This study analyses the relationship between dairy cooperatives in Kenya and Morocco and their institutional environments. It compares ten Moroccan and Kenyan dairy marketing cooperatives and suggests possible development strategies, support programmes and enabling policies in order to address two important organizational challenges, namely effective quality assurance systems and attractive and cost-efficient payment modalities for members. We discuss ways in which the institutional environment can be strengthened in overcoming these challenges, by looking into three areas: internal organizational strengthening of the cooperative sector, public support with conducive policies and regulations, and the facilitation of multi-stakeholder platforms to discuss, propose and implement these policies.