The Livestock Sector Needs Drastic Policy Reform

Article in the national daily newspaper Zuunii Medee No 17, 22 January 2010
What Mongolian Livestockprogram talked about?
Donor and public representatives recently discussed ‘Mongolian Livestock’, a Government program initiated by a group of MPs assisted by relevant ministries and agencies. The program touched on pastureland risk management, animal health and breeding and livestock quality improvements – opportune targets for the livestock sector. However, the implementation mechanisms include many elements as if the program seeks to recover the former centrally planned economy.  Most importantly, the issue whether herders will be interested to participate in the program remains vague.

Did the programs resolve problems?
We have implemented many Government and donor programs targeting to resolve the problems in the livestock sector, such as state policies regarding herders, programs against dzud and drought, livestock intensification, animal health…a long list goes on.  Unfortunately, the situation has not changed much as evidenced by the current lack of dzud preparedness.

Why livestock and herders’ programs remain largely on paper?
Do we need a new program when the reason for the low implementation of previous programs is not well identified and addressed? What is the core reason that makes livestock and herders programs remain only on paper? The answer is very simple; programs were unable to attract herders’ participation. Why are herders uninterested in apparently important issues like animal health, pastureland and risk management, and animal and livestock product quality?

If not programs, what mobilizes herders?
The answer again is simple; participating in the programs requires efforts and costs higher than the current way of running livestock. In a market economy, it is reasonable for any player to choose the cheapest way to maximize income and satisfaction. Herders are very good at doing this, as they have tripled goat numbers from five million with cashmere price increases and reduced camel numbers 3 times with the increased demand for khuushuur meat. The reason for the surprisingly successful implementation of this job, without any government and donor programs, was economic incentives.

How do herders run livestock herding?
Herders use pastures and the resources on them, such as water and salt licks, free of any charge and without any accountability mechanisms for overgrazing and degradation. In this system, herders rationally choose maximizing animal numbers as the dominant economic behavior. Herders do not bother themselves with alternative methods promoted by the government and donor programs. “I’ll take anything if programs give it to me for free, and as everybody helps us, there’s no need for demanding dzud preparedness” – this is the dominant herder’s mentality. In other words, the current way of livestock herding is so cheap that it discourages herders from being  interested in alternative ways of running livestock, and participating in government and donor programs. In this situation, any program is predetermined to fail.                                       

In the previous example of increased goats and decreased camel numbers, herders earned some short-term gains. However, the state, as the owner of pastures, lost much due to overgrazing and degradation. In addition, future generations of herders lost much as a result of the decline in the quality of pastures. Even herders of the current generation started to lose as evidenced by the impacts of increased degradation and desertification.

The targets of the “Mongolian Livestock” program will repeat the failure of previous programs if the appropriate mechanisms to attract and mobilize herders are not in place.

Priority target of livesock sector policy
Everybody seems to understand that livestock sector cannot be run in the current way. The core policy target is to introduce a mechanism to make sure that good livestock measures such as those in the ‘Mongolian Livestock’ program are implemented with the active participation of herders.  

The mechanism should be able to encourage herders to shift from their current economic behavior – animal number maximization – to more productivity-oriented strategies. The mechanism is to assign certain values to the impact animals have on pastures and make them the responsibility of herders, as beneficiaries of using state-owned pastures through their privately-owned livestock. This is a grazing fee system. A differentiated grazing fee should be established according to pasture quality, location, animal type and the degree of overstocking. Each factor has a role to play. Livestock benefits are different from good and poor pastures. Therefore, the state, as owner of pastures, needs to create equal economic conditions for herders charging a higher grazing fee from good pastures. The same applies to locations, as herders located closer to urban areas gain extra benefits from the low costs of accessing markets and services. Lower fees for remote pastures will also discourage herders from migrating to peri-urban areas that lead to severe land degradation. Despite being a major source of cash income, goat is considered to be a worst user of pastures by destroying grass roots. Therefore, a higher fee for goat makes sense, in terms of both impacts on pastures, and payment capacities of herders with more goats. Finally, animal impacts on pastures are proportionate to the degree of overstocking; therefore a base fee needs to be increased at least proportionately to the degree of overstocking. This will provide a key economic incentive for herders to maintain ecologically sustainable stocking density. In the highly variable weather conditions of Mongolia, a base grazing fee needs to be variable to account for year-to-year variations. The revenues collected need to be spent on supporting pastureland and risk management activities in a decentralized manner, encouraging herders to pay. Thus, in addition to providing an economic incentive for changing herders’ economic behavior the grazing fee system will address a lack of funding local governments face in delivering important public services such as dzud and drought early warning, risk preparedness, land use planning, livestock and product quality control and various extension services.

Section of the ‘Mongolian Livestock’ program includes the following objective: “Introduce an economic mechanism to link between stocking density and pasture carrying capacity, set a limit on animal numbers in overstocked areas and encourage herders to stick to it”. This general target needs to be modified and elaborated into the above-mentioned grazing fee system.

Introducing a grazing fee as part of the land leasing/use agreement between the local government and herder groups will play a key role in encouraging herders to adopt strategies alternative to maximizing animal numbers. At this stage, other economic incentives targeting to drive the herders’ interest in a required way might be also needed. Accordingly section 4.5.2 of the ‘Mongolian Livestock’ program to “Introduce economic incentives to encourage livestock and livestock product quality” is worthy of praise.

Introducing a grazing fee requires political courage and mentality change
The current legal environment of free use of pasture resources with no accountability mechanisms was introduced deliberately by the Government. The policy was urged by personal interests of politicians to keep their positions by pleasing short-term interersts of today’s herders, thus victimizing the national interest for sustainable livestock development with long-term vision. As a result, herders remain uninterested in advanced methods of running livestock herding and the livestock sector is stuck with the medieval technology. This policy is strikingly inhuman as it seeks to perpetuate outdated mentality and thwarts the herders’ willingness to change and development.

It is time to introduce a drastic policy shift like a family ‘correcting’ a spoiled child. Some herders indulged in privileged environment for many years, may not like the idea. However, herders are able to understand foresighted policy and the state has full capacity to get it across. Given the urgent demand for the policy change, one would wish the political courage to make the necessary decision fell on the current State Great Hural and government.
A.Enkh-Amgalan, Founding Director, Center for Policy Research