Will help one million people in Kenya, Rwanda and Uganda lift themselves out of poverty through profits from the production and marketing of high-quality milk

LITTLE ROCK, Ark., Jan. 25, 2008 – Heifer International today announced a grant of $42.8 million over four years from the Bill & Melinda Gates Foundation for the East Africa Dairy Development (EADD) project to help poor rural farmers double their incomes by increasing their production and marketing of high-quality raw milk.

Bill Gates, co-chair of the foundation, announced the project as part of a package of agricultural development grants at a press conference with Amos Namanga Ngongi, President of the Alliance for a Green Revolution in Africa (AGRA), and World Bank President Robert B. Zoellick at the World Economic Forum in Davos, Switzerland. Following the Davos event, the grant was announced at Heifer’s headquarters in Little Rock by Heifer’s President and CEO, Jo Luck.

The goal of the grant project is to help one million people – 179,000 families living on small 1-5-acre farms – lift themselves out of poverty by providing them with an opportunity to produce and market milk in a more profitable way. The project will develop 30 strategically located milk-collection points as the means for small farmers to join the growing dairy industry in East Africa. It will particularly target women for both the benefits of the project and leadership. It also includes training for 10,000 farmers to become growers of nutritious animal fodder to sell to dairy farmers as supplementary livestock feed.

“If we are serious about ending extreme hunger and poverty around the world, we must be serious about transforming agriculture for small farmers—most of whom are women,” said Bill Gates, co-chair of the Bill & Melinda Gates Foundation. “These investments—from improving the quality of seeds, to developing healthier soil, to creating new markets—will pay off not only in children fed and lives saved. They can have a dramatic impact on poverty reduction as families generate additional income and improve their lives.”

The grant to Heifer International, announced at the World Economic Forum as part of a package of grants totaling $306 million, nearly doubles the foundation’s investments in agriculture since the launch of its Agricultural Development initiative in mid-2006. The initiative, part of the foundation’s Global Development Program, is focused on a range of interventions across the entire agricultural value chain—from planting the highest quality seeds and improving farm management practices to bringing crops to market. The foundation believes that with strong partnerships and a redoubled commitment to agricultural development by donor and developing country governments, philanthropy and the private sector, hundreds of millions of small farmers will be able to boost their yields and incomes and lift themselves out of hunger and poverty.
Heifer’s President and CEO, Jo Luck said, “The foundation’s support and recognition of our values-based model and the size and scale of the project take Heifer to a new level in our endeavors to help the poor overcome poverty. We’re proud to have been selected by the Bill & Melinda Gates Foundation and appreciate the confidence placed in our work.”

Heifer will manage the project with two supporting partner organizations: TechnoServe, a U.S.-based nonprofit that fights poverty by encouraging business development, and the International Livestock Research Institute (ILRI), an animal-research organization based in Nairobi, Kenya.


Milk chilling plants are a key to the project
Key components of the EADD project are:
(1) The development of 30 milk collection hubs, including chilling plants for bulking and holding milk for pickup by refrigerated commercial dairy delivery trucks. The chilling plants will carry their own backup power generators so they are not dependent on local sources of electrical power;
(2) The formation of farmer business associations that will own and manage the plants and develop hubs of dairy business services;
(3) The use of artificial insemination to improve local breeds of dairy cows to produce more milk per cow. It will also focus on improving animal nutrition and animal health for better milk quality, and,
(4) Extensive training, provided by Heifer and its partners, in animal agriculture, business practices and other subjects needed for successful operation of a business to produce and store raw milk.

The project targets specific districts chosen for their suitability for small-scale dairy development in Kenya, Rwanda and Uganda, with the goal of doubling incomes of the participating families in those areas.

Part of the $42.8 million grant from the foundation is a $2.5 million challenge to be matched dollar-for-dollar through a Heifer fundraising campaign. With the resulting $5 million, Heifer will create an investment fund to guarantee financing arranged by the farmer business associations. Heifer will mount a year-long campaign to raise the matching funds from its donors.


Current state of the dairy industry in East Africa
The commercial dairy industry in sub-Saharan Africa today is relatively small, with most milk being sold raw by farmers directly to consumers or through peddlers who re-sell it in village markets or at “milk bars.” Customarily, Africans boil raw milk before using it.

Using Heifer’s tested model of values-based, grassroots development, farmer groups will be organized into associations of at least 2,000 farmers from the local areas around each chilling plant. Participants will be trained in dairy farming and in how to manage the chilling plants and other hub-related businesses. The chilling plants will become hubs of activity where individual farmers will deliver their fresh milk. The hubs are expected to develop other farm-related businesses, further increasing local economic activity.

Heifer is best known for its 63-year history of providing livestock to poor farm families and helping them become self-reliant. In this case, preliminary studies indicated that rather than give farmers cows, it would be more cost-effective to raise the livestock through a program of artificial insemination. By breeding local dairy cows using high-production dairy animal semen, the resulting hybrid cows will have local disease resistance characteristics as well as greatly improved milk production. Farmers then will agree to follow Heifer’s signature practice of “Passing on the Gift” by paying for insemination services for other farmers’ cows, spreading the benefits throughout the project regions.

Dr. Rajiv Shah, director of agricultural development at the Bill & Melinda Gates Foundation, said the partnership shows the promise of dramatic improvements in the farmers’ livelihoods:

“Heifer International has a strong track record of building partnerships with local governments and farmers groups and listening to farmers’ needs,” said Dr. Shah. “By connecting farmers—most of whom are women—to a more formal market where they can sell their milk, this project has the potential to dramatically increase their incomes and improve their lives.”


Women targeted to share in benefits, leadership
Women are specifically targeted by the project, both to ensure that they share in the benefits and that the burden of work required to care for the livestock and to collect the milk is distributed equitably between men, women and youth. Women and youth will be brought into production and business activities related to the dairy industry, and the projects will be monitored to make sure the dairy farmer associations include them in leadership.

The EADD will be independently monitored throughout implementation, with impact studies conducted to assess the effectiveness of the development project. TechnoServe will provide expertise in marketing, while ILRI will provide expertise in identifying hub sites and in implementing best practices in animal agriculture throughout the life of the project.

In expanding dairy markets and increasing market access for small farmers, the project will have several aims:
? Contribute to improving both modern and traditional markets and market-suppliers
? Increase profit participation by smallholder farmers in the dairy value chain
? Build farmers’ business skills to undertake additional income-generating activities
? Increase demand for dairy products, sustaining price levels as production volumes increase
? Improve milk quality through the supply chain with consequent demand and health benefits
? Establish a competitive environment to position East Africa as a competitive industry player

By addressing the entire dairy value chain, this project will enable farmers to increase their milk production and gain better access to the market to sell their surplus, which will lead to greater profits for farmers.

About the Bill & Melinda Gates Foundation
Guided by the belief that every life has equal value, the Bill & Melinda Gates Foundation works to help all people lead healthy, productive lives. In developing countries, it focuses on improving people’s health and giving them the chance to lift themselves out of hunger and extreme poverty. In the United States, it seeks to ensure that all people – especially those with the fewest resources – have access to the opportunities they need to succeed in school and life. Based in Seattle, the foundation is led by CEO Patty Stonesifer and co-chair William H. Gates Sr., under the direction of Bill and Melinda Gates and Warren Buffett.
For information about the Bill & Melinda Gates Foundation, go to http://www.gatesfoundation.org/.

About Heifer International
Heifer’s mission is to end hunger and poverty while caring for the earth. Since 1944, Heifer International has provided livestock and environmentally sound agricultural training to improve the lives of those who struggle daily for reliable sources of food and income. Heifer is currently working in more than 55 countries, including the U.S., to help families and communities become more self-reliant. It has helped 48 million people through training in livestock development and livestock gifts that multiply. Every gift of an animal provides benefits such as milk, eggs, wool and fertilizer, increasing family incomes for better housing, nutrition, health care and school fees for children. Recipients “Pass on the Gift” of offspring of their cows, goats and other livestock to others in an ever-widening circle of hope.
For more information, visit www.heifer.org or call 1-800-696-1918.


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