Dairy business hubs as collective action in
enhancing competitiveness of smallholder
dairy farmers in Kenya
Irungu R., J. Maiteri and J.M. Ndegwa
Conference on Policies for Competitive Smallholder Livestock Production
Gaborone, Botswana, 4-6 March 2015

INTRODUCTION
• Dairy sector accounts
• 3.5 % Kenya’s GDP
• 40 % national livestock GDP
• Smallholders produce 80 % milk output
• Involves 1.8 million households
• Employs many women and youths
• Contributes to nutritional and food security

INTRODUCTION…
• Dairy Business Hubs (DBHs)
• Collective farmer-owned milk bulking and
chilling plants
• Farmers access other essential services
• Collective action enhancing competitiveness
of smallholder
• Study objective was to characterize dairy
business hubs as inclusive action

MATERIALS AND METHODS
• Data obtained through secondary sources and
key informant interviews
• Dairy projects reports and published papers
• Semi-structured interviews and group
discussions with key informants (farmers,
business managers, input suppliers and
intermediary organizations)
• Focus group discussions with farmers
attending Dairy Farmers Field Schools
• Supplemented with direct observations

RESULTS AND DISCUSSIONS
• Dairy Business Hubs
• Collectively owned milk bulking and chilling
plants with many members (> 10,300)
• Provided essential services for dairying
• Linked smallholders to processors cost-effectively
• Improved access to milk market
• Increased milk quality and storage time
• Created economies of scale and recognition

CONCLUSIONS
• Dairy Business Hubs (DBHs) were inclusive
businesses that were ‘new’ ways of organizing
dairy smallholders
• Centred within organised groups of milk
producers with central milk collection and
delivery points with easy access by main
processors
• DBHs improved efficiency in milk production
and marketing

RECOMMENDATIONS
• Kenya government and other development
partners to support replication of this farmer-
owned business approach in the dairy industry
• Assist existing hubs to consolidate their gains
and maintain and grow their businesses
• Harness larger financial returns through DBHs
strategically forming apex processing companies

ACKNOWLEDGEMENTS
• KALRO, Muki Coopérative and Future Focus
Dévelopement for Financial support
• BIDPA and ILRI paid air fare, accommodation
and subsistance
• Conference organizers and paper reviewers
for accepting our paper