Cooperatives Use Incentive Mechanisms to Extend Social Protection to Herders

The ILO-led UN Joint Programme (UNJP) on Extending Social Protection to Herders with Enhanced Shock Responsiveness aims to demonstrate how partnerships are critical to accelerating the achievement of the SDGs by supporting the government and stakeholders to promote social protection, with a focus on having more herders be covered by social protection schemes including social insurance and reducing their vulnerabilities to poverty and extreme climate change.

One of the key stakeholders of the project is the National Association of Mongolian Agricultural Cooperatives (NAMAC), a non-governmental organization established in 1992. The NAMAC has been playing a significant role in increasing agricultural production efficiency, improving the living standards of the rural population, and developing educational and cultural welfare.
Cooperatives working with herders during the cashmere season
The UNJP is collaborating with NAMAC on different areas including enhancing the capacity of herders cooperatives in targeted five soums of Zavkhan province with an aim to raise herders’ awareness on social and health insurance, thus increase the coverage of herders. In regard to cooperatives capacity building, the project has been performing two main roles: 1) provide cooperatives and herders with necessary information about social insurance and its benefits, 2) support cooperatives in taking actions based on the information they received through small grants. The UNJP is giving a total of 4 million tugrugs for the 6 participating cooperatives in the targeted five soums so that they can get involved more effectively with fewer financial restraints.

To reach the goal of increasing insurance coverage by herders, NAMAC has identified 10 incentive mechanisms that can be piloted by herder cooperatives. U.Ganbaatar, Head of the Cooperative development department of NAMAC, said that such mechanisms were identified with the input from their member cooperatives and selected as the best possible mechanisms that can be implemented at cooperatives. He added that although the pilot is very new to cooperatives, the mechanisms are based on the basic needs of herders and are very close to their daily lives.

The targeted five soums (Ikh-Uul, Tes, Ider, Durvuljin, Otgon) of Zavkhan province have been piloting the following mechanisms since June:
  1. Study and test the feasibility of accepting non-cash payments from herders such as livestock and raw materials as insurance premium;
  2. Study and test the possibility of deducting social insurance premiums from the incentives herders received from their sales of raw materials to national processors;
  3. Study and test the possibility of offering prioritized breeding services to herders who enroll in social insurance;
  4. Provide a discount for veterinary service fees for herders who enroll in social insurance;
  5. Test the feasibility of supporting young families and low-income families by paying their social insurance premiums with conditions similar to loans;
  6. Provide annual medical check-ups for herders who enroll in social and health insurance;
  7. Make amendments in cooperative mutual fund loan policy and offer better conditions to herders who enroll in social insurance;
  8. Organize campaigns to raise awareness for herders and increase their coverage;
  9. Cooperate with local mining companies to support the social insurance enrollment by herders;
Herder cooperatives in the five soums have selected leverages from the list that are more suitable for them and been piloting them in their respective areas with the goal of raising herders’ awareness on social and health insurance, thus increasing the coverage. So far, the cooperatives have reached about 1,000 herders. The pilot is expected to end in October.