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Milk processor Brookside has increased the price of milk from its farmers in a move likely to intensify the fight for control of the raw milk market.
Brookside said that it would pay farmers an extra Sh3 for each kilo of milk delivered beginning tomorrow.
The price increase comes on the back of ravaging drought that has hit major raw milk producing zones in the country.
“This is an incentive meant to cushion farmers from the effects of adverse weather experienced in the country over the past two months. It will help farmers to recover their milk production costs, and enable them to prepare adequately to grow and conserve feeds as we approach the long rains,” John Gethi, the firm’s general manager said in a statement.
Gethi said the price increase would apply to all its contracted raw milk suppliers, since the processor pursues a national pricing model. Some milk companies pay differentiated prices for raw milk, with varying rates for different counties – terming the price correction a show of commitment to farmers.
Last year, Brookside paid a total of Sh 10 billion to farmers from milk delivered.
The move by the processor, who command 45 per cent of the national raw milk market is seen as a strategy to retain farmers’ loyalty and woo new suppliers. The Ruiru based processor, has a daily peak milk intake capacity of more than 1.5 million litres with close to 160,000 raw milk suppliers.
It could also prompt other processors like New KCC, Buzeki, Sameer and Githunguri dairy to review their producer prices.
Gethi said commercialization of the dairy enterprise is key to increasing incomes for smallholder farmers, who account for over 70 per cent of daily raw milk supply volumes.
“We have rolled out a market oriented approach that seeks to have more smallholder farmers sell their milk to processors in order to grow income especially for rural households,” he said.
Escalating costs of production at the farm level has been cited as part of the current challenges facing the industry.
“As a main market for farmers’ milk, our intervention is to work with our suppliers to increase financial viability of smallholder farms along the value chain. We are focusing on capacity building for all smallholder farmers as a strategy to grow the dairy enterprise,” he said.
The firm also said it will from this week roll out a series of dairy training courses for farmers across 25 counties and has since developed a curriculum that will cover production of hay at the farm level, animal breeding and clean milk production.
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