Kenya: Smart card technology to revamp milk collection

A smart card system being tested in the country is set to change the way milk farmers do business, by using technology to improve record-keeping and efficiency.

The new system, being tested around the country, uses the computer-readable cards at milk cooling centres where farmers bring milk for storage.

The Business Services Market Development project (BSMDP), funded by the British government’s Department for International Development (DFID), has introduced the system on a pilot basis.

The one-stop dairy shop, uses information technology to revamp the milk collection system. A weighing scale, fat-content analyser, and payment calculator, are connected to a central computer to determine the amount delivered and how much the farmer is due.

Farmers in milk societies using the system will receive smart cards which will record their cooling centre transactions.

“When farmers bring in milk, they produce the smart card which is slotted into a reader connected to the computer,” explained Kevin Billing, a DFID representative with the programme.

A unique code on each smart card, identifies the farmer, and after determining the amount payable, the system prints out a payment slip the farmer can present to the cashier for payment.

If the farmer later wants feed concentrates for their animals, the smart card is slotted into the machine and prints out an order of the inputs.

The farmer then takes the order to the milk co-operative society’s shop where s/he gets the feed.

This card will be used for all the farmers needs including the artificial insemination services. At the end of the day, the account of the farmer is balanced and withdrawal are made from net earnings.

The project is part of a country-wide effort to help farmers to optimise their operations and increase their production.
The system, which has been in use in India for several years, only takes few minute to process payments. It was introduced with an aim of doubling milk production in the country.

After it is fully rolled out, the computerised system could replace traditional recording methods, which have been faulted for inaccuracy and inefficiency.

Other benefits could be improved financial accounting and transparency, and employment generation in rural areas, says DFID.
Muki co-operative society in Nyandarua is one of the few societies that has been chosen for the pilot project.

The farmer-operated milk cooling centres were set up in the 1970s and 1980s, largely ceased operations in the late 1990s as mismanagement and the wider troubles in the dairy industry hurt operations.

In conjunction with the BSMDP system, the Kenya Dairy Board is planning on revitalising older cooling plants and building new facilities in milk producing districts.

The DFID project also includes training for farmers in business management skills, said Mr Billing, which could help the cooling plants function as streamlined businesses.

“All the worlds’ major economies grew because of small businesses and the same can happen in Kenya if farmers see dairy as businesses,” said Mr Billing.

Cooling centres are seen as one way farmers can add value to their produce directly, and avoid exploitation at the hands of various middlemen.

Business Daily