New proposed dairy industry bill orders for timely payments to farmers

KENYA – The Agriculture Ministry in Kenya has proposed a new law under the Dairy Industry Bill, 2024, which mandates milk processors to pay dairy farmers within 30 days.

This legislation addresses the persistent issue of delayed payments, which often leaves farmers waiting months to receive their dues.

According to the bill, “A dairy business operator shall promptly pay primary producers for milk delivered within 30 days after the end of the month in which the milk supply is made.”

In addition to ensuring timely payments, the bill introduces a guaranteed minimum price for raw milk to protect farmers from exploitation, particularly during market gluts. This minimum price will vary depending on the animal species producing the milk.

“The guaranteed minimum producer price for raw milk shall be as prescribed and shall be based on different animal species,” the bill states. 

The proposed legislation also emphasizes quality-based pricing. The Kenya Dairy Authority (KDA), which will replace the Kenya Dairy Board (KDB), will set minimum milk prices based on its quality, incentivizing farmers to produce high-quality milk.

 “The Authority shall promote quality-based pricing of dairy produce in consultation with relevant stakeholders and prescribe different grades of raw milk for the purpose of quality-based pricing.”

Moreover, the bill seeks to devolve the role of licensing milk producers to county governments, aligning with the new Constitution’s designation of agriculture as a devolved function. The KDB currently licenses primary milk producers, but counties will assume this responsibility under the new bill.

“A person who intends to produce milk for sale shall apply in the prescribed form to the relevant county government to be registered as a primary producer,” the bill notes.

However, the KDA will retain the mandate of registering dairy business operators, dairy equipment suppliers, and dairy processing aids suppliers, with regulatory permits valid for twelve months.

The bill introduces mechanisms for recalling defective milk from the market to ensure the safety and traceability of dairy products.

“A dairy business operator shall withdraw or order the withdrawal or recall of dairy produce from the supply chain if there is evidence that the dairy produce poses or is likely to pose a health risk to consumers.”

The KDA will have the authority to recall and penalize processors distributing defective milk.

Finally, the bill stipulates that milk processors must have contracts with farmers before purchasing milk, further formalizing the transactions and ensuring clear terms between parties.

If passed, the Dairy Industry Bill 2024 promises significant improvements in the dairy sector by ensuring timely payments, fair pricing, quality assurance, and enhanced regulatory oversight.