The Kenya Dairy Sector Competitiveness Program (KDSC) is five year program that aims to improve Kenya's dairy industry competitiveness. The program will employ a market driven value chain approach, utilizing a Business Development Services (BDS) methodology. The KDSC will help transform the Kenyan dairy industry into a globally competitive, regional market leader, with the overall goal of increasing smallholder household income from the sale of quality milk. Land O' Lakes will be facilitating this transformation, while the industry stakeholders will lead it.
Program RationaleAs sub-Saharan Africa's second-largest dairy-producing and dairy-consuming country, Kenya is well-positioned to be one of the region's market leaders for value-added dairy products. To maintain and expand market leadership, the Kenyan dairy sector must increase its competitiveness in the regional marketplace, fend off competition in the domestic market from international firms, and transform the informal sector to ensure consumer safety.
This requires an upgrade of the dairy value chain to eliminate inefficiencies and lower production and processing costs, while simultaneously increasing milk quality, from farm to consumer, to meet acceptable domestic and international standards. The sector however faces a number of challenges that hinder competitiveness both locally and in the regional market.
The quality of Kenyan dairy products has been a barrier to entry into regional export markets and presents significant risks to consumer safety in the domestic front. With the harmonization of dairy products and analytical methods standards by the Common Market for East and Southern Africa (COMESA) countries, the Kenyan dairy industry must bridge a significant quality gap to meet these higher quality standards and seize market opportunities within COMESA and beyond, while defending its domestic market from high-quality imports. Other constraints include low productivity and high cost of production at all levels of the value chain.
In addition, the sector is dominated by informal milk marketing locally, and currently commands a very small proportion of the regional export market. Further, the current dairy policy and regulatory environment does not effectively foster industry efficiency and competitiveness, nor does it promote a culture of quality.
The KDSC Program aims to address these challenges.
Program ObjectivesThe goal of the KDSC Program is increased smallholder household income from the sale of quality milk. The Program has three main objectives:
- Increased competitiveness of the Kenyan dairy sector resulting from collaboration among sector stakeholders and increased capacity of public sector agencies to serve the needs of the sector
- Increased marketing of milk meeting quality standards by producer-owned milk bulking/cooling businesses and
- Greater access to market-linked business development services and technologies by male and female dairy farmers and farmers producing dairy-related inputs.
