Kenya's Blueprint

The collapse of KCC and the poor management of other economic institutions provided the growing political opposition with ammunition to fight the government. By the end of 2001, the opposition had formed a loose alliance comprising mainstream opposition political parties. They began mobilising support around issues such as economic decay, collapse of agricultural institutions such as farmers‟ bodies, decaying infrastructure, and widespread corruption among others. And in December 2002, Kenyans voted in support of the Presidential candidate, Mwai Kibaki, from the opposition coalition – NARC.

The new President constituted a government in 2003. Members of the government included individuals whose political careers could be traced to their roles in activist movements and other pro-reform groups of civil society. The government reviewed its pre-election manifesto and the Poverty Reduction Strategy Paper to develop a national development strategy – Economic Recovery Strategy for Wealth and Employment Creation. Among the strategies identified as critical for economic recovery was revival of the agricultural sector and its institutions. This provided the entry point to rapid revival of various sectors. There were several reformers in the new government and some of them were keen to follow the party‟s blueprint for reforms.

The taking back of KICC aroused huge public excitement and expectation. It inspired other cabinet Ministers to design strategies that would show results. Radical reforms were effected in several sectors.

Liberalisation of the Milk Industry; Nail on the Coffin

1992 marked an end of an era for KCC’s 60 years monopoly, the milk market was opened; anybody would directly reach out to customers. 

Competition in the milk market led to sharply higher farm-gate prices, real rise in prices was noted between 1993 - 1995 from Ksh. 6 to Ksh. 14. However, the introduction of cost sharing for inputs and services as a result of the reduction in subsidies in the late 1980s meant that many farmers were not able to respond to higher prices due to problems accessing inputs and other support services.

Whilst price increases as a result of liberalization were modest in real terms, liberalization also led to increased price volatility for producers. This is in part the inevitable result of replacing an administered pricing system with market competition. However, changes in the processing industry also contributed to this increased volatility.

A receiver manager was appointed and a board appointed to run the body. In 2000, the receiver issued a tender for sale of KCC. Influential politicians allied to the government and the ruling party quickly formed a new company – KCC Holdings – claiming that they were dairy farmers. They submitted a tender to buy the company.

They paid Ksh. 400 Million only to acquire the company and in March 2001 renamed it KCC – 2000 Ltd. They bought KCC at a low price yet assets value of KCC was estimated at about Ksh. 6 Billion. 

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The content used on this episode is adapted from the The Revitalisation of Kenya Cooperative Creameries: The Politics of Policy Reforms in the Dairy Sector in Kenya by Prof Rosemary Atieno & Prof Karuti Kanyinga

The Making of an Empire

This is the first episode of season 1 of Kenya's Blueprint. The episode takes a deep dive into what led to the formation of Kenya Cooperative Creameries.

It explores the impact the Swynnerton Plan of 1954 had in the agricultural sector for the indigenous population.

The 1958 act that led to illegalizing of commercial sale of raw milk through the Public Health Act and formation of Kenya Dairy Board that enforced the act.

Register on our website to receive more resources on the dairy sector.

The content used on this episode is adapted from the The Revitalisation of Kenya Cooperative Creameries: The Politics of Policy Reforms in the Dairy Sector in Kenya by Prof Rosemary Atieno & Prof Karuti Kanyinga

What Went Wrong?

First series, a deep look at KCC. First episode release on October 10, 2020.