At 79, Tanganush Kostikyans, a grandmother of four from the village of Meghrashat in Armenia, decided it was time to own her small business—a cow she came to name Tsaghik (Flower). The cow came to her by way of Heifer Armenia in 2007, as part of the organization’s Shirak Marz Development Project. Tanganush is the matriarch of a seven-member household that includes her son Hovhannes, her daughter-in-law Shushan, and her grandchildren Mariam, Meline, Sargis, and Araksya. With seven mouths to feed, Tsaghik proved quite useful, providing the family with 15 liters of milk on her good days. By 2013, Tsaghik had given birth to two calves. Tanganush kept the youngest, and gave the oldest to another family; in Heifer circles, that is known as “passing on the gift.”
Heifer International CEO Pierre Ferrari (Photo: Nanore Barsoumian)
Most small farmers are of the old mindset that a cow is an asset. But a farm is in fact a business, and cows are no longer simple assets, but income generators, said Heifer International CEO Pierre Ferrari in an interview with the Armenian Weekly. And so, the organization focuses on providing farmers around the world with the right tools and training to ensure their entry and success in local and regional markets. The success stories are plenty. The Rabbit King, a Chinese rabbit breeder whose modest start with a couple of Heifer-provided rabbits turned into a multimillion-dollar venture, is a case in point. Although most farmers will not turn into millionaires, Heifer provides them with the right tools to elevate their communities from an impoverished existence. Families working with Heifer are then obliged to pass on the gift of animals and training—what Ferrari considers a “living loan, the repayment [of which] is to the community, not to us.”
Armenia, too, has its own Heifer success stories. Paul Yeghiayan, the associate director of philanthropy at Heifer International, told the story of a man who had his start with a single cow from Heifer. He lived in his one-room house with his wife and his cow for a year. He sold the cow’s milk, eventually sold a calf or two, and over the years his situation drastically improved. “He started with being the poorest guy in the village. Ten years later, he has the biggest house in the village and is now the mayor, because he just kept adding and building,” Yeghiayan told the Weekly.
Although currently the focus in Armenia is on dairy, it doesn’t have to be. “If you are 85 years old, you’re not going to handle a cow, but you might settle for bees or chickens. If you grew up in the Soviet system and you are getting $20 a month in pension, there’s still a place for you in all of this. You’re not going to become a major producer, but at least you can produce something that you can barter or sell so that you can meet your needs,” said Yeghiayan.
Heifer was started in 1944 by Dan West, a dairy farmer in Indiana. West had volunteered in Puerto Rico and Spain, working with displaced people and handing out reconstituted milk. But the dairy farmer had an idea: What the families really needed, to live in a self-reliant way, was a cow, not just donated milk. “That’s the core of what we’re doing,” explained Ferrari.
When Ferrari became the CEO of Heifer International in 2010, he and his team were determined to evolve West’s model, to put in place systemic changes, because they believed that bringing families from a level of extreme poverty to one of subsistence—though better than starvation or deep hunger—still left families vulnerable in the face of man-made and natural catastrophes. But training alone wasn’t enough; what these impoverished communities needed was access to markets in larger communities. When Ferrari took charge, the organization oversaw around 900 projects in 40-50 countries. The projects constituted “small islands of subsistence existence,” with lowered levels of malnutrition and mortality rates, but the populations were still very vulnerable, he confessed. Coming from a background in business, scale was an important factor in the success of the organization’s work, and with that came a demand-driven production system.
Tanganush Kostikyans
“You don’t have to be gargantuan, you don’t have to be General Electric, but scale brings with it the utilization of mechanization. For example, in an Armenian project, tractors matter. Not every farmer, if you’re a small project, can afford a tractor. But if you have a collective system—not a Soviet system but a cooperative system—you can actually have equipment, improvement, productivity, and lower costs. So that’s where we’re at,” said Ferrari, smiling. Scale also brings with it competition, quality, and connections to the market, he added. Farmers in these rural communities must effectively compete in local and regional markets.
With that in mind, Heifer successfully brought about systemic changes to their projects in Kenya and Uganda, engaging some 160,000 families. The success is apparent: The organization has now launched the second phase of the project, involving 260,000 additional families. Heifer focused on empowering the farmers, by organizing small self-help groups in the communities that would collaborate to increase productivity in livestock management. “Sometimes they aggregate their cows together, so they have 30-40 cows managed by 1 or 2 of the farmers while all the other farmers are growing the forage to feed the cows,” said Ferrari. Then, the farmers organize themselves to distribute the milk to the processing plant, and the processor comes with insulated tanks to collect the milk every day. “We do all that training to make sure that the milk is collected as clean as possible, and then delivered to a hub that is sufficiently high-tech. You need to have compressors, chilling plants, storage, washing systems, and administrative systems to collect the milk and pay the farmers accordingly,” explained Ferrari, who stressed that taking care of livestock is more complicated than it seems, as the animals need constant care—from immunizations to the occasional antibiotics.
The milk would then be pasteurized, and some of it would be turned to yogurt and cheese. In the end, the dairy business in these rural communities creates a whole new ecosystem, allowing new businesses—such as veterinary services, restaurants, and schools—to flourish.
Armenia is a little further along in the process, according to Ferrari. “In Armenia, you had a collective system in Soviet times that was forced collectivization. A lot of the stuff just decayed after the Soviet Union fell apart and now we have to reconstitute the system but in a different way, where the community essentially controls the key assets, the pastures,” said Ferrari.
Tanganush’s daughter-in-law Shushan with their cow Tsaghik (Photo courtesy of Heifer International)
The governance system would be decentralized and community based, “but not to a point where you have the problems of the tragedy of the commons,” added Ferrari. “What we’re trying to do is to create pro-poor, wealth-creating value chains, so that the asymmetry in power that normally exists between the markets or large processors and the farmers is reduced in some way.”
In Armenia, like elsewhere, Heifer works with the local government. Heifer believes that cooperation with local authorities is essential for long-term sustainability, said Ferrari, and local governing bodies are far more accountable to local communities than central governments. Yeghiayan concurred. “The local municipalities in Armenia like [Heifer’s work] because growing the economy in their area, village, or region is good for them. Now all of a sudden, they have access to markets they didn’t have before, and so there’s more money flowing there, which of course means they’re doing better as well,” he said, adding that such projects also curb emigration, as more men stay to work on the farms.
Heifer is not in this alone. The World Bank and Armenia’s Ministry of Agriculture are part of the project. But Heifer’s role is at the farmers’ side. “We’re like the reliable business partner for the farmers, so that when we go to the table, it’s not just poor farmers who don’t have much. So we’re sort of balancing it out. The World Bank likes having Heifer there because they know it will make it much more likely that the project will actually happen and be successful, and that the money is not going to disappear,” explained Yeghiayan.
As mountainous Armenia has harsh winters, owning the right equipment is imperative for farmers. “A big part of having the tractors and reseeding the pastures is so they can produce a year-round consistent source of food. The cows in Armenia are really skinny, if you’ve noticed; they don’t produce good milk, and the quantity is certainly not enough to entice a bigger buyer. But the idea is, of course, that you fatten them up so there’s more fat content in the milk,” said Yeghiayan. Watering points are another important factor to consider, as cows will need to hydrate while feeding.
Many of Armenia’s farmers process their own milk, turning it to cheese and yogurt. For them to really succeed as small businesses, they must focus on targeting the optimal quantity and quality of the milk the cows produce. In subsistence-level livestock management, a cow yields 1.5-2 liters of milk a day, but with the right feeding practices a good cow in Armenia can yield around 18 liters, said Ferrari. The good thing about milk is that globally there is more demand for the product than supply, which is to the benefit of the farmers.
The farmers determine the daily fair value of their product by calculating their feed cost. “They can make a decision, if it’s unprofitable, to reduce production, or to find a way to reduce the feed cost, or manage the complexity of that little factory that a cow is,” he added. In the end, it’s about empowering farmers and eliminating the asymmetry of information.
In Armenia, farmers get a daily update on how much they can charge per liter of milk via SMS text messaging. “Most of the large dairy companies are headquartered in Yerevan, but they will sign contracts and they will go out with their trucks and pick up milk on a daily basis from a lot of these villages, but the prices are negotiated ahead of time. SMS texts ensure that the drivers don’t show up, trying to cheat somebody,” said Yeghiayan.
Currently, Heifer works with 4,400 families in Armenia, and the project seems to be a success. If it continues at this rate, the World Bank will support another project of the same size in a different region of the country. In the end, what Heifer considers a successful project is one that no longer requires the organization’s guidance or funds. “Our belief is that the best thing to happen to Heifer is for it to be extinguished. We don’t want to exist,” said Ferrari. “Our strategy is always to exit as rapidly as possible, so they can be self-reliant. If a project goes on, it’s the beginning of a failure for us. We want to go on to the next village.”
What is needed is a “passionate urgency,” according to Ferrari. “Twenty-five thousand kids under five die of reasons that have to do with malnutrition. That’s a disaster, a daily catastrophe. And it’s been going down, it’s been going down steadily over the years. But can we get it down to zero? That’s the passion! That’s the urgency!” he said. “Systemic change can be done very rapidly… When communities are self-reliant and accountable to themselves, they can actually prosper. We’re there purely as temporary trainers… Most of these communities feel so alone. They feel isolated. They feel that nobody thinks or nobody cares about them. That’s the great tragedy of poverty.”
“I get emotional about this because I see this all over the world,” continued Ferrari. “But these stories are where change starts.”
To donate to Heifer’s Armenia Small Farmer Project, or to find out more, visit https://secure1.heifer.org/fund-a-project/armenia-small-farmer-project.html.