Dairy farmers oppose privatization of KCC

Nakuru,

Tuesday December 5, 2023

KNA by Jane Ngugi and Dennis Rasto 

Dairy Farmers from across the country have protested plans by the government to privatize state corporations including New Kenya Cooperative Creameries (KCC).

Through their representatives, the farmers said New KCC was the most active agricultural agency and privatizing it could have a negative economic impact and hurt the country’s food security.

The farmers instead urged the government to support the process of reverting New KCC to dairy producers saying they had invested heavily through a capital levy charged on their supplies over the years.

Farmers’ representatives who included Ms. Ann Wachira, Ms Lydia Kagema, Ms Miriam Bushati, David Koskei and Muchemi Nderitu urged the state not to privatize the New Kenya Cooperative Creameries.

“Privatization of New KCC is not ideal for the farming sector in the country. New KCC has been 100 per cent farmer-owned and the only resources the state has injected is Sh547 million to bail out those who had taken over the cooperative after it was mismanaged,” stated Mr Koskei.

 He indicated that New KCC had been fully modernized and it was an opportunity for farmers to start reaping the benefits instead of privatizing the agency.

“The only way the State can protect the interests of dairy farmers across the country is by securing multibillion assets owed by the milk processor,” he added.

 Wachira said the late former President Mwai Kibaki was instrumental in the revival of New KCC and promised to revert it to dairy farmers.

Speaking after a meeting in Nakuru town, that brought together dairy farmers from Nakuru, Murang’a, Embu, Uasin Gishu, Laikipia, Nyandarua, Kericho and Bomet counties, Wachira urged President William Ruto’s administration to conclude the process of handing the dairy processor back to its farmers.

“Milk deliveries to New KCC contribute 7 percent of the country’s Gross Domestic Product, 2 million Kenyans depend directly and indirectly on the milk processor. The firm has been a buyer of last resort to most farmers as during a glut it also accepts milk contracted by private processors,” she observed.

According to Kagema, New KCC receives a bulk of its milk from small holder farmers who deliver between 3 to 20 litres unlike private processors who have contracted large scale farmers.

She explained that New KCC is a strategic institution adding that the government should instead privatize corporations that are making huge losses instead of targeting well-performing agricultural bodies.

 Kagema added: “New KCC was founded in 1923 by colonial white farmers and has since grown until its collapse due to mismanagement years after independence. It has enormous assets owned by farmers who contributed through capital levies deducted from their milk supplies.”  

“New KCC assets are enormous and include land, factories, cooling plants spread across the country including in Miritini, Eldoret, Kapsabet, Kisumu, Runyenjes, Nanyuki, Iten, and even a building in Kampala, Uganda,” said Nderitu.

“The creamery has 40 acres of land in Dandora that was valued at over Sh4 billion over a decade ago. If the creamery is privatized, how will these assets be sold?” He posed.

 Nderitu argued that if New KCC is reverted to farmers, the government can have some shares to help in supervising and protecting it to perform well for the interest of farmers.

 Bushati said farmers will be demoralized if New KCC is privatized. “New KCC should be handed back over to farmers through shareholding in cooperative societies,” she said.

She noted that the Kibaki administration revived New KCC after its collapse and it was given a facelift through the modernization of facilities during former President Uhuru Kenyatta’s administration.

“We thought through its bottom-up economic ideals, President Ruto’s administration would empower farmers to own their creamery by reverting it back to them,” she said.

She appealed to elected leaders to support farmers to have the dairy processor reverted back to them.

 Bushati gave the history of how KCC was founded with contributions from farmers leading to purchase of all assets belonging to the company.

"All the assets belong to farmers and should simply be reverted to them. We will not allow the privatization," she said.

She said although KCC collapsed and was revived with assistance from the government, the money used by the state amounting to Sh570 million was too little compared to the value of the assets.

 Bushati observed that the Dandora New KCC plot minus machinery on it was valued at more than Sh4 billion yet the company had assets belonging to farmers all over the country.

She said farmers had bought all the KCC assets including land and property through deductions, which were known as capital levy.

The farmers said they recently petitioned Parliament over return of New KCC to them and they would still do the same.

The farmers vowed that they would use all means available to block the privatization of New KCC.

The government announced last week that it would privatize some state firms including New KCC, Kenya Seed Company, Rivatex and KICC among others.

Courtesy; KNA