Ruto moves to clear Sh400 million dairy debt as milk deliveries drop 3.7%

President William Ruto has pledged to clear approximately Sh400 million owed to dairy farmers by the end of October, as his administration moves to address delayed payments and declining milk supplies affecting Kenya’s dairy sector.

Speaking during an Anglican Church of Kenya (ACK) service in Kapsabet, Nandi County, on Sunday, Ruto said farmers supplying New Kenya Co-operative Creameries (New KCC) had gone two or three months without payment.

He also announced plans to decentralise the management of New KCC factories, giving individual plants greater control over their finances and making local officials accountable for payment delays and financial decisions.

“By the end of this month, we want to pay all the outstanding milk debts. Some farmers have not been paid for two or three months, and we want to pay every farmer.”

He put the outstanding amount at approximately Sh400 million, promising that every farmer would receive the money owed.

“We have Sh400 million. We will pay every farmer what we owe them,” he said.

Ruto directed that farmers should receive payments for milk supplied before the fifth day of every month, saying the government wanted to prevent fresh arrears from accumulating.

“We have said that we want our milk to be paid for before the fifth day of every month, so that everyone can receive their money. We do not want debts,” he maintained.

The President said New KCC had for years operated under a centralised management structure in which financial decisions were made from Nairobi, despite milk being supplied by farmers across the country.

“For a long time, KCC was being run from Nairobi, yet the people in Nairobi do not have the milk. We are the ones who have the milk.”

He argued that revenue from milk sales had been used to settle various obligations without sufficient accountability to farmers.

“When they receive the money, they go and pay some debt, or pay for some supplies, or pay someone else.”

The Head of State maintained that each factory would now be responsible for managing its operations and finances, with local officials answerable for poor performance.

“We have said that every factory should manage itself. Every KCC milk factory will now manage itself.”

He added that the government would take responsibility for outstanding debts at the national level, while ensuring individual factories did not inherit liabilities that could affect their operations.

The announcement comes as Kenya experiences milk supply constraints that have affected availability in some retail outlets and pushed up prices in parts of the country.

According to the government records, citing the livestock department, formal milk deliveries to processors fell by 3.7 per cent, from 84.4 million litres in June to 81.3 million litres in July 2026. Authorities attributed the decline largely to prolonged dry conditions that reduced pasture and increased pressure on animal feed supplies.

The government also reported that national milk demand stands at about eight billion litres annually, against production estimated at 5.76 billion litres, highlighting the gap between consumption and domestic supply.

Reduced pasture availability and expensive fodder can force farmers to spend more on feeding their animals while receiving less milk, putting pressure on their earnings and ability to maintain production.

The shortage has also affected consumers. Reports from September and October indicated that some supermarkets experienced low stocks, limited availability of certain milk brands and restrictions on purchases, while some consumers faced higher prices.

New KCC plays a significant role in connecting dairy farmers to formal markets by collecting and processing raw milk into products for distribution. Delayed payments can therefore affect farmers’ ability to purchase feed, meet household expenses and sustain milk production.

The immediate test for the government will be whether it clears the outstanding payments by October 31 and ensures subsequent payments are made on time.

The administration will also face pressure to address the wider production challenges affecting the sector, including unreliable feed supplies and seasonal declines in milk deliveries, as it seeks to improve the livelihoods of farmers and stabilise supplies for consumers.