Questions emerge over Kang'ata’s minimum income scheme for dairy, mango farmers

On April 2, Murang’a Governor Irungu launched the Kang'ata Minimum Guarantee Return (MGR) programme for dairy and mango farmers, announcing monthly payouts of Sh3.50 for every litre delivered to manufacturers in the region and Sh7 for every kilo of mangoes delivered to contracted buyers.

While the programme was supposed to benefit only farmers and reach all without favour, there are emerging indications that it has been hijacked by suspected middlemen and political loyalists who are now receiving the payouts at the expense of the real beneficiaries.

Nation.Africa unearthed the anomaly when it contacted the farmer listed as the highest milk producer by the name of Mr Francis Wangari, who receives Sh63,000 per month from the programme.

When we approached him with the intention of featuring him to give other farmers tips on good husbandry practices to increase productivity, he declined the offer, saying he was not a producer.

"While I produce some milk, I also buy from the farmers and pool it under my account and supply it to Kigoro Dairy in Gatanga," he said.

When we brought this anomaly to the attention of the governor and asked if the programme had ground rules in place to benefit only farmers and not aggregators, Dr Kang'ata admitted that it was an error that should not have happened and suggested that new and correct names would be compiled.

Right farmers

"That was a mistake... I will get one of my officials to get the right farmers," he said.

Asked if the payment benefits enjoyed by those wrongly listed would be withdrawn, he said they would remain.

"We use data that is reflected in a cooperative's bank accounts. As long as he is a member and has a bank account, he is entitled to this MGR because the name was provided by the cooperative," he replied.

Asked whether the scheme had any checks and balances to distinguish between cooperative brokers and actual producers, Dr Kang'ata said farmers who help aggregators with supply should disassociate themselves and instead become supply members to get the money.

"At the end of the day, it is the farmers' choice. And they have the freedom to choose and we (as a county) cannot interfere in such a private arrangement," Dr Kang'ata said.

For the mango farmers, the two private companies - Kelvian and Sunny - that were hired as buyers issued a restriction saying they were only interested in two of the more than 10 varieties grown in the area.

The two companies said they were not interested in the other varieties," Daniel Muchiri, the crop director, told Nation.Africa.

He said the best proposal was for the farmers to come together in their cooperative and push for value addition to reap maximum benefits. 

The left out farmers, especially those harvesting traditional varieties, are now not benefiting from the MGR programme as they have no definition of the selling price on which to base the payout calculations.

These anomalies have prompted Martin Kamande, chairman of the District Dairy Breeders and Entrepreneurs Association, to question the haste with which the programme was introduced.

"The whole programme lacks clarity and is prone to abuse, therefore it should be suspended, investigated and corrected to serve all genuine farmers equally and fairly," he said.

Mr Kamande told Nation.Africa that "the list includes milk bar operators, brokers and private value addition plant owners who buy a litre of milk from farmers at between Sh33 and Sh38 and sell it to the county programme for higher profit".

Dr Kang'ata revealed that the beneficiaries of the programme make between Sh53 and Sh55.

This means that the brokers in the programme earn between Sh15 and Sh22 per litre as profit, automatically making them the biggest winners in the MGR scheme.

According to the county's 2021 Dairy Sector Performance Report, the cost of producing a litre of milk in Murang'a is Sh28 during the rainy season and Sh33 during the dry season.

This would mean that even with the county's MGR programme in place, some actual farmers would remain stuck at an average profit of Sh5 per litre, who also suffer from payment and office expenses that reduce the profit to between a loss and Sh2.

Mr Kamande added that "as it stands, the county's MGR programme is like an operating cost compensation for milk traders and not producers and it also has United Democratic Alliance (UDA) political activists and officials in it".

During the Madaraka Day celebrations at Kahuro grounds, Deputy Governor Stephen Munania raised eyebrows when he declared that the programme was reaching all farmers in the nine sub-counties.

"All the sub-counties are benefiting from the mango and milk subsidy... all are benefiting without any discrimination," he said to an uneasy murmur.

However, the governor soothed the discontent by admitting that there were some dairy farmers "who were unlucky to be left out of this programme, but that is because they did not apply for enrolment even after we announced that they should come forward and do so".

Dr Kang'ata urged them not to worry "because next year we will give you a chance to apply but only if you come as a big group... A big example of farmers left out of this programme are those who deliver their milk to New KCC ....the farmers cannot blame us because they never applied... but if they do, we will pay them because our aim is to reach out to all farmers".

He said a privately owned Aspendos Dairy with 5,777 suppliers receives Sh3.8 million every month, followed by Murang'a Creameries Cooperative Union (MCCU) whose 3,995 suppliers receive Sh3 million. Kangari United with 926 members receives Sh1.4 million while New Nginda Dairy with 1,544 members receives Sh1 million.

"Others are getting between Sh800,000 and Sh60,000, which goes directly to the farmer without any middlemen," he said.

Murang'a dairy producers have seen their Murang'a County Creameries (MCC) value-addition plant in Maragua town, with investments of Sh1.5 billion, sinking and are calling on the governor to bail it out so that he can channel the dairy MGR programme through it.

"We have our own MCCU and the MCC plant. We can all become aggregators and use this plant to access the market for better returns and the MGR programme can go directly into the centralised value chain as opposed to the current fragmented arrangement that is hard to track," said a Kangari breeder, Elizabeth Maina. 

But the governor, in his Madaraka Day speech, defended the MGR scheme, saying it was a departure "from my predecessor Mwangi Wa Iria's scheme, which was prone to all sorts of abuses".

Wa Iria would buy and distribute free inputs such as fertiliser and maize seed, and buy napier grass and cows for dairy farmers.

Dr Kang'ata said economies of scale did not support the purchase of inputs for farmers.

He said the terms of Wa Iria's contracts were that the supplier received 30 per cent of the budget, while a network of theft and plunder was opened up during distribution to farmers.

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