In 2008, an estimated 1.3 million people in rural areas and 3.5 – 4 million in urban areas were food insecure. An estimated 150,000 persons residing predominantly in high-potential areas of the Rift Valley province were extremely food insecure following the post-election crisis (FEWS NET 2009). Approximately 100,000 more children have become malnourished as a result of the food crisis (Save the Children 2009). Failed short rains in 2008 and previous three to four agricultural seasons has contributed to exacerbating food insecurity in the country. Marginal agricultural households, agro-pastoralists, pastoralists, and urban poor have been particularly affected. The marginal agricultural households in the southeastern and coastal lowlands are worst-hit as 70 percent of their annual harvest is derived from short-rains seasons (FEWS NET 2009). High food prices have also made 75 percent of the pastoralist communities food poor due to dramatic increase in cereal prices ranging from 50 – 80 percent as compared to other commodity prices. Amongst urban households, 40 percent were highly food insecure. As a result of the crisis, there has been an increase in school dropout rate, food riot incidents, and crime rate (WFP 2008).

The dairy industry in Kenya

The dairy industry in Kenya is one of the largest and sophisticated in Africa. With an estimated 5 billion litres of milk produced in the country, the dairy industry is an important player in the economic and nutritional aspects of the Kenyan population. Despite the huge opportunities ahead, the sector however, faces a number of challenges. The hullabaloo that has been generated by the recent introduction of VAT on processed liquid milk products in Kenya is an indication of the importance of the dairy sector to Kenya’s economy. Although the Government later retracted its intended imposition of VAT on this important item following the hue and cry from consumers, Kenya Dairy Board and other stakeholders, milk had already become the ‘poster product’ for all those who had raised objections to the VAT Act. Rather than face a ‘milk revolution’ and have the Government’s well intended purpose to streamline the VAT tax muddled with controversy, the National Treasury removed liquid processed milk from its original list.

VALUE SALES OF SOFT DRINKS RECORD POSITIVE GROWTH DESPITE HIGH INFLATION

In spite of the high food inflation index in 2015, coupled with economic challenges such as the declining exchange rate, value sales for both off-trade and on-trade recorded positive growth. Growth can be attributed to variables such as persistent hot climatic conditions in the country, intensive marketing initiatives and cheaper pricing of products.