President William Ruto announced at the Mashujaa Day ceremony in Eldoret that the government will pay dairy farmers Ksh65 for each litre of milk delivered starting this month.

In addition to the base price, a quarterly bonus of Ksh2 will be paid to farmers.

Ruto noted that before the reforms farmers earned Ksh35 per litre, later rising to Ksh60, making the new rate a further increase.

The Kenya National Bureau of Statistics reported that fresh milk production reached a record 5.5 million tonnes (about 5.5 billion litres) in 2025, a 3.5 % rise over the previous year.

Industrial processors handled over 1 billion litres of milk for the first time, up 11.5 % from 2024.

Despite higher output, households, hotels and dairy outlets have reported tighter supplies and rising retail prices.

Farmers attribute the shortage to costly animal feed and reduced yields, prompting some to sell directly to consumers for better returns.

The government plans to decentralise the eight New Kenya Cooperative Creameries (New KCC) factories so each can operate independently and supply regional markets, a move aimed at lowering transport costs and easing shortages.

Ruto also pledged that the roughly Ksh400 million owed to dairy farmers will be settled by the end of October.