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Govt to spend Sh3B in three years on KCC modernisation programme

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On Tuesday (8th August, 2023) President William Ruto commissioned the Modernised Kenya Co-operative Creameries (KCC) in Kiganjo, Nyeri County. 

Speaking during the event, the president said that over the past seven years the government had spent over Sh2 billion in the modernisation of KCC’s plants. He added that his government will spend Sh3 billion in the next three years on the modernisation programme. 

With the provision of high-class milk processing facilities, the president expected milk production in the country to increase from the current 5.2 billion to 10 billion litres a year in the next five years.

Similar mordernisation programmes he said had been completed in Eldoret, Sotik, and Nyahururu KCC branches. Other facilities under renovation include those in Nyambene, Miritini, and in Kitale.

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“Milk and milk products are a major income source for our nation netting us Sh2 billion annually. With more efficient milk processing machines there will be reduced wastage, earning the country even more from the sector,” he pointed out.

For his part, Simon Chelugui Cabinet Secretary for Labour, said that the revamped KCC will seek to ensure that milk farmers are not taken advantage of by private processors.

“Every farmer delivering milk to KCC will be paid on the fifth of every month and earn a minimum of Sh50 per liter– in line with the market price. We are now focused on the export market,”

President Ruto also promised that before December, through a Sh8 billion program the government will set up 650 milk coolers with at least every Kenyan ward having access to the facility for milk chilling and preservation. “Beyond cutting down on milk wastage this will also reduce the cost of milk transportation shouldered by farmers.

We want to avoid unnecessary costs imposed on farmers by cooperatives and cut out middlemen within the milk sector to ensure that the farmer earns Sh50 per litre of milk delivered for processing.”

Deputy President Rigathi Gachagua promised reforms within the dairy subsector terming it as the worst victim of state capture and conflict of interest. “When KCC pays out Sh50 per liter to farmers, this is severely taxed by dairy cooperatives depreciating farmer earnings. This will be one of the issues to be addressed by amending the Cooperative Act which will be discussed at the dairy conference to be held in Nakuru in early September,” he said.

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The deputy president highlighted the president’s commitment to reforming the sector with the sacking of the parastatal’s previous board which he claimed had been appointed by one processor to serve individual interests as opposed to those of farmers.

“Cartels are also taking advantage of friendly trade treaties in the East Africa area by bringing in imported milk from Europe into Kenya through neighboring countries from where they process and package this milk,” Gachagua highlighted. The deputy president called for a broader discussion with countries in the region to avoid them being used by private interests to exploit local dairy farmers.

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