Valuation Study

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Impact of Livestock Keeping


Medium: Animals, Plants and/or Others

Country: Mongolia

Analytical Framework(s): Economic Analysis

Study Date: 2010

Publication Date: 2011

Major Result(s)

Resource/Environmental Good MNT, million currency units per year
Average gain of introducing a community pasture management system1 1,110.00
Average gain of imposing pasture utilization fees on herders2 734.00
Average gain of reinstitution of income tax for herders3 1,290.00

Study Note: The foremost objective of this report was to develop policy options that would make the pastures of Mongolia sustainable in the long term, and to slow down the process of desertification, which has thus far affected 72% of Mongolia. The pastureland of Mongolia is a common access resource, but herders do not always behave in environmentally sustainable ways. The net effect of over 40 million livestock owned by approximately 200,000 herding families in a vast, fenceless landscape is tremendous.Moreover, this highly complex issue involves not only herders and government institutions, but also the country's mindset in terms of animal husbandry.

Study Details

Reference: Erdenesaikhan Naidansuren and Onon Bayasgalan. 2011. An Economic Analysis Of The Environmental Impacts of Livestock Grazing in Mongolia. EEPSEA Research Report, No. 2011-RR12.

Summary: This report comprises an economic analysis that focuses on the negative impacts of livestock keeping, particularly of goats which have the largest impact on pasture quality among the five livestock types in Mongolia. The absence of regulations and theinadequacy of pertinent laws and government policies have facilitated what can be considered as a national crisis. This report proposes three policy options to address this problem. Although some of the solutions are already present in the current legal framework, none have been enforced for various reasons. The three policy proposals allaim at reducing grazing efforts and introducing enterprises that will improve livestock productivity. In all three options, there is a livestock population target, and we determinehow much it costs to get each policy option to reach such a target. In order to highlight the economic significance of the impact of livestock on pasture sustainability, we determined 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 findings showed that goats were not worth the high value that herders placed on them. In fact, they were the least economically valuable among livestock animals, all things being equal.

Site Characteristics: The study provinces are located in the northern semi-arid zones of the Altai mountain range in Central Asia. The altitude of these provinces ranges between 1,000 and 4,000 meters above sea level. The climate is continental and displays extreme temperature fluctuations. The annual average air temperature ranges between -1 and +4 degrees Celsius. During the cold season (December - February), the temperature rangesfrom 18 to -30 degrees while in the summertime (May-August), it ranges from 15-30 degrees. The annual precipitation is 200-325 mm in the northern forest and mountainous regions and 50-100 mm in the Gobi desert region.

Comments: Mongolia has the highest per capita livestock figure in the world but does not benefit fully from this. Firstly, Mongolians primarily drink imported milk despite ample domestic supply due to the remote locations of most local milk markets. Secondly, the country cannot achieve competitive advantage in the meat market because itsslaughtering system does not meet international trade standards. Lastly, herders are not experienced or skilled enough in processing their products for value addition; they only know how to sell the raw materials. All these point to a very inefficient animal husbandry production system.