DAIRY COOPERATIVES AND POLICY REFORM IN KENYA - EFFECTS OF LIVESTOCK SERVICE AND MILK MARKET LIBERALIZATION

Liberalisation in the dairy industry in Kenya is currently under way i n several forms, The urban milk market monopoly of the Kenya Go-operat ive Creameries has been lifted, Clinical veterinary and artificial ins emination (AI) services are no longer publicly supported in many areas . Private sector response to these reforms was expected to be greatest in the high-potential market-oriented dairy zones of Central Province , where the dairy farmers' co-operative societies play a central role in meeting the needs of dairy producers. A survey conducted by the aut hors measured the changes between 1990 and 1995 in milk marketing and service provision by the dairy co-operatives, Tabular and GIS analyses were used to evaluate the survey data. Dramatic changes in milk marke t patterns are apparent, in ways unintended by the policy reforms. Mos t notable has been a large increase in the role of the unregulated raw milk market. This helped increase real milk prices paid to producers by up to 50%, but also led to a steepening of the price gradient with distance from urban consumption centres, Large increases were observed in the provision of veterinary and AI services by the dairy farmers' co-operatives societies, whose producer client base and credit facilit ies may enable them to compete effectively with the independent privat e sector. Market liberalisation therefore expanded the role of the raw milk market and the participation of the dairy farmers' co-operative societies in milk marketing and the provision of input services, (C) 1 998 Elsevier Science Ltd. All rights reserved.