Industrialisation, trade and enterprise development

Mr. Balminder Singh Sochi formely harvests green chili at his farm in Gem, Siaya County while in the second frame he sorts out the chili at the cold storage facility at old Kisumu airport in preparation for export. Mr Singh quit his job as a mechanical engineer to venture into the lucrative chili farming becoming among the first beneficiaries of the inaugural export of fresh produce from the Kisumu International Airport. He secured a 10-acre piece of land at Nyabeda village of Gen Sub-County in Siaya where he planted four acres of green chili (Demon F1) in June, 2021. With support from Kenya Plant Health Inspectorate Service (KEPHIS), two and a half months into planting, he started harvesting, producing 500-600 kgs per acre. With production, averaging 1, 500 kgs per week, Sochi started exporting the produce in October last year to England, a venture he says pays off. Europe tops the global green chili market with an estimated 5% Compound Annual Growth Rate (CAGR).

Agro Processing


The Big 4 Agenda prioritized investment in projects geared towards boosting the agricultural value chain as key to achieving Food Nutrition and Security. It is based on studies that jobs created within the agriculture sector are low-paying and cannot create enough employment unless the Government pursues targeted interventions.

Policies developed by Government over the years also stress the immense potential of agro-processing and value addition to employing the youth. They include the Agriculture Sessional Paper No.4 of 2013 on employment policy and strategy for Kenya; Sessional Paper No.4 of 2013 on employment policy and strategy for Kenya; Sector Development Strategy (2010-2020); the National Industrialisation Policy for Kenya (2011-2015); Kenya National Youth Policy (2007); and the Kenya Youth Agribusiness Strategy (2017-2021)

Linking their efforts through the Kenya Agricultural Value Chain Enterprises (KAVES) project, 30 Government and private sector organisations have been addressing constraints up and down the value chain to increase the productivity and incomes of smallholder farmers, and other actors in the dairy, maize (and other staples) livestock and horticulture sectors.

The Kenya Youth Agribusiness Strategy recommends agro-value chain analysis, for example, the tea value chain analysis, to investigate the potential of the value chain fit for the youth.

The partners in KAVES include:

  1. Ministry of Agriculture, Livestock and Fisheries.
  2. County governments.
  3. Agricultural Sector Development Support.
  4. Programme (ASDSP).
  5. Kenya Dairy Board (KDB).
  6. Kenya Plant Health Inspectorate Services (KEPHIS).
  7. Kenya Food Security Steering Group.
  8. Pest Control Products Board (PCPB).
  9. Horticulture Competent Authority Structure.
  10. Horticultural Crops Development Authority (HCDA).
  11. Kenya Agricultural Research Institute (KARI).
  12. Public and private sector actors in the dairy, maize, and horticulture value chains.

They are working with smallholder farmers, businesses, and national and county government partners, including agro-processors, input suppliers, transporters, exporters, retailers, financiers) to develop fully functioning and competitive value chains.

This is boosting the productivity and incomes of smallholder farmers, and other actors along the value chain in the dairy, maize (and other staples) and horticulture sectors.

The goals are to:

  1. Improve economic stability and food security
  2. Improve nutritional outcomes, reduce chronic under-nutrition
  3. Build and diversify sustainable value chains
  4. ivIncrease the productivity and incomes of 500,000 smallholders


The legal framework for value addition in the Tea sector is provided for in The Crops (Tea Industry) Regulations, 2020 under the Crops Act 2013. Tea is a major cash crop in Kenya and the single leading foreign exchange earner for the country. The Tea sub-sector has a US$40.5 billion market worldwide which is likely to grow to US$ 44.3 billion by 2022. The major tea exporters in the world include China, Sri Lanka, and Kenya coming in third. According to the recently released Economic Survey of Kenya, tea contributed a total of Kshs 122.2 billion to the Kenyan economy in the last year, making it one of the largest contributors to the country’s economy.

Value addition is the additional domestic processing of primary commodities, which entails increasing the economic value and consumer appeal of a commodity. The tea value chain extends beyond agricultural production to processing, trading, marketing and tourism. In tea, value addition is achieved through product branding, packaging and flavouring.

This includes:

  1. Packaging of quantities of less than 10kg for export and local markets both as loose tea and tea bags.
  2. Flavouring of tea.
  3. Production of instant tea and iced tea.
  4. Processing of tea extract.
  5. Promotion of own garden brands by factories through compliance with consumer requirements such as fair trade.
  6. Certification and other consumer requirements to increase competitiveness in the global market.

Value-addition for tea will result in significant increases in foreign exchange income. Replanting with higher-yielding varieties will also boost Kenya’s production to the 600 million Kg mark by 2022. Among the strategies is a partnership with global hubs like the Dubai Tea Trade Centre, which account for over 60 per cent of all value-added global tea exports.

Last year, the Ministry of Industrialisation, Trade and Enterprise Development led negotiations with Pakistan that saw the removal of a Non-Tariff Barrier (NTB) in the form of the Attestation Fee of tea export documents between Kenya and Pakistan.

The Government’s transformative agenda is to strengthen agribusiness trade and international competitiveness as envisioned in the Kenya Vision 2030. Tea is Kenya’s leading industrial crop in terms of its contribution to the GDP and is the livelihood of over 600,000 smallholders making up on average 60 per cent of total tea production. The goal is to increase the value addition in exported tea from the current 14 per cent in order to increase the exchange earnings from the crop.

Key issues constraining growth along the value chain include:

  1. High labour cost, which accounts for 68 percent of the production cost
  2. Widening yield gap between smallholder farmers and estates due to continued use of moribund tea bushes and the type of tea clone grown.
  3. The concentration of black CTC as most factories have only a single production line, thereby limiting product diversification. There are limited incentives for the production of other types of tea.
  4. High cost of energy and heavy reliance on wood fuel in the processing of tea.
  5. Low domestic consumption
  6. The dominance of few multinational companies in the Mombasa Tea Auction who determine the prices
  7. The limited number of export destinations and shrinking of current markets.
  8. Unbranded Kenyan tea
  9. Limited marketing research.
  10. Delays in the adoption of national agricultural policy
  11. Disconnect in the interpretations of the county governments’ devolved roles and functions and those of the tea directorate for tea. The County governments do not have a clear understanding of their role in the development of the Tea Sub-sector. This has resulted in the haphazard imposition of taxes and confusion surrounding the renewal of land leases for the tea estates.
  12. Inadequate human and financial capacity for MoALF, Tea Directorate, KTDA, TRI, EPC, MoITC, and PSTD was assessed.
  13. Lack of predictable and adequate financial mechanisms to enable institutions to discharge their mandates.

Solutions include:

  1. Mechanisation of plucking and pruning activities.
  2. Basic training of farmers on machine operations.
  3. Supporting small scale farmers to replace moribund tea bushes with high yielding tea clones
  4. Promoting alternative complementary enterprises.
  5. Expanding factories’ capacity to produce teas other than black CTC (like specialty teas and extracts).
  6. Investment in human skills development and production lines for manufacturing.
  7. Adopting innovations for reduction of energy cost by shifting to energy-efficient technologies
  8. Promoting domestic consumption of tea by, developing skills to redesign the marketing approach
  9. Focusing on awareness campaigns and advocacy.
  10. Diversifying export market destinations, for example targeting high tea consuming markets in Africa like Morocco and Nigeria through additional bilateral trade agreements as well as other trading blocks.
  11. Investing in market research, especially market behaviour to consolidate existing markets and explore new ones.
  12. Enhancing the capacity of the industry on domestication and harmonisation of international standards.
  13. Promoting tea processing and branding within the Special Economic Zones to enjoy the associated incentives and make Kenyan tea more competitive.
  14. Fast-tracking adoption of the agriculture policy and the national tea policy.
  15. Separating the governance of tea from other crops
  16. Setting up of a one-stop shop for the AFA- Tea Directorate to provide information on the licences, taxes and levies in the tea industry as well as the incentives and opportunities.
  17. Rationalisation of fees and levies across the different County governments’ jurisdiction through training on revenue and taxation.
  18. Focusing tea research on marketing by providing resources and adequate numbers of qualified staff via linkages between the sub-sector and the higher institutions of learning.
  19. Supporting County governments to develop appropriate strategies for the development of the Tea sub-sector with qualified staff and adequate financing of departments.

Reforms in tea sub-sector

The Government’s agenda is to examine gaps along the value chain and ensure small-scale tea farmers enjoy their hard-earned sweat by improving the governance system and giving the farmers more authority in decision making.

The interventions necessary to address the challenges in the Tea Sector are categorized into four areas:

  1. Executive Order
  2. Legal and regulatory framework: Tea Policy and Bill/Act Fiscal Incentives,
  3. Financing through Development Finance Institutions (DFIs)
  4. Market access promotion

For instance, an Executive Order was made to increase the amounts of value-added exported tea from the current 12.2 per cent to 25 per cent in the next five years in line with Big Four Agenda and Agro-processing intents by the Government.

The Government has identified the dysfunctional and inefficient tea auction system characterized by lack of transparency, accountability and competition as prone to manipulation, capture, insider trading and cartelization by value chain players leading to ineffective price discovery, low prices and poor earnings to tea farmers. To protect farmers, the Government has set a minimum reserved price for processed tea at the auction.

Curbing the predatory behaviour of the Kenya Tea Development Authority (KTDA) and its subsidiaries on the value chain is also key. This includes a decision to ban the KTDA company secretary from participating in board meetings of tea factories.

KTDA under its agent model is contracted by as many as 66 tea factories as a management agent and this has meant that the KTDA company secretary would sit in on board meetings of the factories.

With the change, factory limited companies (FLCs) must employ their own company secretaries or outsource the service. Another change is that a director or affiliate of a management service provider like KTDA is no longer allowed to serve as a director or have a direct commercial relationship with a KTDA-contracted FLC.

KTDA has been blamed for unwarranted delays in payments to small and medium-scale tea growers despite receiving payments from tea brokers within 14 days from the date of the auction. The changes seek to lessen KTDA’s grip in the tea subsector and open the market to new management and more competition. Another key change is the outlawing of the direct sale of tea overseas in favour of the auction. Teas not sold during a particular auction shall then be re-listed for sale in the subsequent one.

Registered tea auction organisers must set up an electronic trading platform, while buyers must submit a performance bond to the Agriculture and Food Authority (AFA) in the form of a bank guarantee equivalent to 10 per cent of the estimated value of the tea they intend to buy.

The money from the sale of tea at the auction shall be remitted directly to FLC accounts within two weeks of the auction date and FLCs shall within 30 days pay tea growers at least 50 per cent of their dues for green leaf delivered every month, with the balance paid within the financial year.

Tea contributes immensely to the development of this country and is the leading foreign exchange earner contributing about 23 percent of the total foreign exchange earnings.

Most tea produced in Kenya is black tea, with green tea, yellow tea, and white tea following. Consumers in key markets are increasingly expanding their preferences from Black CTC teas to green, flavoured and ready-to-drink teas, necessitating diversification to the niche segments by producers.

The Government is already implementing the Tea Act, 2020 to strengthen the regulatory framework for the tea industry. However, this has been hampered by ex-parte court orders issued by the Judiciary in several petitions filed against some provisions of the Act.

The Act establishes the Tea Board of Kenya with the mandate to regulate, develop and promote the industry. Also in the Act is the process of electing Board members representing the small and medium scale tea growers, large-scale tea growers and the tea traders at the Tea Board of Kenya.

Between March and June 2021, Smallholder tea growers elected new directors for their tea factories using the system of one grower, one vote as provided for in the Tea Act, 2020.  All the 54 smallholder tea factories and KTDA Holdings have fully constituted their Boards and appointed their own company secretaries independent of the KTDA Management Agent.

The new directors of the smallholder tea factories and KTDA Holdings have successfully been inducted on Corporate Governance and financial management to enhance their oversight role in the management of institutions within the smallholder tea sub-sector.

With effect from November 2021, smallholder tea factories reduced the brokerage fee payable to tea brokers from 0.5 per cent to 0.2 per cent of the net sales and the management agent fee paid by factories from 2.5 per cent to 1.5 per cent. The changes were projected to save smallholder tea factories over Kshs 1 billion annually.

One of the major reforms undertaken by the Government is to ensure farmers have access to fertiliser at a subsidized rate to improve the yields and increase production. In October 2021, KTDA procured 86,288 metric tonnes of fertiliser on behalf of smallholder tea growers for application during the short rains season.

Despite an increase in the price of fertiliser, the Ministry of Agriculture and KTDA through the Ministry has requested the Government for fertiliser subsidy amounting to Kshs 1 billion, which will reduce the cost of fertiliser by Kshs.600 from Kshs3,073to Kshs2,473 per 50 Kg bag. The request for subsidy was processed by the National Treasury. Among other key reforms in the Tea sub-sector is the reduction in the cost of credit to small and medium-scale farmers.

KTDA was working to ensure small-scale tea growers get credit from Greenland Fedha Limited Micro-finance, a fully owned subsidiary of KTDA, at an affordable rate of 8 per cent per annum with effect from December 2021. This was to cushion them against the high-interest rates charged by microfinance institutions.

However, there was a challenge since Greenland Fedha as a subsidiary of KTDA enjoys an advantage over Savings and Credit Societies (Saccos) and could lead to heavy defaults on loans owed by the farmers to Saccos. The Government now prefers that Greenland Fedha lend through Saccos or insist that farmers seeking Greenland loans be first cleared by their Saccos. Farmers prefer that KTDA focus on its core mandate of processing and marketing tea.

Using the Government’s Public-Private Partnership (PPP) policy, Kenya Railways and KTDA signed a partnership for KTDA-managed factories to transport their produce via the Standard Gauge Railway (SGR) line from the Nairobi Freight Terminal to the Mombasa for export. This will lower costs for transporting tea for export and provide faster, safer and more convenient transportation of the commodity with the goal of a full migration from road to rail transport.

On average 300 million kilogrammes of processed teas are transported to Mombasa annually for export. The convergence of the SGR and the Metre Gauge Railway (MGR) at Longonot station will further reduce the transport of tea by road to Mombasa, creating a seamless rail network for cargo from as far as Uganda, Rwanda and the Democratic Republic of Congo (DRC). KTDA is also setting up a tea handling facility next to the Nairobi ICD for export tea.

Online Solutions – Tea Soko

Tea Soko was established to provide ultimate solutions for the tea industry in Kenya under the stewardship of JKUAT Enterprises Limited. It serves the whole tea value chain through market connectivity, business partnership with small-scale farmers, cottages (tea factories) and other stakeholders. In line with Kenya’s Vision 2030 and the Millennium Development Goals focusing on International Trade, Tea Soko gives buyers access to premium Kenyan Tea at their convenience, while producers can use it to access the global market.

Kenya is among the largest producers of black CTC, which is rich in antioxidants and has recently seen an uptake in specialty teas and Tea Soko connects farmers to the global market. Other popular varieties on the platform are purple tea, green tea, yellow tea, white tea and Oolong tea in both CTC and Orthodox (whole leaf) formats.


Despite Coffee being one of Kenya’s largest exports since its introduction in the country over a century ago, the sector has been undergoing a slump since 2020.

The 2021 Economic Survey shows that the sector dipped by about 18 per cent on lower crop yields, mainly due to the harsh effects of the coronavirus pandemic. Coffee output was 36,000 tonnes in the 2020, a decline from 45,000 tonnes the previous year. Production by co-operatives decreased by 16.2 per cent and estates by 22.5 per cent. Export prices of unroasted coffee rose from Sh416.70 per kilogramme in 2019 to Sh512.40 in 2020. Opportunities to improve the lot of small and medium scale coffee farmers lie in:

  1. Better governance structures for cooperatives, millers and Coffee Board of Kenya
  2. Institutional reforms to increase farmers’ participation in all stages of value chain
  3. Incentives to encourage networks and alliances formation among coffee farmers
  4. Coffee branding, particularly through single-origin identification i.e., the Geographical Indication (GI) of coffee, which offers opportunities for contract farming and joint ventures.

Boosting the Value Chain

Many reforms in the coffee industry have been initiated. In February 2022, the Government launched the National Coffee Farm Inputs Stimulus Package E-Subsidy Programme to boost access to farm inputs by small and medium scale coffee farmers.

The programme targets 82,650 farmers in the 32 coffee growing counties and is being implemented by the New Kenya Planters Cooperative Union (New KPCU).

Through the programme, coffee farmers will access a wide range of inputs of their choice at an affordable price. To eliminate corruption in the process, the Government has embraced technology by issuing small and medium scale farmers with smart cards through New KPCU. This has made it better, faster and reliable. Farmers use the cards to buy fertilizers or pesticides from accredited suppliers. The programme allows farmers to get loans at reasonable interest rates to be repaid in the shortest time possible.

The Youth Enterprise Development Fund (YEDF), one of the flagship projects of Kenya Vision 2030, under the social pillar is also enabling Kenyan youths to venture into coffee farming. An example is Sailo Youth Group in Kipkelion East, Kericho County who used a Kshs 200,000 loan from the Youth Enterprise Development Fund to begin coffee farming and are now reaping the benefits.

Kericho County is a tea-growing zone, but areas of Kipkelion East Sub-County, which is on the south-western part of the county, are known for coffee farming, thanks to its black cotton soil. Sailo Youth Group has since bought more land for their coffee plantation and members are using income from coffee to sustain their families. The group owns four acres of land of which three acres are under coffee. In 2020 they earned over Kshs 800,00 from 9,800 kilogrammes of coffee berries.

In Kipkelion East three popular varieties of coffee dominate including Ruiru 11, Batian, and K7. Ruiru 11 can resist Coffee Berry Disease and Coffee Leaf Rust and is suitable for all growing altitudes in Kenya. The Agri-biz loan from the Youth Enterprise Fund targets youth who wish to start or expand agricultural-related businesses, including the purchase of equipment and working capital and is available to individuals, registered groups, partnerships and companies. They can access up to Kshs 2 million to be repaid within a period of three years.

In April 2020, the Government of Kenya (GOK) announced a US$14 million coffee revitalisation programme, with most of these funds allocated to improving coffee processing and the rest dedicated to input use and support for cooperatives. The impact of this program will likely not be observed until after 2022. Coffee is projected to register a 7 per cent rise in production in 2022. The Ministry of Agriculture has introduced the Coffee Bill 2021 currently undergoing public participation by the National Assembly.

So far, the Government has legislated on the Coffee General Regulations and Coffee Cherry Revolving Fund Regulation and forwarded the Coffee Bill, 2021 to Parliament for deliberation and approval. Through the New KPCU, over KShs 300 million has been disbursed to farmers out of the Ksh3 Billion Coffee Cherry Advance Revolving Fund. The Government prefers the revolving fund with an affordable interest rate of 3 per cent for farmers to buy inputs and other essentials compared to more expensive alternatives.

The Agriculture Ministry is also undertaking a performance audit of 300 coffee co-operative societies and supporting the digitisation and modernisation of factories’ infrastructure. The Ministry wants to create an agricultural commodities regulator to oversee the trading of all agricultural commodities under the watch of AFA. Government is also facilitating the adoption of digital agri-tech tools that among other things relay to farmers in real-time how much their coffee fetched on the market via an SMS (short message service) platform launched by the Ministry of Agriculture in 2018.

Precision Agriculture for Development in collaboration with Safaricom developed the platform which also helps farmers access information on choice of chemicals, fertilisers and other inputs. Technology is also helping to reduce wastage occasioned by processing and milling. Once the Coffee Bill 2021 becomes law, marketing agents doubling up as buyers will be banned and coffee growers will be given more agencies in the processing, trading, sale and payments for their coffee.

Kenya produces quality Arabica beans which are generally recognized and upgraded with other relatively lower brands hence the need for value addition. The coffee sub-sector has adopted better packaging to extend the useful life of roasted coffee and plans are underway for large-scale roasting in importing countries using vacuum packing as a preservation technique. The share of gross value added as percentage of retail price of roasted coffee in most importing countries is over 70 per cent. As a country, Kenya can gain much from her coffee exports by roasting it within the country.

The Trade, Industrialisation and Enterprise Development Ministry is working with the Ministry of Agriculture to encourage coffee co-operatives to lease facilities put up by the private sector and the government at Export Processing Zones (EPZ) to add value to their produce, like the Africa Coffee Roasters (ACR) factory in Athi River EPZ on Thursday. By roasting and packing locally farmers can gain more from their coffee exports.

The Coffee Research Institute (CRI) has created a variety known as Batian that is immune to rust leaf and coffee berry disease and a rapid maturation period of two years. Value-adding operations during production include soil preparation, fertilisation, spraying, maintenance and harvesting. At the farm level, the CRI and private sector traders offer producers complementary services and pertinent inputs. Kenyan coffee is among the best in the world and 99 per cent is exported, most of it Germany, Sweden and Belgium, the USA and Saudi Arabia.


Under the Kenya Vision 2030, recognised dairy industry as one of the fundamental avenues for employment creation for women and the youth. It is significant sub-sector with fresh milk among the top five foods consumed by most households in Kenya. Kenyan milk production is 3 per cent of the 18 per cent global production by Sub Saharan Africa. An estimated 4.3 million dairy cattle are reared under extensive, semi-intensive and intensive systems.

They include local and exotic breeds and hybrids of both. Milk production rose from 1.02 million thousand tonnes in 1970 to 5.53 million thousand tonnes in 2019, growing at an average annual rate of 3.77 per cent. However, data from the Kenya Dairy Board (KDB) shows milk volumes declined by 0.95 per cent in 2020 to 679 million litres from 685 million litres in 2019. In 2020, the production of processed milk and cream was 458 million litres, down from 492 million litres the previous year.

Kenya Livestock Commercialisation Project

The Government in collaboration with International Fund for Agricultural Development (IFAD) set aside Sh9.6 billion to establish the Kenya Livestock Commercialization Project (KeLCoP) to boost rural smallholder farmers’ incomes and enhance food and nutrition security. State Department for Livestock is implementing the programme in 10 counties with a keen focus on the youth, women and marginalised segments of the population. Selected counties are Siaya, Busia, Bungoma, Elgeyo Marakwet and Samburu. Others are Kakamega, Nakuru, Baringo, Marsabit and Trans Nzoia Counties.

The six-year project focuses on small ruminants, improving local poultry breeds and strengthening bee-keeping value chains which have the potential to provide productive employment and food security opportunities for women and the youth. It also covers dairy goat, sheep and goat meat farming. It is intended to improve opportunities for small-scale farmers to increase production, access markets and remain resilient to economic and climate risks.

Up to 495,000 farmers will benefit directly and indirectly from the multibillion-shilling project. Use of climate-smart production technology is at its core supported by electronic extension services, breed improvement, upgrading of market infrastructure, capacity development, and provision of grants for marketing activities in the targeted counties.

The Ministry of Trade, Industrialisation and Enterprise Development has already identified the foreign markets to be targeted.


Kenya Agriculture Livestock and Research Organisation (KALRO) has introduced improved breeds of dairy cattle and grass adapted to harsh climatic conditions to mitigate the effects of drought on livestock. The improved crossbreed of the indigenous Sahiwal and the exotic Friesian cattle are resistant to most pests and diseases and can yield as much as 30 litres of milk per day. KALRO, through its Dairy Institute at Naivasha, is also training farmers on breeding, disease control, animal health, feed formulation, value addition and marketing in the dairy subsector.

The high cost of animal feed is a major challenge for small scale dairy farmers. KALRO is equipping farmers with skills to grow their own feeds from maize germ, boma Rhodes and brachiaria grass. The cross-bred dairy cows can survive the harsh nomadic lifestyle in arid and semi-arid regions and allows pastoralists to keep fewer animals, but with higher milk or meat production potential.

To deal with the perennial feed shortages, KALRO has introduced, through its Arid and Rangelands Research Institute, a re-seeding programme, where grasses, mainly indigenous and adopted, are re-grown in the rangelands. The improved cattle breeds are well adapted to the range and grasslands and are being used to improve the African Zebu breed that is less productive, yielding an average of just 10 litres of milk per day.

KALRO has also secured registration of four range grass varieties for establishment of new pasture fields and restoration of degraded rangelands. Sahiwal bulls are providing semen for harvesting by Kenya Animal Genetics Resource Centre (KAGRC), for use in artificial insemination. KALRO has also established a call centre where farmers can receive expert advice on planting materials, fertilisers, plant and animal diseases and weather updates. The 600,000 small-scale farmers geo-referenced on the platform are easier to locate for extension services and other support.

These efforts are informed by the reality that Kenya’s informal milk sector accounts for more than 70 per cent of 40,000 jobs in the dairy sub-sector.

Trainings focus on technologies, innovations and management practices including assisted reproduction in dairy cattle breeding, disease tolerance, forage conservation, feed rations, manure management for bioenergy, fortification of feeds, marketing and milk handling.

Kenya Climate-Smart Agriculture Project (KCSAP)

The Kenya Climate-Smart Agriculture Project (KCSAP) is a Government of Kenya project jointly supported by the World Bank. KCSAP is being implemented over a five-year period (2017-2022) under the framework of the Agriculture Sector Development Strategy (ASDS) (2010-2020) and National Climate Change Response Strategy (NCCRS, 2010). Dairy farmers in Taita Taveta County are already reaping the benefits of the project with the County government setting an annual target of 30 million litres of milk, up from 18 million litres.

The project supports small-scale farmers in mobilisation, training and operational expenses to increase their productivity and enhance supply of products. Programmes initiated include artificial insemination and veterinary services that have benefited 7,000 dairy farmers. Extension officers from the Ministry of Agriculture are also facilitated by the County administration to advise farmers.

In Kisii County small-scale dairy farmers are using artificial insemination and zero-grazing techniques to boost milk production. Friesian, Ayrshire, and Jersey breeds are serviced with semen from bulls of superior quality using to give birth to hybrids that yield more milk. According to the Tegemeo Institute of Agricultural Policy and Development, milk from livestock in Kenya is estimated at 5.2 billion litres annually, out of which cow milk accounts for 75 percent.

Milk is primarily produced under zero-grazing, semi-zero grazing, and open grazing by an estimated 1.8 million small-scale farmers. Embracing technology in the livestock sector, producing climate change resilient and high-yielding breeds are part of key effort smallholder dairy farmers are making to help the National Government achieve the Big 4 Agenda pillar of Food Security and Nutrition.

Tana River County Government in partnership with the European Union (EU) has constructed two mini milk cooling plants in Bangale and Garsen Wards. The two solar-powered cooling plants will be used for milk collection, bulking and as chilling centres. Once operational, the Tana River Fish and Milk Authority (TRFMA) will manage the project. The plants are equipped with milk reception centres, pumps, cooling and storage tanks, solar panels and backup batteries. The plants will reduce losses experienced by farmers and increase the shelf–life of milk. Two Satellite milk collection centres are operating at Boka in Tana North Sub- County and Tarassa in Tana Delta Sub–county, holding the milk for onward transport to the main cooling plants.

The quality and hygiene of milk produced will improve, thus enhancing its marketability. Ten thousand litres of milk will be processed daily up from the current 3,000 litres. In Trans Nzoia County, KALRO is collaborating with dairy farmers to plant brachiaria grass for increased milk production due to its higher protein content compared to other fodder grasses. She said that KALRO is promoting fodder grass in Trans Nzoia, West Pokot, Elgeyo Marakwet, Turkana and Uasin Gishu counties. The wonder grass takes four to five months. Among the varieties being promoted by the organization are basilisk, xaiares, Flata and M G 4. The grass can be planted for open grazing fields or harvested and stored for future use.

More than 1,000 dairy farmers in Western Kenya have doubled their milk production and grown their incomes by saving on high-cost feed and growing their own high-quality, drought-resilient forage grasses. The farmers have been trained since 2018 on new varieties of grasses.

KALRO tested the grasses for suitability to local conditions before they were released to farmers. Young people without cattle are also benefitting, growing the fodder and selling it to farmers.


The Dairy Industry Regulations, 2021 were gazetted and launched in March 2021 and are now law. They are meant to solve challenges facing the dairy sub-sector including seasonality of production, low productivity, poor quality, costly and inaccessible animal feeds and a weak regulatory framework, among others. The regulations fall under Section 19 of the Dairy Industry Act and underwent rigorous legal and constitutional requirements and incorporated input from stakeholders, including the County governments who are leading their implementation.

The regulations will also ensure that automated milk dispensers meet international standards of hygiene. They cover a raft of areas including registration, licensing, cess and levy, returns, reports, and estimates, enforcement of compliance, produce traceability and recall, contracts for milk sales, pricing of dairy produce, imports and exports and safety of produce. The regulations will stabilise the prices of dairy products reduce the negative impact of cartels and middlemen who exploit farmers. They empower the sub-sector regulator, the Kenya Dairy Board, to set minimum prices for raw milk from farmers and limit importation of dairy products.

Nakuru County is implementing the Dairy Value Chain Strategic Plan (2019-2023) to train and assist small-scale farmers to increase production.

The dairy sub-sector is the largest in the agriculture value chain, creating employment and ensuring food security.  Although Kenya is the second largest producer of milk in Africa, the dairy sector incurs a lot of losses during production and processing. The Strategic Plan will formulate relevant approaches and programmes for the development of the industry in the County. Mr Kinyanjui said.

Farmers will benefit from improved artificial insemination, cattle sheds, mobile veterinary clinics and the establishment of bulk milk chillers, milk collection centres and skills on how to cultivate fodder. Milk production is driven by small-scale dairy farmers whose population is estimated at 1.8 million. The informal sale of raw milk in rural, peri-urban and urban areas is a regulatory concern due to the potential public health concerns.

The Strategic Plan increases the capacity of dairy farmers to produce and deliver quality and safe dairy products and expands their access to domestic and export markets.


By Dickson  Githaiga, KNA

Bulla Haji Dairy Farm, on the outskirts of Mandera Town, is a marvel in the dry region dominated by pastoralism. On this farm, one encounters beautiful and well-kept Friesian dairy cows, an indication that they too can thrive in the arid region dominated by the Zebus and Galla goats. Using the 27-acre farm, the county is keen on turning the tide by training locals in various aspects of zero-grazing. Muhidin Ali Haji, the farm supervisor, says their main target is farmers living along rivers in Mandera since they can grow feeds in large quantities.

The farm was started with 12 Friesian animals sourced from Naivasha in 2015 and the number has since increased to 32 over the years following successful breeding using artificial insemination.

“Only one cow died due to the change in climatic conditions, but the rest have adopted well and some have even calved down,” said Haji. Friesians are heavy feeders and susceptible to various diseases therefore they need quality management to keep them productive. “This is a fact that we knew, and we were prepared to handle, the reason why we have grown our pasture over the years,” he says, adding pneumonia and mastitis are some of the challenges they have to contend with. Ticks are another challenge, thanks to the pastoralism culture, thus regular spraying is a must on the farm to curb them.

“Our highest milkers offer us up to 50 litres a day, milk which the county government buys to sustain the project,” says Haji.

The farm grows Sudan and Napier grasses, and they use the former to make hay, ensuring that they have feed all the time. “This farm is trying to change the perception that zero-grazing is impossible in Mandera and the locals have shown much interest in it already,” says Johora Mohamed, the Agriculture and Livestock Executive. At least 200 locals trained on zero-grazing at the farm are awaiting public auctioning of the animals to start their ventures.

“We have a procurement committee currently evaluating the value of the cows on the farm before deciding on the price for auctioning. The exercise is expected to end this month and the interested farmers will get their cows by the end month,” says Johara. In zero-grazing, a farmer should ensure that the cowsheds are clean all the time, meaning that the cow dung should be removed every day. In addition, the farmer should have a reliable source of water because the animals need a lot of drinking water as they feed on dry pasture. “Once the cow is served, we feed it mainly on dairy meal and silage, which we later withdraw and replace with the dry matter that includes hay,” says Haji.

Two to three weeks before calving, which is the steaming up period, a cow is withdrawn from the herd and moved to the maternity bay where it is fed on dairy meal and silage high in protein to ensure high milk production after calving. “This is a very exciting venture that I am ready and willing to sell all my indigenous livestock to start zero-grazing,” says Ahmed Abdullahi, a farmer. Shamsi Mohamud, the County Chief Officer for Livestock and Fisheries, says livestock is the main source of food and income in the county, providing 95 per cent of household income but most of the animals are reared for beef. “We believe this is the time to train our community new livestock farming techniques for more profits,” she says. “We know it may take time but it is possible to transform residents from nomadic pastoral culture to zero-grazing,” she adds. She notes it is encouraging that despite the high temperatures of 35 degrees Celsius and 24 degrees Celsius, the Friesians are doing well in the region.

Friesians are best kept on large-scale producer farms with better resources but they are not the best producers when kept by small-scale farmers with limited feed resources.

They are outstanding milk producers and if bred under good management, they can be milked up to three times a day. However, their milk has the lowest butterfat content of 2.5 to 3.6 per cent and about 3.1 per cent protein.

Kenya Livestock Insurance Programme (KLIP)

With 60 per cent of Kenya’s livestock herd being resident in her arid and semi-arid regions, or over 70 per cent of the country and severe drought is a major challenge due to climate change. In 2014, the Ministry of Agriculture, Livestock, and Fisheries – with support from the International Livestock Research Institute (ILRI) and the World Bank – launched a livestock insurance scheme, targeting vulnerable pastoralists.

The Kenya Livestock Insurance Program (KLIP) targets vulnerable pastoralists whose livelihoods are entirely dependent on livestock. KLIP has been developed as a public-private partnership (PPP) where the Government creates the enabling conditions, including premium support, and the insurance companies focus on service delivery, including insurance product development and paying claims to the insured beneficiaries.

KLIP is based on the internationally recognized index-based livestock insurance model, which was developed in 2009 by a team of scientists from ILRI and technical partners. Its signature feature is the use of satellite data to generate an index for grazing conditions so that payments are triggered early in the drought when conditions fall below a certain critical level. The index eliminates the need for monitoring by insurance agents and ensures timely payouts to pastoralists, which help herders keep more livestock alive. KLIP with County governments to protect livestock against the risks associated with drought effects, through satellite-based index insurance.

Dairy Goats

The Dairy Goat Artificial Insemination Centre at the Animal Health and Industry-Training Institute (AHITI) in Kutus, Kirinyaga County is nearly complete with a nitrogen plant for semen storage and a laboratory for semen production. The KShs 500 million centre built with the support of the World Bank under the Eastern Africa Agricultural Productivity Project will increase the productivity of the dairy goats from an average of 1 liter to 5 litres per day.

It is part of the Government’s commitment to delivering on the Big 4 Agenda pillar of Food Security and Nutrition and will enable small-scale goat farmers to access quality breeds. The Government has purchased full artificial insemination kits for technicians to support the dairy sub-sector and lower the cost of the service. The goal is to increase goat milk production from the current 1 litre to 5 litres per day.

Also being built is an embryo transfer plant at Mariba farm in Meru to be equipped with an embryo-sexing machine for high-quality breeds. Dairy farmers in Mt Kenya region are already enjoying subsidised costs for artificial insemination services thanks to a multimillion-shilling liquid Nitrogen gas plant already in operation. The cost of artificial insemination services has been reduced by 50 per cent from a high of KShs 1000 to Kshs 500. Service providers were charging farmers exorbitant fees per animal due to the long distance between the county and Kabete in Kiambu, where the crucial Nitrogen gas is produced. The project will give a boost to the dairy sub-sector due to easy and cheaper access to certified animal semen. The Sh200 million Nitrogen plant produces 20 litres of Nitrogen per hour and benefits farmers in Nyeri, Muranga, Embu and Tharaka-Nithi counties.

Kenya will be able to produce enough goat semen for local farmers and have a surplus for export within the East African Region from the Ndomba plant alone.


By Anne Mwale, KNA

On the fringes of the picturesque Menengai Crater within Bahati Sub-County eight youthful women are toiling on a small farm feeding 17 dairy goats. The members of Kazi na Bidii Youth Group are beneficiaries of a dairy goat rearing programme rolled out by the County Government of Nakuru seeking to improve the livelihoods of women and youth groups in rural parts of the devolved unit.

Members of the youth group according to the Chairperson, Ms Esther Gathoni, have also received training on home-based manufacture of value-added goat products such as pasteurized milk, yoghurt, butter and cheese. Ms Gathoni, an Agricultural Economics graduate from Egerton University said farmers who rear five dairy goats stand to benefit 50 per cent more than those keeping one dairy cow as goats do not need many feeds and space to keep yet their milk always retails at a higher price as compared to that of a cow.

“Farmers need to be aware that a half an acre of Napier grass can support five dairy goats while an equal amount of Napier grass only supports one dairy cow. With this knowledge out there, farmers can make the right decision on which venture to pursue,” explained Ms Gathoni.

She stated that one dairy cow can yield 20 litres of milk a day which retails at average price of  KShs 40 per litre while five dairy goats produce 14 litres of milk daily fetching KShs140 per liter.

“Goat milk production is a good source of income and an avenue to improve rural areas’ economy as consumer acceptance of goat milk and its products is growing. We are also venturing into value addition,” explained Ms Gathoni. On value addition, Ms Gathoni explained that her group was conducting several experiments to manufacture mozzarella cheese from blends of cow and goat milk. Kazi na Bidii Youth Group is one of the 80 farmer groups in the county, with a total membership of over 500 that have received over 1,200 Alpine and Toggenburg breeds from the devolved unit’s Department of Agriculture, Livestock and Fisheries.

County Senior Veterinary Officer Dr Christopher Auma, said 125 Alpine dairy goats had been distributed to 41 farmer groups in Mauche ward, Njoro Sub County while a further 157 Alpine and Toggenburg breeds had been donated to farmers in Kabazi and Subukia Wards. Dr Auma indicated that the devolved unit kicked off the programme last year after procuring superior Kenya Alpine and Toggenburg dairy goat genetic material which he observed were tough and adaptable to various climatic conditions and yields more milk with proper breeding, good nutrition, appropriate housing and management of diseases and pests.

Other goat breeds kept in Kenya are Oberhasi, Galla, Small East African Goat and Boer. Most farmers keep Alpines and Toggenburgs mainly for milk.

“Alpines and Toggenburgs are hardy and can adapt to all agro-climatic conditions while producing to their maximum. The two breeds are the best milk producers and lactating rarely reduces milk output until they are served. They can be milked for up to eight months after calving. The genetic material that most dairy goat farmers are using today was imported from South Africa many years ago. Farmers are reusing the same bucks for breeding, and this has resulted in inbreeding, low production and stunted growth in animals,” explained the Senior Veterinary Officer.

He noted that the main challenge facing the dairy goat subsector was poor management of the animals, diseases and poor breeds.

Dr Auma revealed that studies have confirmed that nutrients like iron, calcium, magnesium and phosphorus in goat milk were easily digested and absorbed by the body than those in cow milk. “The demand for goat milk is growing as it is easier to digest and has higher quantities of amino acids such as tryptophan and calcium than cow’s milk which are crucial for healthy teeth and bones. A cow’s milk trails in fatty acid content at 17 percent compared to goat milk’s 35 percent making it more nutritious. It has lower levels of cholesterol making it a safer option for those seeking healthier lifestyles,” he added.

He said all beneficiaries of the programme are smallholder farmers who cannot keep a cow due to their small land sizes or cost of feeding the animal and now prefer to rear dairy goats. The programme he added, has also equipped the farmer groups with knowledge on the different goat breeds, feeding, pests, prevention and cure of most probable diseases and housing. He advised dairy goat farmers to construct pens that shield the animals from wind, direct sunlight and rain and must have adequate resting areas if they are to produce more milk.

“A good goat shed should have separate feeding and resting areas. And it should be raised two feet from the ground, should be properly ventilated, well-lit and kept neat, clean and dry as dampness attracts pests and diseases,” stated Dr Auma.

He said that sanitation, decontamination and ventilation in the pens are necessary to rid mites off goats, which cause both health and economic losses. “Many smallholder farmers have opted for zero-grazing systems as it limits the dairy goats’ exposure to parasites and infectious diseases as compared to those in free-range. Minimized movements lower their risk of coming into contact with disease-causing organisms,”

He, however, noted that poor ventilation in zero-grazing units may cause respiratory diseases, the leading cause of death in goats.

Dr Auma explained that goats kept under zero grazing should be fed on Napier grass, Rhodes grass, Kikuyu grass, maize and hay. “They also love Lucerne, calliandra, leucena, desmodium, mulberry, sweet potato vines, cottonseed cake, sunflower cake and soybean cake for proteins, feeds that are, however, harder to come by,” he added. He said that the County Administration was ensuring that the dairy goats were dewormed and vaccinated regularly as they are sensitive to pests and diseases.

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