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Chapter 1. Read this first!

This chapter is an introduction to what is going to come: the reasons for starting milk producer groups are described in 1.1, principles of a group in 1.2. and the importance of an enabling environment for the success of a group in 1.3. Chapter two will focus on forming groups, chapter three on developing groups, chapter four and five on group activities and chapter six on participatory tools.

1.1. Why form milk producer groups?

Milk is often produced daily in small amounts by a large number of producers, and markets for milk products are often found in distant urban centres. Combining forces in a group to reach these markets provides a direct and clear benefit to the members of a group. This is the main reason that milk producer groups are particularly suited to increasing household income.

A milk producer group can carry out a range of activities: milk collection, milk processing, marketing of milk products, organizing the supply of inputs like animal feed, fodder and credit and organizing livestock services like animal health, breeding, information and financial services. The more activities milk producers undertake themselves, the more their income can rise.

Carrying out activities in a group has many benefits (see Box 2: “Reasons to start a milk producer group”). In general, group formation is encouraged when:

Box 2: Reasons to start a milk producer group

  • more income through direct market access;

  • ability to pool resources to carry out activities that otherwise might not be possible: e.g. pooling of savings to start credit schemes, pooling of labour to carry out labour-demanding jobs;

  • economies of scale: investments and inputs are cheaper, credit and marketing costs are lower;

  • better access to outside support services: groups can be easy contact points for other organizations providing support services, e.g. breeding services, savings and credit, information and advisory services, training;

  • risks are shared e.g. in relation to investment and credit;

  • milk producers can learn from each other and exchange useful information;

  • milk producers have more status and power as a group;

  • development and enforcement of rules is easier in case of conflicts, e.g. grazing rights;

  • the group can provide social support to the members in times of crisis;

  • saving time when carrying out activities in a group.

limitations and dangers of a group

There is a possibility that the group could be dominated by only a few members and that there is no democratic decision-making. To prevent this, one has to look particularly at potential political and cultural conflicts, religious groups, different castes, socio-economic differences, gender etc. Small groups facilitate dialogue between members; they have greater economic flexibility and are less likely to be dominated.

Formation of a successful group requires patience. It might take up to six months to form a stable group. Formation which is too rapid should be avoided, but equally, long delays may lower the interest of potential group members.

1.2. International Cooperative Alliance group principles

The ICA homepage,

The seven international cooperative principles, as stated by the International Cooperative Alliance (ICA), are listed below. These guiding principles form the basis of what is considered a milk producer group in this book.

Voluntary and Open Membership: Anyone willing to accept the responsibilities of membership should be able to become a member of the group without gender, social, racial, political or religious discrimination.

Democratic Member Control: Groups are democratic, owned and controlled by their members, regular elections are held and all members have equal voting rights (one member, one vote).

Member Economic Participation: All members contribute and democratically control the capital of their group. At least part of that capital is usually the common property of the group. Surpluses are allocated for developing the group, benefiting members in proportion to their contribution and supporting other activities approved by the members.

Autonomy and Independence: Groups are autonomous and controlled by their members. Any agreement with other organizations does not interfere with the autonomy of the group.

Education, Training and Information: Groups provide education and training for all members and employees which encourages them to contribute effectively to the group development.

Cooperation among Milk Producer Groups: Groups are working together through local, national, regional and international structures.

Concern for Community: The activities of the milk producer group benefit the sustainable development of their communities.

1.3. Enabling environment

To establish and develop a successful milk producer group, it is essential that there is an enabling environment in the area. An enabling environment means that external factors are beneficial for the setting up of a milk producer group. The group has no control over external factors and examples of these are:

In developing countries, there is a change towards empowering community groups. Many governments are reducing their direct agricultural assistance and people are being given more responsibility for their own development. In the near future, there will be greater emphasis on community groups and a participatory approach. This environment greatly assists the formation of milk producer groups, but it is important that appropriate laws and support organizations are in place.

If you want the milk producer group to be effective, the legal aspects and policies of the area have to be supportive of groups that are owned and operated by milk producers themselves. There should be laws that define in what legal format milk producer groups can exist.

Cooperation with other organizations is important for the group, since most milk producer organizations are dependent on outsiders for inputs and services like veterinary assistance, feed supply and information services.

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