NAIROBI, Kenya – Dairy farmers have raised concerns over the government’s proposed decentralisation of New Kenya Cooperative Creameries (New KCC), cautioning that the move could weaken the milk processor and jeopardise its market dominance.
President William Ruto recently unveiled a plan to allow farmers to own milk factories in their respective regions, following a model similar to the Kenya Tea Development Agency.
During a visit to Eldoret, Ruto said the government would support the initiative by assisting farmers in managing the factories, implementing reforms, and injecting initial funding.
“We want to make New KCC farmer-owned, and the model is like that of the Kenya Tea Development Agency, where farmers possess ownership of factories in their areas of jurisdiction, countrywide. As a government, we shall assist them in managing the factories, implementing reforms, and injecting some money,” Ruto stated.
The government has already injected Sh2 billion to help New KCC clear outstanding debts owed to farmers for milk deliveries and fund reforms to stabilise operations.
Ruto warned, however, that this would be the final government contribution.
“I want to make it clear that the release of the Sh2 billion will be the final payment I am making to New KCC, and there will be no more funds. I have given firm instructions to the Ministry of Cooperatives to make sure they carry out reforms in the New KCC,” he added.
Despite the plan, farmers are concerned that decentralisation could fragment the milk supply chain, reduce New KCC’s market share, and leave them vulnerable to exploitation by private buyers.
They argue that, as contributors through capital levies, they deserve a central role in decisions regarding the company’s management and restructuring.
“The New KCC is owned by the farmers despite the government having pumped funds to transform its operations, and they should be involved in the decision-making process on its operations,” said Kipkorir Menjo, director of the Kenya Farmers Association.
Farmers are calling for strategic reforms to upgrade New KCC factories, improve milk production, and boost earnings.
