Bolivian herders face many constraints in producing alpaca fibre, including grazing land degradation, a lack of access to veterinary services, and the low-value genetic stock of animals. This article describes how a collaboration between an international NGO and a local herders' association
increased productivity and incomes by establishing a more sustainable loan fund for herders that was complemented by supplying improved animals, technical assistance, and other inputs. Another important innovation was the creation of a commercial company in Bolivia for processing and export
marketing of the alpaca fibre, which was previously sold to Peruvian companies through intermediaries. The new company is owned by the producers' association and the herders themselves. The article outlines the issues that have arisen in aiming for sustainable provision of the various services.
While herders paid the full cost of improved animals and veterinary products, including transport, there was resistance to charging herders directly for extension services. Nevertheless, some of the extension costs are being recouped through interest from project loans and the herder associations'
share of the profits of processing and marketing the fibre.