Interview: D.Vladimir “We are aiming to supply our raw materials to factories without intermediaries”

– Oyu Tolgoi supports local herders –

There is a saying about the importance of collective efforts: “Magpies together are better than a tiger by himself.” In a similar vein, we met with local herders who recently formed a cooperative and began work in Gaviluud bagh of Khanbogd soum. D.Vladimir, herder of this bagh is the man behind this initiative. We spoke to him about government policy on cooperatives and the advantages of working together as well as gaining an understanding of the views of herders on other topics.

Do herders today need to work together and cooperate? Why have you decided to form a cooperative?
I founded the Galba development cooperative in 2003. This was the name of our former collective farm. In 2008, the government was actively supporting the cooperative movement. I felt that herders scattered everywhere could do better by changing the way we did things. Therefore, 28 people joined together to form a cooperative to sell ourr wool, milk and dairy products. We registered the cooperative and obtained the official stamp and certificate. That is how it started. We put together our wool, milk, dairy products and began to sell it for full market prices. However, after about a year, we felt that the local administration and government were not giving us much support and our cooperative was not able to increase our joint assets. All of us had debts and since a cooperative is a group whose members contribute to common assets, it was hard for us to operate with small amounts of capital. We tried to get a soft loan, but we could not obtain it. Therefore, we returned the assets to most of the members and the cooperative was left with only nine members – me and my children. For ten years, we reported zero revenue .

So does this mean that the cooperative is now restored? What was reaction of the herders?
Yes, it does. Since 2012, the government began to support herder cooperatives, therefore, we resumed the cooperative and its official stamp and certificate. According to a study, one cooperative per bagh, a total of 1,100 cooperatives, are needed to provide raw materials for national producers. During the bagh meeting, a lot of information about this was provided. I have knowledge about cooperatives and I was studying the relevant laws and regulations, so some 117 people from 58 households joined the Galba development cooperative, contributing their assets so that we could resume the activities. There are now many more people who want to join our cooperative. Currently, we have stopped enlisting new members, but we will be in a position to start recruiting new members again next year.

What are the advantages of being a member of a cooperative?
Government resolution no.48 from 2013, has an annex providing monetary incentives for members of cooperatives, including herders and people with animals who supply animal skins and leather to domestic processors as well as setting monitoring and reporting processes. These incentives were available from 1 July, 2013 to members of herder cooperatives who supplied wool and raw materials. However, this decision was changed and postponed till 1 Jan, 2014. Some domestic processing companies said they can get raw materials from herders and work together with them if they have herder cooperatives. They also said that they can help herders to grade raw materials and provide free training to do this. We are aiming to supply our raw materials to factories without any middlemen or intermediaries. Factories invest in temporary jobs and spend much money on primary grading of raw materials so they proposed that they could pay us more money to do this job for them. We now grade cashmere according to categories such as colour, age and between male and female goats. The prices which middlemen pay to herders differ greatly from the prices paid by factories for raw materials. The Government is pursuing policies to support domestic production and to increase herders’ incomes by eliminating middlemen and intermediaries. Today, meat is passing through three or four intermediaries before reaching factories and consumers.

Did you have face-to-face meetings with domestic processing companies? Are they going to support cooperatives?
Yet, I met with them. Oyu Tolgoi organised a tour of chairmen and representatives of cooperatives and agricultural specialists of Khanbogd, Manlai, Bayan-Ovoo soums to four national factories and seven cooperatives of Dundgobi, Uvurkhangai and Tuv aimags. This tour was very productive. The overall attitudes of processing companies is that they are very supportive of us.

How is your cooperative going on today?
Cooperatives are required to do primary veterinary care and disinfection of their livestock and have a warehouse with quality guarantees. Our bag used to have an animal bathtub and stone fence which I built when I was bag governor. They were not privatised and were used as fences for horses and then got damaged substantially. Our cooperative spent 300 thousand tugrugs from our common fund to restore the fence. Once the buried animal bathtub is recovered, we will begin to bathe our animals there.

It is said that if herders bath, vaccinate and give antigelment vaccines to animals and treat their skins for worms, they will receive incentive payments. First, we will bathe and give antigelment medicines to all livestock in the households of our cooperative members. Each herder has a veterinary notebook and the veterinary care services will be recorded in the notebook and stamped by a veterinarian.

We requested to the soum governor that he provides our cooperative with land to build a warehouse. The Governor said he will consider our request. Material for the warehouse roof will be provied by the soum administration and the materials for the walls will be paid for by Soum citizen-representative khural members and companies. Oyu Tolgoi LLC have provided funding and repaired the water well near the animal bathtub. We will get water for the animal bathing from that well. If everybody agrees and works together, this work will succeed. I think our work will be complete by early next year. Oyu Tolgoi supports local herders as the wells that they have dug in our bag are working well. The herders are very satisfied.