Brookside Dairy has paid out over Ksh100 million in cash bonuses to farmers contracted by the company.
The reward scheme pays bonuses to farmers based on milk quality and for surpassing supply targets.
The scheme has allowed the company to achieve greater supply of high-quality milk preferred for high-value products that fetch premium prices, such as butter, ghee, sour milk and yoghurt.
The firm introduced a quality-based pricing model in 2020, shifting from the existing price model which primarily factors the weight of milk.
The quality-based pricing model hinges on the amount of butterfat in a kilogramme of raw milk.
Brookside’s director of milk procurement and manufacturing, John Gethi, explained that they made deliberate efforts to incentivize farmers amid the shocks of the Covid-19 pandemic.
“This initiative started soon after Covid-19 hit the country and we made a bold move to pay our farmers Sh42 per kilo and the move has paid dividends as farmers have doubled their efforts.
“This is a major milestone by Brookside to support the farmers braving shocks associated with the Covid-19 pandemic that cut performance across all sectors,” he noted.
Part of the plan to improve milk quality includes building capacity among farmers. Brookside has been undertaking regular trainings for farmers and introduced improved extension services.
“Good quality dairy products can only be made from good quality raw milk. The attribute of quality in our dairy products cannot be achieved without the involvement of our farmers in the production and supply of quality raw milk,” he stated.
The company announced a 17 per cent increase in producer prices in September, a move that benefitted both dairy co-operatives groups and smallholder farmers contracted to the processor.
It was a reaction to depressed production as the dairy supply chain was disrupted by the pandemic.
“The price review has been necessitated by a change in the prevailing market conditions,” Gethi noted at the time.
Over 160,000 farmers deliver to Brookside either through dairy co-operatives or as individuals.