Cabinet Secretary for Cooperatives and MSMEs Wycliffe Oparanya has mandated the New Kenya Co-operatives Creameries (KCC) to submit a comprehensive restructuring report within 90 days. This directive comes amid growing concerns over the accessibility of affordable credit for farmers, coupled with the urgent need to streamline benefit payments.
The Current State of KCC and Challenges Faced
Speaking at the New KCC factory in Dandora, Oparanya emphasized that no additional capital would be injected into the KCC until it demonstrated the ability to sustain its operations. This decision underscores the government’s commitment to ensuring that public funds are utilized effectively and transparently.
“For the sector to achieve its revitalization agenda, New KCC must restructure its human capital. The current level of productivity does not match the competition in the market,” Oparanya stated. His remarks highlight a crucial challenge faced by KCC: despite having state-of-the-art equipment and facilities, the organization has struggled to generate adequate revenue, ultimately failing to prioritize the interests of farmers.
Patrick Kilemi, the Principal Secretary for Cooperatives, echoed Oparanya’s sentiments, reinforcing the notion that the reform process at KCC is critical for the long-term success of the dairy industry. “We cannot keep doing the same thing and expect different results. The reform process at KCC is on track, and we must implement it for the benefit of the farmers, who are the backbone of this institution,” Kilemi asserted.
Importance of the Restructuring Report
The 90-day deadline for the restructuring report is not merely a bureaucratic exercise; it represents a pivotal opportunity for KCC to reassess its operational model and adapt to the evolving landscape of the dairy industry. The need for reform has never been more pressing, as farmers continue to grapple with challenges related to credit access and market competition.
The restructuring process will involve a thorough evaluation of KCC’s internal processes, workforce optimization, and alignment of objectives with the needs of farmers. By addressing these key areas, KCC can position itself to better serve the agricultural community, which relies heavily on its services for income generation and sustainability.
Enhancing Farmer Benefits and Productivity
CS Oparanya assured farmers that efforts to reform KCC are already underway and will ultimately benefit dairy farmers by enhancing their productivity. “Our focus is on enhancing the dairy value chain through cooperatives. We have adopted the ‘pay farmers first’ principle, resulting in timely payments on the 1st of every month. This is a clear sign that our reforms are gaining momentum,” Oparanya remarked.
The adoption of the ‘pay farmers first’ principle is particularly noteworthy, as it addresses one of the major grievances that farmers have faced over the years—delayed payments for their produce. By ensuring that farmers receive timely payments, KCC can help stabilize their income and enable them to invest back into their farms and operations.
Affordable Credit Facilities for Farmers
One of the critical components of the proposed reforms is the availability of affordable credit facilities for farmers. Oparanya encouraged farmers to leverage these credit options, which are designed to assist them in acquiring expensive equipment that can enhance production efficiency. Under this scheme, farmers can access up to 70% financing for required equipment, while the remaining 30% is to be covered by the farmers themselves, either individually or through cooperative groups.
This financing model is particularly beneficial for small-scale farmers, who often face financial constraints that hinder their ability to invest in modern farming techniques and equipment. By providing access to credit, the government and KCC aim to empower farmers, thereby increasing overall productivity within the sector.
Current Milk Processing Landscape
Currently, New KCC processes milk primarily from cooperatives, which account for approximately 85% of the total supply. Small-scale farmers contribute 10%, while large-scale farmers provide the remaining 5%. This distribution highlights the critical role that cooperatives play in the dairy industry and emphasizes the need for KCC to strengthen its partnerships with these entities.
The reliance on cooperatives underscores the importance of fostering strong relationships between KCC and the farming community. Through collaborative efforts, KCC can enhance its service delivery and create a more supportive environment for farmers, leading to increased production and profitability.
The Way Forward
As KCC embarks on this restructuring journey, it must prioritize transparency and inclusivity in its operations. Engaging with farmers, cooperatives, and other stakeholders throughout the process will be crucial in ensuring that the reforms are aligned with the actual needs and challenges faced by the agricultural community.
Furthermore, the success of the restructuring process will hinge on the commitment and dedication of KCC’s leadership and workforce. Implementing effective changes will require not only a strategic overhaul of operational processes but also a cultural shift within the organization to prioritize farmer interests above all else.
Conclusion
The directive from CS Oparanya for KCC to submit a restructuring report within 90 days is a timely and necessary step towards revitalizing the Kenyan dairy sector. By focusing on enhancing productivity, ensuring timely payments to farmers, and providing access to affordable credit facilities, KCC has the opportunity to transform its operations and better serve the agricultural community.
As the restructuring process unfolds, all eyes will be on KCC to see how it navigates the challenges ahead and fulfills its commitment to supporting farmers. If successful, these reforms could pave the way for a more resilient and sustainable dairy industry in Kenya, ultimately benefiting all stakeholders involved. The dairy farmers of Kenya are counting on KCC to rise to this challenge, ensuring their livelihoods are safeguarded and their contributions to the economy are recognized and rewarded.
