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A policy research paper
Erdenesaikhan Naidansuren Onon Bayasgalan Environment and Security Center of Mongolia NGO Suite #123, Government House III Baga Toiruu- 44 SB District Ulaanbaatar Mongolia email@example.com
TABLE OF CONTENTS EXECUTIVE SUMMARY 1.0 INTRODUCTION 1.1 Main issue 1.2 Research objectives 1.3 Research sites 1.4 Literature review 2.0 PASTURELAND USE 2.1 Causes of overgrazing 2.2 Overview of land degradation 2.3 Identifying the pasture carrying capacity 2.4 Environmental impact of goats 3.0 LOCAL SURVEY RESULTS 3.1 Research site demographics 3.2 Methodology 3.3 Result 4.0 LEGISLATIVE FRAMEWORK ON PASTURE USE 4.1 Traditional pasture regimes 4.2 Current laws and policies pertaining to herders 5.0 POLICY OPTIONS 5.1 Option 1: Community pasture management (CPM) 5.2 Option 2: Application of fees on pasture utilization (FPU) 5.3 Option 3: Re-application of herder income tax (IT) 5.4 Option 4: Grazing quota for herders (GQ) 5.5 Option 5: No policy (NP) 6.0 COST ANALYSIS 6.1 Methodology 6.2 Flock circulation 6.3 Measuring the costs 6.4 Breakdown of the policy options 6.5 Policy Costs 6.6 Criteria selection for policy options 7.0 CONCLUSION 8.0 RECOMMENDATIONS BIBLIOGRAPHY APPENDICES 6 7
45 46 48 49
LIST OF TABLES
Table 1. Table 2. Table 3. Table 4. Table 5. Table 6. Table 7. Table 8. Table 9. Table 10. Table 11. Table 12.
Pasture status in project counties (NLA) Pasture Carrying Capacity in the Eight Counties Total livestock owned by the surveyed herding families (2008 census data) Total goats owned by the surveyed herding families (2008 census data) Baseline data for all policy options Livestock reduction levels Flock circulation calculation scheme of goats Comparison of the positive and normative values of the livestock Breakdown of the policy options Average annual policy expenses Selection criteria for policy options Criteria points of the policy options
LIST OF FIGURES Figure 1. Figure 2. Figure 3. Figure 4. Figure 5. Figure 6. Figure 7. Figure 8. Figure 9. Figure 10. Figure 11. Figure 12. Project sites Uvurhangai province Bayanhongor province Livestock size increase in the eight counties Annual average livestock growth rate Goat population growth rate Respondents’ ideas for sustainable pasture management Policy problems that are related to pasture deterioration Livestock reduction rate Livestock reduction rate incorporating the 2009-2010 dzud Policy calculation steps Costs of the policy options
EXECUTIVE SUMMARY Mongolia’s pastureland has seen rapid rates of degradation in the past two decades because of climate change and inappropriate grazing patterns. With such levels of pastoral degradation, the following entities are being negatively affected: herders, the livestock sector, the economy, the jobs sector, the nomadic cultural heritage, and Mongolia’s biodiversity. This report’s foremost objective is to propose policy options that make the pastures of Mongolia sustainable in the long-term, and to slow down the process of desertification, which has thus far afflicted 72 percent of Mongolia (SDC 2009). Because the pastureland of Mongolia is a common access resource, herders do not behave in an environmentally sustainable way. The net effect of over 40 million livestock owned by approximately two hundred thousand herding families in a vast, fenceless landscape is tremendous. However, this very complex issue not only incorporates herders and government institutions, but also the country’s overall mindset towards livestock husbandry. This report is comprised of an economic analysis that focuses on the negative impact of goats, which have the largest impact on pasture quality among the five livestock types. The absence of regulations and the inadequacy of pertinent laws and government policies have stemmed this national crisis. Consequently, this report proposes three policy options addressing this problem. Although some of these solutions are already recognized in the legal framework, none are enforced for reasons that will be explained further in the report. These three policy proposals aim to reduce grazing effort, and to introduce enterprises that improve the productivity of the livestock. In all of the three policy options we have a livestock population target, and we determine how much it costs for each policy option to reach this target. In order to highlight the economic significance of the impact of the livestock on pasture sustainability, we determine the pure economic value of goats, sheep and horses. Calculating the pure economic value of livestock is a new concept for Mongolian agriculturalists and economists alike. Our suprising findings show that goats are not worth the favored value that herders place on them. Goats are in effect the least economically valuable animal, especially if one recognizes the unequal distribution of product markets and manufacturers of the goods of the other livestock animals. Mongolians primarily drink imported milk despite its ample domestic supply. Mongolia does not use its competitive advantage in the meat market because the slaughtering system do not qualify for international trade. Herders are also not experienced in processing their products; they mainly know only how to sell them as raw materials. The key underlying theme behind each of the policy options is to develop the market for wool, milk, meat and hide so that the productivity of each animal is multiplied, hence reducing the need to concentrate on livestock population. Subsequently, this report recommends the most optimal of these options as a solution to achieving sustainable pastures. This research was financed and managed by the Environment and Economics Program for South East Asia (EEPSEA) and the authors are acknowledge and very grateful to
Hermi Francisco (PhD) and Ted Horbulyk (PhD) for their valuable contribution for this report.
1.1 MAIN ISSUE Eighty percent of Mongolian land is a common access resource, and the two hundred thousand herding households of Mongolia use ninety percent of this land as pastureland (Zagdarsuren 95). The forerunning issue of Mongolia today presides in the vast pastures of Mongolia that are seeing dangerous levels of degradation due to the absence of a successfully enforced sustainable pasture management system. The main issue is the lack of effective coordination and regulations in the management of pastureland. Bad pastures have a direct impact on the lives of herders; it can strip entire families from its sole source of income by killing off all their livestock. Bad pastures also affect the entire Mongolian population through fluctuating prices of livestock products, and through heightened economic pressure from suffering herder families. Although the main cause of land degradation, the spread of desertification and biodiversity is claimed to be climate change (64.1%), overgrazing and overpopulation of livestock also play an enormous role (35%) in the destruction of pastures. Climate change is mainly caused by human activities, thus there is no knowing how much of a role Mongolians have played in speeding up global climate change.
1.2 RESEARCH OBJECTIVES Main Objective: To generate policy options that improve the quality of pastureland by means of reducing the negative impacts of goat grazing, sheep grazing and horse grazing in Mongolia. The following tasks will guide us to the best policy options: A. Identifying the current situation of pasture degradation in the project area with a focus on the impact of livestock. B. Developing policy options for alleviating pasture degradation with the help of community surveys and research of the legal framework surrounding the degradation problem. C. Estimating the costs of these policies and comparing their impact on the local community and the pastureland. 1.3 RESEARCH SITES Mongolia is administratively divided into 21 provinces, which has an average population of 75,000 excluding the capital city of Ulaanbaatar. Each province has between 14 and 27 counties (also referred to as soums). In this project, eight counties from Uvurhangai and 6
Bayanhongor provinces were selected for further study. Uvurhangai and Bayanhongor provinces are among the provinces that have the highest goat population density. These provinces are located in between the Khangai and Eastern Altai Mountain ranges. They are about 400- 800 km to the south-west of Ulaanbaatar city. The counties are Bayanundur, Sant, Hujirt and Hairhandulaan counties in Uvurkhangai province and Ulziit, Jinst, Bogd and Bayanlig counties in Bayanhongor province. Below you can see the eight counties in the context of the entire nation. These counties are located in different natural zones of Mongolia, such being the mountain forest steppe (Ulziit, Hujirt), the dry steppe (Hairhandulaan, Bayanundur and Sant), and the Gobi desert zones (Jinst, Bogd, Bayanlig).
Figure 1: Project sites
Figure 2. Uvurhangai province
Figure 3. Bayanhongor province 1.3.1 Climate and Weather
The project area is located in the Northern semi arid zones of the Altai mountain range of Central Asia. The altitude of these provinces ranges between 1000 to 4000 meters above sea level. The climate is continental and displays extreme temperature fluctuations. The 8
annual average air temperature ranges between -1 and +4 degrees. During the cold season (December – February) the temperature ranges from 18-30 degrees below zero, whereas in the summertime (May- August), it ranges from 15 degrees to 30 degrees above zero. The annual precipitation is 200-325 mm in the northern forest and mountainous region and 50-100mm in the Gobi desert region. 1.3.2 Social data
These counties are representative of the typical characteristics of the Mongolian rural population. Table 1 in the appendix section, shows that most of the households (73-86%) live in remote areas, and are herding livestock. 1.3.3 Native plant and animal species
Bayanhongor and Uvurhangai provinces reside side by side with Bayanhongor province in the western and Uvurhangai province in the eastern side. They both contain a mixture of dry and desert steppe to the south and mountainous forest steppe bordering the two mountain ranges. Uvurhangai province is well-known for its waterfall called Ulaan Tsutgalan, which has begun to dry up frequently during the summers. Bayanhongor province contains many medical plants, such as the desert cistanche, licorice, roseroot, agriophyllum pungens, snow lotus, sand rise, and sphallerocarpus. It also has marmots, foxes, wolves, corsac foxes, badgers, lynxes, leopards, ibexes, goitered gazelles, white-tailed gazelles and antelopes. Some of the desert regions have wild horses, wild donkies, wild camels, wild boars, and the Gobi bear, all of which are considered rare species. Uvurhangai province contains, wild sheep, ibexes, wild horses and camels, goitered and white-tailed gazelles, foxes, lynxes and leopards. In terms of bird life, it has swans, pelicans, snow cocks, black grouse, partridge, and snow grouse. Overgrazing of pastures and competition for water resources has affected all of the mentioned flora and fauna. Livestock is beginning to take over the habitats of the wild animals and to graze on the medicinal plants severely. Livestock also compete for water with all of the bird species that are becoming fewer each migrating season. Thus, the native plants and animal species in these two provinces are special areas of concern. Protecting these species is critical because they preserve the biodiversity of the land, which is also critical to the sustainability of the pastures.
1.3.4 Economic activity The main economic activity in these counties is livestock husbandry. The semi-arid nature of the land and the sparse vegetation and limited precipitation in this part of Central Asia is suited for pastoral livestock production. Crop and vegetable farming does exist, though its contribution to the local economy is insignificant. 9
Since pasture is an open access resource, herders do not possess any property assets. Output per head of livestock is small because of the low productivity of grasslands in a semi-arid region. Consequently, herders have a high interest in increasing their livestock sizes. 1.4 LITERATURE REVIEW The book entitled “Goat herd: the most pressing ecological and economic issues” is a very comprehensive book that is representative of the general opinions and field of studies that Mongolian scientists carry out with regard to goats and livestock grazing. This book contains a compilation of 11 important studies conducted by 23 of the livestock experts in Mongolia. Because Mongolia has a population of only 2.7 million people, the studies of this handful of scientists are very representative of the scope of studies carried out in the entire nation. Scientists A.Bakei, P.Badarch, and B.Binyee’s report “Development Trends of the Goat Industry” covers the most important issues surrounding the goat industry. This report gives statistics on the population of livestock and its growth trends in the past two decades. The report has highly critical content regarding the flaws of the public policies that pertain to herders. They also include statistics on the production and export rates of cashmere in Mongolia. Their policy recommendations were very sound, and included the central idea of improving the productivity of livestock products. Their sources include other Mongolian scientists, the National Statistics Office, and the 2005 Millennium Ecosystem Report of UNEP. The paper entitled “The Pasture Use of Goat Herds, and Various Ecological Issues”, composed by scientists S.Tserendash, N.Erdenetsogt and L.Narantuya, were specifically helpful for this report with regard to the behavior pattern of goats. Their experiments illuminated the disparities in the eating habits and eating preferences of goats and sheep. Their collected data gives evidence that goats have the most harmful impact on pastureland. They are strong proponents of the pasture use fee policy in addition to strict enforcement of livestock ratios. The recommendations offered by D.Dungu and G. Bayarsaikhan in “Improving the productivity and reproductive quality of goats”, point towards the development of goat breeding mechanisms that offer the best cashmere quality. Their complex matrices connecting the different goat breeds will be very useful for people operating breeding centers.
2.0 PASTURELAND USE
Currently, 72.3 percent of Mongolian land is undergoing the process of desertification, and the pasture capacity is being exceeded by a margin of 32.5 percent or by sixteen million sheep equivalent units (SDC 2009). 10
2.1 CAUSES OF OVERGRAZING In order to identify the main causes of pasture degradation in the project area, we used a primary source and a secondary source. First, we conducted a survey among local herding communities asking them about their opinions and feelings concerning local environmental problems, their root causes, their effects, and possible measures that can be taken to alleviate the land from further deterioration. Secondly, we reviewed agricultural and environmental government, NGO and scientific reports, and also looked at satellites images of desertification to gather information on the rate of desertification and land degradation in Mongolia. Current pasture management systems are unsustainable for the following reasons: rapid herd size population growth, the weaknesses in policies and regulations, the lack of institutional and governmental support, weaknesses in the Land Law, and the global demand for cashmere. Mongolian land systems have been in flux this past century, and herders have had to adjust to a lot of administrative changes. The differences between past and present land laws help clarify the legislative weaknesses that have intensified unsustainable pasture management. The Mongolian Constitution, the Civil Code and the Land Law govern the entire legal framework for land tenure issues. Although residential land became privatized, pastureland has never been considered private property. Under the centralized communist regime which lasted from the forties to the beginning of 1990, the state owned all livestock, which was steadily controlled at around 25 million heads. When Mongolia transitioned into a market economy in the early nineties, the economy was hit very hard by the withdrawal of Soviet participation. Many people were left jobless and given few job alternatives, one of which was livestock husbandry. Livestock husbandry was a popular option because the state began to distribute livestock as private property to willing herders in the 1990s. Herder numbers increased a little over threefold between 1986 and 1990 alone from 123.5 thousand to 417.7 thousand (Dorligsuren, 2006). Livestock numbers have persistently risen from 25 million up to 43.3 million by the year 2008 (Bakei 2009). This transition was completely revolutionary in Mongolia because the livestock sector was left without any form of regulation whatsoever. In 1989, the sheep to goat ratio was 3:1, but by 2008, the sheep to goat ratio had become 1:1. (The significance of maintaining a 3:1 sheep to goat ratio is explained on page seventeen of this report). Between 1989 and 2008, the number of goats multiplied by four, the number of camels halved, and the number of cows reduced by ten percent (Bakei 2009). The amount of cashmere production tripled between 1990 and 2008 (Bakei 2009). Despite the extreme livestock population rise, herders are constantly struggling for subsistence. Herders are vulnerable to many risks, for which they receive no formal preventative assistance, but various forms of disaster relief. The harsh winters of 20002002 killed eight million livestock and left thousands of herders without any source of 11
income. Seven years have passed since this disaster, and the government and herders have done very little to safeguard their livestock from being vulnerable to future blizzards. Again, in the winter of 2009-2010, Mongolia lost over 8.4 million livestock according to the statistics of the National Emergency Management Agency. The following graph shows the livestock increase in five out of the eight soums.
Figure 4. Livestock size increase in the five counties Compared to 2004, the total sum of livestock numbers of these counties has increased twofold with an average growth rate of 1.19 percent. However, the 2009-2010 dzud reduced these livestock sizes to below 2004 levels. The livestock figures above show that the counties have generally had similar growth trends, which imply that they are affected by similar forces.
Anual growth rate of livestock of 6 counties in last 6 years 1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00 X dulaan Jinst Bayanunder Average growth of livestock Bayanlig Bogd Sant Hujirt Ulziit
2003/2004 2004/2005 2005/2006 2006/2007 2007/2008
Figure 5. Annual average livestock growth rate
OVERVIEW OF LAND DEGRADATION
The National Land Authority (NLA) defines land quality based on the following characteristics: • • • • • • Thickness of nutrient layers Humus content Soil pollution and contamination Land surface change Plant yield, plant cover change Plant species composition and change
Thus, bad pasture means that most of the characteristics above are not in very good condition. According to the Land law, land quality assessments should take place very five years in each county. The most recent assessment took place in 2008; however, the previous one had taken place in 2001. The project team worked together with land assessment researchers to finalize the latest assessment reports of these counties in May and June of 2009. Table 1 shows that a majority of the counties in the two provinces have severely degraded lands. Uvurhangai has a higher level of pasture degradation, which ranges from 45.2 percent to 80 percent. Sant County displays the worst case of degradation at 80 percent. Table 1. Pasture status in project counties (NLA)
Total pasture, thousand ha 324.1 260.9 152.2 410.8 1118.7 509 365.8 374.1
Average grass productivity per hectare, kg 260 250 460 150 110 160 160 400
Pasture degradation status, ha Normal or slightly degraded 147.8 150.7 59.3 225.1 856 361.2 304.6 217.8 Low 28.3 115.7 52.3 74.5 116.2 111.7 0 133.9 Medium 134.2 87.1 21 55.3 39.1 36.1 44.8 22.4 high 13.8 5.9 19.7 55.9 107.4 28.3 -
Degraded pasture in percentage 54.4 80.0 61.1 45.2 23.5 29.0 20.0 41.8
Bayanundur Sant Hujirt Hairhandulaan Bayanlig Jinst Bogd Ulziit
2.3 IDENTIFYING THE PASTURE CARRYING CAPACITY (PCC) Pasture carrying capacity is an important term used in the livestock sector among others. The carrying capacity of a pasture is the maximum number of animals that can graze a pasture throughout the grazing season without harming it. The carrying capacity ensures adequate forage for grazing animals and leaves enough residual forage for re-growth the following year. Residual forage protects soil from erosion and increases the forage yield the following year by improving stand vigor, soil moisture and nutrient cycling. Improving the productivity of a pasture can increase its carrying capacity. In general, carrying capacity is largely determined by four factors: 1) annual forage production, 2) seasonal utilization rate, 3) average daily intake, and, 4) length of the grazing season. The following expression, which was adopted from Scott et al, Agriculture and Agri-Food Canada, explains it in a simplistic manner. Annual Seasonal Forage Production X Utilization Rate -------------------------------------------------------Average Daily X Length of Intake Grazing Season
Carrying Capacity =
The following information in Table 2 was obtained through measuring annual forage production in each of the eight counties, and taking into account reduced productivity of pasture from 2008 livestock census data. Table 2. Pasture Carrying Capacity in the Eight Counties
Total pasture, kha
Average annual grass yield, ton 0.26 0.25 0.46 0.15 0.11 0.16 0.16 0.4
Total available feed, ton
Current livestock, thou head 218.7 236.7 187.5 194.5 149.2 119.3 159.5 177.4
Current SEU*, thou unit 321.6 298.5 310.4 246.9 196.4 127.3 193.4 247.2
Carrying capacity, thou. head 156.0 120.8 129.6 114.1 227.9 150.8 108.4 277.1
Pasture utilization rate, %
Exceeded SEU, thou. unit
Bayanundur Sant Hujirt Hairhandulaan Bayanlig Jinst Bogd Ulziit
324.1 260.9 152.2 410.8 1,118.7 509.0 365.8 374.1
84.3 65.2 70.0 61.6 123.1 81.4 58.5 149.6
206.1 247.2 239.5 216.4 86.2 84.4 178.4 89.2
165.5 177.7 180.8 132,8 0 0 84.9 0
*Remarks: SEU – sheep equivalent unit. 1 camel = 5 SEU; 1 horse = 6 SEU; 1 cow = 6; 1 goat = 0.9 SEU; Table 2 shows that SEUs in Bayanundur, Sant, Hujirt, Hairhandulaan, and Bogd counties have exceeded the carrying capacity of pasture by 178- 247 percent. The pasture carrying capacity of Sant County, for example, can keep up to 120 thousand SEUs, yet it is supporting 326 thousand and currently all pastures are heavily utilized at a rate of 247%. Sant County needs to decrease its SEUs by 177.7 thousand; otherwise, all the pasture would be overgrazed in a short period, and a majority of the underfed and weakened livestock will face a high risk of mortality from the recurrent natural disasters such as dzuds and droughts. The 2009-2010 year dzud killed 135,471 livestock in Sant county, which is almost as high as the target amount of 177.7 thousand SEUs. This dzud took place while this report was being finalized. Thus, although some of the new numbers are mentioned in the tables and figures, they are not reflected in the actual cost and policy analysis. This incident reflects the vulnerability of herders to sudden natural disasters (in addition to policymakers) to whom the death numbers are much more than statistics. The target level of grazing efforts will have to be revised up or down in accordance with climate conditions especially in the winter. In certain cases, dzuds will wipe out entire livestock populations, alleviating the pressure to reduce livestock, but worsening the pressure for herders to find alternative sources of income. 2.4 ENVIRONMENTAL IMPACT OF GOATS The goat population has been growing without pause since 1990 and surpassed the sheep population in 2004. In 2008, the sheep population was 18.3 million, and the goat population was greater at 19.9 million. Nationwide, it appears that 600,000 goats are added each year, and at this rate, the number of goats will reach 25 million in four to five years (Bakei 2009). The subsistence nature of livestock husbandry, the ever increasing prices (inflation) of commodities, easy access to buyers, and the easy liquidation of goat assets have affected the mindset of herders into breeding as many goats as they can. There is a shortage in awareness raising measures among herder communities about the dangers of overgrazing and a scarcity of alternative income sources to meet the primary needs of local inhabitants. 15
Among all of the livestock, goats have had the highest rate of population growth. On figure 6, you will see that, the goat population has been more or less stable from 1971 to 1991 with deviations of 300-600 thousand. It increased sharply from 1992 to 1998. However, the dzud disaster (heavy blizzard) of 2000, reduced goat numbers in these two provinces to its 1990 level. Herd sizes have continued to increase and are at its highest peak at 1.69 million goats in Bayanhongor province and 1.56 million goats in Uvurhangai province. The sudden goat population growth increase was initially caused by the privatization of livestock, and then further induced by worldwide popularity of cashmere and its ever-expansive market demand.
Figure 6. Goat population growth as of 2010 Figure 6 shows that the goat population rate reached the 2008 rate after the dzud of 20092010 in Bayankhongor province and the 2004 rate in Uvurkhangai province. The population drop in Bayankhongor province is 16 percent, and the population drop in Uvurkhangai province is 42 percent since the 2009 numbers. From an environmental conservation and development point of view, there are several reasons to keep the goat population at a steady level: a) Goats uproot and browse vegetation, and selectively eat the seeds and young ones of vegetation during the germination period (S.Tserendash 2009). Very familiar with these goat tendencies, herders have traditionally kept the goat to sheep ratio 16
at 1:3. This herd composition allowed the process of natural pasture regeneration to occur. However, this composition ratio has been lost for many years. b) Goats increase soil erosion the most from any other livestock because their sharp hooves trample and break the crypto-biotic crust that covers soil (Bakei 2009). There is neither any state regulation on goats nor are there any comprehensive government policies that seek to address this problem. In fact, in fall 2008, the government supported goat herders, which totaled a subsidy of 24.7 billion MNT. (Look at section 4.2.5 for more details) c) Goats are the most destructive of all livestock. The amount of forage they eat per day is on average 5.9% of their body weight, whereas that of the other livestock is a lot lower (S.Tserendash 2009). Given the option, they are capable of grazing pasture until exhaustion (UNDP 2008). d) Too much dependency on cashmere exports is a danger herders must avoid. The cashmere market is becoming increasingly competitive with neighboring China producing more quality cashmere throughout the years. Additionally, herders receive a very meager sum by traders considering the amount of profit that they make from the end product (Bakei 2009).
3.0 LOCAL SURVEY RESULTS
The purpose of the survey was to find out the opinions of herder families with regard to their opinions about the quality of their surrounding ecosystem services, their perspective of the severity of pasture degradation, the causes of pasture deterioration, the relative impact of livestock on pasture, necessary government and herder input in pasture management, and other pasture management policy options. 3.1 RESEARCH SITE DEMOGRAPHICS The survey was conducted in the period between June 20 and July 20 of 2009. A total of 160 herders and their family members participated in the survey, which means that twenty herder families from each county were surveyed. Most of the respondents were family heads, of which 77% were men and 23% were women. We intended to question ten herders that had goats and ten herders without any goats from each of the counties. As will be explained in section 3.2, we were unable to carry through with that part of the plan. Twenty five officials including county governors, deputy governors, local parliament speakers, agriculture officers and environmental inspectors were also interviewed. They also filled in survey questionnaires, which were specifically designed to acquire their views on potential policy options. The following tables illustrate the livestock ownership statistics of the 160 people who participated in the survey. Generally speaking, 200 livestock is the minimum poverty threshold number of livestock, and herders with 600 and more livestock are considered 17
extremely wealthy. Forty percent of the survey takers had livestock within the 0-200 range, and twenty percent had livestock within the 600-1000 range. In terms of goat ownership, 53% of the respondents are within the 0-200 range, and 18% are within the 600-1000 range. Thus, two quintiles of the survey takers were extremely poor, one quintile was fairly well off, and the remaining two quintiles were in the middle income range. Table 3. Total livestock owned by the surveyed herding families (2008 census data)
Hujirt Below 100 Within 100-200 Within 200-400 Within 400-600 Within 600-1000 Above 1000 7 7 3 0 0 3 Sant 2 2 4 5 6 1 Hairhandulaan 3 4 10 2 1 0 BayanUndur 4 2 5 4 2 3 Jinst 5 4 3 4 2 2 Bogd 0 6 5 1 1 1 Bayanlig 6 3 3 3 3 2 Ulziit 5 5 2 3 3 2
Table 4. Total goats owned by the surveyed herding families (2008 census data)
Hujirt Below 100 Within 100-200 Within 200-400 Within 400-600 Within 600-1000 Above 1000 15 4 0 1 0 0 Sant 4 5 9 1 1 0 Hairhandulaan 8 7 2 3 0 0 BayanUndur 3 2 5 4 2 1 Jinst 5 4 5 3 3 0 Bogd 0 9 3 0 2 0 Bayanlig 6 3 2 2 2 1 Ulziit 5 4 2 3 1 0
3.2 METHODOLOGY We used a stratified random sampling method in our survey in which the herders were grouped by the number of livestock they possessed (which can be seen on tables 2 and 3). To keep the sampling process unbiased, livestock types and their quantities were separately delivered to local agricultural departments. The data is taken from county level 2008 livestock census. The survey questionnaire was prepared with six sections. The first section contains 18 questions related to the environmental problems of the local region, pasture and resource degradation, causes of environmental deterioration, and the degradation impact of livestock. The second, third, and fourth sections had questions related to the costs of implementation of the potential three policy options. These sections had between 4 and 14 specific questions related with the implementation of each policy option. These three options (which will be described later) were: • Application of grazing fee for pasture utilization 18
Application of herder income tax Community management of pasture
The survey was taken in two steps: the first survey pre-testing period was carried out in April 2009 in Sant county of Uvurhangai province. During the pre-testing period we found some problems with the survey design: • It was not possible to have equal numbers of respondents who owned goats and respondents who didn’t own any goats. We found that almost everyone sought to own goats due to easier access to the cashmere market, thus finding ten respondents who didn’t own goats was impossible. The survey touched on the sensitive issue of the number of goats each respondent owned. Because respondents were reluctant to expose their personal income details, this part of the survey was made optional. However, we received official livestock census data from government officials to ensure data accuracy.
3.3 RESULTS The summary of responses to the first set of questions regarding environmental conditions and problems, and the main causes of deterioration are stated below: Regarding the respondents’ opinions about the causes of environment problems: 46.3 percent- climate change through reduced precipitation 28.1 percent- increased livestock numbers and destructive human activities 25 percent- desertification, drought and sand movement 8.1 percent- decreased water availability The majority of herders blamed decreased precipitation and climate change for pasture deterioration (65.5%), and the remainder put the blame on increased livestock pressure 34.5%). Regarding the livestock species that impact pasture quality most the majority said that goats were to blame (76%) and the rest (16%) said horses were to blame. There was a consensus that goats represented the highest growing species and that there is a relationship between livestock population growth and pasture degradation. Most herders (74%) felt insecure about their customary pasture area during the seasons because they were not legally entitled to the land, and a brave minority (7%) responded that they hired people to ensure that their pasture was safe from free-riders. A critical question regarding whether herders care about pasture quality in an open access pasture was answered in the negative by a lot of herders (61%) and affirmative by the rest (32%). A sound majority (86%) of the respondents stated that the government should get involved in pasture regulation. Figure 7 illustrates the responses to the question on what sorts of measures can be taken to utilize pasture more responsibly.
Respondents' ideas for sustainable pasture management
community pasture management 4%
do not know w hat to do 5% aw areness raising and training 8% rotational use of pasture 9%
pasture law required 1% access to loan 3% no answ er 39%
reducing livestock numbers 13%
practical measures through fencing, planting, and irrigating 18%
Figure 7. Respondents’ ideas for sustainable pasture management Key finding of the survey: 1) The majority of herders are aware of their surrounding environmental problems and the main causes of pasture degradation, and they proclaim the need for government involvement and strict regulations of pasture resources division that are equally distributed. 2) A substantial number of herders believe that the main cause of pasture degradation is climate change, which fosters inaction and hopelessness on their part. This conviction supports the dangerous conclusion that herders themselves are not capable of playing an important role in alleviating pasture problems by working together to adjust herd sizes.
4.0 LEGISLATIVE FRAMEWORK ON PASTURE USE
There has never been any particular legislation defining the manner in which pastureland should be used. Establishing legally binding regulations on pastures was not deemed necessary with a sparse human population in such vast pastures. However, times have changed and the Mongolian nomads have begun to outpace nature’s replenishing rate with the sheer number of livestock they have been breeding. Although there has been a 20
livestock census system in Mongolia since 1918, currently, there is neither an established system of assessing the state of pasture resources nor a nationally adopted system of measuring the carrying capacity of pastures. 4.1 TRADITIONAL PASTURE REGIMES 4.1.1 Khoshuun system /1300s-1950s/ Traditionally, nomadic herders grazed the vast but fragile grassland by rotating animals over shared pasture seasonally, and in a species segregated pattern. Herders were a part of khoshuuns, where they shared labor resources and controlled their grazing patterns according to pasture quality. These khoshuuns knew about the detrimental grazing habit of goats and thus kept the sheep to goat ratio at 3:1. Ruling nobles and monks from Tibetan Buddhist Temples operated the khoshuuns. Khoshuuns were better ecologically distributed than soums today because they spanned north south to incorporate different ecosystems (Mearns 1992). The khoshuun system was completely demolished during the fifties, when Communism began to emerge in Mongolian politics. 4.1.2 Collective system /1950s-1990/ When socialism began to emerge in Mongolia, the state introduced collectives, also called negdels, which were established in every county in the early fifties. In the collective system, livestock was generally deemed common property and herders were only allowed to keep their own herds of up to 75 heads. All of the operations were centralized, and the quality of pasture was regulated by the state. This system was not popular among herders because it did not reward herders according to their level of hard work. This system collapsed in 1990 together with the collapse of the Soviet system. 4.1.3 Current pasture regime /1990s-present/ The current pasture regime is worse than both the khoshuun and the collective system because regulations regarding the management of pasture are nonexistent. The pasture use system is in chaos; there are constant disputes over who is entitled to use which pasture and it has become the norm for herders to try to use as much pasture while they can. Few herders feel obliged to assume responsibility over managing this deteriorating resource. Since it is illegal to claim private ownership over pastures, why would herders invest their time and efforts into protecting it? Currently, there are a few number of herder groups scattered around the countryside, which were established with the aid of international development organizations. The herders in these groups manage the livestock together. Herding groups are becoming more popular among herders, who are becoming convinced collective management is far more effective than individual management. The Land law stipulates that local governments are responsible for regulating pasture utilization and the distribution of pasture use among herders in their territories. The 21
county parliament has to review and adopt pasture utilization plans for their county, and its government office has to ensure that these plans are implemented. Despite this law, there is no administrative framework, staff or sufficient funds for pasture resource management within local counties. Within the government structure, the Ministry of Food and Agriculture (MFA), and the Ministry of Environment and Tourism (MET) carry the key responsibilities to addressing the nationwide pasture degradation disaster. The Ministry of Food and Agriculture shoulder the brunt of the responsibility over pasture management and are channeling many efforts to improving pasture sustainability. However, it does not have the environmental clout and focus that the MET has over the issue. Unfortunately, the MET leaves the issue at the hands of the MFA, and does very little to push the issue, and to support the MFA with their efforts. The limited cooperation between the agencies result in certain activities that are done by both agencies (very inefficient) and in certain activities that would have been much more effective with the participation of both ministries. 4.2 CURRENT LAWS AND POLICIES PERTAINING TO HERDERS There are very few laws and policies that pertain to livestock management. They are mentioned below: 4.2.1 Land law 2002 This Land law contains the fundamentals of land resource management. Provision 52 of this law defines the responsibilities of county governments regarding pasture regulation in their local territories. It also allows herder communities to possess certain pastures nearby winter shelters through contractual agreements with the respective county administrations. Provision 58 of the law allocates a specific sum of money and specifies the government’s land quality monitoring responsibilities. According to this provision, the state should regularly monitor the conditions of land resources every 5 years through its implementing agency. Due to the weak functionality of local governments and the lack of cooperation between Land and Agriculture state agencies, the recommendations made by the monitoring agencies are hardly ever followed up, and hence result in very few outcomes. There is no clear framework within the central and local governments that assumes responsibility of the regulation of pasture resources. 4.2.2 Law on land use fee 1997 In 1997, the government adopted the Law on land use fee, which imposes fees on all land use types, including pasture use and hay collection. This law sets the amount of fees for pasture use by each type of livestock, which is represented by sheep equivalent units (SEU). This annual grazing fee amount ranges between 57- 77 MNT per SEU. However, herders were exempted from this law from the very beginning. Thus, they have never had to pay pasture use fees.
4.2.3 Law on individual citizen’s income tax 2006 The Law on individual citizen’s income tax attempts to regulate livestock numbers by taxing herders based on their livestock. The tax rate varies by economic regions (intended to encourage even utilization of pastures). For example, annual tax per SEU in the central region is 100 MNT (8 cents), the tax in remote provinces is 50MNT and in other regions it is 75MNT. The herder’s tax rate is ten times lower than that of other citizens, whose income tax is 10 % of their annual earnings. In June 2009, the parliament exempted all herders from the individual citizen’s income tax justifying their decision with the 2008 economic crisis. 4.2.4 Pasture law draft 2006 The first Pasture law draft appeared in 2006. The draft essentially focuses on giving rights to herders to possess winter and spring use pastures. This would allow herders to make investments on the pastures of their possession to improve their rate of productivity. In 2009, the draft was amended with a provision that gives possession rights not to individual herders as in the first draft, but to entire herder communities. If this law eventually gets passed, it is likely to regulate livestock numbers and herd composition with regard to the pasture carrying capacity of their respective domains. Although this can be a good policy instrument, it is still a draft after four years and there remain many weak points. This law draft has been hindered from make progress because of the continuous debate and criticisms that cloud the draft. Additionally, politicians are also reluctant to pass this law because of the sensitivity that surrounds the issue, often among their own constituents. 4.2.5 Government Pasture Policies Best herder policy: After the collapse of the communist system, the state promoted a policy to encourage citizens to breed livestock to support herders’ livelihoods and to promote economic growth. In 1990, the government created an award called “A herder with thousand livestock”. The reward has raised public criticisms that it is pushing only for higher livestock numbers, and is very detrimental to the environment. The government reacted by making some environmentally inclined revisions to the award, which they renamed the “Best herder” award. However, the essence of this policy remains unchanged. Additionally, all the provinces (total of 21 provinces) have their own internal “a herder with thousand livestock” award systems. This is a failed policy that counteracts the environmental mission of the government. Goat subsidy policy: In October 2008, the government decided to support goat producers because they represented one of the largest groups suffering from the economic crisis. The government offered herders 5000 MNT for each kilogram worth of cashmere that their goats represented (for every 1.5 goat). The total payments amounted to 30.5 billion MNT, which was taken from the Mongolian development fund, a fund which is designed to benefit as much of the population as possible. Many other sectors were suffering as much as the cashmere sector during that time. Again, the backwardness of 23
this policy illustrates the fact that the government still does not fully recognize the full extent of the damage that goats impose on the environment.
5.0 POLICY OPTIONS
The following policy options were deduced from our research as possible solutions to addressing the overgrazing and goat overpopulation issues in the chosen counties of Bayanhongor and Uvurhangai provinces: 1) 2) 3) 4) Communal pasture management regime Application of fees on pasture utilization Re-application of herder income tax Pasture grazing quota
It is important to stress that the intentions of this report and of the government is not merely to decrease grazing efforts and nor to reduce the goat population, but to do so in a manner that makes grazing activities sustainable in the pasture areas. Thus, the starting point for the policies investigation will be by determining the pasture carrying capacity statuses of the target counties. The pasture carrying capacity status serves as the most important indicator of pasture sustainability. The pasture carrying capacity will serve as the main objective or threshold value of the policy options. To reach this objective, substantial reduction of grazing efforts is required for five out of the eight counties in the Bayanhongor and Uvurhangai provinces as can be seen in the table below. Table 5. Baseline 2008 data for all policy options
County names Bayanundur Sant Hujirt Hairhandulaan Bayanlig Jinst Bogd Ulziit Current SEU, thou units 321.6 298.5 310.4 246.9 196.4 127.3 193.4 247.2 Current PCC, thou head 156.0 120.8 129.6 114.1 227.9 150.8 108.4 277.1 Pasture utilization rate, % 206.1 247.2 239.5 216.4 86.2 84.4 178.4 89.2 Exceeded SEU, thou unit 165.5 177.7 180.8 132,8 0 0 84.9 0
The pasture carrying capacities of five out of the eight project counties have been exceeded. The pasture utilization rates that are in bold represent those counties whose utilization rates exceed the optimal level. These 2008 figures show that these counties need to reduce their existing livestock numbers substantially by the amount of SEUs written in the rightmost column of table five. However, the dzud of winter year 20092010 killed 8.4 million. The soums that were worst hit by the dzud were those five soums that had livestock numbers exceeding their pasture carrying capacity. Thus, there is a correlation between livestock numbers exceeding their sustainable numbers, and nature actually proving that these numbers truly are unsustainable. Despite the decline in 24
livestock numbers in those five soums, they will remain a target area for concern in this report because the herders are likely to raise their livestock numbers yet again. Throughout the rest of the study only these five soums were studied. This does not mean that the three other soums, that have fairly better pasture conditions will be ignored from policy implementation. The three other soums: Jinst, Bayanlig and Ulziit will have lower livestock reduction targets, otherwise, they also face the risk of facing unsustainable pastures in the near future. We came to the four policy options by first identifying the root cause of the unsuccessful attempts by the government and all other involved parties to tackle the grazing management problem. The following chart on figure 8, shows the identified root causes and also shows possible solutions that seek to correct them. The four policy options were borne out of this chart, and they represent different combinations of the solutions.
Policy problems that are related to pasture deterioration
Lack of pasture regulations A. Regulate pastures such that the carrying capacity is not exceeded B. Establish a communal pasture management regime among herding groups
Exclusion of herders from income tax C. Tax herders based on their income Exclusion of herders from land use (pasture) fees D. Charge herders on their pasture use Lack of investment in strengthening the capacity of province governments E. Increase training workshops to strengthen the capacity of province and soum governments Lack of initiative to promote businesses in the countryside F. Increase investments in small and medium enterprises Promotion of goat population growth G. Promote goat productivity instead of goat population growth Inappropriate rewards that promote livestock population growth H. Change the reward system to one that solely promotes environmentally friendly herding practices
Figure 8. Policy problems that are related to pasture deterioration Once one of the policy options is chosen, they will undergo heavy monitoring that will test whether the proposed reductions are successfully being implemented. Should the delivery of the policy option warrant further improvements to ensure that the pasture resource is maintained, we will consider stronger action and a tougher stance on reducing grazing effort.
5.1 Option I: COMMUNITY PASTURE MANAGEMENT (CPM) This policy option will establish herder groups for approximately every fifteen herding families, and these groups will share a designated pasture area which they will use exclusively. Their main responsibilities will be to coordinate their livestock movements, to monitor pasture quality, and to ensure the quality of pasture by defining the livestock size limits that suit their land. They will also pool funds to invest in pasture restoration and protection. Trespassing by nonmember herders will be legally forbidden through a contract made with the local government. The involvement of central and local governments will be crucial during the initial establishment of herder groups. The government’s role in this policy option will be to oversee the successful management of the herding groups, to strengthen their capacity to maintain strong and environmentally effective herder groups, and to loan out money for investments in small and medium enterprises to improve the productivity of the livestock. Members would need to be aware of where their herding styles fit into the general pasture carrying capacity scenario, and know the legal borders of their specific groups (since they won’t be fenced). During the first several years, the government will assist in settling pasture delineation disputes and in monitoring pasture quality to ensure that the groups’ livestock is grazing within safe limits. 5.2 Option II: APPLICATION OF FEES ON PASURE UTILIZATION (FPU) This policy option is based on the re-application of the pasture fee provision of the Law on Land Fees. Herders will become obligated to pay fees based on their pasture use subject to a more impact based index for each of the livestock species. The predicted outcome of the policy is to see significantly reduced livestock numbers (especially goats) within twenty years. This policy will take into account the pasture use inequalities that exist between different herder, and will have features that provide more income options for herders by supporting small and medium enterprises. In Law on Land Fees the fee rate ranged from 55- 77MNT depending on natural zones (fees were smaller in drier zones). The present value of 77 MNT of 1997 is 20 MNT today (2010), which is 1.4 US cents per year for each SEU. If we consider that one sheep eats 1.6 kilos of forage per day, it eats 584 kilos annually. The local market price of a 25 kilo bundle of hay is 2500 MNT ($1.80). This means that each sheep uses $20 worth of feed annually. In comparison to this value of forage, the pasture fee of each SEU is far too small (0.07% of this value). In setting effective fee rates, we use five variables to target the animals according to their respective level of environmental impact. The following formula, which is an updated version of the traditional pasture fee formula, will be the main guideline for fee charges: R = 77*Y*X*C*D*T 77 Base pasture fee per head of livestock in MNT 27
Y X C D T
Pasture quality (bad- 2, good- 1) Livestock type (3-goat, 2- horse, 1-sheep 0- camel, and cow) Pasture proximity (distant, not utilized- 0.5, heavily utilized- 1.5) Pasture carrying capacity (exceeded- 2, not exceeded- 1) Herd ratio of goats and sheep (doesn’t comply- 2, irrelevant/complies- 1)
Camels and cows are not charged with any pasture fees because they are not considered a major risk to pastures and because their numbers are generally small compared to goats and sheep. The underestimation of the impact of goat species on pasture quality is the biggest downfall of the agricultural sector; the national SEU value of goats is set at 0.9. This value of 0.9 blatantly misconstrues the negative impact of goats on pastures. In this policy, the SEU of goats is set at 3. The above function shows that the pasture fee rate for all of the livestock ranges between 77 and 1848 MNT. According to the formula, the pasture fee for each goat will cost 1848 MNT in heavily degraded pastures. Applying this policy will ultimately lead to increased productivity per head of livestock. Instead of the traditional way of stressing livestock numbers, this policy will focus on pasture quality. 5.3 POLICY OPTION III: RE-APPLICATION OF HERDER INCOME TAX (IT) The Mongolian tax law stipulates that every citizen should be taxed 10% of their net income. However, herders were exempted from this tax law in 2009 because they allegedly represented the most vulnerable members of society. This policy option suggests the re-introduction of a slightly amended tax law on herders. This law taxes herders on the number of livestock that they possess. The index system, which makes assumptions about the economic value of livestock counts camels as 2 SEUs, horses and cows as 5 SEUs, and goats as 1.5 SEUs. Goats are valued as 1.5 SEUs instead of 0.9 SEUs because of their cashmere production potential. The tax rate ranges from 38 to 250 MNT. The calculations on appendix 1 shows that if herders were to be taxed for their income, they would have been taxed at a rate of 0.07% as opposed to the 10% that all other citizens are charged. This tax law did not tax herders the normal 10% income tax in the first place, and is unlikely to have affected the decisions of herders at all. To make the tax rate effective enough to make herders reduce their herd sizes and instead optimize the productivity per head, this policy will follow the following equation, which has made the tax rates substantially higher than their previous rate. The formula for calculating tax levels is as follows: Tg = 75 * T * Z * K 75 T Z K Base tax in MNT (as stipulated in the General Tax Law, 2003) Profitability of livestock: goat= 5, horse= 3, sheep=1, camel & cow= 0 Coefficient of goat age, Z=2 for male goats above age three, Z=1 for others Coefficient of productivity 28
The first factor is based on the economic return of goat breeding. On average, a goat produces 300 grams of cashmere, which yields about 9000 MNT (US$ 6.4) each year. The second factor is the age of goats. In order to optimize their yearly profits, herders are interested in keeping their goats alive as long as possible. Although the quality is markedly poorer, five year old male goats yield almost twice the rate of one year old goats. The third factor considers the productivity of each livestock type. Higher taxes are imposed on those species that offer lower economic returns. The tax level ranges between 38 MNT to 2250 MNT a year per animal. 5.4 POLICY OPTION IV: GRAZING QUOTA FOR HERDERS (GQ) Quotas are generally considered an effective tool for managing open access resources throughout the world. This is especially so in fisheries. Although pasture is also an open access resource, it is not as simple in the case of Mongolia. Our survey conducted on herding households illuminates the feasibility and popularity of this policy option very clearly. Quotas are only useful if the open access resource can easily be defined either by manmade enclosures or by the very limited nature of the resources. Mongolian pasture simply cannot be fenced. This type of quota management was tested for ten years in Inner Mongolia; herders were given limited pasture and limiting herd quotas for changing nomadic herding management into settled one. However, this quota based grazing system is not suitable for Mongolia’s case. Mongolian herders are not nomadic of their own accord, but are so because pastures are extremely vulnerable to climate conditions, and limited plots of pasture do not guarantee consistency in their forage productivity. Thus, we acknowledge that this is a possible policy option that is not feasible enough to compel us to calculate its cost effectiveness. 5.5 POLICY OPTION V: NO POLICY (NP) In the no policy scenario, no deliberated action will be carried out to combat the overgrazing crisis. A large number of herders with already low herd sizes will lose their herds to winter storms (dzuds) and starvation, and thus find themselves at a loss for subsistence means. This will dramatically increase rural to urban migration, which will further exacerbate the poverty and unemployment problems already existent in Ulaanbaatar and other cities.
6.0 COST ANALYSIS
6.1 METHODOLOGY There is a total of 997,500 livestock and over 5400 herding families in the five counties with exceeding carrying capacities. To reach a number of livestock that does not exceed the carrying capacity of the pasture, the total number would have to be reduced approximately to 290,000 heads or 3.4 times. Considering the fact that livestock is the only source of living for all these herder families and a majority of them have less than 200 livestock, (which means they live below or close to the poverty line), it is impossible 29
to reduce the livestock population in a short time period. Our approach to reaching this level is a gradual reduction system that is to be carried out for twenty years. However, twenty years is a flexible timeline, which may be shortened to fewer years if conditions are more favorable than we predicted and pasture quality improves more rapidly than supposed. This would happen simultaneously with investments in pasture restoration, the establishment of schemes that increase livestock productivity, and the promotion of small and medium enterprises for livestock raw material and dairy processing. We exclusively calculated the costs for goats, sheep and horses because sheep and goats make up 85-90.5% of the total livestock in the five counties, and horses come second after goats in their level of environmental impact. To estimate the impact of the policies, we first calculated the flock circulation, and then we used the flock circulation data in the herder expenses component of the cost effectiveness equation. We discounted the costs of the policies at six percent. The general interest rate of the Mongolian Central Bank is currently at around ten percent. Although twenty years may seem like too long a period for the policies to become fully implemented, this length of time is necessary to guarantee that alternative sources of income and improved technologies are solidly established, which would make herd reduction an easier process for herders. The following table illustrates the final reduction percentage rate of the goats, sheep and horses that will be neccessary to effectively improve pasture conditions, at least to make the pasture more sustainable. These livestock population reduction rates are subject to change if the prices at which the products of the animals change relative to each animal. These changes would have to made throughout the implementation of policy. For example, if the price of wool rises with improved processing and marketing of the product, herders may become more compelled to increase the sheep to goat ratio to even higher than 3:1 such that the amount of grazing pressure is still maintained while the flock composition is slightly changed. However, it is fair to say that these population target ratios are a decently sound representation of their eonomic worth and their environmental impact. Table 6. Livestock reduction levels
Target population 2008 Population Required annual reduction percentage rate (as of 2008) 39% 37.5% 20.4% 2010 Population Required annual reduction percentage rate (after 2010 dzud) 34.5% 34.8% 18%
Goat Sheep Horse
~ 86,00087,000 ~180,000 ~21,000
485,417 426,504 48,721
189,124 244,725 31,254
The following two figures show the livestock reduction rate plans before and after the dzud. A comparison of these two graphs indicates the drastic impact of the dzud on the livestock numbers. Again, the first figure is given more emphasis on this report, and the second figure is there just to shed light to reduction rate fluctuations that may occur throughout the years.
Figure 9: Livestock reduction rate
Figure 10: Livestock reduction rate incorporating the 2009-2010 dzud Our population target level is based on the 1:4 goat to sheep ratio that is deemed most suitable for the environment. The horse population target is set to be halved. The total population of sheep, goats and horses spanning twenty years in the flock circulation
calculations (see table 1 of the Excel spreadsheet) is affected by the birth rate, natural death rate and our desired herd reduction rate. 6.2 FLOCK CIRCULATION The flock circulation numbers represent the real economic value of each goat, sheep and horse in the most holistic sense. These numbers illuminate the normative value; the total monetary value of the animals that herders are capable of receiving if they are successfully able to sell all of their livestock products at their current price levels. The flock circulation calculations currently appoint value to the milk, hide and wool of all of the livestock because of the potential profits they can reap in the future. They are capable of bringing in profits if a large enough market is established to bridge the gap between the customers and suppliers. There is certainly a large demand for the currently unwanted milk, hide and wool, especially in Ulaanbaatar, but there is no established intermediary mechanism that connects the suppliers and customers. Table 7 shows the flock circulation calculation scheme of goats. The same scheme was used for horses and sheep, but with different coefficients. Table 7. Flock circulation calculation scheme of goats
Population converted into SEU Total Goat Population Portions of the population Reproductive
SEU Conversion Coefficient Death from natural causes for mature livestock /in percentage, average from the past 5 years/ Percentage from the total population /average of the past 5 years of the nation's population/ Number of offspring from every 100 births /average of the past 5 years of the nation's population/ The percentage of livestock that will have their hide sold in the market The average product from each livestock unit The amount of milk that will be produced in one month of the summer season. (Opportunity cost included) The average is taken from the Mongolian Breed. (Opportunity cost included)
0.9 0.0204 0.404 0.812 0.39 18.5 15 0.28
head head head head piece kg l kg
Offspring Hide Goat Income Types Meat Milk Cashmere Salary for herding labor Expenditure Types Feed Veterinary Costs imposed on Herders
The annual salary for each livestock unit. The hay will be used one month of the winter. Each livestock unit will consume 1.4kg per day. The annual veterinary expenses for each livestock unit, taken from studies.
6000 42 350
MNT kg MNT
The annual cost of the depreciation that Depreciation Costs takes place on the maintenance of water of Springs and sources due to usage by livestock. Wells Expenditures Subtotal Profit
The following numbers only serve to give one an idea of the relative values of each of the livestock. These values of goats, sheep and horses are always changing because of price fluctuations, especially in the meat market. These estimates show the positive and the normative values of each animal in the five soums when 39% (goat), 37.5% (sheep) and 20.4% (horse) annual reductions are made to the following animals. This report stresses the normative value of the livestock because they illustrate the potential value of the livestock when their productivity is increased, and on the flip side, their negative environmental costs. The positive value does not reflect the environmental costs; it also shows the value of the animals with reduced productivity to the current ability of the markets to brand the products and to offer it to its potential customers. Table 8. Comparison of the positive and normative values of the livestock
Positive value today) 6’010 MNT 5’070 MNT 450 MNT (the value Normative value (the value it should theoretically be) 4’530 MNT 6’720 MNT 23’820 MNT
Goats Sheep Horses
Apparently, sheep produce 5 kilograms more meat and 9 liters more milk than goats. Thus, sheep are theoretically more valuable than goats. The cashmere market is far more advanced and far larger in Mongolia because of its international popularity than the meat milk, or wool markets. If the wool, meat and milk markets also become well established, the value of sheep will become closer to their normative value. The flock circulation calculations value horses at 23’820 MNT, a high price compared to sheep and goats, because of the sheer size of horses. Horses are said to offer 120 kilograms of meat and 100 liters of milk. Female horses are much more valuable than male horses because they produce milk. Among the female horses, the white ones are more valued for their milk. Horse meat is not too popular in Mongolia, and horses are generally used much less for their transportation means. Thus, unlike the flock circulation value for horses, they are not as economically valuable as they appear. If the demand for horse meat were to rise, this lofty horse value is more likely to be realized in real life. When calculating the total income derived from wool, cashmere and milk, we subtracted (excluded) their incomes from those livestock that were deliberately slaughtered to reduce herd sizes. By doing so, we incorporated the opportunity cost of not being able to further reap wool, cashmere and milk profits from these slaughtered livestock.
6.3 MEASURING THE COSTS It was not possible to carry out a cost analysis on the different policy options simply because they are structured such that some of them invest more in pasture rehabilitation and others invest more in herder institutions. The effectiveness component of these policies was unequally allocated from the very beginning. The following graph shows the general steps we took for each of the policies when measuring their costs.
MNT per animal/year or per soum/year Initial Population 485 417 426 504 48 721 5 000 7 000 24 000
Types of Costs, MNT Total Goat Population Total Sheep Population Total Horse Population Value from goats Value from sheep Household Expenditures Value from horses Investment for improved productivity of SEU (Inbreeding support center) Investment for pasture restoration
Year 1 445 442 408 386 46 748
946 563 150 1 119 573 000 238 538 016
194 080 000 199,104,000 for five years 33,500,000 for a ten year loan payback 25,000,000 for 3 years 80,000,000 for 3 years Initial 70 million, then 10 million per year 9 000 000 1 800 000 3 000 000 15 000 000
199 104 000
Investment for livestock raw material processing (value adding)
Total Herder Revenue /in tugrugs/ Support for herder groups Government Expenditures Pasture boundary delineation of herder groups Detailed determination of pasture carrying capacity Costs for three technical staff for each administration in each county (Community support, SME development, communal pasture management, Salary Equipment and Technology Public awareness and advocacy costs
33 500 000 1 877 990 166 125 000 000 400 000 000
350 000 000 45 000 000 9 000 000
dispute resolution, monitoring and evaluation.
Investment for livestock raw material processing (value adding)
335 000 000 335 000 000
Loan payment from herders
33,500,000 for ten years 33 500 000
Total Government Expenses (-) Total Policy Revenue Present Value of Total Policy Revenue (at 6% discount rate)
1 245 500 000 632 490 166 632 490 166
Figure 11: Policy calculation steps The costs were divided into two sections; herder revenue and government expenses. These costs were calculated for the next twenty years. Some of the investments were designed to last five to ten years, which is why it was important that the costs of each year were depicted in the measurements. The reason that the herder component of the costs is described as ‘revenue’ is because they receive a net positive value from all of the policies. Herders generally keep too many of their livestock on their feet, which is logical because they act as a form of insurance from natural disasters. (However, the 2009-2010 dzud proved that the large herd sizes do not guarantee a safety net. There were many cases where the entire herd of herders was obliterated by the dzud). This table illuminates the fact that keeping large sizes of livestock is not economically profitable herders, who should be keeping their livestock in business circulation.
6.4 BREAKDOWN OF THE POLICY OPTIONS The three proposed policies have similarities and differences in their characteristics. Policy 1, for example, has the most amounts of components whereas policy 3 is much simpler. From the common government expenditures column, one can see that all of the policy options will have an emphasis on establishing processing centers, which will be a means to improve the productivity of the livestock and to create alternative sources of income for herders. This will mean that not all rural inhabitants will have to rely strictly on herding, which will also reduce the need for every family to own livestock.
Table 9. Breakdown of the policy options Common herder cost components
value of goats, sheep and horses that are to be slaughtered loan payment for livestock raw material processing center
Common government expenditures components
detailed determination of pasture carrying capacity
Components unique to policy option 1
inbreeding support center, for improved productivity of SEU /see app. 5/ investment for pasture restoration (herder) /see app. 3/
Components unique to policy option 2
pasture fees H
Components unique to policy option 3
tax expenses H
salary for technical staff
pasture restoration expenses from 50% of pasture fee revenue G revenue from (50%) pasture fees G
total tax revenue G
equipment and technology costs loan payment for livestock raw material processing center public awareness and advocacy costs large investment in raw material processing center, SME /see app. 4/ Soft loan payments from herders for the processing center
expenses for support of herder groups G pasture boundary delineation costs G salary for three technical staff G
6.5 POLICY COSTS The government receives very little money from herders in the first policy. Therefore, the herders receive the highest amount of profits because they receive the least amount of burden from the government in turns of fees or charges. Policy option 1 displays an annual average net profit of 1.11 billion MNT, which is second after option 3. In policy 2, 36
the government collects an ample sum of money from the pasture fees, but they have to spend half of this amount on pasture restoration. This policy distributes the expenses to the herders and the government more equally than the other two. Although policy option 3 seems to be profitable for both the government and for herders, it does the very minimum to restore pastures and to support herder groups. Table 10. Average annual policy expenses Options Total Herder Balance Option I +1.32 billion MNT (constitutes the profits from livestock product sales, with very little expenses coming from the herders) Option II +827 million MNT (constitutes the profits from livestock product sales minus the pasture fees) -93.1 million MNT (the government will spend half of the fee revenue on pasture restoration) Option III +778 million MNT (constitutes the profits from livestock product sales minus the income taxes) +511 million MNT (the government will retain all of the tax revenue) No Policy At the current rate of degradation, most herders will be left without pastures within the next few years.
Total Governm ent Balance
-212 million MNT (the government will not receive any form of revenue from the herders, and bear the brunt of the restoration costs)
Total Policy Balance
The government will be pressured to subsidize the failing livestock sector, to suffer negative economic growth, and to deal with a large unemployed population. +1.11 billion MNT +734 million +1.28 billion The net effect will be (consists mainly of MNT MNT negative to both the herder’s revenue) (consists (consists of government and mostly of herder and society. The poverty herder government level of herders will revenue) revenue) rise drastically.
The values represented in table 8 and figure 10 were derived from 2008 livestock census data. These numbers would be different we were to incorporate the fallen livestock numbers resulting from the dzud. These values have the special function of showing the costs of the different policy options relative to each other. The integrity of the relations between the options will remain. In addition, these numbers show the costs related to a situation where there is excess livestock, which is generally the situation in these provinces. To incorporate livestock figures showing unrepresentative livestock numbers would not meet the goals of this report.
Figure 12: Costs of the policy options 6.6 CRITERIA SELECTION FOR POLICY OPTIONS The economic performance of the options should not be the sole determining factor of which policy is ideal for Mongolia. Certain policies may be great in theory but not practical or realistic in the real setting, thus a practicality criterion is factored in. A policy is not ideal if there is no political will in the part of the government to pass laws supporting those policies, thus the likeability, or the government’s attitude will be the third criterion. The fourth criterion is the support of the policies by the main stakeholders; the herders. Herders should ideally agree with the policy methods and be able to cooperate with the government in fulfilling their responsibilities within the policy. A mutual agreement on the necessity of the policies has to exist for a policy to pass. Table 11. Selection criteria for policy options Criteria Relative cost Weight ** Methodology for evaluation The cost to revenue 1-4, 4 being Cost and revenue ratio, which will the most cost calculations illustrate the effective relative cost of the policy. This must not be mistaken with cost 38 Description Measures
Herder’s acceptance level
effectiveness. How feasible the policy is of actually working out successfully considering the surrounding conditions. The willingness of key policymakers and legislators to pass laws and support the policy. The willingness of herders to cooperate with the policy requirements. The extent of impact of the policy, whether they be positive or negative.
1-3, impractical, slightly practical, very practical 1-3, unwilling, somewhat willing, very willing
Past pasture systems and regulations and their success rates.
Impacts (positive *** and negative)
Past records of laws and policies to examine the government’s tendencies 1-3, unwilling Herder survey to cooperate, somewhat willing to cooperate, very willing to cooperate 1-4, 4 meaning Expert judgment the highest amount of positive impact
Each of the five components will be measured on a scale of 1 to 4 or 1 to 3, with the higher score being more favorable in terms of policy implementation. 6.3.1 Policy option I. Community pasture management 1) Relative cost /3 out of 4 points/ This policy imposes the highest costs on the government and provides the highest profits to herders. It ranks second in terms of total policy expenditures. However, it ranks first in its average relative cost because the level of government aid falls dramatically as the years progress. Nevertheless, this policy has the most unequal distribution of costs within the involved parties. 2) Practicality, success rate /4 out of 5 points/ Through a communal pasture management regime, herders can implement the mechanism of division of labor, which simultaneously allows all groups to benefit. Herding groups have other benefits such as offering a sense of security to herders because mechanisms such as collective funds safeguard members from losing everything in times of emergencies. This policy is deemed fully practical because it gives herder groups 39
exclusive property rights to their pasture. Having exclusive rights gives herders more of an incentive to investing more of their time and efforts into ensuring that their land will be able to sustain them for as long as possible. However, this option has one large challenge of causing disputes among herding groups with respect to border delineation and internal disputes regarding the division of responsibilities, especially between the rich and the poor herders. These disputes pose a threat of breaking up herding groups, which must be taken into consideration when designing and setting up these groups. An action plan will be produced, which will define the steps and procedures to be taken should there be a split in a herding group. The first goal will be to reconcile the members of a group, but if that effort fails, the remaining herders will be strongly encouraged to become members of other herding groups in the surrounding area. 3) Government’s Attitude /4 out of 5 points/ This option requires substantial involvement of the government during the first several years. The government will need to do an inventory of existing pasture resources, implement fair division of pasture to emerging herder groups, establish property boundaries and set up a clear legal framework that allows everything to operate as smoothly as possible. Upon organizing such activities and completing them within the first five years, the government’s involvement will be limited to monitoring the contract implementation by various herder institutions and a periodic assessment of pasture quality. Oversight of implementation of pasture agreement is the government’s main function. This policy option requires the most active participation of the government, and the government has to be responsible for many different activities. In this respect, it expends the most time, energy, and money from the government. However, out of all of the policy options, this policy option is the most diplomatic form of dealing with the pasture problem because it does not impose direct financial obligations to herders. It is politically easier for the government to carry out, but it requires the most grueling work. 4) Herders’ Support /5 out of 5 points/ Although a communal pasture management system will cost the herders a lot from the reduction they will have to make in their herd sizes, they are not directly asked to pay up cash. They will instead be asked more to offer their time and commitment to maintaining the strength of their respective herding groups. Herders are offered a leading role in this form of management. This policy offers the most amounts of support services to herders (as seen on table 6), and aids them through the transition to smaller herd sizes. The services include offering pasture restoration, establishing an inbreeding support center and a herder support mechanism. This policy has the highest amount of benefits and positive externalities to herders because a collected effort in the shape of herder groups to reduce herd sizes to match the area’s carrying capacity improve the time and resource allocation of everything. This substantially improves the herders’ access to group services. A small portion (11 respondents) of the survey-takers was members of herder groups, and they pointed out the necessity of all other herders to join similar regimes. Their argument was that a few herder groups would not be as efficient if large numbers of individual 40
herders surrounds them. The survey results also show that 85 percent of respondents emphasize the need for government to regulate pasture use. Approximately forty percent said the government should give the right to herders to posses the pasture resources, and seventeen percent of respondents said that pasture possession rights should be given to herders’ informal and formal groups. Respondents had diverging opinions on the case of individual pasture ownership although the majority was in favor of a communal pasture regime. A little over half of the 160 respondents had had experience with formal and informal herders groups. These groups had focused on uniting their labor on haymaking, felting and crafting. 5) Impacts (Positive and Negative) / 4 out of 4 points/ This policy will fragment the pastures of the five soums into many pieces. However, direct physical barriers, such as wooden fences, will not separate these fragments. If the attributes of this policy runs successfully, this policy is capable of having the most positive environmental impacts, because not only will it mean planning set targets to reduce livestock numbers but it also means managing livestock grazing in various regulatory ways. This policy option represents an active solution to improving pasture quality and keeping the balance between pasture overgrazing and ecosystem resilience. During the initial stage of the policy implementation, herders will experience a deficiency in their household budget because of the reduction in their livestock numbers. However, other measures proposed in this policy option, such as the inbreeding, livestock raw materials processing through small and medium enterprise development and increased dairy production as well as community development, will eventually compensate for this negative impact and yield positive results. Overall Score: 20 out of 23 points 6.3.2 Policy option II. Application of a Fee on Pasture Utilization 1) Relative cost /2 out of 4 points/ In this policy, the herders rank second in receiving profits, the government ranks second in policy expenditures and the cost to revenue ratio is also second in ranking. It is the golden mean policy option among the three policies. The costs incurred on herders and the government is the most equally shared out in this policy. 2) Practicality /2 out of 5 points/ Herders are not used to paying any form of fees to the government to carry out their daily operations (herding). A pasture fee system exists in the law, but is currently exempted from being enforced; thus, it is mainly a matter of implementing it. It is more practical than policy option 3 because it is less costly, but is less so than policy option 1. The pasture fee for goats is lower than the goat tax level in policy option 3. However, the sheep and horse fees are slightly more than that of policy option 3. It is unlikely for 41
herders to follow suit with paying pasture fees, when they have never had to pay them and when they have financial worries enough. On the contrary, herders are accustomed to receiving all the charity and assistance that they can get from the government. The government should do so in the right manner, a manner that does not breed further dependency. 3) Government’s Attitude /2 out of 5 points/ The government will receive some revenue from the pasture fees, though their general balance will still be negative. In 2008, the government was trying to support the expansion of the goat population. Thus, this policy will be very inconsistent with the government’s track record. Most government officials will therefore be quite reluctant to support a pasture fee system. The key legislators (parliament members) have to answer to their constituents, which are mainly comprised of livestock herders. Because their chances for future election are at stake if they pass undesirable laws for their herder constituents, they will generally be fearful of passing the pasture fee law. 4) Herders’ Support /2 out of 5 points/ The herder mentality is that the government is not doing enough to support their arduous lifestyles, and that they have a responsibility to aid herders as much as possible. It is most probably the case that the government is not doing enough to improve the welfare of Mongolia’s herding population. However, the government’s role is not to be a charity organization, but is to be a leading implementer of successful policies and systems that make the lives of their citizens a lot easier to endure. Thus, herders will not be in favor of the pasture fee system despite the fact that half of their payments will be spent on pasture restoration. 5) Impacts (Positive and Negative) / 2 out of 4 points/ Half of the revenues collected from the pasture fees will be allocated to pasture restoration. In the first year, the pasture fee revenue is 529 million, which when divided into the five soums, is approximately 160 million MNT per soum. This amount is enough to make a perceptible difference to the quality of pastures in each soum. Compared to the first policy option, this option has fewer regulatory features to pasture use. The environment will mostly benefit from this policy option through the pasture restoration funds. In terms of environmental impact, this policy is the most favorable policy, which proposes direct pasture restoration activities from its first year of implementation (based on the regular pasture fees). Its impact that reduces the household budget is also as significant as the first policy option. Overall score: 10 out of 23 points 6.3.3 Policy Option III. Herder’s Income Tax 1) Relative cost /3 out of 4 points/ 42
This policy option looks financially too good to be true; herders receive a substantial amount of net profit (though it is the lowest of the three), but most importantly, the government receives a net profit (more than the other two). The government receives a net profit because all of the taxes are taken in as revenue. Unlike policy option 2, the government does not have a commitment to spend a specific portion of the revenues on efforts such as pasture restoration. The relative cost ranks second out of the three policies. 2) Practicality /3 out of 5 points/ The tax level is higher than the pasture fees. However, it is easier for herders to accept that they have to pay their taxes (which all lawful citizens are obliged to pay), which is higher than before, but is still not the 10% of income taxes that other citizens have to pay. Herders are also more familiar with tax payments because they had to pay between the years 2006 and 2009, whereas they have never had to pay pasture fees. The tax collection system is more advanced than the pasture fee collection system. 3) Government’s Attitude /2 out of 5 points/ There is some appeal to this policy to government officials; this policy will bring in a substantial amount of revenue that will raise the government’s budget. However, with the 2009-2010 winter year dzud that killed over 8.4 million livestock, this policy would appear to target the most vulnerable and suffering group in society. Thus, the government, which is protective of its perception by herders, will be especially wary of passing such a law. The government will meet increased pressure from herders to heighten their support without imposing any burdens on the herders themselves. 4) Herder’s Support /2 out of 5 points/ This policy imposes the highest charges on herders. There is also no guarantee that the total tax amount will return to the herders and directly benefit their lives. This policy offers very few promises to herders and is the harshest policy option. There is very little appeal in this policy option, and herders, although they will be familiar with the tax principle, will be extremely vocal about their difference in opinion. 5) Impacts (Positive and Negative) / 1 out of 4 points/ This policy option should already exist in the legal framework. There is no reason why herders, who are also citizens using the country’s services should not be paying their taxes like any other citizen. However, with respect to our specific goal of introducing sustainable pasture management policies, this policy will have the least impact. This policy does not have the many special services that herder groups would have, nor does it allocate half of its revenues to pasture restoration like policy option 2. Thus, this policy option has the lowest impact ranking. Overall Score: 11 out of 23 points 43
Table 12. Criteria points of the policy options Criteria Relative cost (out of 4) Practicality (out of 5) Government’s attitude (out of 5) Herder’s acceptance level (out of 5) Impacts, positive and negative (out of 4) Total Score Policy Option I: Policy Option II: Policy Option III: CPM FPU IT
3 4 4 5 4 20 2 2 2 2 2 10 3 3 2 2 1 11
7.0 CONCLUSION Policy option 1 has the highest ranking in the cost effectiveness criteria; however, policy option 2 is also not too far behind in its level of competency as a feasible policy option. Policy option 2 would be more challenging to gather the full support of the government and the herder population in spite of its more straightforward nature and market based approach to reducing the negative impact of goats, sheep and horses on the environment. Land degradation is a very pressing matter in Mongolia, and time is a very important factor in the success of any of the policy options. Policy option 1 offers the speediest policy solution because it is the easiest to be accepted by the different stakeholders. This report concludes that a hybrid option of policy options 1 and 2 should be implemented in Mongolia. A legally required pasture fee system in which the pasture fees of the local regions go to the herding groups of the respective areas would strengthen herding groups and impose a smaller burden on the government. Currently, herders who stricken with the losses of the dzud and are facing poverty, will be in a very weak position, and in most cases incapable of paying mandatory pasture fees. Policy option 2 incorporates the valuable factor of making the herding group system generally more equitable, which is in fact one of the main threats of policy option 1. In policy option 1, the poorer herders are very likely to resent the wealthy members of their herding group since they would inevitably be using a larger portion of their shared pasture. Wealthier herders are less likely to be affected by the communal herding group system because they have the option of not completely cooperating with their groups about cutting down on their herd sizes. They are in a stronger position to cooperate with the rules of systems that have a mandatory compliance feature, which imposes more market based and straightforward responsibilities, such as the pasture fee policy. We mentioned that herders in herding groups would be agreeing upon a group tax and putting the collected money into a fund for pasture restoration activities. However, it 44
would be much more efficient if the entire nation had a general pasture fee system that all herders would be obligated to follow. The reason that this is important is that with varying fee systems within different herding groups, some are likely to be more successful than others are. Herders from herding groups with high pasture fees are likely to want to transfer to a neighboring herding group that has lower fee rates. Thus, making the fee system a legal responsibility for herders is definitely ideal, however, it would be wiser to incorporate this feature three to five years after the herding group system has formed and established itself as a real operating system. By the fifth year, the actual experience of the herding groups with internal pasture fees would be useful to make the most efficient and effective pasture fee law throughout the nation. By this time, the mentality of herders is also likely to have changed such that they feel more responsible for the quality of their pastures and hence more accepting of such a law. Additionally, herders will have found jobs that do not require herding, and will be in a better financial situation to comply with the demands. It is not within the scope of this report to measure the direct costs and expenses of introducing the pasture fee policy (option 2) into the herder’s group policy (option 1). It would require more intensive surveys from herders, and an actual case study of an operational herding group. Introducing policy option 2 will be very successful provided that the policy option 1 is running fairly smoothly within the first five years of implementation. The expected outcome of the hybrid policy of policy options 1 and 2 will be to make a marked difference on the quality of pastures and to ensure that it becomes sustainable for the number of livestock on the long run. For this to happen, a lot of emphasis will lie on improving the productivity of each livestock through the establishment of small and medium enterprises (SME) and through the improvement of livestock breeds. By doing so, herders will begin to look away from trying to maximize their herd sizes, but instead try to optimize the quality and productivity of their individual herds. 8.0 RECOMMENDATIONS The key recommendations borne from this report falls on the government of Mongolia. The central government is responsible for coordinating and arranging the functions of all of the regional governments in a manner that is much more efficient than it is today. The following recommendations offer guidelines that the government should pursue immediately. Define its development policy. The government should define a development policy that incorporates an understanding of the importance of the fact that Mongolia is overpopulated with livestock whose impact far outweighs the carrying capacity of the pastures of Mongolia due to both livestock overpopulation and mismanagement of pasture grazing. The main aim of the policy will be to improve livestock productivity minimize the impact of each livestock. Set limits to goat species through the use of command and control and/or market based methods. Goats should be the priority species that should face reductions, 45
however this is subject to change depending on market, productivity and population circumstances of livestock. Create alternative livelihood options for rural populations. The pressure on pastureland would be greatly reduced with the establishment of small and medium sized enterprises that process raw materials and dairy products in rural areas. Enhance the livestock productivity per head. This should be by market based incentives such as offering better inbreeding mechanisms and promoting the utilization of parts of an animal that was previously unused and had no economic value. Adopt a pasture law with a specific emphasis on ecological sustainability and on the proliferation of communal pasture management systems. Improve coordination between the different ministries that handle the affairs of herders. In order to do this all of the policies of the different ministries that relate to herders and pastoral ecosystems should be reviewed, and changed when necessary. Invest a lot of its capital on public awareness campaigns and training programs. These campaigns should educate people about the destructive nature of current land use regimes, and offer tools and solutions to improving this situation.
Bakei A. 2006. Conference Proceedings “Issues for pasture management improvement” pp. 10-19. Ulaanbaatar, Mongolia. A.Bakei, P. Badarch, B. Binyee. 2009. “Development Trends of the Goat Industry”. Goat herd: the most pressing ecological and economic issues. Pages 9-21.Ulaanbaatar, Mongolia. D.Dungu and G. Bayarsaikhan. 2009. “Improving the productivity and reproductive quality of goats”. Goat herd: the most pressing ecological and economic issues. Pages 33-41.Ulaanbaatar, Mongolia. Dorligsuren D. 2006. Proceedings on Issues for pasture management improvement pp. 20-63. UB Mongolia Foggin Marc. Depopulating the Tibetan Grasslands: National Policies and Perspectives for the Future of Tibetan Herders in Qinghai Province, China Mountain Research and Development Vol 28 No 1 Feb 2008: 26–31 doi:10.1659/mrd.0972 Oyunchimeg and Zagdsuren 2006. Conference Proceedings “Issues for pasture management improvement” Grazing impact of goat to pasture pp. 150-158. UB Mongolia Michele Nori, Michael Taylor, Alessandra Sensi 2008. IIED issues paper no. 148. Browsing on fences Pastoral land rights, livelihoods and adaptation to climate change S.Tserendash, N.Erdenetsogt and L.Narantuya. 2009. “The Pasture Use of Goat Herds, and Various Ecological Issues”. Goat herd: the most pressing ecological and economic issues. Pages 22-32. Ulaanbaatar, Mongolia. Swiss Agency for Development and Cooperation. Coping with Desertification Project. 2009. UB Mongolia. UNDP Mongolia, Ministry of Food and Agriculture, and Ministry of Nature and Environment. Sustainable Land Management to Combat Desertification (2008-2012). Report. Ulaanbaatar. Williams Dee Mack. Grassland Enclosures: Catalyst of Land Degradation in Inner Mongolia Society for Applied Anthropology Volume 55, Number 3 / Fall 1996
Appendix 1. Province name Uvurkhangai County names Population total man women total
4261 3525 6649 3510 3477 1958 2909 3413 2113 1771 3240 1762 1692 993 1391 1694 2148 1754 3409 1748 1785 965 1518 1719 1204 1148 1903 1038 1002 537 788 888
Household Urban Rural
171 180 803 211 238 133 171 239 1033 968 1100 827 764 404 617 649
Bayan under Sant Hujirt Hairhan dulaan Ulziit Bayankhongor Jinst Bogd Bayanlig
Appendix 2. We made comparison of tax due amount and income of an entire Sant County. Sant County has 1067 herder households and average family member per household is 4. County households possess 6,090 cows, 7,821 horses, Camel -735, Sheep- 114,507 and 107,631 goat. Total SEU 6,090 cows * 5 + 7,821 horses * 5 + 735 Camel*2+ 107,631 goat *1.5+ 114,507 sheep= 347 thousands SEU. Total human population 1067 households *4= 4,268 persons Tax exempted 20 sheep per person. This is to ensure that poor are not affected by income tax: 4268 persons * 20 sheep per persons= 85,400 SEU To find total tax amount, which county’s all herders due: In order to do that it is need to find taxable SEU 347,000- 85.400= 261.6 thousand SEU Then, total tax amount is 261.6 thousand SEU * 75 MNT= 19.6 mln MNT Now to find total approx. income from livestock: 347,000 (total SEU) * 80,000 (market price of average sheep) = 27,758.3 mln MNT Comparing these values: total tax/total SEU= 0.07%
Appendix 3 The policy includes an investment for restoration of highly overgrazed areas in these 5 soums. In total, there are 123.58 hectares of highly degraded pastures in these 5 soums (see table 5 on page 4). Herder households, whose livestock exceeds the carrying capacity of their possessed pasture, should make a mandatory investment for pasture restoration. It is calculated that 995.52 millions MNT is required for the restoration of 123.58 hectares of highly overgrazed pastures (see investment costs of highly overgrazed areas of each of 5 soums in table below). Based on identified investment costs required for restoring highly degraded pasture, each soum government determines annually the number of areas for restoration and investment cost in each of the five years. Then, the local government divides this required investment among those households or herders groups, whose livestock numbers exceed the pasture carrying capacity (PCC). This way, we expect faster compliance of herders with PCC under the policy option I: communal pasture management. Table. An estimated investment budgets for restoration of highly overgrazed pastures in the project 5 soums
Degraded pastures to be restored (in hectares) 13.8 19.7 5.88
Dominant pasture plants Dry steppe stipa community Dry steppe stipa community Dry steppe allium mongolicum community
Site location in the natural zones Steppe Forest steppe Steppe
Cost of restoration of a hectare pasture (Million tugrug) 7.8 7.6 7.8
1 2 3
Bayan-Undur Khujirt Sant
Chernozem Chernozem Chernozem gravelly
Total costs of restoration highly degraded pastures (Million tugrug) 108.8 150.2 46.2
Khairkhan dulaan Bogd Total
55.9 28.3 123.58 Desert grey brown
7.8 8.9 39.9
436.02 254.3 995.52
Appendix 4 Required investment for SME (livestock raw material processing) The funding source of the small and medium enterprises (SME) will be the SME Department of the Ministry of Food Agriculture and Light Industry, which will give out a ten-year soft loan to herders. The government adopted the Law on SME in 2007, and has started funding various business proposals. Based on the livestock raw materials available in these five soums, we are proposing the following SMEs in this region. Type of SME Milk processing Wool processing Food processing Cashmere processing Meat production Total Investment per Required SME, MNT SME unit 38,000,000 10,000,000 5,000,000 50,000,000 50,000,000
5 2 5 1 1
190,000,000 20,000,000 25,000,000 50,000,000 50,000,000 335,000,000
This measure will stimulate local production through raw material processing center and create alternative jobs to newly unemployed herder. This will in turn diversify income generation and encourage herders to pay more attention to increasing productivity of their livestock as opposed to traditional herding management.
Price (thousand MNT) Expense Type Livestock productivity database Wool length Employing a livestock reproduction specialist Motorcycle for each specialist Father livestock animal for inbreeding Identification registration for each animal (earring) Earring metal Weight scale Weight scale to determine productivity of wool/cashmere (very detailed) Total (thousand MNT) Measuring unit Piece Piece job position Amount 1 1 3 Unit 15 40 4500000 Total 15,000 40,000 13,500,000
Piece Head Piece Piece Piece
3 2500 10000 1 1
1200000 70000 150 250000 25000
3,600,000 175,000,000 1,500,000 250,000 25,000
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