'Supporting cooperatives for dairy VC development' program
The program will introduce effective practices to milk producers in eastern region to enhance their livelihoods and to reduce rural poverty.
I confirm that I am fully aware of the eligibility criteria, and based on its description, I am eligible to apply to the CSV Prize 2017.
COOPERATORS WORLD NGO, MONGOLIA
Established (the solution has passed the previous stages and demonstrated success)
Annual budget in 2017 (USD)
Number of beneficiaries impacted so far
Nonprofit, NGO, or citizen sector
Headquarters location: Country
Headquarters location: City
Location(s) of impact
Baganuur, Herlen rural cities
Impact 1: Rural areas in five provinces Tov, Selenge,Hentii
Impact 2: Increased access to milk in Ulaanbaatar
Problem: What problem is this initiative trying to address?
The challenge we face in Mongolia is rural poverty, particularly among dairy farmers and herders. The country has a large dairy herd with more than 3 million cattle that are spread over vast area away from markets. Market channels are limited for farmers & herders but dairy imports are rising. Organized commercial dairies often exploit rural milk producers. Therefore, we have focused on this problem to increase rural incomes and build social capital through dairy and horticultural production.
Solution Summary: What is the proposed solution? What do you see as its most promising aspects for creating shared value?
During the last six years, we worked with Mongolia’s dairy farmers in northern and western provinces. Combining cooperation with technical and marketing support we have seen significant increases in productivity, production and incomes. Financing of mini-processing units, has increased incomes for the cooperative members through sale of traditional products. Creation of a financially viable source for technical support of production, processing and marketing is critical. Milk production has grown steadily in the 60 producer groups we have worked with, rising from 132 to just under 2000 tons. Farmer incomes have risen from US$73000 to $650000. This has been achieved with limited resources and, just at the point where scale is becoming possible, those donor resources are shrinking as USAID ends its program in Mongolia. We believe that we have achieved a level of success that will lead to sustained growth if we have external investment over the next two to three years.
Impact: What is the impact of the work to date? Specify both the social and the environmental impact of your work
To date we have promoted 60 producer groups and financed three rural milk processing units. Our technical services have helped herders raise milk yields. The introduction of silage and improved housing helps herders maintain animals during our harsh winters. Most important has been marketing. The processing units allow surplus milk to be turned into products that can be sold when milk production ends.
Farmer incomes have grown significantly in the six years we have helped them form cooperatives. Their winter milk production has risen by more than 25 percent; sales have gone up by six percent. Quality has improved. Three processing plants are running at between 5 and 10 thousand litres per day. For the first time, dairy farmers have reliable urban markets. Close to 700 members have renovated or built a new house.
The cooperation of dairy farmers has an important impact on our communities. Pursuing mutual goals requires trust; success strengthens that trust.
Financial sustainability plan: How is this initiative financially supported? How will you ensure its financial sustainability long-term?
1. Grants 45%
2. Earned income 55%
In calculating financial support there are several centers to consider. First are the individual cooperatives. These are member-owned, financed with member equity and which earn a surplus that is placed in reserve accounts and distributed to members on the basis of patronage. In 2016, the milk and milk products generated $650,000 in income on 1,976 tons of milk. During this year we anticipate production to come to approximately 2,250 tons. At the current prices this should result in cooperative incomes of $1.5 to $2 million. We believe that over the next few years, cooperative members’ milk production will continue to rise and that sale of milk and milk products .
Unique value proposition: What makes your initiative innovative? How does your project differ from other organizations working in the same field?
While we’ve drawn on international experience, our approach is unique to Mongolia where it has been tested and proven. It allowed dairy producers to access markets to earn regular income. We reach remote, isolated communities with both technical support and markets for milk. We plan to expand to other provinces and contribute to achieving the scale that will make our work self-sustaining. Most important, the impact on the producers and their communities is what makes our work worthwhile.
Founding story: Share a story about the "Aha!" moment that sparked the beginning of this initiative.
The work with dairy in Mongolia began before our “Aha” moment. Global Communities, funded by the US Department of Agriculture, began working on rural value chains in Mongolia and decided that dairy had potential. Initially there was not a great deal of dairy farmer enthusiasm, but we persisted in visiting villages, listening, learning and understanding that they truly could benefit from forming cooperatives – not as a project, but as a way to improve their lives and strengthen their communities. Then, as producers began to form cooperatives, we saw and felt their excitement as they not only benefitted financially, but built relationships of trust in one another. When we would attend their meetings, we no longer needed to persuade; we only needed to sit back and hear the cooperative members working to solve problems and seize opportunities together.
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