The Kenyan Dairy Sub-Sector: A Study for DFID Kenya, Ebony Consulting, 2001

Description
The study examines the potential benefits of donor interventions in Kenya's bovine milk production supply chain. The analysis finds that productivity improvements in Kenya's dairy sub-sector could be achieved at scale, and that the future growth potential of the market would make such gains sustainable. Furthermore, the significant involvement of smallholder farmers/micro-enterprises means that such interventions could result in a measurable reduction in poverty.

This sub-sector analysis looks in particular at the potential for to develop sustainable Business Services, also considering other areas for intervention. The study considers whether or not to engage only with cold-chain milk production, or whether "warm-chain" raw milk producers, numerous among Kenya's rural poor, should also be targeted by the programme. The pro-poor potential of raw milk-related interventions is evident, but the process is complicated by the fact that "warm-chain" production and distribution takes (took) place entirely in the informal economy.

The report also places the status of the Kenya's milk supply chain in its wider context. Milk production in Kenya underwent a period of decline in the 1990s with the transition to a liberalised milk supply chain and the collapse of state-supported Kenya Cooperative Creameries. Using this study and others, DFID Kenya and its partners id'ntified the gaps in the supply chain that were preventing the sub-sector¿s recovery, areas that had thus far not been filled by private sector service providers.

Summary of results
The study recommended the following interventions:

- Legitimising the informal sector (High priority)
- Increasing the overall supply of milk from smallholders (High)
- Improving productivity and reducing smallholder costs (High)
- Improving milk safety through all channels (Medium)
- Improving the quality of inputs to smallholder producers (Medium)
- Facilitating availability of critical inputs (Medium)
- Improving real prices paid to smallholder farmers (Medium)
- Improving returns to informal and small-scale sellers/processors (Medium)
- Strengthening accountability and capability of Industry Bodies (Medium)




Associated Activities and Documents
Final Documentation
»	Kenya Business Services Market Development Programme, DFID, 2008