NAIROBI, Kenya, Jan 15 – New Agriculture Cabinet Secretary Peter Munya on Wednesday ordered New Kenya Co-operative Creameries (KCC) to increase milk price to Sh33 per litre from the current Sh25, a day after the President Uhuru Kenyatta directed Treasury to release Sh500 million for buying excess milk from farmers.
Speaking after assuming the docket that was previously held by Mwangi Kiunjuri, Munya promised farmers that milk prices will soon stabilize.
“Following the release of those funds I want to direct the New KCC to enhance milk prices to Sh33 and the new prices take effect immediately,” directed Munya addressing journalists at Kilimo House.
The excess milk bought by the government will then be processed into powder for strategic food reserve as well as for the use by the Government agencies as relief food said Munya adding that government agencies will only be buying local milk.
New KCC Managing Director Nixon Sigey who was present at the presser said they had requested for Sh2 billion to be able to buy all the milk from farmers, but the government has only released Sh500 million.
Last year, farmers had asked the government to regulate the milk prices in the country so as to cushion them from exploitation.
During his state of nation address, Tuesday, the President also directed Treasury to impose 16 per cent Value Added Tax on milk products originating from outside the East African region.
Uhuru said this will stabilize the price of milk locally as farmers continue to grow their yields.
The President in his address made it clear that among his priorities this year is to increase money in the pockets of farmers. He said he wants the farmers to enjoy their hard earned cash and not the middle men who exploit them.
Last year, dairy farmers protested the drop in milk prices saying it did not even cover the cost of production. Some of the farmers went ahead to spill milk citing low prices and the lack of access to markets.