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EU Set to Milk Region With Subsidised Goods?

16 November 2007

KENYA - "Dairy farmers in Kenya are doing well now," says Peter Wanyeki, as he flashes a big smile. "Before, when we went home to the village, you could never take enough money with you. Everybody was poor. But now the situation is different. The dairy farmers are rich because they are getting a very good price for their milk."

Peter now works in Nairobi, but he grew up on a dairy farm. "I want to go back to farming in five years. I think I can have 30 to 50 cows, get together with some other farmers and set up a processing centre. If we do that, we will do fine," he says, clearly upbeat about the prospects for the industry.

The picture for dairy farmers is not uniformly attractive though. There are farmers in certain regions, such as those along the coast, who feel they have been marginalised by the government.

Nevertheless, on balance, with government support for the revitalisation of the dairy marketing board called the Kenyan Cooperative Creameries (KCC) in 2003, the sector has performed much better.

The question is, will Kenya's dairy farmers survive if Kenya and the other countries in the east African region enter into an economic partnership agreement (EPA) with the European Union (EU)? The deadline for the talks is December 31 and even at this late stage, negotiations remain heavily bogged down by differences.

The EU envisions the EPA to be a reciprocal trade agreement. It plans to open 100 percent of its market duty free and quota free to its former colonies, including Kenya. In return, the EU is insisting that Kenya and its neighbours open 90 percent of their markets.

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