Livestock is one of the growth sectors in the rural economy. In the third world the provision of livestock services for smallholders has generally been in the hands of the governments, leading to erratic, insufficient, and unreliable delivery systems. Especially in cases where the benefits of services accrue to the owners of the animals, privatization of some of the animal services may improve the delivery system. In order to explore the impact of such a private system, a group of sheep (...) farmers in North Sumatra, Indonesia, were organized in an Animal Health Delivery Network (AHDN). The experience with AHDN indicates that the scope of private sector involvement is promising. Farmers were able to recognize the benefits and willing to pay for the drugs. However, they seem to be reluctant to apply the drugs themselves, thereby relying on the help of extension agents and traders. Selling drugs via poultry shops to farmers was not successful because drug wholesaler firms do not make their products available in small quantities. The study confirmed that the role of Government and private sector in the delivery of livestock services needs to be redefined. (shrink)