Proposed dairy industry regulations are a euphemism for hostile takeover

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By Shadrack Muyesu

Mursik may soon be illegal in Kenya if proposed regulations to govern the dairy sector are adopted. According to proposed the guidelines which seem to favour large milk companies at the expense of the small scale producer, the Dairy Industry (Licensing) Regulations of 2018, farmers will no longer be able to sell, offer sale or expose for consumption any milk in its raw form without  a license issued by the Dairy Board.

The regulations further propose that producers will not be able to buy or sell raw milk unless they do so in bulk, through organised groups of farmers including cooperatives and registered companies authorised by the Board or under contractual agreements with processors. The common practice of selling a litre or two to a consumer for 20 shillings will no longer be possible.  Only those producing 200 litres and above may be exempted, but even then, only when selling to a producer.

A person handling raw milk for purposes of selling in bulk will also be under obligation to ensure that the milk is pasteurised within two hours of milking.

The Kenya Dairy Board says the new laws are in the interest of health but these rules do not take into account the many farmers in rural areas without access to such facilities, who sell small for daily upkeep or who deal in traditionally fermented milk – a matter of cultural heritage in some counties.

The most curious thing about the proposals perhaps, is the blanket power it gives the Board to regulate the industry. While the regulations provide for licensing, they do not provide the criteria upon which such licensing will be carried out. They give the Board a free hand in deciding the compliance of a producer and the continuing validity of a license. At the very least, the gap sets the stage for bribery and harassment and undermines any noble intentions of the regulations. Such gaps also bring into question the constitutionality of the regulations, as they fall way short of the established principle that laws must be complete, easily discernible and self-informing.

Dynasties or the people?

According to the Board, the proposals are necessitated by the need to update policy and regulations with the liberalised nature of the industry (which may be interpreted as criminalising the sale of milk directly to neighbours); adopting the industry to changing technological innovations; responding to consumer demands with regard to quality and safety as well as enabling access of Kenyan produce to markets. The ordinary eye will however, not fail to read the actual mischief behind the regulations.

Should they pass, the biggest beneficiary of the changes will be the Kenyatta-owned Brookside Dairy Limited – by far the market leader in the dairy industry. Brookside owes its dominance to an aggressive acquisition strategy that has seen it take over established competitors such as Molo Milk – initially part of the Buzeki Conglomerate; Sameer Agriculture and Livestock Limited (SALL), the Sameer Group subsidiary which owns Daima Milk; Delamere Milk and Yorghut; Kilifi Milk, Tuzo, Ilara, Lea and Ever Fresh and crippling those who have resisted take-over, like New KCC.

With these acquisitions, Brookside now controls 40 percent of the market share with New KCC and Githunguri Dairy holding 35 percent and 10 percent respectively. The rest is the domain of small scale farmers in rural areas which, vide the regulations, the dominant player is apparently making a play for. With their passage, a near formality and the rumoured take-over of Githunguri Dairy, it is plausible the biggest player will soon enjoy a 70 percent market share. 

Other suspect regulations

But it is not just the Dairy Industry (Licensing) Regulations of 2018. There are also the Dairy Industry (Returns, Reports and Estimates) Regulations, 2018 which propose that producers file monthly returns and production estimates with the Board.

The Diary Industry (Produce Traceability) Regulations, 2018 propose that producers label their produce to enable consumers understand its production and content as well as allow the Board trace its “history”. The producer will also be required to provide his name and address for purposes of “monitoring”.

The Dairy Industry (Pricing of Dairy Produce) Regulations, 2018 propose that the price of milk be determined by its quality and not the quantity. According to the regulations, among the parameters to consider are heavy things such the somatic cell count, total bacterial count, added water values, total solids contents, butterfat contents, aflatoxins and most worryingly, any other parameter as may be determined from time to time and be gazetted by the Board.

Inter alia, the Dairy Industry (Management) Regulations, 2018 provide for the inspection of all dairy produce, from their point of production by inspectors from the Board for compliance with Kenya Dairy Board standards. Licenses may be cancelled for those whose product is found to fall short of the lofty standards contemplated by the regulations. Worryingly again, the regulations do not provide the criteria for assessment, instead allowing the Board to set and revise the standards at its own discretion. The regulations criminalise the sale of any dairy products that do not meet the standard. They also provide construction requirements for handling dairy produce which the small scale producer will never be able to meet.

Part 12 of the management regulations carries milk dispensing requirements. Foremost, it prohibits the operation of a milk dispenser (milk ATM) without a valid license issued by the Board. Further, it restricts the operation of such machines to persons with the capacity to assess the quality of the milk and requires these persons to maintain records of all the tests carried out. Finally, it restricts the said persons to only receiving and selling pasteurized milk.

The Dairy Industry (Imposition of Cess and Levies) Regulations, 2018 on the other hand allow County Government to tax primary milk producers – essentially, those selling a cup or two to neighbours. Consumers will also have to pay “regulatory levy” on any milk purchased. Those who import dairy produce will also have to part with an import levy of 10 percent of the transportation charges and market value of the products. This is over and above the current import duty. Farmers who flout the rules could pay a fine of Sh500,000!

Two things emerge from these changes. First, by dint of the definition given to “milk producer” which includes any person who produces milk for sale, the small scale produce will be elbowed out. This not only cuts off a major source of income for many ordinary Kenyans, but it also denies them access to quality milk. Its common knowledge that while processing eliminates harmful bacteria, companies also take advantage to introduce additives and water, which is equally harmful to the body.

The mandatory improvements will also make milk production very expensive. This cost will be passed to the choice-less consumer. The lofty standards also signal the elimination of smaller dairy companies especially those that rely on imports. (

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