Kenya milk crisis blamed on equipment

February 16, 2010 12:00 am
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, NAIROBI, Kenya, Feb 16 – Cooperatives Minister Joseph Nyagah has blamed the current crisis at the New KCC to the recent purchase of machinery at Nyahururu which has not performed optimally.

In a statement, the Minister requested the Kenya Anti Corruption Commission (KACC) to investigate the purchase and the problems associated with the new machinery.

“The Inspectorate of State Corporation is also at the New KCC to check on the issues that I raised in Parliament, in addition, to others that are arising,” Mr Nyagah said.

“I will not allow Wananchi (Kenyans) to be exploited by anybody, and will take action on anybody found to have sabotaged or taken advantage of the farmer,” he added.

The Minister said he supported the milk farmer in the dispute which involved reduction of milk prices that saw farmers pour thousands of litres of milk in protest.

“I am greatly pained to see the farmer pouring out milk because New KCC has insufficient capacity.  How can this happen when the farmer has now gone into dairy production fully.  This is not acceptable, and I will do whatever is within my powers to ensure that this never happens again,” the Minister said. 

He added that a government decision two years ago to hold milk powder in its strategic reserves was still in the pipeline.

He said a Sh600 million budget was approved by the Cabinet for this two years ago.

“We are working on modalities to implement this Cabinet decision so that we may assist the farmer.  The revenue will then be used to purchase extra machinery to expand capacity,” Mr Nyagah said.

He said the government was also working to ensure that illegal milk powder did not get into the market and said the illegal imports had contributed greatly to the present crisis.

Below is the Minister’s full statement:

 For the last few weeks much has been said about the New KCC.

Most of the issues have concentrated on the renewal of the contract of the former Managing Director.  This debate has derailed the country from addressing the critical issue; which is – what are we doing for the suffering farmer?

The debate has now taken what appears to be a political nature.  This is meant to force me return the former MD.   This does not surprise me given the work that I have been doing with the cooperative movement since I took over the ministry.

I have, worked tirelessly because of my desire to see the poor farmer, who has been exploited over many years, improve his life.  Unfortunately I have in the process stepped on many people’s toes.

For record purpose – I stand by the milk farmer in the current debate. I am greatly pained to see the farmer pouring out milk because New KCC has insufficient capacity.

How can this happen when the farmer has now gone into dairy production fully.  This is not acceptable, and I will do whatever is within my powers to ensure that this never happens again.

Some members of the Board, and some in management, have definitely not told the whole story for one reason or another.  It is for this reason that we have now requested the Kenya Anti Corruption Authority (KACC) to look into the purchase and the problems associated with recently acquired machinery at Nyahururu which has not performed optimally.

 The Inspectorate of State Corporation is also at the New KCC to check on the issues that I raised in Parliament, in addition, to others that are arising.  I will not allow Wananchi to be exploited by anybody, and will take action on anybody found to have sabotaged or taking advantage of the farmer.

As we undertake this, it should be noted that the government decided sometime ago on the need to hold milk powder in its strategic reserves, just as it does with maize.  In fact the cabinet approved Sh600 million for this two years ago.

We are working on modalities to implement this cabinet decision so that we may assist the farmer.  The revenue will then be used to purchase extra machinery to expand capacity.

Since New KCC is now expected to play the role of “buyer of the last resort” of milk, the Ministries of Finance, Cooperatives and Livestock are addressing how best to implement this.  The responsibility of processing the extra milk cannot be left to KCC alone unless extra Treasury funding is provided.

Meanwhile, we are working on ensuring that illegal milk powder does not get into the market.  We have to work on this with the relevant authorities.  These illegal imports have contributed greatly to the current crisis.

Privatisation of New KCC is critical to the long term interest of the dairy farmer.  The Ministry registered it as a Cooperative, and then converted it into a company (parastatal).  The Ministry is holding it in trust for the farmers.

It must be sold to the farmers, and not in the normal IPO method.  That is my position and the position of the old KCC farmers who lost millions.  I will not allow private groups to buy it, to the disadvantage of the farmer.

In conclusion, my sympathies are with the milk farmers.  As I have tried to do for the coffee farmers and others, I will do the same for the milk farmer.  Let us remove politics from the New KCC debate and concentrate on helping farmer.

Hon. Joseph W N Nyagah
Minister for Cooperative Development and Marketing

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