Dairy farmers reap the benefits of working together in a co-operative society

Good evening, dear listener. Welcome to your favourite farming program. Today, we explore the role that co-operatives and co-operative development play in improving the livelihoods of farmers in rural areas.

Sound of cows for five seconds, then under

In the highlands of Uasin Ngishu district in the Rift Valley Province in Kenya, a quiet revolution is taking place. Two years ago, dairy farmers in the area decided to pool their resources together and start a co-operative society. They named it Kabiyet Dairies. Two years later, farmers are producing more milk and getting more than twice the price for their milk.

Sound of people chatting for five seconds then under

It is mid-morning in Kabiyet, a village about 70 kilometres from Eldoret town. There is an air of excitement among the people gathered at the market. To farmers in this area, today is a special day. The local co-operative society is paying farmers for the milk that they have delivered to the co-op throughout the month.

Mrs. Cecilia Jepchumba is one of the many dairy farmers gathered here. She has two cows and delivers 25 litres of milk every day to the co-operative. The money she receives today will go towards buying essentials and paying school fees for her first-born son who is attending Form One in a nearby secondary school.

Yet, such a steady income has not always been the case for Mrs. Jepchumba.

If you look around, you will notice that our farms look good. The conditions are ideal for farming. People here are never hungry. But they have been poor. Those with big farms plant wheat and make good money. But the majority of us with small pieces of land plant maize and beans. These crops fetch poor market prices because farmers harvest their crops and sell them immediately. At harvest time, a 90-kilogram bag of maize sells for as little as 400 Kenyan shillings (Editor’s note: approximately $5 US dollars). So we earn very little money for our produce.

Mrs. Jepchumba was convinced by a neighbour to become a member of the new group that farmers in the village were joining in large numbers.

I had only one cow that gave us 10 litres of milk. We sold the milk to vendors, who later sold it in Eldoret town. The income from the milk and our two-acre farm was not enough to cover the needs of our three children. My neighbour told me that the co-operative society would give us an alternative market for our milk. When we delivered milk to the co-operative society, we saw that the prices were good. So we decided to buy another cow. We looked for an improved breed. It was expensive, but we knew we could make more money by selling the milk.

That was two years ago. Today, she has two mature cows and a pregnant heifer. For Mrs. Jepchumba and other women in the co-operative, despite the hardships, empowerment has come to their households.

In theKalenjincommunity (Editor’s note: theKalenjinpeople live in the Rift Valley area of western Kenya), cows are considered a man’s affair. When I registered as a member, many men said I wouldn’t last in the group. But my children encouraged me, and they promised to take good care of our cows so that they can produce more milk. When they have the time, like after school, my boys cut Napier grass for the cows.

The women in this village who are members of the co-operative meet once every month to discuss and share ideas on how to improve our dairy farming.

Sound of cows and of a farmer hoeing, five seconds then down and out

Away from the market, Vincent Maritim is busy weeding his Napier grass, the main fodder crop for his four cows. He delivers about 42 litres of milk to the co-operative society daily. He says the co-operative has improved his life.

I earn more money than I used to. I’m able to take care of the needs of my family. It is laughable that two years ago, I would sell a litre of milk for nine Kenyan shillings. What I get now is much more than an average farmer in my village can expect.

In addition, I spend less on transport, both in terms of hard cash and also in terms of the time that I need to bring milk to the central collection point. Imagine 2,000 of us spending at least 30 minutes each every day to deliver milk to the dairy. That is so many hours wasted! Instead, we could be doing things on the farm that increase milk production. The dairy owns a truck that goes round each morning and evening to collect milk from farmers and deliver it to the dairy. I milk my cows and wait for the truck at the road, which luckily passes by my farm. It is easier, cheaper and less bother for us farmers.

Are the benefits limited to the money you get and the money you save?

The benefits go beyond money. The co-operative gives me the opportunity to share the experiences of other farmers – to see how they take care of their animals and solve pest and disease problems. I’m talking about real knowledge exchange.

There is also the feeling that we are doing something together as a village, as a community, as the people of Kabiyet. We are stronger when we are together than when we are doing our own things individually.

For Vincent and the other members of Kabiyet Co-operative Society who deliver their milk to the Kabiyet Dairies, the future looks bright thanks to their plan to work together.

Sound of tractor and noise of milk containers, five seconds then under

Those are the stories of two successful dairy farmers in Kabiyet. We are privileged to have with us in the studio two other people who are helping to make this success happen: the chairman of Kabiyet Dairies Limited, Mr. Abraham Rugut, and Mr. Eliud Makhoka, a farmer trainer.

Welcome to the studio.

Thank you.

Let’s start with you, Mr. Abraham Rugut. When was the co-operative society started?

We started our project in 2008. At that time, half the people in the area were living in poverty. Our business was launched on the 1st of June 2009. On that day, we received a cooler to chill our milk. The cooler was donated by the East Africa Dairy Development project. But on that day we didn’t know that we were going to get any milk! Fortunately, we managed to collect more than 1600 litres of milk. We had been talking to farmers since 2008. I must tell you that farmers in our area are known to be very difficult people to deal with!(Laughter)

In what ways are the people difficult to deal with?

Let me give you some history. The people living in Kabiyet came from Tinderet. These are the people who gave the Europeans a hard time when they were building the Kenya-Uganda Railway from Mombasa to Kisumu near the Ugandan border.(All laugh)

But we were prepared; we knew that things were not going to be easy. We talked to them for about four months before they agreed to join the co-operative. And, because we were open in our discussions, the farmers were very positive about the venture. That is why we were able to collect more than 1600 litres of milk on the first day of business. And the quantities rose. On the second day we collected better than 2200 litres and on the third day, we hit the 3000-litre mark. This was very impressive!

This trend continued and by December 2009, we were collecting about 25,000 litres of milk per day. At the moment, the dairy collects 36,000 litres of milk every day.

How many members does the co-operative society have?

We have a membership of about 4,200 farmers. Three-quarters of them have paid the membership share price of 5,000 Kenyan shillings (Editor’s note: about 60 US dollars). The rest have paid in part and are continuing with their payments.

You have said that you started by collecting about 1600 litres of milk per day, and within a short time, this rose to more than 30,000. What accounts for this dramatic increase?

First of all, we have worked very hard to teach farmers good methods of producing milk, in order to have more milk and higher quality milk.

Secondly, we have done several things that have motivated the farmers to join the co-operative in large numbers. Farmers in the co-operative pay 800 Kenyan shillings for artificial insemination services instead of the usual rate of 2,500 (Editor’s note: 800 Kenyan shillings is about 10 US dollars and 2500 Kenyan shillings is about 30 US dollars). We also have an agro-vet shop where farmers buy inputs at slightly lower prices than the prevailing market rates. They can also get the inputs on credit. The input charges are deducted from the payment the farmer gets at the end of the month for milk that is delivered to the co-operative society.

The third thing that we have done as an incentive for our farmers is to open a village bank where our farmers can deposit, save and withdraw their cash. Farmers are saved the trouble of travelling to Eldoret or Kapsabet for banking services. These towns are about 70 kilometres away, so this is a big saving in time and money.

What benefits have local farmers realized from this dairy co-operative?

Look at the volume of milk: 36,000 litres of milk every day represents a lot of money. This money has changed people’s lives. It is safe to say that the number of people living in poverty has been reduced. Before we started this project, milk in Kabiyet was selling at eight to 10 Kenyan shillings per litre. After the project started, the price rose gradually to 24 shillings per litre. This is a very big improvement to the incomes of farmers in this area.

When farmers join together in a group, they can ask for better prices because they have bigger quantities. For example, if I had 20 litres of milk, I could only sell at the local market. If I couldn’t sell to the local market, then I would sell to middlemen. But with a co-operative like ours, we can bypass all the exploitation by middlemen. Kabiyet Dairies acts like an agency. We are able to negotiate and sell directly to Kenya Co-operative Creameries, the biggest milk processor in the country.

What lessons have you learned in the course of developing this farmers’ co-operative?

We focused on bringing together farmers with a common interest. However, this alone cannot guarantee success. Kabiyet Dairies has made impressive strides in using better technologies to improve the status of our farmers. I want to give you two examples. First, our farmers are improving the quality of their herds through artificial insemination. That means they are moving away from the low-yielding traditional breeds and enjoying increased milk production. The other is the installation of a milk cooler, through a partnership with the East Africa Dairy Development project. We could not handle such a large volume of milk without a cooler. This is how technology is contributing to the success of the co-operative society.

Mr. Eliud Makhoka is Director of Lengo Agriculture and Demonstration Centre, based in Eldoret. He was contracted by the Kenya Dairy Board to help the Kabiyet farmers improve the quality of their fodder crops. Mr. Makhoka, what should farmers think about if they want to start and manage a profitable co-operative society?

It is said that two people cannot walk together unless they are in agreement. This is the most important principle of the co-operative movement: that the people who come together to form a co-operative should have a common interest. This might be the only thing that will hold them together when there is conflict, or when the group experiences hard times. Members must know exactly why the co-operative was formed and what contributions are expected of them.

Let me add that corruption is one of the biggest killers of co-operative societies. Examples of corruption include cases when co-operative leaders spend farmers’ funds on expenses that have not been approved, or purchases that reward scheming leaders and bring no returns to members. Farmers need to make sure that the co-operative has prudent financial planning and forward-looking leadership.

What is the future of the co-operative movement in Kenya?

Co-operative societies will be very relevant and important for small-scale farmers in Kenya and across Africa. Small-scale farmers in Africa face many challenges that can only be overcome through group efforts. For example, dairy farmers in a group can pull together resources and purchase a feed-mixing machine. They can purchase and share different kinds of equipment.

At the same time, co-operative societies improve the strength and resilience of communities in rural areas. Development organizations will tell you that it is much easier to implement a health or education project in an area where there is a successful co-operative society. Co-operatives help people have a better understanding of the common good. Therefore, people are more willing to take part in initiatives that benefit the wider community, rather than just thinking of their own families.

One last question to all of you: what needs to be done to ensure that the benefits you have talked about are spread to farmers all across the country?

I have two concerns: one is to increase the viability of existing farmers’ groups and wherever possible nurture them and transform them into full co-operative societies. This will help spread the benefits that come from farmers working together in an organized manner. Also, it is true that many farmers lack planning, management and financial skills. Co-operatives can help address this by offering farmers opportunities to acquire these skills.

Mr. Makhoka, let me put your question differently: what needs to be done to ensure that the co-operative movement moves to the next level?

We have to be creative in managing co-operative societies. Sometimes, the amount of money that is needed to purchase inputs means that farmers have little money in their pockets. Adding value to raw agricultural crops is one way to address this lack of cash. Farmers earn more if their co-operative societies are able to sell value-added products directly to the market.

Let me end by saying that, while a lot of effort has gone into the establishment of new co-operatives, we also have to look at ways to further develop new markets and the infrastructure needed to reach these markets. So, on the one hand, co-operatives have to work on adding value to their products and investing in marketing, even if it means joining hands with other co-operatives with common interests. On the other hand, the government should invest more on infrastructure such as roads, railways and information technologies to enable farmers to reach these markets.

Dear listeners, that concludes our discussion for today on how co-operatives can help boost farmer incomes. If you want to start a farmers’ group, joint marketing group or co-operative society, talk to the agricultural or livestock extension officer in your area, or visit the Ministry of Co-operative Development and Marketing offices in your district.

Until next week same time, bye for now.

Signature tune up, hold and out