One of the main problems small dairy farmers in Pakistan face is the limited availability of nutritious feed. While there is strong demand for nutritious fodder such as silage, it is mainly being sold to commercial dairy farmers – leaving smallholders, who constitute 80% of the dairy sector in Pakistan, with few options.
Raising awareness of silage and its benefits was simply not enough. In an attempt to rectify this, MDF conducted some extensive research of the dairy sector, and found that the existing incentives for small farmers to either purchase or produce silage by themselves were not significant for a change in behavior. MDF’s approach had to be different – fundamentally different – so the MDF team developed a new business model with significant incentives built into it. The aim was to get small farmers to buy silage and for medium-sized farmers to commercially produce and sell it.
Using this business model, Luqman, disabled farmer from Peshawar, can easily buy a silage bale at the right size and price from an MDF silage entrepreneur in his neighborhood.
While there are many potential rural entrepreneurs who are interested in setting up local small silage-making units, they often lack the financial muscle and production know-how to launch their businesses. So MDF has set out to support a batch of rural silage entrepreneurs and demonstrate the viability of the small baled silage model.
“I can now get small silage bales from within 2km radius of my home. This has made my life much easier.” says Luqman.
But silage didn’t stop there. In order to scale-up the silage model and improve access to finance for potential producers, MDF joined forces with a commercial bank to develop a financial product tailor-made to the needs of potential silage entrepreneurs.
A first of its kind, the product allows potential entrepreneurs to access the credit they need to start localized production of silage, resulting in its improved availability to small and medium farmers.
While there are farmers who are already doing this at the village level, they usually rent their machinery after harvesting their own crop, and since the window for harvesting the crop is short they are unable to cater to a wider audience.
In one year, MDF’s silage entrepreneurs have rented out silage machinery to 30 farmers in Khyber Pakhtunwa. One of these entrepreneurs is Sameen Khan, who lives in a joint family with 28 household members, in Noshera, Khyber Pakhtunkhwa. He has 20 animals, 13 of which are milking animals.
“Since I have started using silage, I have been able to increase herd by 7 animals and milk yields have gone up by about 2 litres per animal per day,” says Sameen Khan.
He also sells silage bales and rents his machinery to neighboring farmers. He made use of the local radio services to promote silage in his region. He rented out silage making equipment to five farmers in his region and also provided them with technical support. He produced 425 tonnes of silage in 2017, out of which he fed 119 tonnes to his own animals, the remaining 306 tonnes were sold at PKR. 10.5 per kg.
His wife takes care of the animals at home, whereas he takes care of market transactions related to silage and milk.
“My wife and I work together to take care of animals; including milking, feeding and cleaning. Feeding silage is easy and our animals’ milk yield has improved. We sell the surplus milk in the market. We use the additional money for our children’s education.” says Sameen.
In the future, Sameen Khan plans to buy more land and expand his rental business as the demand for silage is increasing.
See our next blog – Crowding In….Coming Soon!
Text and photos by MDF Pakistan Communications Specialist, Roha Tariq