DAIRY BUSINESS HUBS AS COLLECTIVE ACTION IN ENHANCING

COMPETITIVENESS OF SMALLHOLDER DAIRY FARMERS IN KENYA

Irungu R., J. Maiteri and J.M. Ndegwa

INTRODUCTION

• Dairy sector accounts • 3.5 % Kenya’s GDP • 40 % national livestock GDP

• Smallholders produce 80 % milk output• Involves 1.8 million households • Employs many women and youths• Contributes to nutritional and food security

INTRODUCTION…

• Dairy Business Hubs (DBHs)• Collective farmer-owned milk bulking and

chilling plants• Farmers access other essential services • Collective action enhancing competitiveness

of smallholder• Study objective was to characterize dairy

business hubs as inclusive action

MATERIALS AND METHODS

• Data obtained through secondary sources and key informant interviews

• Dairy projects reports and published papers• Semi-structured interviews and group

discussions with key informants (farmers, business managers, input suppliers and intermediary organizations) • Focus group discussions with farmers attending

Dairy Farmers Field Schools• Supplemented with direct observations

RESULTS AND DISCUSSIONS

• Dairy Business Hubs• Collectively owned milk bulking and chilling

plants with many members (> 10,300)• Provided essential services for dairying • Linked smallholders to processors cost-effectively• Improved access to milk market • Increased milk quality and storage time• Created economies of scale and recognition

CONCLUSIONS

• Dairy Business Hubs (DBHs) were inclusive businesses that were ‘new’ ways of organizing dairy smallholders

• Centred within organised groups of milk producers with central milk collection and delivery points with easy access by main processors

• DBHs improved efficiency in milk production and marketing

RECOMMENDATIONS

• Kenya government and other development partners to support replication of this farmer-owned business approach in the dairy industry

• Assist existing hubs to consolidate their gains and maintain and grow their businesses

• Harness larger financial returns through DBHs strategically forming apex processing companies

ACKNOWLEDGEMENTS

• KALRO, Muki Coopérative and Future Focus Dévelopement for Financial support

• BIDPA and ILRI paid air fare, accommodation and subsistance

• Conference organizers and paper reviewers for accepting our paper