The document provides background information on Kenya's dairy industry and the Kenya Dairy Board (KDB). It discusses the history and establishment of KDB, its mandate to regulate and promote the dairy industry. It outlines challenges facing the industry such as animal health and feeding issues as well as milk quality problems. Priority intervention areas are identified and stakeholder collaborations mentioned. It proposes the introduction of a Dairy Development Levy to strengthen KDB's capacity and support industry development initiatives.

8. Kenya Dairy Board Management Structure Board of Directors Managing Director Technical Services Department Finance Department Administration Department The Board of Directors consists of 14 members appointed by the Minister of Livestock Development and representing various actors in the Dairy value chain Representation MoLD MoF

10. Kenya Dairy Board - Branch network KDB has presence in the major milk production and consumption zones of our country

14. Current status of the industry cont ’ Potential to offload excess production through exports

15. Current status of the industry cont’ Drop in 2008 was attributed to the effects of the post election violence The formal sector accounts for about 20% of the marketed milk

27. On going programs in the industry Program Financier Implementor Main objective Kenya Dairy Sector Competitiveness Project (KDSCP) USAID Land O’ Lakes Increase incomes to smallholder dairy farmers East African Dairy Development Project (EADDP) Bill & Melinda Gates Foundation Heifer Project, World Agro-forestry center, ABS, Promote marketing of milk and strengthening of SBO’s Improving Quality Assurance in Milk Markets (IQAM) MESPT SITE Enterprise Promotion Improve quality along the dairy value chain by building capacity in SME’s Small-Holder Dairy Commercialization Project IFAD MOLD Commercialize dairy production

29. Challenges facing the Kenya Dairy Board Constraint Proposed interventions Limited resources to fully and effectively undertake its mandate Improve income base e.g. introduction of Dairy Development levy Slow formulation and enactment of Dairy policies/regulations Speed up review/enactment of relevant policies and bills e.g. Dairy policy and bill Inadequate human resource capacity Recruit more personnel/build capacity of existing staff Inadequate working tools Construct a head office, acquire enough vehicles, establish a laboratory facility etc

38. Comparison of KDB levies with other Parastatals Organization Mandate Levies charged Budget 2008/2009 (Ksh millions) Catering and Tourism Development levy Trustees Promotion of training, marketing, and the development of tourism industry in Kenya 2% of sales 855 Kenya Sugar Board Regulating, developing and promoting sugar production and marketing 4% of the ex-factory price at the mills and 4% C.I.F on imported sugar 1,500 Electricity Regulatory Board To regulate production and distribution of electricity 3cts/Kwh 134

39. Comparison of KDB levies with other Parastatals Organization Mandate Levies charged Budget 2008/2009 (KSh. millions) Tea Board of Kenya Develop. Promote and marketing of tea 1% of sale price of Kenyan tea 384 Kenya Plant Health Inspectorate Services Coordinate all matters relating to crop pests and diseases 1% of value of imports/exports 887 (inclusive of a G.O.K grant of 400 million) Kenya Dairy Board Regulate, develop and promote the dairy industry in Kenya 20 cts/LTR of traded milk and 7% C.I.F on imported milk 146

40. Dairy Development levies in other countries Administrator Payments Uses Danish Dairy Board Milk Levy fund paid by milk producers and processors At rate of Kshs 5.60 per KG of milk Support to a number of activities including provision of dairy information, research and development, market promotion etc Dutch Dairy Board Dairy levy paid by milk producers and processors Dairy research, information, animal health and quality issues Canadian Dairy Commission Dairy levy on milk paid by producers, processors and distributors Enforcement of regulations, market promotion, support to dairy information