Kenya Market-led Dairy Programme – Phase II From Aid-to-Trade The project is a continuation of the current KMDP-I. KMDP-I made significant strides in addressing relevant and important issues in the Kenya dairy sector, such as the skills gap, feed and fodder supply, milk quality, value chain inclusiveness and entrepreneurship .  KMDP-I uses a business or market-led approach, thereby seeking for strong collaboration between the Dutch and the Kenyan dairy sector. It showed that the Kenyan dairy industry needs to further innovate and adopt and adapt international best practice, in order to enhance competitiveness and to enter into a sustainable growth path. The Dutch dairy sector has valuable knowledge and technology solutions to offer, provided these are adapted to local needs and affordable. KMDP-II seeks a deepening of KMDP-I, using the same principles but with a more deliberate strategy and design to facilitate transitioning from aid to trade relations. The project is designed along two interrelated and mutually reinforcing pillars. Pillar-I is more dairy or market development related, with a focus on intensifying and upscaling the most relevant interven-tions under KMDP-I (i.e. practical skills training infrastructure, fodder supply, milk quality and inclusive dairy value chains). Thereby deepening involvement and engagement of Dutch experts and input and service providers. Pillar-II will focus on business brokering and trade promotion related interventions, in close collaboration with the Netherlands Business Hub and Dutch organisations/agencies that represent the dairy sector in the Netherlands. 
Through these two pillars, KMDP-II will invest in enhancing professionalism and competitiveness of the Kenyan dairy sector and in doing so, the market for Dutch technology and expertise, whilst at the same time it will invest in the capacity of the Dutch private sector and knowledge providers to be inclusive and relevant for the Kenyan market. The project goal is: “To contribute to an improved business and investment climate of the Kenyan dairy sector”. The project will promote and facilitate the transitioning from aid-to-trade relations in the dairy sector, as a strategy for increased sector competitiveness, growth and food security.

The objectives and related outcomes of KMDP-II will be: 
1.	To improve the availability of affordable & good quality practical training, extension and farm advisory services for farmers and other value chain actors.
2.	To improve the availability of affordable and good quality fodder to farmers.	
3.	To improve the availability of incentives and mechanisms along the value chain that enable the supply of quality milk (food safety).
4.	To improve linkages in the dairy value chain to stimulate chain integration and inclusiveness.
5.	To improve the linkages of dairy value chain actors with international companies and institutes, as a stimulus for innovation and competitiveness in the sector.
Objectives 1-4 are grouped under Pillar-I of the project. The activities under these objectives or out-comes are more related to dairy development. Collaboration with Kenyan stakeholders under these outcomes offers a platform or entry point for piloting innovative market-based solutions with the engagement of Dutch dairy sector stakeholders. Objective or outcome 5 is more concerned with mainstream trade promotion, international exposure and exchange, and facilitation of B2B linkages. This will take place in close collaboration with the Netherlands Business Hub in Nairobi. Pillar-I activities of KMDP-II will focus on dairy value chain operators in Nakuru, Eldoret and Meru milksheds. The target group consists of clients and beneficiaries. Lessons learned will be shared at sector level, as will be the case with evidence-based policy influencing, for which relevant agencies are based at the national and county levels. 
•	Clients are the actors in the dairy value chain that the project will work with directly. These include dairy lead/demo farms, dairy cooperatives and processors, input suppliers and service providers, dairy sector associations, and policy and regulatory bodies. 
•	The beneficiaries are dairy farmers and their households, farm workers, employees of dairy coope-ratives, processors, input suppliers and service providers, and consumers. 
In the inception phase, a firm selection will be made of clients under outcomes 1-4 and interventions will be designed in more detail. For this proposal –and subject to adjustments - the following clients and client groups have been identified in the three geographical areas:
•	Processor-led approach: in Meru milkshed with Meru Central Dairy Farmers Cooperative Union, affiliated dairy societies and farmer groups, in the Nakuru milkshed with Happy Cow, dairy societies and farmer groups. Meru Union has 26 affiliated primary cooperative societies with a total membership of 40,000 farmers (households). Happy Cow receives milk from two dairy societies with a combined membership of 4,850. 
•	Possible selection of a third processor with an inclusive business model in Eldoret or elsewhere in the country, based on demand and opportunities for strengthening the other outcomes under Pillars-I and II. Other possible clients are local and international input suppliers and service providers.
•	Selection of commercial fodder producers, agricultural contractors, seed suppliers, and farm mechanisation firms (examples: Gogar Farm, Gitau, Morendat, Dejirine, Nundoroto, SPEN, Leldet and Kenya Seeds, international firms).
•	Selection of medium and large scale dairy farmers (MSLFs) willing to take part in pilots and demos, eager to innovate, invest and open-up their farms for learning and sharing by smallholders and peer MLSFs. Preferably as testing grounds for pilots, as training farms and organized in study groups and investors’ forums for knowledge sharing, collaboration and lobbying.
•	Selection of Technical Training Institutes (TTIs), Practical Dairy Training Centres (PDTCs) and Dairy Advisory Services (DAS). Examples: TTIs: Baraton University, Egerton University, Laikipia University, Bukura Agricultural College, DTI; PDTCs: Lewa/Mawingu/Willens PDTCs; DAS: SNV Local Capacity Builders, Fieten Ltd; international firms. 
Pillar-II will have a stakeholder and sector focus, rather than a client or geographic focus. Kenyan stakeholders (i.e. farmers, dairy societies, processors, input suppliers and service providers, training institutes, etc.) willing to invest and interested in (exploring) products and services offered by the Dutch dairy sector, will be linked to Dutch companies/parties for trade and partnerships (including joint ventures, dealerships, franchises). Besides, Pillar-II will also give support to the Dutch private sector and knowledge institutes in exploring market opportunities and developing market share. This will be done in partnership with the Netherlands Business Hub in Kenya, NABC and/or Dairy Campus/ Dairy Development Centre. A number of medium-scale farms (incl. training farms) with good dairy farming practices and business acumen will be selected, to develop into model farms for showcasing of Dutch technology and practices.