Ruto Unveils Plan to Decentralise New KCC Factories to Lower Milk Price

President William Ruto has announced plans to allow Kenya Cooperative Creameries (New KCC) to operate its eight factories independently, in a move aimed at reducing milk distribution costs, easing shortages and lowering prices for consumers.

Speaking during a church service in Kapsabet, Nandi County, Ruto said the reforms would end the current system in which milk passes through the Nairobi facility before being distributed to other parts of the country. He said each factory would serve its surrounding markets directly, reducing the need to transport milk over long distances before it reaches consumers.

“The issue of transporting all the milk from one single place to the rest of the country will now come to an end. Moving forward, all KCC factories will now operate independently from each other in order to solve the milk shortage issue, and also drive the milk prices down,” Ruto stated.

Under the existing arrangement, the Nairobi facility serves as a central point for distribution to other regions. The government expects the proposed changes to reduce transport expenses and improve the efficiency of milk delivery.

Ruto said the new model would draw lessons from the Kenya Tea Development Agency (KTDA), which operates through a decentralised production system while retaining centralised corporate structures for functions such as bulk procurement and marketing. The proposed changes are intended to give individual KCC factories greater responsibility for supplying their respective markets. 

Alongside the planned reforms, Ruto pledged that the government would pay approximately KSh400 million owed to dairy farmers by the end of October. The payment is expected to help farmers meet production expenses and sustain milk output.

Kenya's dairy sector continues to face pressure from prolonged dry conditions, declining pasture quality and high animal feed costs. These challenges have increased the cost of maintaining livestock and made it harder for farmers to sustain production, contributing to supply constraints and higher prices for consumers.

The government is also considering ways to diversify milk production to reduce the sector's vulnerability to changing weather conditions. Ruto has directed the State Department for Livestock Development to examine the potential of improved camel and water buffalo breeds as alternative sources of milk.

The proposal comes as the government continues to invest in infrastructure intended to protect milk supplies and reduce losses. Agriculture and Fisheries Cabinet Secretary Mutahi Kagwe told a Senate committee on 16 September that the State Department for Livestock Development had procured milk coolers during the 2024/2025 financial year at a contract cost of KSh1.4 billion.