Kenyan government unveils US$11M dairy investment to cut production costs

KENYA – The Kenyan government has invested US$11.02 million (KES1.428 billion) in dairy infrastructure to reduce production costs, cut milk losses, and improve farmers’ incomes, according to Agriculture Cabinet Secretary Mutahi Kagwe.

Appearing before Parliament to respond to questions on the agriculture sector, Kagwe said the investment will finance 230 bulk milk coolers, including 200 solar-powered units, to strengthen milk aggregation and reduce post-production losses.

The solar-powered coolers are expected to save dairy cooperatives about Sh73 million annually in electricity costs while supporting more than 115,000 farmers across 41 counties. The facilities are expected to help farmers aggregate an estimated 475,000 litres of milk daily.

Additionally, the government is also subsidizing improved dairy genetics as part of efforts to raise productivity. The price of sexed semen has been reduced by nearly 65 per cent, from Sh2,900 to Sh1,000 per dose under the subsidy programme.

The CS said the measure is intended to make improved genetics more accessible to farmers and support higher productivity in the dairy sector.

Moreover, the government has also implemented measures to address the cost of animal feeds, including the launch of the National Animal Feeds Development Strategy and the establishment of a National Strategic Feeds Reserve.

Under the Land Commercialization Initiative, underutilized government land, including Agricdev Kenya and KALRO farms, is being opened up for commercial fodder production. The government is also using public-private partnerships to expand feed production and secure fodder supplies.

The measures include a US$2.31 million (KES300 million) feed mill by De Heus in Athi River and an agreement with UAE-based Al-Dahra to utilise up to 200,000 acres at Galana-Kulalu for agricultural production.

The government has also introduced tax measures, including duty waivers and VAT exemptions on selected raw materials used in animal-feed production.

According to the Ministry, regular cost-of-production studies, averaging Sh36.2 per litre across production systems, continue to inform policy interventions and support sustainable producer prices as demand for milk grows.

To reduce methane emissions across 12 counties, the government US$42 million grant (approximately Sh5.4 billion) from the Green Climate Fund.

The strategy focuses on enhancing productivity through improved genetics, feed management, animal health, and manure handling, emphasizing economic gains alongside climate benefits.

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