'Cow for loan' deal helps farmers get top dairy breeds

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Migori Agriculture executive Valentine Ogongo (R) hands over a dairy cow to Esther Ondiek and her son Walter Kephar on October 31, 2020, as a loan from Myfugo Innovation Limited. [Caleb Kingwara, Standard]

When it comes to challenges of keeping livestock, Paul Owino, a breeder from Migori County has seen it all. From battling diseases to low milk yields, the farmer says he can write a book on animal keeping.

“I have kept indigenous cow breeds for years and their performance has been dismal. The milk yields are low and they are prone to diseases. Having seen how my fellow breeders were also suffering with traditional breeds, I was driven to action,” Owino says.

Owino was prompted to start Upendo Neema Community Based Organisation in Rongo sub-County, Migori County in 2013 to help farmers improve their dairy ventures. The idea was to encourage locals to start keeping the new cow breeds that are high yielding.

Slowly, the group has grown to 3,000 members of which 75 per cent are women. 

“Our goal is to ensure economic resilience and prosperity of the members through various agri-business ventures. We hope to start a dairy co-operative society in the next 12 months. Our biggest challenge has been access to financing. Many of the members desire to keep new cow breeds but financing has been a challenge,” Owino says.

Cow as collateral

To help the group reach the next level and access financing, they partnered with Myfugo Innovation Ltd who offers training on dairy keeping and cow asset financing that allows them to give cows as loans to farmers.

Myfugo Innovation Ltd has developed an affordable financing model to help the organisation actualise their dreams.

“This new approach makes it affordable to acquire high yielding cows. My desire was to acquire a Friesian that costs about Sh100,000 but I did not have that money. After joining Myfugo, I paid  Sh2,000 as a deposit and was given the cow. Now, I am servicing the loan slowly,” he says.

The farmer gets 10 litres of milk per day, five in the morning and five in the afternoon which he sells in Rongo town at Sh40 per litre which gives him Sh400 a day.

“The money which I get is enough to pay my loans, buy animal feeds and even pay school fees for my children,” he says.

Stable now, Owino plans to have more improved cow breeds to increase his milk production.

To cut down on costs of dairy feeds, Owino has grown Napier grass on his quarter acre farm.

Owino is one among some 60 group members who have benefited from the Myfugo financing option.

Walter Kepher and his mother Esther Ondiek, from Kitere village in Rongo sub-County are also beneficiaries of the financing project.

“Our dream has always been to own a high grade cow but we could not afford the one-off payment plan. But Myfugo has helped us. We got a Friesian cow and we hope to repay the loan with money we get from selling the milk,” Kepher says. 

So what inspired the idea?  

Allan Tolo, chief executive of My Fugo Innovation Ltd says they have partnered with CBOs like Upendo Neema CBO in Migori and Homa Bay counties to help farmers transform their dairy ventures.

“Before we embarked on this project, we noticed that a number of cattle keepers were struggling with low milk yields. Their desire was to keep top breeds like Friesians, guernseys and Ayrshires but they could not afford, that is why we stepped in with this affordable cow asset financing model,” Tolo explains. The cow itself acts as the collateral and is taken in case farmer defaults on loan repayment. 

Myfugo also offers other dairy development services.

“We also give farmers gadgets that is hung on the animal's collar, called smart cow collar. With this gadget, the farmer is able to tell whether the animal is on heat and call an inseminator. The gadget also helps tell if something is wrong with the animal,” Tolo says.

Given that Migori County is still behind on diary production, Valentine Ogongo, the CEC Agriculture has lauded the initiative saying it will go along way in boosting the county’s dairy production.

Statistics show that the dairy herd population in Migori stands at 10,206 dairy cattle while Zebu stands at 386,030 producing about 16 million litres against a demand of 80 million litres. This gap is filled by imports from other counties and processed milk. To change this state of affairs, the county has distributed 380 dairy cows to cluster groups. It has also procured and distributed 100 Sahiwal breeding bulls for Nyatike sub-County for breeding.

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