens would access the volumes of milk they need.

The same scenario replays with many other food products, creating the impression that the country cannot feed itself. When a farmer in Kinangop is feeding cattle with vegetables he cannot sell, there is someone in Nairobi who has money but cannot afford the same item due to high prices.
 
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upepo said:
Like with many other food items, the problem lies in market malfunctions and not the inability to produce food. In this case, farmers are producing more than the market can absorb, and they are selling it at an affordable 30 shillings per litre. On the other hand, consumers cannot afford to purchase the quantities they need due to the high retail prices of about 100 shillings per litre. The processes in between the farmer and consumer cost a whooping 70 shillings per litre, preventing both parties from fully enjoying the benefits of the product. If the in-between processes could be forced to cost less, farmers would have enough markets and citizens would access the volumes of milk they need.

The same scenario replays with many other food products, creating the impression that the country cannot feed itself. When a farmer in Kinangop is feeding cattle with vegetables he cannot sell, there is someone in Nairobi who has money but cannot afford the same item due to high prices.
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There's a public processor that should stabilize prices and offer a market to farmers during the time of glut. What do they do instead? They try to keep up with the Joneses in the final pricing of their product. They are also in the clutches of corruption cartels hence their inability to pay suppliers four months down the line. Why is govt bailing them out with 600m of public money yet they took farmers' milk and sold?
 
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This is bad. We need govt to incrntivise a private investor to put up a dairy there. Surely the likes of Buzeki can help solve the problem if given tax breaks and land?
 
upepo said:
Like with many other food items, the problem lies in market malfunctions and not the inability to produce food. In this case, farmers are producing more than the market can absorb, and they are selling it at an affordable 30 shillings per litre. On the other hand, consumers cannot afford to purchase the quantities they need due to the high retail prices of about 100 shillings per litre. The processes in between the farmer and consumer cost a whooping 70 shillings per litre, preventing both parties from fully enjoying the benefits of the product. If the in-between processes could be forced to cost less, farmers would have enough markets and citizens would access the volumes of milk they need.

The same scenario replays with many other food products, creating the impression that the country cannot feed itself. When a farmer in Kinangop is feeding cattle with vegetables he cannot sell, there is someone in Nairobi who has money but cannot afford the same item due to high prices.
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eliminate the middle man and you will see magic, i.e. the real free market economics at play. Remember in kenya, taxis were for the 'rich', until the likes of uber and clones came in
 
DeepInYourMind said:
the middle man
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There are normally two of these (sometimes three!), the aggregator usually a co-op or private co, each taking a slice of the cheese. I don't see the middleman being eliminated during our lifetime. This is coz 80 pc of our milk is from smallholders.
 
Mwalimu-G said:
There are normally two of these (sometimes three!), the aggregator usually a co-op or private co, each taking a slice of the cheese. I don't see the middleman being eliminated during our lifetime. This is coz 80 pc of our milk is from smallholders.
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old time taxi drivers responded by burning the ubers. That is before they realized they could earn more by being uber drivers
 
Mwalimu-G said:
There's a public processor that should stabilize prices and offer a market to farmers during the time of glut. What do they do instead? They try to keep up with the Joneses in the final pricing of their product. They are also in the clutches of corruption cartels hence their inability to pay suppliers four months down the line. Why is govt bailing them out with 600m of public money yet they took farmers' milk and sold?
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A while back there were clips circulating of kcc pouring milk because of lack of storage facilities yet prices in stores were still high.

Seems we can't manage ourselves. We need to bring the white man back just the way blacks in south africa are voting for DA.
 
Mwalimu-G said:
There are normally two of these (sometimes three!), the aggregator usually a co-op or private co, each taking a slice of the cheese. I don't see the middleman being eliminated during our lifetime. This is coz 80 pc of our milk is from smallholders.
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An aggregation centre should have an operational cost not more than 9 shillings per litre, but we have some taking between 18-25 shillings per litre, without a quip from the county level co-op officers, since they're assured of their cut.
The reality is that Farmers protection is a thing of the past/ only used as sound bytes by politicians.
 
Clemens said:
An aggregation centre should have an operational cost not more than 9 shillings per litre, but we have some taking between 18-25 shillings per litre, without a quip from the county level co-op officers, since they're assured of their cut.
The reality is that Farmers protection is a thing of the past/ only used as sound bytes by politicians.
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Shida iko hapa katikati from aggregation to processing to packaging to distribution. The farmer does 99% of the work for 30 shillings while the remainder 1% costs 70 shillings. Watumie model tofauti kama milk ATMs, mahali customers wanapata liter na 70 bob.
 
upepo said:
Shida iko hapa katikati from aggregation to processing to packaging to distribution. The farmer does 99% of the work for 30 shillings while the remainder 1% costs 70 shillings. Watumie model tofauti kama milk ATMs, mahali customers wanapata liter na 70 bob.
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Milk ATMs can work if only you live near a big urban/peri-urban area, the places mentioned in the above article have Eldoret town, in Eldoret town you will find a Nandi from Kaiboi has an arrangement for daily milk delivery from his farm to his house, a Keiyo from Kapchebelel will also have a similar arrangement, the same applies to a Marakwet from Kapsowar.
The milk being delivered by the PSV vehicle leaving the milk ATM vendor only selling to the small nonlocals market, if only they could tap places that are milk deficient and the locals don't have similar arrangement, the likes Kisumu and Nakuru towns
 
wrongturn said:
A while back there were clips circulating of kcc pouring milk because of lack of storage facilities yet prices in stores were still high.

Seems we can't manage ourselves. We need to bring the white man back just the way blacks in south africa are voting for DA.
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There was a time during such times za glut they would have a buy two get one free offer so they don't waste milk. But even without this, processors should be turning the glut into powder, butter & cheese then Ruto in his foreign travels should be looking for markets. Lakini wacha farmer aumie
 
shocks said:
There was a time during such times za glut they would have a buy two get one free offer so they don't waste milk. But even without this, processors should be turning the glut into powder, butter & cheese then Ruto in his foreign travels should be looking for markets. Lakini wacha farmer aumie
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Especially the milk powder.
 
shocks said:
There was a time during such times za glut they would have a buy two get one free offer so they don't waste milk. But even without this, processors should be turning the glut into powder, butter & cheese then Ruto in his foreign travels should be looking for markets. Lakini wacha farmer aumie
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Hakuna politician hufanya anything for common good uku. Kama hakuli, then akuna kitu kitamshughlisha
 
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