Better lives through livestock
Effects of COVID-19 on dairy sector in Kenya
J Auma, E J Rao, N Ndiwa, J Kimani and I Baltenweck
Policies, Institutions and Livelihoods Program (ILRI)
Accelerated Value Chain Development Program (AVCD)- dairy value chain component
July 2022

Overview of the dairy value chain in Kenya
Dairy in Kenya is
• 40% of livestock GDP
• 14% of Agriculture GDP
• 1.8 million smallholder dairy
households who account for 80%
of production
• 5.3 billion liters of milk produced
in 2016 up from 4.0 in 2007
• Supports employment for
400,000 wage workers at farm
level
• A recent problem has been flooding of the local market with cheap imports.
• In April 2020, the government instituted a 10% tax on these milk imports.
• Per capita milk consumption in
Kenya (110kg) is 4 times the
mean for SSA
• Most consumers buy milk once
daily in quantities of 0.5L-1L
• 18-20% of household income is
allocated to dairy products
• 60-70% of milk is marketed raw through informal
channels (offer low prices (20-50% cheaper than
processed milk) to low-income consumers and
better prices to farmers)
• >90% of processed milk is in the hands of the 3
major processors (has adverse implications for
producer price setting and consumer price
negotiations)
• Supports employment for 40,000 persons in
processing and marketing (70% in the informal
sector)

Expected effects of COVID-19 on the dairy value chain
Inputs & service
providers
- Supply chains &
sales interrupted by
low mobility
- Reduced demand
for inputs & services
from farmers
- Likely to experience
low sales
- Volatile prices &
cash-flow
Farmers
- Reduced access to inputs
& services with long-term
effects on productivity
- Reduced access to distant
markets & post-harvest
losses given perishability
- Demand from local
consumers may increase
- Reduced non-farm income
- ‘Fear of disease’ effects on
labour supply
Traders and
transporters
- Reduced
access to
distant markets
- Dominant
local sales may
increase
further
Processors
and
transformers
- Milk supply
for processing
reduced by
low mobility
- Reduced
access to
distant
product
markets
Retailers
- Dominant
local sales
increase
(closer and
cheaper)
- Better off
consumers
increase use
of long shelf
products
Consumers
- Likely to reduce expenses on
high-value foods like milk/reduced
consumption
- Reduced purchasing power &
low mobility
- Reduced demand from
restaurants, schools etc
- More purchases from neighbors
/local markets
- Fear of food contamination

Case study – dairy farmers in Nyanza province in Kenya
• This assessment aims at understanding the impact of COVID 19 pandemic on dairy
value chain actors in Kenya. Disrupted household incomes associated with lockdown
and restricted movements could lead to reduced demand for milk at household
level.
• This assessment focused on the ILRI-led Accelerated Value Chain Development
(AVCD) program regions, as the pandemic may erode the gains that the AVCD
project has made in terms of technology uptake, increased productivity, as well as
improved nutrition and household income.
• Assessment helps the AVCD project in planning responses to address possible
negative consequences of the pandemic on project beneficiaries and therefore
minimize the risk of derailing gains achieved in the last four years of implementation
in the region.

5
Data collection
• Study uses quantitative and qualitative approaches.
• Households are selected from AVCD database of 6,200
profiled by dairy farmer assistants (DFAs) in Nyanza
• Stratified sampling was used to randomly select 10-15
farmers per DFA yielding a sample size of 324
households.
• Face to face household interviews were done using a
structured questionnaire.
• Key informant interviews were conducted with select
value chain actors.
• Study assesses the effects of COVID-19 on dairy
producers during the pandemic outbreak and
government restrictions and after some restrictions are
lifted

6
Effect of COVID-19 on household and dairy activities
• Business owners are the most affected: 9 out
of 10 experienced a drop in income and about
70% of agricultural households had a
reduction in income.
• On average, daily income dropped by about
40% (from KES 600 before March 2020 to KES
360 after).
• About half of the dairy famers had difficulties
accessing inputs and services.
• Access to adequate food was reduced,
especially amongst self employees.
0
10
20
30
40
50
60
70
80
90
100
loss of income loss of business loss of job/employment lack of access to
adequate food
Difficulties access dairy
related inputs and
services
Farming (crop/livestock)
(N=225)
Formal employment
(N=28)
Self-employed (e.g. business)
(N=109)
Retired/Earning pension
(N=16)
% households experiencing effects of COVID 19

7
Effect of COVID-19 restriction on access to food and food
items
• 85% of the respondents reported having difficulties securing food for their households,
due to higher food price, lower availability, reduced income and restrictions of movements
• Siaya was the hardest hit with high food prices, Migori with unavailability of certain food
items
0
10
20
30
40
50
60
70
80
90
100
Homa Bay
(N=79)
Kisumu
(N=125)
Migori
(N=77)
Siaya
(=72)
Total
(N=353)
Inadequate income to access food High prices of food
Unavailability of some food items
% households reporting food security difficulties
0
10
20
30
40
50
60
70
80
90
100
Homa Bay
(N=90)
Kisumu
(N=142)
Migori
(N=82)
Siaya
(N=73)
Total
(N=387)
Region
Lack of income to buy food Not easily available like before
Higher prices than before Restriction of movement (stay at home)
Food security challenges (% households reporting)

8
Effect of COVID-19 on access to dairy management and
milk production
• Access to animal health services and purchased feeds is a challenge for many dairy farmers
• Reported milk yields reduced from 4.7 Litres per cow per day before March to 3.1 Litres after March 2020
% dairy farmers experiencing difficulties accessing inputs and services
0
10
20
30
40
50
60
70
80
90
100
fodder concentrate (dairy
meal, bran)
artificial insemination basic animal health
packages
Routine disease
prevention
Emergency clinical
services
Normal/routine
clinical services
Dairy
extension/technical
advisory services
Homa Bay Kisumu Migori Siaya Total

9
Effect on milk production and utilization
• With less milk produced, more milk kept for home consumption and lower prices offered by cooperatives, some
farmers stopped supplying milk to cooperatives
% farmers supplying milk regularly to cooperatives
0
10
20
30
40
50
60
Homa Bay
(N=100)
Kisumu
(N=153)
Migori
(N=96)
Siaya
(N=75)
Total
(N=424)
Before Covid-19 During Covid-19
0
10
20
30
40
50
60
70
80
90
Homa Bay Kisumu Migori Siaya Total
more milk retained for household consumption
low prices offered by cooperatives which discourages farmers
farmer found a new market outlet
current household milk production is lower than before
reasons for reduced milk delivered to cooperatives (%
farmers reporting reasons)

10
Effect on milk production and utilization- net effect
• Overall, the majority of dairy farmers experienced a loss in income, with about 1 in 10 farmers reporting an increase
in dairy income
• Cooperatives lost some market outlets- sale to restaurants, schools and other had institutions had to reduce prices
paid to farmers. This discourage some farmers from delivering milk
• Average milk prices were however relatively stable as milk was sold to other outlets
% farmers who made gains or losses for their dairy enterprise
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Homa Bay
(N=38)
Kisumu
(N=99)
Migori
(N=72)
Siaya
(N=29)
Overall %
(N=238)
No change made losses made gains
0
10
20
30
40
50
60
Before
March
2020
After
March
2020
Before
March
2020
After
March
2020
Before
March
2020
After
March
2020
Before
March
2020
After
March
2020
Homa Bay Kisumu Migori Siaya
Milk price (KES/Litres)

11
Summary
- This study focused on the production node of the dairy value chain in Kenya
- With reduced access to inputs and services, dairy farmers reduced
production, with negative effects on dairy income for most of them. Farm
gate milk prices were however relatively constant, as other outlets did not
reduce prices
- Overall daily income (dairy and non-dairy) dropped by about 40%
- 85% of the respondents reported having difficulties securing food for their
households, due to higher food price, lower availability, reduced income
and restrictions of movements

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