Kenyan farmers warn decentralising New KCC could weaken dairy market leader

KENYA – Dairy farmers have raised concerns over the government’s plan to decentralise New Kenya Cooperative Creameries (New KCC), saying the move could weaken the milk processor and undermine its dominance in the market.

President William Ruto recently announced that the government intends to restructure New KCC by allowing farmers to own factories in their regions, following a model similar to the Kenya Tea Development Agency

“We want to make New KCC farmer-owned, and the model is like that of 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,” he stated during a visit to Eldoret.

He noted that the government has already injected US$15.47 million (KES 2 billion) to help New KCC clear debts owed to farmers for milk deliveries and to fund reforms aimed at stabilising operations.

“I want to make it clear that the release of the Sh2 billion will be the final payment I am making to the 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,” the President added.

Despite these assurances, farmers argue that decentralisation could fragment the milk supply chain, reduce New KCC’s market share, and expose them to exploitation by private buyers.

They insist 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, Kenya Farmers Association director.

Farmers are instead calling for reforms that focus on upgrading New KCC factories to boost milk production and improve earnings.

They believe strengthening existing infrastructure would secure both the processor’s market position and farmers’ livelihoods, rather than dismantling the centralised system that has long anchored Kenya’s dairy industry.

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