In Kenya, the dairy products manufacturer Sameer Agriculture and Livestock Company (SALC) has called on the government to remove the 16% VAT duty on yoghurt, not only to boost consumption and thereby eliminate the ‘cases of milk glut during [the] rainy season’. The promotion of yoghurt consumption would also bring health benefits, according to the company. SALC has recently invested KSh1 billion (approx. €9.1m) in upgrading its facilities, to expand capacity from its current level of 50,000 litres of milk per day to 200,000 litres.

The issue of dairy sector regulation is in the spotlight in Kenya, since the much delayed Dairy Bill and government dairy development policy document are nearing finalisation. Press analysis points out that while the Kenyan dairy sector ‘has recorded tremendous growth since 1992’ when liberalisation began, this has been achieved ‘with little support and incentives from government’.

According to the Kenya Dairy Board, by December 2011 ‘milk production stood at 5.1 billion litres with about 555 million litres processed both for local use and export.’ Recently, four new processors have been awarded licences to start operations. Dairy sector companies argue that with a proper legislative framework the sector could make a significant contribution to economic development and poverty reduction.

The dairy sector in Kenya is reported to be ‘the fastest growing agricultural sub-sector in the country’, with the formation of dairy cooperatives and growth in milk production helping to ‘economically transform people’s lives’. The Managing Director of the Kenya Dairy Board, Machira Gichohi, has said in a press interview that the Dairy Board is ‘embarking on an aggressive marketing campaign that will help them export local dairy products to more countries especially in West Africa and the Middle East’. Marketing missions are due shortly to visit the Middle East and South Sudan, and there are also plans ‘to exploit the inroads made by national carrier Kenya Airways in West Africa to try and capture that market’. This would place Kenya in direct competition with EU exporters to markets in Senegal, Nigeria, Ghana and Liberia.

Efforts are also being made to expand local dairy product consumption, including by reviving a major school milk programme. Kenyan Livestock Minister Mohammed Kuti has challenged local industry ‘to address the imbalances that exist in the value-chain and ensure that the interests of all stakeholders from the farmers through to the consumers are taken care of’. According to the Minister, what is needed is ‘an organisation where the primary producer, the processor and the consumers are represented to determine what is everybody’s “take-home”’, ensuring that other stakeholders have a say as well as the middlemen who handle 60% of dairy milk collection in some parts of the country.