East Africa Dairy Development Project

Dairy sector in kenya

Kenya’s dairy sector is estimated at 14% of Kenya's agricultural GDP. Milk is primarily produced by smallholder dairy farmers who account for 56% of total output. It is estimated that the sector has 1.8 million smallholder farmers with one/three cows (about 80% of producers). The remaining 44% of milk output comes from large commercial farmers.

There are more than five million dairy cattle producing an estimated four billion litres of milk annually. Milk production is projected to grow by about 150% by 2050.
Kenya has the highest per capita milk consumpion in sub-Saharan Africa, at 110 litres. The demand, currently at 8 billion litres, is also expected to grow with the population increase.

The government has therefore prioritised the industry in national strategy and there’s also a dairy master plan to guide the development of the industry up to 2030.

But the sector faces significant challenges that affect the realisation of its full potential. As a result, Kenya has to import from neighbouring countries to meet demand.

One of the reasons is the low average annual dairy productivity which ranges between six to eight litres per cow per day. It is important to highlight that productivity varies with production systems. The highest productivity is attained under intensive production systems. A low level of productivity increases the cost of production and affects the competitiveness of the industry.

Choice of breeds

Based on studies at the Egerton University’s Tegemeo Institute, the dairy industry in Kenya is yet to reach its potential. To make it competitive, all players must work together to improve productivity at farm and improve efficiency of dairy markets.

Firstly, a dairy animal’s milk yield is determined by its genetic composition. Exotic cows produce much higher volumes compared to indigenous breeds. But indigenous breeds are hardier and are able to withstand harsh conditions.

Feed quality and cost

Feeds are essential to dairy productivity. Dairy farmers grapple with low quality and high cost of feeds. Studies show that improving the quality of fodder significantly improves milk productivity.

The cost of feed and fodder varies by the production system. In intensive production systems, feed and fodder account for 55% of the cost of producing a litre of milk, while it’s 44% in semi-intensive systems and 37% in open grazing systems . For producers under intensive systems, the high costs erode profitability despite productivity being highest.

Rising costs of commercial feeds drive the cost of production up. Feed prices have continued to rise even after government waived the duty on imported raw materials.

Animal health

Animal health affects both productivity of milking heads and the quality of milk. Responsibility for animal health is shared between the national and county governments. Both have been working to enhance disease monitoring and surveillance by launching vaccination campaigns, especially in the open grazing areas. Regulation of veterinary service providers remains critical, especially as it pertains to safety.

Capital

Other key challenges affecting the sector include access to capital for both farmers and value chain actors. This prevents critical investments in the industry. Furthermore, supply of public goods such as improved rural roads adversely affects the collection and delivery of milk, especially during the rainy seasons.