Kenyan Dairy Cooperatives Reap Benefits from New Business Skills

ACDI/VOCA Helps Kiirua Dairy Co-op Rebuild

Agriculture fuels development in Kenya, and farmers’ co-ops—which connect farmers to markets and each other—are vital for growth, contributing an estimated 45 percent of Kenya’s GDP. Until recently, however, many co-ops did not operate as businesses.

After Collapse, Dairy Co-op in Heart of Kenya Rebuilds

The Naari Dairy co-op in Kiirua, an agricultural area about 150 miles from Nairobi, was one of these small, local economic stimulators. The co-op supported dairy farmers by helping them sell their milk and by providing animal feed on credit. But during the 1997 liberalization of Kenya’s economy, cooperatives that had been tethered to the state suddenly needed to operate autonomously. The shift to independence damaged the infrastructure of some co-ops, and many fell apart from corruption, mismanagement and profit loss. The Naari Dairy was among them. The co-op collapsed due to embezzlement and dairy farmers in Kiirua were left without key support services that helped them flourish.

When several of the members of Naari Dairy banded together to start an informal group that could pick up where the original co-op left off, ACDI/VOCA provided key assistance that helped the nascent organization, registered as the Kiirua Community Based Organization (CBO), rebuild.

ACDI/VOCA’s Cooperative Development Program (CDP) supports food security in Kenya by building the capacity of co-ops like the Kiirua CBO. With soup to nuts training—from instruction in good governance and leadership, to education in production and marketing techniques—ACDI/VOCA helps Kenyan co-ops improve revenue and become self-reliant business enterprises. The program currently works with 5 organizations, and is in the process of involving several new cooperatives.

Technical Assistance Improves Efficiency

Through CDP, ACDI/VOCA began supporting the Kiirua organization by helping them define a strategic plan and conduct a training needs assessment. One of the first barriers to overcome was a conflict over land. The Naari Dairy co-op revived, and the two organizations fought over the land previously used for the co-op. With the input of CDP consultants and volunteers, Kiirua moved to a new location and leased its own grounds for milk collection.

Based on the training needs assessment, CDP provided the Kiirua with extensive support on recordkeeping. Previously, the group noted the liters delivered by each member on a daily basis, using a member number. With training from CDP volunteers, the group switched to a monthly ledger including the member name, member number and number of liters delivered on every day of the month. This standardization greatly improved the group’s efficiency in tracking sales and issuing monthly payments.

One of the most significant accomplishments of the strategic planning process has been that the Kiirua/Naari CBO pursued—and succeeded at—registering as a cooperative. This enables them to enter into legal contracts, thereby expanding their business opportunities. The strategic planning process also identified selling animal feed on credit to members as a business opportunity. With only the technical support, and no financial investment of CDP, the group recently launched the animal feed credit program.

Before CDP started working with the group, they delivered 450 liters per day and they now deliver 900 liters per day.

ACDI/VOCA Gender Training Yields Results

Because women are critical to Kenyan agriculture and the success of agricultural cooperatives, CDP also works to empower women to participate and take leadership roles in co-ops. After a sensitivity training conducted by a CDP volunteer, a female member of the Kiirua/Naari cooperative remarked, “When you visited us the first time, you asked me if I could consider vying for a leadership position in our group. At that time I was adamant I could not lead.” But after CDP training, she said, “I am now confident I can, and will offer myself for leadership in future.”

Forward-Thinking for Lasting Results

Over the next several years, CDP will continue strengthening the Kiirua/Naari cooperative, focusing on financial management and member education. And ACDI/VOCA’s five-year program to establish Cooperative Learning Information Centers will ensure that co-ops like Kiirua/ Naari continue sharing best practices many years into the future, even after the Cooperative Development Project ends.

The U.S. Agency for International Development (USAID), which awarded ACDI/VOCA $4.6 million for the 2004-2010 CDP, renewed the program in September 2010 and awarded funding for five more years to focus on Paraguay and East Africa. Over the life of the project, ACDI/VOCA anticipates a 25 percent growth in membership of its cooperative partners, for a total of 25,000 direct beneficiaries in five years, of whom one in five will be women. The program also anticipates a 45 percent increase in member income.

Learn more about the cooperative development program in Kenya.

Pictured at left: Kiirua Dairy Cooperative Society holds a meeting with its members.