As global milk prices continue to soar, Kenyan small-scale farmers are poised to become major players in the market for milk.
 
New livestock breeding strategies are likely to be vital in meeting increased demand for Kenyan milk without risking the loss of hardy local breeds, according to scientists speaking at a conference in Nairobi.

“The big new market incentives are presenting opportunities and challenges alike for developing countries,” said ILRI’s Director General, Carlos Seré. “Rising prices are driving more indiscriminate cross-breeding, which is leading to the extinction of tropical breeds, as well as to poorly performing second- and third-generation cross-bred animals.”
 
In the last 12 months, the world market price for milk has more than doubled from some USD28 per 100kg to over USD60. In the past, distorted markets and high standards in the international milk market have stopped Kenya from competing with powdered-milk-exporting countries. Today’s high dairy prices are forcing some manufacturers to find alternative, less expensive, milk, which is allowing Kenya to enter the export markets at significant levels for the first time.

Small-scale milk producers are big milk producers
Kenya has about 1.8 million rural households keeping some 6.7 million dairy cows.  These small-scale farmers and traders handle more than 80 per cent of all the milk marketed in the country. Despite their size, they are prepared to compete with the industrialized world’s biggest dairy producers, according to ILRI agricultural economist Steve Staal. “The small farmers make use of family and other cheap labour and grass, crop stalks and other residues, to feed their cattle, rather than costly grain,” Staal said.

These and other issues were the topic of an international conference in Nairobi that ILRI convened (8-9 November 2007) to address how improved animal breeding can reduce world poverty—partly by helping poor nations benefit from the skyrocketing demands and prices for milk, meat and eggs.

Animal breeding can help small farmers exploit the growing milk markets
Seré noted that the region’s cattle breeders must be careful to conserve valuable local breeds, which are better able to survive harsh conditions than are high-producing cattle imported from industrialized nations. “In Kenya, for example, the familiar black-and-white Holstein dairy cow is a status symbol among smallholders, who want to own this high-milk-producing exotic animal,” Seré said. “Smart and sustainable breeding strategies that conserve local breeds can bring about higher smallholder milk production.”

In East Africa, milk production and consumption has always been big business, and in Kenya, the dairy industry is the single largest agricultural sub-sector–larger in value than horticulture or tea. Kenyans are amongst the highest milk consumers in the developing world, consuming an estimated 145 litres per person per year on average. Among all developing countries, only Mongolians and Mauritanians consume more milk per dollar earned than do Kenyans.  The milk market in East Africa as a whole is estimated at USD1.7 billion a year. This excludes the 34 per cent of the region’s milk that is consumed on-farm, which is an important source of household nutrition.

Staal says the new breeding strategies for Kenya need to be two-pronged.

“The agriculturally high-potential highlands of Kenya are already ‘densely dairied’. One out of four households here already owns at least one cross-bred dairy cow. But dairy cattle in East Africa are currently low milk producers, averaging about 7 litres per day. We expect dairy expansion thus to happen on two fronts. We need higher-producing cross-breeds for the high-potential areas as well as hardier cross-breeds for less-favourable agricultural areas, particularly Kenya’s vast drylands where water, feed and veterinary services are scarce.”

Over the last decade, scientists at ILRI’s Nairobi-headquarters have worked with the Kenya Agricultural Research Institute (KARI), the Kenyan Ministry of Livestock and Fisheries Development, and civil society groups to help transform the country’s 39,000 informal ‘raw’ milk sellers into legitimate milk marketers. This achievement led to gains for Kenyan dairy producers and consumers—through improved market efficiency—of an estimated USD29 million per year. This research has also helped to deliver improved livestock technologies, including breeding strategies designed for poor farmers.

Pioneered in Kenya, these new dairy interventions are now being expanded into other countries of eastern Africa and Asia, especially India, where smallholder dairying is also booming.

“With better and more appropriate breeds and species of farm animals, many of the 600-million-plus livestock keepers in poor countries will be able to produce more milk, as well as meat and eggs, for the fast-growing global livestock markets,” Seré said. He noted that new science-based breeding technologies and policies will help raise smallholder dairy yields in sustainable ways, pulling millions out of poverty while conserving valuable local cattle breeds.

Unprecedented opportunities for Kenya’s smallholders
Researchers pointed out that higher prices, paired with surplus supplies of milk in Kenya, also could make Kenya a significant player in a growing second market—for ultra-heat treated milk (UHT) which needs no refrigeration until the packages are opened.

In a conversation with ILRI, Machira Gichohi, Managing Director of the Kenya Dairy Board (KDB), noted that Kenya is the only country in the region with exportable quantities of milk available.
 
“This year we have seen significant increases in exports from Kenya,” Gichohi said. “Buyers include major food manufacturers, such as Cadbury. We’re already exporting milk powder to other sub-Saharan African countries, including South Africa, as well as to Asia and the Middle East. In addition, the UHT milk market is opening up and we’re now exporting long-life milk to Mauritius and South Africa.”

“Private processors are considering building two new processing plants to respond to the increased opportunities,” Gichohi added.

Appropriate breeding strategies, and the science required to support them, will be critical to new income gains for small farmers.
 “While the strong demand in the international markets presents new opportunities for producers, we must be cognizant of potential impacts on poor consumers in the region who depend on milk, and who may in time face higher local prices,” said Staal. “Innovations in packaging to provide low-cost products and to support the improved functioning of the traditional market, which typically provides the lowest-cost products, may ameliorate impacts of higher prices on the poor, while the expected production increases through smart breeding will help ensure continued ample supply to the domestic market.”

Further information visit the online press room at  https://www.ilri.org/ILRIPubAware/Uploaded%20Files/200711683220.John%20Vercoe%20Conference_Press%20room.htm