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The East African : May 19th 2014
FUNDRAISER PTA bank in $160m loan deal for SMEs Page 41 BUSINESS MAY 17-23,2014 FROM THREE MILLION BAGS OF MAIZE TO EIGHT MILLION $11.5 million in 2012, and $3.4 million in 2011. In Kenya, raw milk deliveries Kenya adds milk to food reserve, and plans to raise its maize stock Move will help p≥otect fa≥me≥s f≥om p≥ice volatility and ensu≥e constant supply of milk to processing plants rose by 5.6 per cent to 523 million litres, up from 495.2 million litres the previous year. “However, this amount of deliveries was still depressed compared with the performance recorded when a total 549 million litres were sold to processors in 2012,” says Kenya’s Economic Survey, 2014. The survey adds that during the same period, the output of fresh milk and cream from processors increased by 22.7 per cent while that of cheese rose by 4.9 per cent. The current annual milk production in Tanzania is estimated at 1.15 billion litres, mainly produced by smallholder farmers, with about 813 million litres (70 per cent) coming from indigenous cattle and 337 million litres (30 per cent) from improved dairy cattle. However, according to the Tanzania Dairy Board, milk production is still very low due to low numbers of dairy cattle. As a result, the country imports 25- 16pc By JEFF OTIENO The EastAfrican K enya plans to broaden its strategic food reserves to include non-cereal foods, in a move aimed at improving the country’s food security status. The Ministry of Agriculture estimates that it requires at least Ksh5 billion ($58.8 million) to transform the existing strategic grain reserve into a food store for various foods. This will cushion farmers from losses occasioned by a glut. Kenya currently has a strategic food reserve managed by the National Cereals and Produce Board, which only stocks maize and currently holds about three million bags. Plans are also in place to raise the current maize stocks to at least eight million bags. Milk is one of the non-cereal foods to be included in the country’s strategic food reserve strategy to help protect dairy farmers from price volatility and ensure constant supply of the commodity throughout the year. The Economic Survey 2014 released a fortnight ago shows that the agriculture sector recorded a growth rate of 2.9 per cent in 2013, down from 4.2 per cent in 2012. Overall, the sector’s contribution to the general economy marginally increased to 25.3 per cent from 24.6 per cent. Improvements in rice, milk, wheat and potato production made up for the low output from the traditional staples such as maize and beans. “The government will establish strategic reserves of long-life milk and milk powder,” said Machira Gichohi, chief executive officer at the Kenya Dairy Board. East African countries have been struggling to feed their growing populations and so broadening food reserves to include non-cereals is one way of improving the region’s food security status. Mr Gichohi said the reserves will not only ensure adequate supply of the product, but also improve the country’s nutrition status. Milk is rich in vitamins and minerals and is recommended by the World Health Organisation as one of the foods that can help fight malnutrition on the continent. The recommended consumption level by nutritionists is at least 200 litres per head per annum. Kenya also plans to include canned beef and fruit in the food reserve in the long term. In the meantime, the government plans to expand grain reserves to include beans, sorghum, millet and others. The country’s dairy industry currently faces stiff competition from Uganda. According to industry players, milk from Uganda is gaining a market in Kenya since it is selling at a lower price than milk produced in the country. Dairy Producers Association chairman Peter Lelei said the 16 per cent value added tax charged on animal feeds has increased the cost of production. According to the Dairy Development Authority, total milk production in Uganda grew from 460 million litres in 1990 to 1.6 billion litres in 2011, with per capita milk consumption growing from 16 litres in 1986 to 58 litres by 2010. The value and quantity of milk and dairy exports was projected to reach $12.1 million last year, up from MILK PRODUCTION UGANDA: According to the Dairy Development Authority, total milk production in Uganda grew from 460 million litres in 1990 to 1.6 billion litres in 2011. KENYA: In Kenya, raw milk deliveries to processing plants rose by 5.6 per cent to 523 million litres, up from 495.2 million litres the previous year. TANZANIA: The current annual milk production in Tanzania is estimated at 1.15 billion litres. RWANDA: According to the Rwanda Agriculture Board, production increased from 189,827 tonnes in 2007 to 257,197 tonnes in 2008. MARKET PATTERNS Regional bourses tend to be busy in the third and fourth quarters of the year. Page 42 39 The VAT charged on animal feeds, increasing the cost of milk production in Kenya 30 million litres of liquid milk equivalents annually, mainly from neighbouring countries. Per capita milk consumption in the country stands at 45 litres per annum. Rwanda’s milk production has also been on the increase. According to the Rwanda Agriculture Board, production increased from 189,827 tonnes in 2007 to 257,197 tonnes in 2008. It further increased to 442,337 tonnes in 2011 and 503,130 tonnes in 2012. As a result, the country’s milk imports from the region have declined sharply in the recent past. Agricultural economist George Mwangi said trade in milk and milk products is expected to increase as the five EAC countries strengthen integration and eliminate tariff and non-tariff barriers. The region’s strategic grain Milk production and consumption in the region has increased. Picture: File reserves were established after Independence and are exclusively for grains like maize and beans. However, there has been a push by agricultural experts for countries to establish reserves for non-cereal foods to improve food security.
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