DAIRY BUSINESS HUBS AS COLLECTIVE ACTION IN ENHANCING COMPETITIVENESS OF SMALLHOLDER DAIRY FARMERS IN KENYA Irungu R., J. Maiteri and J.M. Ndegwa

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