“ Differential policy approach for livestock sector ”

1. “Differential policy approach for livestock sector” Researcher B.Batbuyan

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

3. Research 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

4. Erdene Yaruu Buren Livestock structure (2003) Number of livestock 27993 Delgerkhaan 21709 14448 11092 BurenDelgerkhaan ErdeneYaruu 3rd bagh 2ndbagh 5th bagh9th bagh - Camel - Horse - Cattle - Sheep - Goat Overview of territories covered by the reseacrh

5. Current situation of livestock sector Herder household groups (2003 îí )

6. Current situation of livestock sector Changes in living standards of herdsmen Number of poor herder households with few animals tends to grow year by year.

7. Current situation of livestock sector Number of young animals of per 100 dams, at the beginning of year

8. Current situation of livestock sector Loss of adult animals

9. Current situation of livestock sector Livestock business types Households with livestock Herder household Livestock owner-citizens Rich Very poor Medium Poor Cahmere; Meat(beef, mutton); Wool; hair Skin; Animal origin raw materials MARKET Semi-processed products Milk, milk products; Felt; Meat, meat products

10. “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 on livestock business CONCLUSION • 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

11. “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”

12. Government policy on livestock business CONCLUSION Ways to develop livestock business-herdsmen • 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

13. 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.

14. Direct factors: Indirect factors: Note:+ defined by herdsmen * defined by soum and bagh administrative officers

15. How geographic factors affect livestock businesses 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

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

17. Geographically suitable land Good pastureland Low vegetation land Soum center Reserved land худа How pastureland management affects livestock businesses • 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 Pastureland is used and possessed by differences in living standard and wealth of rural population.

18. Changes in number and structure of livestock in Yaruu soum (1991-2003) Total livestock 145768 132228 124757 107280 81611 58983 1991 1993 1995 1998 2000 2003 Year - Camel- Horse- Cattle- Sheep-Goat How number of livestock affects livestock businesses

19. How number and type of livestock affect livestock business Number of household and livestock grouping in Buren soum Reduction in number of livestock per household limits opportunity to run livestock businesses profitably

20. How number and type of livestock affect livestock business Average number of livestock per household

21. 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.

22. Factors affecting livestock businesses Number and type of livestock Pastureland management Loan Business form Education, knowledge Conclusion “Differential policy approach in the livestock sector: achieving qualitative improvement in livestock businesses by supporting average ones more”

23. Livestock number grouping of herder households in Bagh No. 3 of Buren soum 11749 Number of livestock 9590 3735 1887 1032 Livestock grouping 0 – 50 51 – 100 101- 200 201 – 500 501 - 713 Camel - Horse - Cattle- Sheep - Goat Strengths of the policy to support averages Average households have enough livestock and resouces to conduct livestock business in its real sense

24. Strengths of the policy to support average ones Possession of winter camps by herdsmen of Bagh No. 1 in Yaruu soum Wealthy(rich, average)herdsmen havegood resources of winter camps, in most cases they have own

25. Bagh No. 5 of Erdene 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 Who are averages? Numbers of livestock owned by average herdsmen are relatively different • Businesslikequality, education, sense of livelihood and livestock breeding experience of a household owner

26. 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

27. 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) 1st option

28. 1st option Policy 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

29. 2nd option To increase livestock business income by breeding more livestock most suitable in the territory

30. 2nd option 1) 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.

31. 2nd 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

32. 2nd option Policy 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

33. Policy options for supporting averages - main production forces of livestock sector In the framework of this policy: • 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 • 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. • Shall maintain long-term development strategy by analysing traditional territorial locations and defining most suitable sectors to develop.