The competition to sell quality milk and control the lucrative market is increasingly becoming stiff by the day as leading processors move into top gear to pay farmers a premium to stay ahead of the pack.
This is coming at a time the country is experiencing mushrooming processors and an increasing number of dairy farmers as the milk demand in the country continues to rise.
Leading processor, Brookside Dairy has shifted the dynamics in the industry by paying farmers based on the quality of their supplies.
For many years, dairy farmers in the country have been paid depending on just the quantity of milk delivered. But this is now changing.
In the new quality-based milk payment model, farmers are rewarded for supplying raw milk that meets set quality parameters, including butterfat content, milk free of antibiotics, and recommended density.
This means that farmers now have to adopt modern ways of farming to attain these set quality.
The New Kenya Cooperative Creameries (NKCC) has also been looking to boost its milk production by upgrading its factories across the country and training of its dairy farmers on best practices.
“The company has elaborate plans to upgrade all of our processing factories as we are increasing our capacity due to high demands of our products,” said New KCC Managing Director Nixon Sigey.
Brookside is confident that paying farmers based on quality, and training them to produce quality milk by working closely with saccos will propel it ahead of competition.
One of the saccos Brookside is working with is Kuresoi Dairy Self-Help group which has welcomed the new mode of payment.
“I deliver 15 litres per day at Kuresoi Dairy Self-Help Group and with the Sh42 per kilo that I am paid by Brookeside, I’m assured of good income,” said Samuel Ruto, adding that the new model of payment would attract more farmers who will now take good care of their animals in order to produce quality milk.
At the same time Mr Ruto who is the chairperson of the Kuresoi Dairy -Self-Help Group said since they started delivering the milk to the Ruiru-based processor, they have started earning good dividends and as a group they have increased milk volume. They have also bought a plot, he noted
“Our cooling station is currently handling about 5,000 litres and we hope to double it as our more than 350 farmers are determined to redouble their efforts,” said Mr Ruto.
Brookside says the quality-based milk payment model will boost dairy enterprise in the country as it leads to better efficiency in the supply chain due to the early detection of milk that does not conform to the agreed quality standards.
“The quality model will ensure that farmers are appropriately rewarded for supplying raw milk that meets agreed quality standards,” John Gethi, Brookside’s director of milk procurement, said in Kuresoi South sub-county, Nakuru.
Payment on quality is a win-win arrangement for both farmers and processors, Mr Gethi said, noting that by paying a bonus for every litre of raw milk that meets set quality standards, processors hope to expand both the domestic and export markets, with attendant improvement in food safety standards.
The additional payment for quality milk improves farmers’ income. Farmers also benefit from better extension services through improved access to information and technical services.
The new model appears to resonate with farmer groups, who are key players in the upstream phase of the dairy value chain.
“We are glad that Brookside is recognizing our efforts at producing milk of high quality,” said Mr Ruto after receiving a payment of Sh 1.6 million as a reward for supplying milk that met both quality and quantity parameters as set by the processor.
This year alone, Brookside paid Sh100 million in bonus rewards to its farmers who supplied milk that conformed to set quality and quantity standards, with the processor saying it has put in place a quality control system that extends down to the farm level.
“We have given all our supply groups specific targets on both quality and quantity under our reward scheme.
This bonus is an incentive to them to continue producing more volumes of quality milk,” Mr Gethi said.
On his part, Mr Sigey said New KCC has also lined up several pieces of training to equip the farmers with the latest tips to boost their venture and earn more money.
“The training of dairy farmers will be launched next year as we seek to consolidate our position as one of the top processors in the country,” said Mr Sigey.
“We want them to get the Artificial Insemination (AI) services correctly and increase their herd.”