The New KCC management in a circular to farmers says the move was prompted by tremendous increase of milk delivered to its plants.

The firm says that farmers would be paid Sh16 a litre, down from Sh17 with effect from February 7.

The Kenya Federation of Agricultural Producers (Kenfap) said the price cut would adversely affect farmers who had secured bank loans.

The chairman of the federation's dairy division, Mr Joseph Ng'era, said farmers could not plan and budget when they were not assured of stable prices.

The circular, signed by managing director Francis Mwangi, states that the reduction was necessitated by increased supply of milk to New KCC factories and cooling plants.

Favourable weather

Mr Mwangi attributes the increased milk production to the favourable weather.

"Consequently, milk intake by New KCC has increased tremendously and the trend is still continuing. New KCC is therefore forced to convert most of the milk into powder, UHT and other milk products like butter which are very expensive to produce and store compared to fresh milk," the circular states.

Source: allAfrica.com