: Deneside Farm, Njoro Presentation by Geoffrey Gicharu 25 June 2012 Key questions to ask ourselves: Does Dairy Farming in Kenya have a bright future? Will Kenyan dairy farmers ever make money.? Despite all the donors and NGOs funding, (12 to 13 million US Dollars annually). Why are our farmers still poor? Is dairy farming sustainable? Challenges Facing Dairy Farming In Kenya 1. Increased cost of energy. 2. Increased cost of Feeds. 3. Uncertain weather patterns. 4. Farms are yet to fully recovered from the 2007 post election violence 1. Cost of Energy. Year Price of Milk Per Liter (Ksh) Price of Fuel Per Liter (Ksh) 1990 2.80 0.92 1994 14 10.83 1997 14 25.90 1998 14 28.80 1999 16 39.20 2000 18 48.50 2001 18 48.50 2002 18 39.50 2003 18 39.00 2004 18 54.90 2005 18 58.00 2006 20 60.00 2007 18 63.75 2008 24 88.49 2009 27 69.45 2010 26 86.93 2011 28 117.70 2012 29 106.00 Price changes in Milk vs. Fuel for the past 2 decades 140 120 100 80 Price of Milk/Litre Price of Fuel/Litre 60 40 20 0 1990 1994 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2. Increased cost of animal feeds • High cost of Plant protein feed. • Less Cereals By-Products in Kenya. • High dependence of animal feeds (by- products) from the East African Region. • Future of animal feeds By-Products is not promising. Price changes in Milk vs. Cotton Seed Cake for the past 2 decades 70 60 50 40 Price of Milk/Litre Price of Cotton seed cake/Kg 30 20 10 0 1990 1994 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 3. Uncertain weather patterns • High temperature due to global warming • Unpredictable weather patterns • Frequent drought and crop failure • Heavy Flash Floods Farms have not recovered from the effects of post election violence in 2007 • After the post election violence in 2007 transport costs, feed costs and other inputs have been going higher and higher. • Labour and labour costs has now become a major challenge Current Situation of the Dairy Sector in Kenya 80% of milk production is done by the small scale holders. Only 20% is by the medium and large scale farmers. Current Situation of the Dairy Sector in USA In 1940 – 20Million Milking cows averaging 2500kg per lactation in small holding farms averaging less than 50 cows/family. Today- 9.7 Million milking cows averaging 10000kg per lactation in large farms averaging 5000 cows per family/holding 4. Kenya’s dairy situation is not sustainable 80% - Small scale farmers /small holding.(less than 10cows) 20%- Medium and large scale farmers. NB. The 80% small holding have no major investments and can therefore quit very fast. The 20% large scale can not come out dairying overnight because of high cost of investment over the years . E.g. machinery and infrastructure. How are Farmers dealing with these challenges ? These challenges are now forcing/should be forcing farmers to; 1. Shutdown 2. Keep more cows per unit area 3. Improve milk production per cow The Gross effects of challenges facing farmers Our national herd size is shrinking very fast. Dairy business has realized slow growth compared to other businesses We have serious subdivisions of farms throughout the country. These challenges are also affecting processors - serious shortage of milk and jobs are being lost. What the processors must do to remain in Business • It is time to consolidate their business • Prepare for milk production glut • Improve management • Review raw milk price upward/ match the hawker price The future success of Dairy For the sustainable success of dairy farming in Kenya, a team effort is required from the following parties: 1. Farmers 2. Government 1) The farmers must do the following; a) Re-evaluate their production goals. b) Need to reduce calve mortality and grow calves faster. c) Need to introduce other activities on our farms. d) Need for farmers to own and manage their own milk processing plants. e) Need to form co-operatives or partnerships 2) The Government must address the following; a) Formulate guidelines for the producer prices based on consumer prices percentage. b) Set the minimum produce prices of raw milk through KCC. E.g. its been done in cereal farming (Maize) c) The government must intervene though sub to save dairy farming from total collapse. Interventions have been carried out to (Pastoralists) in Northern Kenya. Funded purchase of livestock from drought affected areas. Free vaccination programs. Free supply of hay and water. Free Dam constructions. Tractors imported to assist land preparation . Importation of cheap fertilizer. The Government must urgently address underperforming institutions setup to support dairy farming in Kenya. The 3 Key Government interventions to salvage the sector Set up Raw Milk producer minimum Price/ Future milk producer prices to be based on % of the end user price Intervention to support medium and large dairy breeders in getting affordable sexed semen/ machinery/equipments, affordable Plant and Blood protein e.g. Soya and cottonseed cake. More farmers involvement in the management of farmers support institutions. Conclusion Do dairy farmers have a future? To all the stakeholders, I say YES. If we can work together as partners. Each person in authority must work and do what he or she can do ,for tomorrow you may not have the opportunity effect good changes in the sector . The future success of farming in Kenya is in your hands. THE END Questions & Comments ?
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