In the village of Rabi in Eastern Nepal, farmers have successfully combined dairy farming with growing trees and crops. The secret to their success is Setidevi Cooperative that, by creating an innovative support structure and an encouraging yet competitive atmosphere, has helped its members build thriving agroforestry systems which are productive, profitable and climate resilient.

High in the hills of Nepal, 484km east of Kathmandu lies the small village of Rabi. Thanks to the work of the Setidevi Cooperative, the village is a flourishing agricultural centre where farmers can achieve financial success, combining dairy farming with agroforestry. 

From small beginnings in 1994, the cooperative has grown and today it has over 1,000 members supporting approximately 600 households and supplying around 700 litres of milk every day through its seven milk-collection centres. In recent years, farmers have seen their productivity increase as a result of adopting agroforestry practices, incorporating their Indigenous knowledge of plant species, their uses and sustainable land-management practices. 

Agroforestry plots in Rabi.  Photo credit: Bijay Kharel

Cows and crops – an excellent combination

By working with local experts, Setdevi Cooperative introduced the idea to its members of combining trees with dairy farming to help farmers grow more fodder, improve soil health and make their farms more resilient to challenges such as climate change. 

Typically, each family maintains 3-5 animals of indigenous breeds and rears them using traditional practices. Raising cows and hill farming are two activities which, when combined, enhance productivity and sustainability in a mutually beneficial process. The animal not only provides milk and other products but also provides manure, a rich source of organic fertilizer. This improves soil fertility and enhances crop yields, which in turn, can be used as fodder for the cows. Farmers in Rabi village have seen this in practice, reporting an increase in milk production and in potato, wheat and rice yield since adopting agroforestry practices.

Combining trees with dairy farming. Photo credit: Deepik Acharya

Innovative strategies to encourage agroforestry

From December 2023 to December 2024, the FFF has supported Setidevi Cooperative through the Central Dairy Cooperative Association Limited Nepal (CDCAN) to enhance dairy producers’ capacity to adopt climate-smart practices such as agroforestry. 

As highlighted in IIED’s most recent agroforestry case study, the cooperative has used a range of innovative strategies to encourage and support its members to set up and maintain their own agroforestry systems. This includes: 

• Training and raising awareness: The cooperative has established demonstration farms to highlight the benefits of agroforestry, showing farmers how integrating trees with crops and livestock could improve soil health, increase fodder availability and boost income.  

• Seed and technical support: They have also provided high-quality seeds, such as super napier grass and fodder trees (often in association with the Alchechaur Community Forest), along with technical guidance on planting and management. 

• Promoting diversification: The cooperative has encouraged farmers to diversify their income sources by integrating high-value crops such as tomatoes, potatoes and citrus fruits alongside traditional subsistence farming. By combining seasonal and perennial crops and staggering planting or harvesting schedules, farmers have reduced their dependence on a single crop or product and have ensured a more continuous income, rather than spiked seasonal earnings. 

• Enabling access to market: The Setidevi Cooperative operates a milk-collection centre in Rabi village, where farmers deliver their milk. The cooperative collects the milk and sells it in local markets such as Banepa, Bhaktapur and Kathmandu, ensuring farmers have reliable market access.

Farmers working on their plots.  Photo credit: Bijay Kharel 

Encouraging uptake of agroforestry systems

Setidevi Cooperative has used profits from its dairy operations to fund agroforestry initiatives, providing loans and incentives from their own Saving and Cooperative Credit Organization (SACCO) to farmers. 

For example, to help encourage uptake of agroforestry systems, agroforestry farmers who produce the most milk are rewarded with cash incentives, encouraging healthy competition among participants. 

All these innovations have collectively strengthened farmers’ livelihoods – increasing their yields and incomes, and building climate resilience. Setidevi Cooperative is a model for how communities can successfully embrace agroforestry systems and reap the interconnected benefits.  Their strategies can be replicated elsewhere by cooperatives at different stages of their agroforestry journeys. 

--------------------------

Read the case study: Acharya, D, Shah, R and Kharel, B (2025). Upscaling agroforestry for dairy production in Nepal: the role of the Setidevi Cooperative. Setidevi Cooperative and IIED, Edinburgh, UK. Available at https://www.iied.org/22649g