More than a Cow: Heifer International's Value Chain Model

What struck me most during the tours and meetings we have been attending here is Heifer’s mission statement; it’s so much broader than I had ever really thought about. I only knew they helped distribute livestock to people in need as a way of improving their lives. Cows provide milk and meat and a hide - I could see how that could help a poor family eat or even create a business.

But it’s so much more than that; Heifer’s actual goal is to actually end poverty and hunger worldwide.

Not just lessen it. Not just help with it. End it.

That means that they are doing a whole lot more than just distributing a goat or cow to a person in a third-world country. They are helping people think through business strategies. They are educating people on best farming practices. They are counseling people to give them the hope and motivation to believe that they can do things.

They are empowering people to better their own lives. I have heard several people talk about not just giving people a hand out, but a hand up. They want to go in and provide resources that will last. They want to equip people to make it on their own long after Heifer leaves that country.

Heifer’s main strategy to help people do this has to do with the value chain. Don’t know what that is? Neither did I.

Heifer's value chain has to do with the gap between the wage that, for example, a farmer gets and the wage they could be getting if they were better trained and had more access to resources. Here is my very, very basic explanation of Heifer’s value chain model (disclaimer: I don’t know any of the real prices for coffee in this example. I have completely made them all up.)

If we have a farmer who is growing coffee beans and making 7 cents a pound when he sells them to the next place (we’ll call that Company #1).

Company #1 sorts and dries them, then sells them to Company #2 for a little bit of a markup (maybe ten cents a pound for example).

Company #2 then roasts the beans and sells them to Company #3 (maybe a “Folgers") for 25 cents a pound. Company #3 can package those roasted beans up and sell them to me for a huge markup, like $10 a pound.

If we can train and equip our Farmer to sort, dry, and roast the beans, now he is able to sell those beans to Company #3 instead of Company #1, so his 7 cents per pound just went up to 25 cents per pound.

In order to cut out those middle steps and increase profit to the people in poverty, Heifer can help the farmer team up with others in the community to accomplish these steps and start competing in the marketplace. This increases the standard of living of the whole area. Heifer can then leave that area and the people are equipped to continue this improvement on their own.

Here is a graphic we created to help visualize the model...

The Heifer Value Chain Model

Heifer International is doing this type of work for all types of farmers across the world, every day. From milk to coffee, Heifer is helping communities empower themselves to creating long term, sustainable change. Sounds like a solid plan right?  As always you can find out more by visiting heifer.org.  You can also read some stories from the field and see the value chain in action by reading their blog or going to When Cows Fly.