Increase Availability of Dairy Business Development ServicesThe predominance of commercial agriculture and dairy farming in the Kenyan economy has attracted a wide array of commercial business service providers (BSPs) that have the potential to meet the vast majority of service and input requirements required by stakeholders at key points along the dairy value chain. In the past, government, donors, and NGOs have subsidized the costs of many of these business development services, including farm extension services, and animal health and breeding services and inputs; distorting commercial markets.
Today, few of these subsidies remain, although some services, especially farm-level extension services, are still subsidized to varying degrees. The Draft Dairy Policy of 2006 calls for further privatization of services including breeding, veterinary and extension services and promote the use of embedded services by cooperatives (i.e. SBOs) and processors.
The program, utilizing the market-based solutions model will
- Identify key constraints and opportunities to competitiveness at critical points in the value chain-farm, MBC and processing plant
- Identify market-based solutions to competitiveness constraints that can be overcome utilizing commercial business development service providers
- Assess the most viable and prioritize the most critical solutions; and
- mplement solutions through facilitation of commercial business development services and promotion of embedded service delivery by SBOs, processors and input and service providers.
Furthermore, Land O' Lakes will facilitate the strengthening of additional BSPs; expand the number of innovative, low-cost, high-impact services, inputs and technologies available in the marketplace; and increase utilization of these goods and services.
To minimize the potential for market distortions, the majority of business development services (BDS) are envisioned to be provided to the industry at commercial, market rates via: fee-based services whereby revenues generated at the enterprise level-farm, MBC, processors, transporters and traders; and embedded services whereby the costs of the service is either deducted from the farmer's milk check, budgeted for in the operational costs of the embedded service provider (e.g., SBO, processor, transporter and/or input supply company) or passed on to the consumer in the final price of the provider's product (e.g., finished price product for processors and input suppliers).
