Agriculture & Microenterprise Development

Success Story

Siongiroi Dairy Plant fuels development

In one of the best demonstrations of the powerful socio-economic impact of a successful project, Siongiroi Dairy Plant is positively changing many lives in the Bomet District of Kenya. From dairy farmers to farm workers, transporters and other traders who derive income from milk delivered to the plant, the spin-off is massive. Slowly, a vibrant market centre is developing around the plant and standards of living within the locality are improving.

"Siongiroi Dairy Plant has changed this place remendously," says the Chief, Siongiroi Location, r. John Muge. "It has helped in reducing hunger, since people are assured of income. Relief food that the people used to rely on during lean times is now history. Paying school fees is no problem for many. We have also witnessed the development of kiosks, butcheries, restaurants, lodges and related businesses."
He says the increase in the number of animals slaughtered per day from two to eight in a few years is testimony to the centre's rapid growth.

With USAID's financial and technical assistance through Technoserve Incorporated (TNS); American Breeders Service/Total Cattle Management; and Heifer Project International (HPI), Siongiroi Dairy Farmers' Society started building its Shs.6.2 million plant in early 1998 and began operations later in the same year. The coming of age of the plant largely demonstrates that with a little outside help, farmers can attain their objectives and help drive rural development. Clearly, what most of them lack is technical assistance and guidance to tackle problems that could be preventing them from realizing their true potential.

For farmers within Siongiroi and neighbouring divisions, milk marketing has been a challenge for almost a decade. Mr. Sigowo Rotich, the chairman of Siongiroi Dairy Society's management committee sums up the frustration and despair that gripped dairy farmers seven years ago and almost led to the collapse of the industry in the area. "We were contemplating selling our improved cows and keeping local ones following the collapse of the now defunct Kenya Co-operative Creameries (KCC) parastatal," says Rotich. "KCC had collected about 20,000 Kilograms of milk and failed to pay us. We were experiencing problems with marketing our milk. Our children were often out of school for lack of fees."

It all began in 1995 when a group of dairy farmers met at Chebunyo market to explore ways of marketing their surplus evening milk. After deliberations, they approached the manager of the sole milk processor in the country by then, the Kenya Co-operative Creameries (KCC). The Sotik KCC branch manager advised them to seek assistance from the Ministry of Co-operative Development, who in turn recommended several non-governmental development organizations specialised in the kind of services they were seeking. It was in this manner that the farmers were linked with Technoserve Incorporated (TNS) and Heifer Project International (HPI), then operating under one management team.

With USAID funding, Technoserve and HPI conducted a feasibility study on behalf of the farmers. Later in 1996, a focus group discussion with farmers within Siongiroi Division facilitated by HPI led to an agreement on the way forward. Mr. Philip Kelel, the management committee secretary explains " We agreed to contribute Shs.5,200 each, Shs.200 as registration fee, and Shs.5,000 as share contribution. We continued to collect money and in 1998 approached the Bomet County Council, who gave us the current 1.8-acre plot on which the plant now stands,"

On September 1, 1998, already registered as a society, the farmers employed six members of staff to run and manage the plant on its behalf. A week later, a cooling plant was supplied by Tetra Park, a private packaging company and the plant started operation with an intake of 632kg. This increased to 5,000kg by December the same year. By February the next year, intake had shot up, to over 10,000kg, exceeding the installed capacity of 6,600kg. Efforts were made by the management staff and committee to get a hired tank from Spin Knit Dairy Ltd. The tank enabled the plant to receive a maximum of 12,000 kg per day.

Currently, the plant has an installed capacity of 18,900kg but is receiving 15,000kg of milk per day which is transported by road tanker to Spin Knit in Nakuru and Premier Dairies in Kericho. The farmers earn over KShs. 5,800,000 ($ 75,000) per month from milk sales through the dairy plant.

Average milk production per cow is six Kilograms, but this is expected to improve owing to USAID's assistance through American Breeders Service/TCM to provide high quality semen through artificial insemination (AI) to improve the dairy herd within the locality. ABS/TCM has trained farmers on how to monitor and detect heat in animals and the right time to artificially inseminate cows on heat. Already, over 600 AI calves have been born and they are expected to sustain milk production. Farmers have also been trained to provide clean, high quality milk. Currently, milk is collected from Bomet district, and parts of Bureti and Transmara districts.

Mr. Richard Ng'eno, the head of reception and procurement at the plant says they experience seasonal fluctuation of intake owing to changing pasture regimes associated with dry climate in the months of January-February and October-November. To help farmers cope with the dry season, USAID and Tetra Park further provided funds to Heifer Project International (HPI) to train the farmers on animal feeds and water conservation for dry periods. Through the facilitation of HPI, the Siongiroi Dairy Society management committee has toured processing plants in Eldoret, Nakuru, Limuru, Ol Kalou and Nairobi (Spin Knit). HPI owns 40 per cent of the equity for the purpose of sustained support, while the farmers' society, whose current membership stands at 2,054 owns 60 per cent.

Siongiroi Dairy Plant intends to start processing milk once daily intake reaches 60,000 kg. "This will be, hopefully, within the next three years," says Mr. Joseph Koech, the plant accountant.

Siongiroi Dairy Plant Case Study: Cycling for wealth
WILSON Korir, 25, has big dreams. Arriving at the Siongiroi Dairy Plant with several containers of milk, he wipes sweat off his face, then breaks into a big grin. He has just cycled 10 kilometres with a load of 342 kilograms of milk.
He anticipates that several more deliveries in a few months to come, he will be the proud owner of a vehicle and many grade cows. He believes the goal is near, since he has already made some savings towards this end. Moreover, he is assured of prompt payment: every two weeks at KShs.14 to 20 per litre.

Korir's enthusiasm reflects the general mood among dairy traders in Siongiroi division of Bomet district since the Siongiroi Dairy Plant was constructed in 1998 by the Siongiroi Farmers' Society with USAID funding. To date, dairy farmers and traders in the division have benefited from various forms of services including introduction of highly productive US bovine genetics; and training on animal productivity and artificial insemination, fodder production and conservation, disease control, milk handling, record keeping, and marketing among others, provided with USAID's technical assistance through three organizations namely: Technoserve Incorporated (TNS); American Breeders Service/Total Cattle Management; and Heifer Project International (HPI). The plant has triggered a spirit of entrepreneurship among many unemployed individuals in the division with far reaching spin-offs. Korir is one such enterprising individual whose hope for a brighter future seems vivid with the presence of the plant.

Before joining the trade, Korir had tried his hand at shop keeping on completing his primary school education only to realize that he could not survive on it. Like many youth in his neighborhood, he grappled with years of unemployment and idleness. Then in 1995, he noticed that milk traders were doing good business. He opted to take on the business and has never regretted his decision. He started off by selling milk to hawkers supplying Kisumu and Narok districts neighbouring his home district. Three months down the line, he again realized that he was headed for doom. The hawkers went for days without paying him his dues and the unhygienic containers used by the hawkers earned them a bad reputation of causing ill health further destroying his business.

However, he says he got completely hooked to milk trading when he started delivering to Siongiroi Dairy Plant. He recalls borrowing a friend's bicycle for his first deliveries in early 1999 having received training on milk handling and equipped with special hygienic containers recommended by the plant management. Three months later, Korir bought his own bicycle with proceeds earned from milk deliveries. Most of the farmers from whom Korir buys milk produce between one and two litres in the morning. They find it uneconomical to deliver such small quantities to the milk collection plant by themselves. So, they sell to him.

Three years since his first delivery to the plant, Korir now has his own milk supplier account number, he delivers over 200 litres daily using four bicycles with the help of three assistants. Korir proudly explains that the bicycles were purchased second hand with earnings from milk sells to the plant and milk transportation services. With annual earnings of over KShs. 840,000, Korir can afford to pay his assistants and save enough for his future investments.

Many would not believe that he is only a milk transporter and not an established dairy farmer. He only bought his first two dairy cows recently but plans to buy lots more in future. Korir says: "There are many unemployed youths out of school who are doing nothing. I have not been idle; I make a turnover of KShs. 2,800 a day."
So successful has he been, that many youths out of school seek him for advice on how to start the milk business. They would like to know where to get capital, but he tells them anyone who is serious cannot be deterred by lack of money. "Like me, they can borrow."

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