Restructuring the Kenya Dairy Board

Kenya

11/2001 - 10/2003

The Kenyan dairy sector is responsible for almost one-third of national Agricultural Gross Domestic Product (AGDP). Uniquely for Africa, some 600 000 smallholders produce about 60 percent of the country's marketed milk with women being directly involved in milking, household processing and marketing. Approximately 80 percent of this milk is sold raw in the unregulated informal market, leading to public concerns about hygiene and safety.

Prior to liberalisation in 1993 the Kenya Co-operative Creameries (KCC), was the buyer of last resort for all milk produced, experienced major financial problems and eventually collapsed. It was re-launched as KCC 2000 but the government has decided in July 2003 to purchase the assets in order to return it to farmer control. KCC now markets less than 20 million litres of milk annually, down from upwards of 250 million litres in the 1980s. In 1992, the processing and sale of milk was liberalised and there are now over 40 small- and medium-sized companies and co-operatives processing some 150 million litres of milk annually. Many smallholder milk producers supply these new processors. As part of a raft of measures aimed at expanding the dairy industry to respond to these developments, and the increasing demand for milk and dairy products, the Ministry of Agriculture and Rural Development has sought to reform KDB.

The objective of the project is to prepare, and initiate the implementation of a programme to restructure and commercialise KDB into a modern, cost-efficient, self-reliant body that works to promote the dairy industry, and which is accountable to the entire dairy industry.

Main results include the following: a remodelled organisational and staffing structure to reflect KDB's updated purpose and independent functions related to delivery of services and information; a set of clear and easily understood standards for the dairy industry; 19 workshops, training courses and field days held for up to 500 key stakeholders representing KDB (board members and staff), milk producers, processors, market intermediaries, other dairy institutions and Government agencies to sensitise them to the process of changing KDB; media campaigns developed, and implementation initiated, for raising consumer awareness about the new dairy industry structure and standards, and about milk hygiene, safety and nutritional benefits.