“ Differential policy approach for livestock sector ”

““Differential policy approach Differential policy approach for livestock sectorfor livestock sector””

Researcher B.Batbuyan

Research objective:

Proposing government policy options for further development of livestock sector while maintaining principle to develop livestock production in real business sense

Research methodology and processResearch methodology and process

• Random selection of herdsmen on occasions along the way of the field reseach travel

• Questionnaire respondents were selected by their living standard levels for the purpose of covering all social spheres of rural population

• Broadly used Participatory Rapid Appraisal (MRA) method

Overview of territories covered by the reseacrhOverview of territories covered by the reseacrh

YaruuBuren

Erdene

Delgerkhaan

27993

21709

Livestock structure (2003)

Number of livestock

14448 11092

Buren Delgerkhaan Erdene Yaruu 3rd bagh 2nd bagh 5th bagh 9th bagh

- Camel - Horse - Cattle - Sheep - Goat

Animal Number of househol

d

Herder househol

d

Number of livestoc

k

Number of livestoc

k

Up to 10 29897 101634(43%)

161391 2270951(9.1%)11-30 39341 792175

31-50 32396 1317385

51-100 52871 52871(22.4%)

3910304 3910304(15.7%)

101-200 47393 47393(20.1%)

6713837 6713937(27.0%)

201-500 29669 29669(12.6%)

8594438 8594438(34.5%)

501-999 3870 4643(1.9%)

2454803 3399104(13.7%)1000-1499 684 777030

1500 –1999 61 102668

Over 2001 28 64603

Total 236210 236210 24888634 24888634

Herder household groups (2003 îí )

Current situation of livestock sector Current situation of livestock sector

Changes in living standards of herdsmen

0%

50%

100%

1990 1994 1998 2000 2003

rich medium poor very poor

Number of poor herder households with few animals tends to grow year by year.

Current situation of livestock sector Current situation of livestock sector

Indicator Average

1986-1990 1991-1995 1996-2000 2001-2002

Total 81 79 73 58

Camel calf 40 36 27 30

Foal 62 60 60 42

Calf 68 72 71 52

Lamb 85 77 78 64

Kid 80 76 71 54

Number of young animals of per 100 dams, at the beginning of year

Current situation of livestock sectorCurrent situation of livestock sector

Indicator1986-

19901991-

19951996-

20002001-

2002

Total 751.9 973 1256.3 3838.2

Camel 25.7 16.6 9.2 23.1

Horse 64.3 76.7 134.3 331.6

Cattle 79.5 132.9 85.7 607.4

Sheep 438.7 579.1 649 1581.1

Goat 143.6 167.7 427.4 1295

Loss of adult animals

Current situation of livestock sectorCurrent situation of livestock sector

Households with livestock

Herder household Livestock owner-citizens

Rich

Medium

Poor

Very

poor

Semi-processed products

Animal origin raw materials

Cahmere;Meat (beef, mutton);Wool; hairSkin;

Milk, milk products;Felt;Meat, meat products

MA

RK

ET

Livestock business types

Current situation of livestock sectorCurrent situation of livestock sector

Government policy on livestock business

CONCLUSION

“Cashmere”, “Wool” “White revolution” programme

“Livestock health programme”

“Law on land”“National programme on

water”“Law on cooperatives” “Support for herder

household groups and herdsmen with a herd of thousand animals“

Government policy: • Attempted to create livestock business opportunities and

environment to some extent • Maintained policy to base livestock businesses on

traditional methods of livestock breeding• It was addressed to all “herdsmen” as a whole• Implements the policy in the framework of poverty

reduction measuress • Leads to alleviate market competition

“Indolent herdsmen that lost their herds in natural disaster receive aids, while those survived by their restless fighting against dzud are unable to benefit from the aids”

Ways to develop livestock business-herdsmen

Government policy on livestock business

CONCLUSION

• To regulate, control and influence the price of raw materials

• To organize livestock product fair and auction• To restore agency sales mechanism• To pay more attention on development of

infrastructure

Main factors affecting livestock businesses

• Unable to sell livestock-origin raw materials under profitable terms;

• Unable to produce thoroughbred, high-quality, productive livestock;

• Unable to find low interest, long term loan;

• Don’t make investment for the support of livestock businesses;

• Do have knowledge livestock production technology, though lack business education on market relations;

• Do know cooperation is necessary while don’t know how and with whom to cooperate;

• Unable to accumulate fat and strength for the livestock due to misuse of pastureland.

Factors Bagh No. 5 of

Erdene soum

Bagh No. 3 of Buren

soum

Bagh No. 2 of Delgerkhaa

n soum

Bagh No. 1 of

Yaruu soum

Market location + * + *

Livestock raw material price

+* * +

Number of livestock in heads

+ + * + *

Patureland management issues

+ * + * +*

Issues of water and wells * + * + *

Direct factors:

Note:+ defined by herdsmen* defined by soum and bagh administrative officers

Factors Bagh No. 5 of

Erdene soum

Bagh No. 3 of Buren

soum

Bagh No. 2 of Delgerkhaa

n soum

Bagh No. 1 of

Yaruu soum

Veterinary service + *

Investment * + * +

Loan + * +* + * +*

Market education, knowledge and information

+* + * + * +

Hay/fodder preparation + + * * *

Indirect factors:

Destination from Ulaanbaatar (km)

80 km 201 km 230 km 1000 km

Income types Bagh No. 5 of Erdene soum

Bagh No. 3 of Buren soum

Bagh No. 2 of Delgerkhaan

soum

Bagh No. 1 of Yaruu soum

Income from sales of livestock and meat

32.2% 48.6% 49.1% 52.2%

Income from milk and milk products

35.9% 8.4% 7.6% 3.4%

Income from sales of wool and cashmere

17.1% 21.3% 22.7% 27.2%

Income from sales of skins 4.6% 8.1% 9.9% 16.1%

Other income (income from vegetable growing, pension, hunting, hired animal herding etc.)

10.1% 13.6% 10.7% 1.1%

100% 100% 100% 100%

Income of selected average herder households and their income structure (in one year)

Note: Here shows average income data of 6-8 households selected from each bagh

How geographic factors affect livestock businesses

How loan issues affect livestock businesses :• Short-term (6-12 months), high interest rate (2-3

percent per month) loans

How business forms affect livestock businesses :• Business at single household level• Cooperative business at herder household group level• Conducting business by establishing informal group or

cooperative of herdsmen

Pastureland is used and possessed by differences in living standard and wealth of rural

population.

Soum center

Reserved land

Low vegetation land

Geographically suitable land

Good pastureland

худа

• Lost traditional pastureland management practice of using land in four different seasons of a year

• A part of herdsmen spends a whole year in one territorial area just by changing camping locations within the area

How pastureland management affects livestock businesses

Changes in number and structure of livestock in Yaruu soum (1991-2003)

Total livestock

145768 132228 124757 107280

81611

58983

- Camel - Horse - Cattle - Sheep - Goat

1991 1993 1995 1998 2000 2003 Year

How number of livestock affects livestock businesses

Reduction in number of livestock per household limits

opportunity to run livestock businesses profitably

How number and type of livestock affect livestock business

1999 2000 2001 2002 2003

50 õ¿ðòý

ë

127 262 266 287 327

51-100 50 107 107 98 93

101-200 285 239 239 243 229

201-500 244 148 148 145 138

501-999 39 23 23 9 9

1000-1499

4 2 1 2 -

895 895 901 901 873

Number of household and livestock grouping in Buren soum

Buren Erdene Yaruu

0-50 22.9 20.4 28.7

51-100 74.7 72.2 68.1.

101-200 143.1 143.6 145.8

201-500 273.2 281.7 299

501-999 627 658 625.2

1000-1600

- - 1600

Average number of livestock per household

How number and type of livestock affect livestock business

SoumAdministra-

tion **

Bagh Governor

Rich herdsme

n

Average herdsme

n

Poor herdsme

n

Very poor herds-men

To increase number of herds per household

+ +

Type of labor cooperation –herder group \establishment of cooperative\

+ +

Finance\ Loan + + + + +

Improved pastureland management

+ + +

Market education + + + + +

Resolution of social issues

+

Ways to resolve livestock business issues*

Note: ** Marked answers selected by majority of participants * In some soums we met Deputy Governor or Chief of Governor’s Office in case if the Governor was not available for interview.

Factors affecting livestock businesses

Number and type of

livestock

Conclusion

Pastureland

management

Loan Business form

Education, knowledge

““Differential policy approach Differential policy approach in the livestock sectorin the livestock sector: : achieving qualitative achieving qualitative

improvement in livestock businesses by improvement in livestock businesses by supporting average ones moresupporting average ones more””

Average households have enough livestock and resouces to conduct livestock business in

its real sense

Livestock number grouping of herder households in Bagh No. 3 of Buren soum

11749

9590

3735

1887 1032

0 – 50 51 – 100 101- 200 201 – 500 501 - 713Livestock grouping

Camel - Horse - Cattle - Sheep - Goat

Number of livestock

Strengths of the policy to support Strengths of the policy to support averagesaverages

Rich Average Poor Very poor

Total

1 Herder household with winter camp

8 12 11 5 36

2 Households that camp in others’ winter camp

1 6 13 6 26

3 Households without own winter camp and move regularly in winter time seeking pastures

0 4 1 0 5

4 Households spend winter in soum center leaving their livestock for the care of others

0 4 14 2 20

Total 9 26 39 13 87

Possession of winter camps by herdsmen of Bagh No. 1 in Yaruu soum

Wealthy (rich, average) herdsmen have good resources of winter camps, in most cases they have own

Strengths of the policy to support average onesStrengths of the policy to support average ones

Who are averagesWho are averages?? Numbers of livestock owned by average herdsmen are relatively different

  Bagh No. 5 ofErdene soum

Bagh No. 1 of Yaruu soum

Wealthy 209-805 270-1600

Averages 86-213 123-286

Poor 24-56 17-108

Very poor 2-29 12-60

• Businesslike quality, education, sense of livelihood and livestock breeding experience of a household owner

Policy options for supporting averages - main production forces of livestock

sector

• 1st option is policy for supporting averages by maintaining principle to resolve issues of pastureland, water and wells -basic means of livestock production- in a complex way

• 2nd option is policy for supporting averages or main production force of livestock sector by promoting their breeding of productive livestock most suitable in the territory

11stst option option

Regulation of policies on land use

To create legal environment that allow long-term possession of pastureland by herdsmen conducting real livestock production and make the land owned

Improvement of pastureland use

Proper use of pastures by defining four seasonal pastoral regions and reserved land for fattening livestock and make them owned by average herder households

Improvement of water and well usage

To allocate restored wells for the possession of average herder households (responsible for the costs of using and repairing possessed wells)

11stst option optionPolicy strengths• No need of financial resource • Supported traditional economy in harmony with

nature and ecology of Mongolia• Treated livestock production in a more complex

way

Policy weaknesses• Covered relatively less number of herdsmen and

supported average ones more• Inconsistency with some laws (Law on land,

National programme on water) • Implementation takes time

22ndnd option option

To increase livestock business income by breeding more livestock most suitable in the territory

22ndnd option option1) Preparation work• Certifying suitable land territory for pastoral livestock breeding

and hayfields

• Granting long-term concessional loans • Creating specialized bases for breeding most suitable

indigenous breeds of livestock 2 ) Start conducting main production• Hay making from fenced fields possessed by the household • Introducing technological advances in livestock production and

renovate current system of livestock breeding and management

• Dynamic correlation between growth of gross livestock products and growth in number of livestock will be maintained.

22ndnd option option

3) Continue the operation

• Profits gained from specialized livestock sector will comprise majority of total profits.

• Start repaying loan principal and conclude the liabilities

• Establishing raw material and livestock product sales network and points at soum centers and along the economically important roads in order to create own market.

• Introducing detailed schedule of work designed to enhance production

22ndnd option optionPolicy strengths • Need relatively low amount of finance • High probability of loan repayment• Significant amount of investment will be made by

average herdsmen themselves • Becomes impetus to the development of livestock

production• Opens opportunity to involve small businessmen in

livestock businesses

Policy weaknesses • Covered relatively less number of herdsmen or

supported average ones more• Implementation takes time

In the framework of this policy:o Government shall pay more attention and maintain

flexible legal policies to support livestock business relations related to banking, finance and marketing, such as providing long-term low-interest loans necessary for herder households

o Shall organize different level of training for herdsmen on traditional technologies of livestock breeding, livestock sector reforms and market appoach of livelihood, depending on their scale and capacity to conduct the business.

o Shall maintain long-term development strategy by analysing traditional territorial locations and defining most suitable sectors to develop.

Policy options for supporting averages - main production forces of livestock sector