Kokiche Dairy Cooling Plant: Unlocking the Potential of Small-scale Dairy Farmers

A commercial truck collects milk from Kokiche dairy plant. Photo /Paul Karaimu, ILRI

Kokiche dairy cooling plant is located in the picturesque hills of Kenya’s Rift Valley region, near Sotik town of Buret district. The area has a relatively good climate suitable for both crop and dairy farming. Many farmers here are subsistence farmers who keep dairy cows as well as grow tea and maize on a small to medium scale. Dairy farming has been practiced here by many generations mostly for household consumption as well as to generate income for families. The intervention of East Africa Dairy Development (EADD) project to catalyze rural economic development through dairy hubs has created an attitude shift to commercial dairy farming. Anchoring this economic development are the farmer-owned milk cooling tanks such as the 6,000 liter capacity tank in Kokiche.

Kokiche dairy cooling plant is a farmer owned limited company with members drawn from smaller dairy management groups of farmers from Konoin, Kimulot and Cheptalal divisions of Buret District. These smaller dairy management groups enable small-scale farmers to pool their resources together to be able to buy shares in the cooling plant. A share at the plant is sold at Kshs 20 (USD 0.25). The minimum number of shares each member is allowed to purchase is 150 shares and maximum is 250 shares.

With support from EADD, the management of Kokiche has managed to mobilize 2100 investor dairy farmers who raised the initial capital required to purchase the milk cooler they are currently using. Mobilization and sensitization of farmers is an on- going activity and Kokiche hopes to attract as many farmers as possible to be part of the new business that will significantly increase their milk earnings.

Operations in Kokiche began earnestly in March 2010 when the new milk cooler was officially launched by then Kenyan Minister for agriculture William Ruto.

Gideon Cheruiyot is a retired civil servant who is now a dairy farmer and one of the directors at the milk cooling plant. He has watched the company grow out of nothing to where they are right now.

“We started with about 500 liters and now we are averaging about 2, 500 liters per day. This is a big boost for us and we are working towards increasing our productivity and fully utilizing this cooler,” says Cheruiyot.

Currently there are about 350 active milk suppliers to the cooler supplying an average of 5-10 liters of milk per farmer, per day. Milk production has increased following intense training by EADD through the cooling plant management. Farmers are now adopting new technologies such as artificial insemination and good feeding practices to increase their milk production and subsequently their income.

“Our farmers now know they do not need large tracts of land to keep their animals. Zero-grazing is more efficient and with better management, their dairy cows can now produce more milk,” says Kenneth Rotich, the manager of the dairy plant, who is in charge of overseeing its daily operations.

Kokiche dairy plant has brought a lot of economic benefits to the area. The dairy plant directly employs 8 staff and another 20 milk transporters. It has also indirectly stimulated income generating activities especially for many young men and women in the area who have found new opportunities as collectors and transporters of milk from the villages surrounding the plant. Many small businesses providing farmers with services such as mobile phone money transfers, artificial inseminations, animal feed stores have also began to emerge.

Turning Challenges into Opportunities

It has not been a smooth ride for the Kokiche plant. In its initial stages, the plant encountered a number of challenges; the biggest of them was milk hawkers who have operated in the area for many years. Competing with hawkers is a difficult feat as hawkers offer farmers slightly higher prices for their milk. But Kokiche has been able to win over many farmers by providing a stable market for their milk as well as other add-on services like subsidized artificial insemination, farmer trainings and the check-off system of payment. Many of the hawkers have now began delivering milk to the cooler.

“Despite the challenges, the business model is working and we are paying farmers on time and consistently, which encourages them. I see the challenges we face as opportunities, they make us think of new ways of reaching farmers and I believe Kokiche will grow to greater heights,” says Rotich.

Farmers of Kokiche have big plans for their business. Already they are planning to launch an Agrovet shop to provide farmers with a range of farm-care and animal health products in the next two months. The farmers are also planning to establish a village bank in the near future to provide them with banking services including access to loans to upgrade their dairy businesses.
“We want our farmers to fully enjoy the benefits accrued from the dairy industry. With this milk cooler, we are seeing that farmers are going to engage fully into the business of dairy farming,” concludes Cheruiyot.