The story of Kiambaa Rural Dairy Cooperative Society
As a young African agriculture enthusiast, one of my encounters with destiny at the Fin4ag conference was during the field trips when we visited Kiambaa Rural Dairy Cooperative and met two happy couples that are living "dairy ever after" in rural Kenya, Mr and Mrs Nyaka and Mr and Mrs Njeka.
The two couples shared their life stories and how dairy farming through the network of a Savings and Credit Cooperative (SACCO) is impacting positively on their families and communities. I was astonished by how these humble and hardworking farmers have an intrinsic understanding of the markets.
During the trip, Mr Nyaka explained to us that African agri-food markets are growing relatively fast and the growing, modernizing and diversifying population in Kenya and beyond will need to be fed, especially with dairy products. "I'm in the right business!" Shouted the optimistic look on his face as he explained to the startled crowd of Bankers, Policy makers and investors standing around his field of napier grass.
The impact of the SACCO on rural farmers
In particular, the Kiambaa Dairy Cooperative comprises of about 2,500 smallholder dairy farmers and produces about 16,000 liters of milk per day. Through the SACCO, the farmers have organized themselves, trained themselves to save, by providing the incentive to borrow once you have consistently saved for about 3 months. As such, the small scale farmers have been gradually expanding their operations and profits.
In addition, through organization, the farmers have been able to access services, and benefits such as agricultural extension, transportation, refrigeration and processing that would have otherwise been inaccessible to individual farmers. In our language, they have over come infrastructural bottlenecks.
The Kiambaa Dairy Cooperative Society has evolved over the years to become a viable "business model" for and driven by smallholder farmers themselves. Currently, the society enjoys a "big brother" relationships with big market lenders such as Kenya's Cooperative Bank.
Here are a few more interesting achievements at Kiambaa:
1. They employ their own support staff for extension, administration, milk testing etc.
2. They have their own yogurt brand, "Dafina Yogurt"
3. They successfully advocated for a Value Added Tax exemption!
4. They have a dairy cow insurance scheme
The sustainability lessons
The Kiambaa Dairy SACCO is a model of how rural farmers have been able to help themselves, they have organised themselves; and have leveraged that to negotiate better input and output prices, to create relationships with bigger banks and dairy processors.
The Kiambaa SACCO has evolved into a fluid and functional system with default rates on credit of less than 2%. The SACCO is therefore now a safer and high potential haven for additional investment and greater partnership, for instance to access higher level technology to enhance their processing capacity so as to penetrate higher level markets creating more jobs.
Development partners, governments and private sector should invest time and resources in learning from models such as the Kiambaa SACCO so as to scale them up for sustainable and broad socio-economic development.
It was also during this conference that I got the wonderful opportunity to meet with some dynamic and inspiring smallholder dairy farmers iin Kenya such as Peris Njeka and Gladys Nyaka, togeter with their supportive husbands and families.
To the Kiambaa Rural Dairy Cooperative, I say thank you for such a warm welcome and inspiring encounter.