Dairy farmers contracted to processor Brookside have a reason to smile after the firm increased producer prices from Sh. 31to Sh.36 per litre.
This comes in the wake of a debilitating drought that has seen milk production fall substantially over the past three months.
The increase, effective for deliveries made from Sunday, will benefit 160,000 farmers and 300 dairy groups contracted by the processor.
The Brookside’s Director of Milk Procurement and Manufacturing, John Gethi in a press release on Monday said the price adjustment is meant to cushion farmers against the effects of prolonged dry weather, which had suppressed production across major milk sheds in the county.
“The current business environment has occasioned an increase in consumer prices of our products. We have decided to pass on the benefits of these increases to our farmers during this exceptionally dry period,” said Gethi.
He called upon the farmers to redouble their efforts in milk production in order to further benefit from this opportunity, with the new price adjustment.
Last week, Industry regulator the Kenya Dairy Board announced that intakes by processors had plummeted by 5 per cent over the first quarter of the year as the effects of dry weather continued to be felt across the country.
The shelf price of milk also rose by Sh5 for the 500ml packet of long-life products at major points of sale and Brookside is keen to continue partnering with farmers to make dairy a generator of regular family income, added Gethi.
“We are currently on an aggressive empowerment programme for our farmers, a majority of whom are smallholders. We are targeting improved production through investment in feed preparation,” he said.
Gethi confirmed that investing in smallholder dairy farmers and equipping them with the tools to become successful is investing in entire communities and building lasting stability and prosperity for the industry.
He said the firm had also scaled up its partnership with the Co-operative Bank’s capacity building arm, the Co-op Consultancy and Insurance Agency, to train leaders of the processor’s 300 dairy groups on corporate governance.
Gethi said the training had inspired greater confidence in the farmer groups, leading to increased milk supply by member farmers.
Brookside, which controls 44 per cent of the country’s raw milk market, has an installed daily intake capacity of 1.5 million litres.
A report by Egerton University’s industry think-tank Tegemeo Institute puts the cost of producing a litre of milk in Kenya at between Sh.19 to Sh.22.
By Wangari Ndirangu
