The present study focuses on dairy cooperatives in Kenya and Morocco, to explore how and to what extent the institutional environment has been enabling the development and performance of the cooperatives. The focus on dairy generates insights that are relevant for many countries, because it is a sector in which cooperatives have a relatively high market share. Kenya and Morocco are especially interesting cases because they are both large milk producers, among the top-10 in Africa. The study zooms in on two key challenges for the cooperatives and their options for finding appropriate solutions: systems to assure the quality of the milk, and methods to offer attractive payments to the farmers. The study was carried led by Wageningen Economic Research, by assignment of – and in close collaboration with - the team Producer Organizations and Cooperatives of FAO.