Milk Farmers to Be Paid KSh 65 Per Litre Starting This Month, Ruto Announces

President William Ruto has announced plans to increase the price paid to dairy farmers supplying milk to New Kenya Cooperative Creameries (New KCC) to KSh 65 per litre, in a move aimed at improving farmers’ earnings and strengthening Kenya’s dairy industry.

The announcement was made on Sunday, October 18, 2026, during the President’s visit to Kapsabet in Nandi County, where he outlined proposed reforms to the management of the state-owned milk processor.

The planned price increase comes as dairy farmers grapple with delayed payments, rising production costs and reduced milk production in some parts of the country.

The government has also pledged to clear approximately KSh 400 million owed to farmers who supply milk to New KCC by the end of October.

Ruto Promises Better Earnings for Dairy Farmers

The proposed KSh 65 payment per litre is intended to improve returns for farmers who supply milk to New KCC.

Dairy farming is an important source of income for many Kenyan households, particularly in the Rift Valley and Central Kenya, where thousands of farmers keep cows for commercial milk production.

However, the profitability of dairy farming depends on several factors, including the price farmers receive, the cost of animal feeds, veterinary services, transportation and timely payments for delivered milk.

When the cost of production rises or payments are delayed, farmers can struggle to meet their daily expenses and maintain milk production.

The proposed increase could therefore provide relief to farmers if it is implemented as announced and sustained.

The precise impact will depend on the applicable purchase terms, the timing of implementation and whether farmers supplying different collection centres can benefit from the revised arrangement.

Government Moves to Clear KSh 400 Million in Arrears

Alongside the proposed price increase, Ruto pledged to clear approximately KSh 400 million in outstanding payments owed to dairy farmers by the end of October 2026.

The President acknowledged that some farmers supplying New KCC had gone two or three months without receiving payment for milk already delivered.

Delayed payments can create serious financial difficulties for farmers, who must continue buying animal feed, paying workers and meeting veterinary expenses regardless of when their money arrives.

For small-scale producers, unpaid milk deliveries can also affect their ability to meet household needs and maintain their farming operations.

Ruto said the government intended to settle the outstanding debts and improve the payment system to prevent similar arrears from accumulating.

The proposed changes are expected to make payments more predictable and help farmers plan their operations more effectively.

However, farmers will ultimately judge the commitment by whether the money reaches them within the promised period.

New KCC Factories to Operate More Independently

The President also announced plans to decentralise the operations of New KCC’s eight factories as part of wider reforms intended to improve efficiency.

Under the proposed arrangement, individual factories would manage more of their own production and financial operations while supplying milk directly to nearby markets.

The current distribution arrangement has involved milk passing through centralised systems, including the Nairobi facility, before reaching consumers in other parts of the country.

The government hopes that allowing factories to serve regional markets more directly will reduce transportation and distribution costs.

Lower operating expenses could improve the processor’s efficiency and potentially help make milk more affordable for consumers.

The reforms are also intended to give dairy farmers a greater stake in the performance of the factories and strengthen their participation in the industry.

The proposed changes would represent an important shift in how the state-owned processor operates, although their success will depend on effective management, reliable milk supplies and transparent financial arrangements.

Ruto’s announcement comes at a time when Kenya has been experiencing pressure on its milk supply.

Recent reports have linked reduced deliveries to processors to prolonged dry conditions, declining pasture quality and the high cost of animal feeds.

When cows receive insufficient feed and water, their milk production can fall, reducing the amount available for processors and traders.

A shortage of raw milk can affect processing companies, distributors, retailers and consumers.

It can also create difficulties for dairy farmers who depend on consistent production to earn a regular income.

Improving the price paid to farmers may encourage continued production, but higher payments alone cannot resolve every challenge facing the industry.

Reliable access to animal feed, adequate water, veterinary services, efficient transportation and well-managed collection centres will also be important.

The government’s proposed reforms will therefore need to address both farmer incomes and the practical challenges affecting production and distribution.

Although the proposed increase is intended to improve farmers’ earnings, many Kenyans will also want to know whether the changes could eventually reduce the price of milk in shops.

The government expects decentralising New KCC operations to improve efficiency and lower distribution costs.

If the reforms reduce expenses and improve the availability of milk, consumers could potentially benefit from a more reliable supply.

However, the KSh 65 figure refers to the proposed price paid to farmers for raw milk, not the retail price of packaged milk.

The price consumers pay also reflects processing, packaging, transportation, distribution and retail expenses.

Consequently, an increase in the price paid to farmers does not automatically mean supermarket milk prices will fall.

The eventual impact will depend on production levels, operating costs, market conditions and how effectively the proposed reforms are implemented.

For dairy farmers, the key issues are whether the KSh 65 payment arrangement takes effect as announced, whether outstanding debts are cleared and whether future payments arrive on time.

Farmers also need a reliable market for their milk so that increased production translates into consistent earnings.

If New KCC improves its payment systems, strengthens regional operations and manages its factories efficiently, the proposed changes could help improve confidence among suppliers.

Nevertheless, the outcome will depend on implementation rather than the announcement alone.

As the end of October approaches, farmers will be watching closely to see whether the promised arrears are cleared and how the revised milk price is applied.

Do you think paying dairy farmers KSh 65 per litre will significantly improve their livelihoods and help address Kenya’s milk shortage? Share your views in the comments.

Newanchor feedback-opera-news-app@opera.com