Project Paper

In: Business and Management

Submitted By Kirima
Words 8475
Pages 34
1.0 Introduction This chapter contains the background of the study, statement of the problem, purpose of the study, objective of the study, research questions, and significance of the study, limitations and the scope of the study.
1.1 Background Information Kenya’s economy is heavily dependent on Agriculture with almost 75% of Kenyans earning from farming. Agriculture contributes over 30% of the Gross Domestic Product (GDP) and usually brings in over 50% of foreign currency earnings. It provides raw materials for Kenya’s agro-industries which accounts for about 70% of all its industrial production. The dairy industry has been in existence for decades and Kenya being the second largest dairy sector in sub-Sahara Africa. The industry has evolved through three markets periods.
First for the period up to 1969, it operated as an open market with various independent dairies being active market players.
Secondly between 1969 and 1992 and primarily due to rationalization of the dairy industry by the Government a monopolistic market situation was created. The government gave the policy guidelines, set prices, determined the players in the industry and set the market rules. The Kenya Cooperative Creameries (KCC) was the only player in the marketing of milk and dairy products.
Thirdly from 1992 onwards the government liberalized the industry. Currently the industry is regulated by the Kenya Dairy Board which was established under section 4 of the Dairy Industry Act Cap.336 of the laws of Kenya. The board is managed by a Board of Directors with a chairman appointed by the ministry of cooperative. Nominees of the board are appointed from selection from District Agricultural Committees (DACs), Provincial Agricultural Boards (PABs) and the Central Agricultural Board (CAB).The managing Director is responsible for the day to day running of the board.
The industry…...

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