The state will allocate Sh3 billion to stabilise milk prices amidst an anticipated market glut fueled by favorable weather conditions that has boosted production on farm.

Cabinet Secretary Simon Chelugui of Cooperative and Micro and Small Enterprises revealed that the funds will be utilised to purchase excess milk from farmers, converting it into long-life products stored in the Strategic Food Reserve.

The allocation is part of the KSh3.8 billion that has already been factored in in the current budget.

Mr Chelugui said that New KCC will play a crucial role in stabilising milk prices, enabling farmers to yield favorable returns despite increased supply.

CS Chelugui is received by the CEO of Cooperative Alliance of Kenya Daniel Marube. Image: BDA.
CS Chelugui is received by the CEO of Cooperative Alliance of Kenya Daniel Marube. Image: BDA.

The intervention aims to address the challenge faced by processors dealing with surplus milk due to current weather conditions, with the excess milk intended for storage in the SFR as powdered milk.

“Processors are now grappling with high supply of milk and the factories are not taking milk from farmers because of the glut, this funds will be used to stabilize the price of the commodity in the market and ensure that we collect all the milk from farmers,” said Mr Chelugui.

“This is an intervention the government is taking to absorb extra milk. Because of the good weather we are enjoying now, we have excess milk production, many processors have actually abandoned the farmers, and therefore government is taking up this and processing for future use.”

Mr Chelugui also encouraged private processors to follow suit in purchasing more milk from farmers for conversion into powder.

This comes at a time when President William Ruto has directed processors to raise milk prices from Ksh42 to Ksh50, with discussions ongoing to benefit farmers.

The President’s initiative follows a meeting with dairy stakeholders last month, addressing sector challenges.

The President convened a meeting of dairy stakeholders last month to address various challenges confronting the sector.