The dairy industry is important for Kenya, which has more cattle than any other African country and the highest milk consumption of any developing country. More than 80 percent of milk is sold, unprocessed, by small-scale vendors who operate illegally in the informal sector.

The Smallholder Dairy Project (SDP) researched the importance of the sector and used its findings to influence policy for poor people. Analysis by two project partners, the Overseas Development Institute (ODI) and the International Livestock Research Institute (ILRI) considered how policy change that helped small-scale farmers and vendors was achieved.

Liberalisation of Kenya’s milk sector in the 1990s led to the collapse of the state owned dairy monopoly, Kenya Co-operative Creameries. Large numbers of small-scale milk vendors grew quickly to fill the gap. Demand for their produce, which was cheaper than the processed products sold by large private companies, was high.

Private companies saw informal vendors as unfair competition and used their influence with the regulator, the Kenya Dairy Board (KDB), to try to remove them. Vendors could not get licenses, were harassed by inspectors and were the subject of a media campaign led by large processing companies, which portrayed them as criminals and their milk as dangerous.

SDP research showed the importance of small-scale dairy farmers and vendors for pro-poor growth. The project therefore re-directed its efforts towards advocacy for policy change in favour of the informal sector. The project’s activities resulted in changed behaviour in all sectors:

• Most importantly, the KDB now works with small-scale vendors to help them get licenses and their officers no longer harass vendors.
• The new Dairy Policy recognises the importance of the informal sector.
• The campaign against small vendors by private processors has ended. Some processors have begun to work with vendors to encourage them to process their products.
• Many vendors are organising into groups. A number have received training in milk-testing and licenses from the KDB.
• Small-scale farmers are more vocal about the importance of the vendors to their businesses. Donors are also more supportive of informal traders in the dairy sector.

The Smallholder Dairy Project was influential in bringing about these changes. ODI and ILRI identified a number of aspects of the project that were essential to making that happen:

• Strong collaboration between government, the private sector, informal traders and civil society organisations was essential. Partnership with organisations like ActionAid, who had experience and contacts for advocacy, was crucial.
• Good, credible research was key to successful advocacy because it provided evidence to back up calls for acceptance of the informal sector.
• Continuous communication through workshops, the media and meetings influenced the behaviour change in all groups.
• Support from well-placed individuals was critical. In this case the project manager was from the Ministry of Livestock and Fisheries Development.
• Politicians needed to understand they would gain politically through supporting the informal vendors.

Source(s):
‘Informal Traders Lock Horns with the Formal Milk Industry. The Role of Research in Pro-Poor Dairy Policy Shift in Kenya’, ODI Working Paper 266, Overseas Development Institute: London, by Cokro Leksmono, John Young, Nick Hooton, H.G. Muriuki and Dannie Romney, 2006 Full document.

Funded by: Department for International Development, UK

id21 Research Highlight: 12 February 2007

Further Information:
Cokro Leksmono and John Young
Overseas Development Institute
111 Westminster Bridge Road
London
SE1 7JD
UK

Tel: +44 (0)20 7922 0300
Fax: +44 (0)20 7922 0399
Contact the contributor: c.leksmono@odi.org.uk , j.young@odi.org.uk

Overseas Development Institute, UK

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