ANALYSIS OF LIVESTOCK HUSBANDRY OF MONGOLIA A CASE STUDY OF TUV PROVINCE

by

Batchimeg Dorjsuren

A thesis submitted in partial fulfillment of the requirements for the

degree of Master of Engineering in Agricultural Systems and Engineering

Examination Committee Prof Vilas M Salokhe (Chairperson) Dr HPW Jayasuriya

Prof Athapol Noomhorm Dr Peeyush Soni

Nationality Mongolian

Previous Degree Bachelor of Agricultural Engineering of Mongolian State University of Agriculture Ulaanbaatar Mongolia

Scholarship Donor Netherlands

Asian Institute of Technology School of Environment Resources and Development

Bangkok Thailand May 2009

ii

ACKNOWLEDGEMENT

First I would like to declare my sincere thanks to my dear Professor Vilas MSalokhe Chairman of my thesis advisory committee for suggesting this topic and his valuable guidance and priceless encouragement during my study His generous help and longsighted advice have successfully affected in this research Second I would like to express deepest gratitude to DrHPW Jayasuriya Professor Athapol Noomhorn and Dr Peeyush Soni This work would not have been possible without the support and assistance of my committee members and dear teachers Moreover I would like to say thanks to secretaries and all staffs of AIT- ASE for their friendship I am grateful to the AIT and Netherlands Ministry for Development Cooperation for providing the scholarship through AIT which enabled me to pursue my studies at this institute I hold the honest respect to all the farmers and herder households who participated in the questionnaire survey at Tuv provinces I am eternally thankful to my father DDorjsuren and mother GBilegnyam for their great love that I feel even this far away Finally I want to thank my entire classmates of AIT-ASE 2007 batch

iii

ABSTRACT

The livestock sector is the key to economic growth and essential component of a poverty- oriented rural development strategy Mongolia has five types of livestock (sheep goat horse cattle and camel) Total 348 million livestock animal were counted in 2006 including 148 million sheep 154 million goats 211 million horses 216 million cattle and 2535 thousand heads camels Most of livestock is located in central and western part of the country The Mongolian animal husbandry is divided in two main sectors including extensive animal husbandry and intensive animal husbandry Generally Mongolian climate is suitable for the extensive animal husbandry However during the last years intensive animal husbandry is developing in some provinces especially the nearest provinces with the bigger cities such as Tuv Selenge and Bulgan provinces Moreover Mongolia livestock sector faced many significant problems such as grassland degradation soil erosion and desertification Main sources of degradation are overgrazing water source and the population In addition the consequences such as poor infrastructures including road and storage facilities the availability of critical support like constructing wells and shelters and preparing hay are affecting the Mongolian livestock husbandry Agricultural products especially livestock products is one of the major sources of Mongolian economics Almost 90 of the total agricultural production of Mongolia produced from livestock sector and obtained the benefit approximately 980 million dollar in 2007 Productions differed by geographical location Almost all products of food industry consume on the domestic market Among the livestock raw materials of Mongolia only cashmere and raw cashmere have been recognized as a competitive sector in the world Keywords Livestock husbandry horse cattle sheep goat camel extensive intensive agriculture products land degradation and climate

iv

TABLE OF CONTENTS

Chapter Title Page

ACKNOWLEDGEMENT II

ABSTRACT III

ABBRIEVIATIONS VIII

TABLE OF CONTENTS IV

LIST OF FIGURES VI

LIST OF TABLES VII

CHAPTER I 1

INTRODUCTION 1 11 Brief Introduction of Mongolia 1 12 Background 2 13 Rationale 2 14 Objectives 3 15 Limitation of the Study 3

CHAPTER II 4

LITERATURE REVIEW 4 21 The Current Situation of Livestock Husbandry in Mongolia 4 22 Brief history of livestock husbandry development in Mongolia 5 23 Regional Distribution 6 24 Livestock Production 7

CHAPTER III 9

METHODOLOGY 9 31 Site selection 10 34 Data Collection 11 35 Data processing and analysis 12

CHAPTER IV 13

RESULT AND DISCUSSION 13 41 The current situation of Mongolian Animal Husbandry 13 42 The Present Status of Mongolian Livestock 14 43 Comparison of Actual and Estimated Livestock Number 15 44 Land Utilization 18 45 Mongolian Livestock Production 21 46 Past Policies and Strategies 26 47 The General View of Study Area 27 48 Veterinary Service 38 49 Problems and possibility of livestock sectorrsquos for the future 39 410 Suggested Strategies for Future Expansion 40 411 SWOT Analysis 40

CHAPTER V 43

CONCLUSIONS AND RECOMMENDATION 43

v

51 Conclusions 43 52 Recommendations 44

REFERENCES 45

APPENDICES 47

vi

LIST OF FIGURES

Chapter Title Page 11 Map of Mongolia 1 21 Percentage shares of major divisions to GDP (NSO 2005-2006) 4 22 GDP growth by percentage (NSO 2007) 5 23 The comparison of total livestock with number of privately owned livestock 5 24 Regional distribution of livestock in 2006 6 25 Share of domestic production versus imports in consumption of major products 7 41 The state of livestock number of Mongolia from 1990 to 2008 14 42 The comparison of the livestock structure in 2008 with 1990 14 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads) 17 44 The comparison of utilized lands between 2000 and 2006 (by type) 19 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006) 20 46 Losses adult animals of Mongolia (2000-2006) 21 47 The percentage of livestock products in agriculture (1990-2007) 21 48 The percentage of benefits from livestock types in economy (NSO 2006) 22 49 Main livestock production of Mongolia (1990- 2006) 22 410 Milk flow chart 23 411 The type of livestock which provide the milk products 24 412 The percentage of total slaughtered livestock by types (thousand tons) 25 413 The output of animal raw materials (1999-2006) 25 414 The livestock number of Tuv province by soum 28 415 The classification of herders household of Tuv aimag 28 416 Herdersrsquo age group and education level 29 417 The kind of livestock of herder households 31 418 The problems of herders in marketing 32 419 The income level of herders households 32 420 Major problems of herder households 33 421 Loan uses by households 33 422 Number of intensive farms of Mongolia 34 423 Number of intensive farms in Tuv province 34 424 Reason of establishment (a) and established year of dairy farms (b) 35 425 The reason which to initiate the dairy farm 36 426 Main customers of dairy farms 37 427 The problems which to faced by the farmers in marketing 38

vii

LIST OF TABLES

Chapter Title Page 41 The calculation by using Equation 43 16 42 Estimation by using Equation 45 18 43 Milk availability (FAOUN 2006) 23 44 Meat consumption in Asian first five countries (FAO Rome 2004) 24 45 The output of animalrsquos raw material in 2004 by stage (metric tons) 26 46 Production of main livestock commodities (Shagdar 2001) 26 47 The implemented projects in livestock sector of Mongolia (Bataa 2002) 27 48 The result of restocking program in Tuv aimag in 2005 to 2007 29 49 The comparison the education level with herderrsquos age 30 410 Households population and livelihood situation 30 411 The livestock composition of herder households (by animal type) 30 412 Main customer and customer area of herders 31 413 The income level of farms who include dairy activities and non-dairy activities 36 414 Potential area of interference for betterment of livestock sectorrsquos future growth 39

viii

ABBRIEVIATIONS

ADB Asian Development Bank ADO Asian Development Outlook AIP Asian Investment Program GDP Gross Domestic Product FAO Food and Agricultural Organization IFAD International Fund for Agricultural Development NSO National Statistical Office MIF Mongolian Investors Forum MSY Mongolian Statistical Yearbook MTG Mongolian Travel Guide MFA Ministry of Food and Agriculture WB World Bank WFP World Food Program EUP European Union Program AIACC Assessments of Impacts and Adaptations to Climate Change FAOSTAT Food and Agricultural Statistic Data RSSBP Rural sector strategy and business plan UN United Nations UNDP United Nations Development Program PRSP Poverty Reduction Strategy Paper MPVA Mongolian Private Veterinary Association Tugrug Mongolian currency (1$=1170 tugrug in 2007) Aimag Province Soum Sub-province Bag Subdivision of sub- province Dzud Harsh winter

1

CHAPTER I

INTRODUCTION

11 Brief Introduction of Mongolia

Figure 11 Map of Mongolia Mongolia is land-locked country of Central Asia It borders by China to the South and East and by Russia to the North and West It is situated between the longitude 874 to 1196 west and the latitude 521 to 414 north The main land is at an average elevation of 1580 meter above sea level

The current population is 264 million Total area is 15641 million km sq and 15 people stand per kilometer 608 people live in the urban areas and other 392 percent people live in the rural area of Mongolia (NSO 2007) The climate of Mongolia is too harsh and it characterized by a long-lasting cold winter dry and hot summer low precipitation high temperature fluctuations (day and night summer and winter) and a relatively high number of sunny days (on an average 260 days) per year The highest precipitation is approximately from 20 to 35 centimeters per year in north part and lowest precipitation is approximately from 10 to 20 centimeters south part of Mongolia Some regions of Gobi (the name Gobi means desert and steppe) which located in north part mostly receive no precipitation at all in years The effective vegetation growth period is a short around 80 to 130 days It is depend on the location of Mongolia Commonly in winter (January and February) the average temperature is -25 degC at night it reaches -40degC In summer time average temperature is +33 degC in central part of Mongolia such as Ulaanbaatar Moreover in Gobi region the temperature reaches +38degC

2

12 Background

The world is in the midst of what has been dubbed a livestock revolution with far reaching implications for human health development the environment and trade (Delgado et al 1999) Mongolia is one of the countries which stands at forefront of this revolution Therefore the role of livestock sector is very important in the Mongolian economy and this sector dominated on the agriculture The value added of agricultural sector is 188 of GDP of Mongolia The livestock products constitute 876 of total output of agriculture (NSO 2006) In 2006 there were 421400 herders constituting almost half of the countryrsquos economically active population (NSO 2006) Moreover there are two main sectors in the food and agricultural sector such as livestock and crop production Those sectors encourage the rural development of Mongolia such as to provide the economic growth Agro-processing industries generate value addition by the processing of agricultural raw materials both food and non-food into products which are marketable usable or edible have improved storability and or nutritive value and enhance income and profitability for producers An agro industrial system is modeled in order to illustrate the marketing the processing the production of agricultural materials and consumption in any countries (Salokhe and Hicks 2001) The Mongolian people to lead a nomadic lifestyle based on pastoral animal husbandry After privatization the intensive dairy farms became a significant issue which is now on the political agenda Keating and McCown (2001) remarked that there are 2 main components in agricultural system such as the production system and management system Production system contains pastureland livestock animals and the climate Today there are many significant problems such as the degradation of grassland desertification soil erosion and the lack for fodder of livestock Moreover the one of the problems is the impact of climate like drought and dzud (harsh winter) Drought occurs once every 2-3 years in the Gobi region and every 10 years in other regions (GOMampUNDP 2000) Nationwide drought occurred in 1944 and in 1972 (MFA 2001) Management system generates the knowledge regarding general principles and theory involving agricultural farmsrsquo management like agricultural economics animal science agronomy rural sociology psychology and engineering (Keating and McCown 2001)

13 Rationale

The livestock plays an important role in Mongolian agriculture and economy Furthermore meat and milk foodstuffs are important in Mongolian food sector and it generates the employment and income Therefore it is so important to know the past and current status potentials problems and constraints After that policies and strategies can be designed for better management and improvements of this sector Moreover this study contributes to the development by providing the information about status and problems of herder households and some intensive dairy farms

3

In addition Enkhjargal (1999) recommended that the government policy for livestock sector especially diary development should encourage and support research and development of dairy breeding stock pasture and farm management Involvements of farmers as producers need to be extending into economic activities that could provide better returns to them It should include feeding breeding health caring milk collecting transporting and processing

14 Objectives

The major objective is to investigate Mongolian livestock sector in Tuv province The specific

objectives are

bull To evaluate the present situation of livestock sub sector of Mongolia and to investigate the agricultural food and non-food products related with livestock animals

bull To analyze the future growth prospects of Mongolian livestock husbandry bull To present the environmental factors which affect the livestock sector

bull To conduct sector and SWOT analyses to identify strengths weaknesses opportunities and threats that the intensive and extensive livestock husbandry has been facing with

15 Limitation

Because of unavailable of data for the whole country this study was restricted only to Tuv province In addition information is limited about the herder households and farmers Therefore the study focuses on the main producers which are herder households and some intensive dairy farms

4

CHAPTER II

LITERATURE REVIEW

21 The Current Situation of Livestock Husbandry in Mongolia

The main source of Mongolian economy is coming from the agricultural sector (MIF 2006) The agricultural sector of Mongolia divided two main subsectors such as livestock sector and cropping sector (MIF 2006) At the end of 2006 approximately 40 of total population had lived in the rural areas Rural development is essential for Mongolia to achieve sustained economic growth and poverty reduction Livestock continues to provide rural households with an important source of herdersrsquo income jobs and food security and a means for investing and storing their wealth (WB 2006) Therefore animal husbandry plays the important role of the national economy Moreover agriculture still accounts for more than a fifth of GDP Some 40 per cent of the Mongolian workforce employ in traditional nomadic livestock herding Agriculture is produced 188 percent of GDP and contributed 30 percent of the total export of Mongolia Figure 21 demonstrates the comparison of the portion of divisions to GDP in 2005 with 2006

Figure 21 The comparison of the portion of divisions to GDP (NSO 2005-2006) The GDP growth due to contribution from all sectors was 99 in 2007 the average of GDP was 87 between 2003 and 2006 Especially agriculture sector provides almost half the population had a strong year extending by 16 and contributing 4 points to growth of GDP The data in Figure 22 shows that the ratio of GDP growth from 2003 to 2009 In addition it shows GDP for the forecast period in Mongolia The forecasts assume that the price will be comparatively higher for export goods (ADO 2008)

5

Figure 22 GDP growth by percentage (NSO 2007)

Enkhjargal (2005) noted that 35 of GDP and the agricultural sector contribute almost one fourth goods for export Moreover approximately 50 of the total labor force is employed in agricultural sector Barker (1997) remarked lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo In addition Mongolian livestock sector produces more than 901 of gross agricultural products and the source of income for more than 34 of all households in Mongolia In 2006 there are 348 million livestock counted in Mongolia The livestock number increased by 44 million heads of livestock animals compared to 2005 (NSO 2006) Furthermore as a result of census in 2006 there are 253000 camels 2114000 horses 2167000 cattle 14815000 sheep and 15451000 goats counted in Mongolia The number of horses increased by 86000 heads cattle increased by 204000 sheep and goat increased by 2 million heads respectively but the number of camel decreased by 07 thousand heads compared with 2005 (AIP 2006-2007)

Figure 23 The comparison of total livestock with number of privately owned livestock Moreover the statistical data shows (Figure 23) that almost 97 of the total livestock was private owned in 2006 and 31 of herder households have more than 100 livestock animals 22 Brief history of livestock husbandry development in Mongolia

6

Traditionally five types of domestic livestock in Mongolia are sheep goats cattle horses and camel Pigs hens and other birds seldom reared Horse is the first animal in Mongolia to be domesticated (Baasanjav et al 1999)

Shagdar (2001) remarked that the wild animals domesticated livestock animals such as sheep and horses in Mongolia between the 8th and 3rd centuries BC Shagdar (2001) argued that Mongolian herder households began the nomadic form in the 13th century and this system remained until present day In those times most livestock animals was private owned of herders However in 1951 the livestock animals transferred to the collective ownership form This collective ownership form was tended to develop more intensively managed production system This form gave diverse assistances to the herders For example to build the enclosures and wells to prepare hay (Shagdar 2001) However during the collectivization period the share of private livestock decreased to 17-30 of the total number of livestock (Shagdar 2001) The collective ownership form lasted till 1989 Due to tend of the decreasing livestock number Mongolian government privatized the livestock animals to the herders in 1991 Because of privatization 967 of total livestock shifted private owned form and 31 of herder households have more than 100 livestock animals After privatization the livestock number and number of herders rapidly increased in Mongolia

23 Regional Distribution

Mongolia divided 5 main regions named East West Central Khangai and Ulaanbaatar Figure 24 shows the regional distribution of livestock in Mongolia (NSO 2006) The forests and mountainous areas of Khangai region Central region and West region of Mongolia are most populous in terms of livestock

Figure 24 Regional distribution of livestock in 2006 The livestock is relatively distributed in comparison with the population size of each region Sheep and goats are the majority livestock and respectively accounted for 425 and 444 of

7

the total number of livestock in every region in 2006 Camels account for only 07 of total livestock and mainly rise in the southern part of the country (NSO 2006) Overgrazing is becoming problematic in areas close to major markets For example livestock density of Orkhon-Uul Darkhan and the capital city named of Ulaanbaatar which is 5 to 10 times lower than other regions

24 Livestock Production

Mongolian major livestock products include meat and meat products and milk and dairy products In addition wool hair cashmere hides and skins are the key input for animal processing industries ( Shagdar 2001) Agricultural production comprises of 30 meat and meat products 27 of them include milk and dairy products 2 skin and hides 1 animal and plants oil 31 flour and flour products 2 fruit and vegetables and 2 livestock feed and starches

Figure 25 Share of domestic production versus imports in consumption of major products (AIP

2006-2007)

From 1999 to 2004 all foodstuffs consumption except meat and milk has been below the recommended level Because of natural disasters such as drought and dzud in recent years the consumption of milk and meat products has declined during those years However the consumption of flour rise eggs potatoes and vegetables has increased in 1999-2002 Especially consumptions of potatoes vegetables and fruits are significantly below the recommendation (PRSP 2004) Mongolia imports some non-meat food products from Russia China and others Mongolia relies fully on imports for fruits and rice (WB 2008) Livestock production is entirely seasonal taking place in harmony with the Mongolian climate For example wool and hair collect in the late spring and early summer while most livestock

8

slaughter in the late autumn and early winter Milk and dairy products mainly produce during summer (Shagdar 2001) a) Meat and meat products On average 75 million head of livestock slaughter for consumption annually accounting for approximately 25 of the total livestock herd counted at the beginning of each year This equals 250000-300000 tons of meat which include mutton beef goat meat and horsemeat Camel meat is not so popular and consumed mostly during the winter Meat and meat products taken from of 30 beef 40 mutton 10 goat meat and 15 horsemeat (Shagdar 2001) b) Milk and dairy products Annually 250000-350000 tons milk produces in Mongolia Cowrsquos milk possesses more than 80 of the total of milk Moreover sheep and goat milk and horse milk accounting for about 10 and 8 respectively In addition more than 90 of all cows are accounted by native Mongolian cows which have an average milk yield of 19 liters per day in steppe and forest region and 13 liters in the Gobi region (Shagdar 2001) Dairy products include yogurt butter dried curds cheese etc Particularly in the rural areas milk consumes directly and converts to a wide range of traditional products Many of these have a long life and are stored for consumption in the winter and spring (WB 2003) Horse milk is used to produce the popular drink it contain a low alcohol that is similar the beer Rich content of amino acids vitamins and sugar found in horse milk makes airag a nutritious and healthy drink which is also low in fat Therefore it is used to treat many illnesses including tuberculosis diseases of digestive organs pharmaceutical toxicity and fatigue (Shagdar 2001) c) Wool hair and cashmere Approximately 25000 tons of wool hair and cashmere is produced in Mongolia annually more than 70 of which is accounted for by sheep wool Mongolia is the second largest producer of raw cashmere in the world Approximately 3300 tons of cashmere is produced annually That is accounting for about 20 of the total global supply Therefore cashmere is one of the main export commodities in Mongolia In wool and cashmere industry the productions of major items include spun threat camel wool blanket carpet felt etc (Shagdar 2001) d) Hides and skin One of valuable resource for producing luxury consumer goods is hides and skin About 65-85 million individual hides and skin are produced in Mongolia annually more than 80 of these are sheep and goatskins which are supplied to processing industries or exported Traditionally sheepskin was used for making warm winter coats and floor covering while various accessories for handling horses were made from cattle hides (Shagdar 2001)

9

CHAPTER III

METHODOLOGY The study conducted in four main stages such as the data collection analysis of the data and reporting and conclusions and recommendation part The general methodology used for specific objectives of the study is shown in Figure 31

Figure 31 Flow chart of methodology and procedure for survey and data collection

10

31 Site selection

The sites for the study selected included three sub-provinces named Jargalant Sumber and Bayanchandmani of Tuv province It is nearest province with the capital city (Figure 32) The site selection chose based on the following characteristics

bull Agricultural production bull The location of province bull Potentials for the development of livestock husbandry bull Financial constraints of the research bull Data availability

General information of Tuv province

Area 77300 sq km Number of livestock 1598000 Population 96500 Cropland 318100 hectare Center Zuunmod Number of sub-provinces 27

Tuv province is located in the centre of Mongolia In addition capital city named Ulaanbaatar located in this provincersquos territory Tuv province is one of the biggest and most productive provinces as this province is well positioned geographically to supply livestock production to nearest areas with high demand This province is situated 43 km from the capital city Moreover the major intensive animal farms are located in Tuv province

In this province have 201 household farms include dairy farms 152 pork farms 24 and chicken farm 1 respectively (MFA 2007) There are a total of 210000 camels 1979 thousand head of horses 1311 thousand head of cattle 10408 thousand of sheep and 8013 thousand heads of goats (NSO 2006)

33 Sampling Design and Procedures of Survey

Formal survey was conducted to collect the general information of herder householdsrsquo comprehension and the current development of agricultural products Herder household and farmers who own agribusiness were selected for interviews The number of herder households and number of farms in each province were determined by following formula

Where n= Number of total sample

N= Total number of farms and herders households E= Error (005)

80 herder households and 8 intensive farms from selected in Tuv province for this survey This size of samples of herders and farms provided statistical justification in order to generalize the results

11

Figure 32 Location of Tuv aimag

34 Data Collection

Data were collected from two sources (i) Secondary data was from the Mongolian National Statistical Office Mongolian State

University of Agriculture and the Ministry of Food and Agriculture Data used in this study included Urban and rural population Number of herder households (selected area) Total number of livestock and livestock distribution Land utilization Main agricultural production

12

(ii) Primary data was collected through questionnaires distributed to the randomly selected dairy farms and herder households in Tuv province and to determine the production processing and marketing (Appendix-A and B) Data collected in this part included

Present situation and the growth prospect of Livestock husbandry The suggestions and comments of herders and farmers who responded in this

research The comments The current problems faced by the herders and farmers

The survey aimed to question 80 herding households from the Tuv province and 8 intensive farmers of Tuv province were involved but in practice only 69 herders and 32 small and medium scale intensive dairy farms were surveyed Therefore around 10 relevant people including an official such as governor of soum and bag coordinator of household livelihood improvement related project and livestock expert were given an additional questionnaire

35 Data processing and analysis

351 Data processing The data of this study collected from the herder households and farmers of Tuv province The draft were analyzed to know the development future growth the influencing factors and special characteristics of the livestock sector SWOT analysis Around 80 questionnaires processed in the SPSS package and Microsoft Excel by using descriptive statistics Moreover in the survey investigated the herders and farmersrsquo opinions about the Mongolian livestock sub sector 352 Data analysis Data collections were analyzed quantitative and qualitative ways according to the field data The basis statistics data and the survey questionnaire results investigated the past and current performance of Mongolian livestock husbandry and calculated the future growth of livestock animals in Mongolia by showing the form of table figure flowchart mean and percentile 353 SWOT analysis The statistical data and the results of questionnaire determine the external factors such as Opportunity and Threat and internal factors such as Strength and Weakness of intensive and extensive livestock husbandry of Mongolia Moreover SWOT analyses provided the opportunity weakness and other factors of Tuv province for the livestock sector

13

CHAPTER IV

RESULT AND DISCUSSION

41 The current situation of Mongolian Animal Husbandry

Generally Mongolian animal husbandry divided two main sectors extensive animal husbandry and intensive animal husbandry Barker (1997) said lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo The extensive livestock management system of Mongolia includes main five species of livestock for most of the year The some herders and some relevant people believe that the extensive animal husbandry is most suitable sector in Mongolia The first reason is that approximately 80 of total territories are grassy area in Mongolia This is one of the biggest scales of the world Second Mongolian livestock systems is continuing with a long traditional nomadic livestock herding Hence the herders obtained the great knowledge and experiments during the several centuries Third Mongolian herder households are settled in the traditional pastoral system such as ldquokhot ailrdquo and ldquoneg goliinhonrdquo Two and more herder households including relatives and acquaintances called ldquokhot ailrdquo and ldquoneg goliinhonrdquo live together This system is most indigenous form This form of living served a variety of functions such as using pasture and seasonal movement of households Lastly the demand of livestock production is increasing during the last few years because of incomes of family are increasing and the increased demand from the neighbor countries Furthermore it has become the foundation of Mongolian livestock revolution Moreover Mongolian climate is suitable for the extensive animal husbandry On the other side the government of Mongolia begun to support intensive livestock farms to develop dairy and meat bread cattle pork and poultry Some people said the intensive livestock husbandry is better than the extensive livestock husbandry There are several reasons for this statement The first significant reason is that the increasing livestock number of Mongolia According to some researches it is possible to support around 38 million heads of livestock on the Mongolian whole grasslands However the number of livestock already reached 42 million heads in 2008 Therefore the growth of livestock is creating the degradation of pastureland by overgrazing in Mongolia Secondly since 1940 the average air temperature has been increasing in Mongolia caused by the climate change of the world Moreover the arid land is increasing due to decreasing of precipitation Therefore since last few years the yield of pasture is depleting gradually Thus grazing time of livestock is decreasing in Mongolia Finally the development of extensive farms directly depends on the supply and safety of the food Presently Mongolia is importing most of food products except the meat and meat products That is why the intensive animal husbandry is developing in some provinces especially the nearest provinces with the bigger cities such as Tuv Selenge and Bulgan According to research by the Ministry of Food and Agriculture (2007) Mongolia has 750 intensive animal husbandries Of which 494 farms for dairy 10 of them for meat cow 15 sheep farms for meat and wool 79 farms with pigs 111 farms with poultry and 40 farms with bees in Mongolia (AppendixC)

14

42 The Present Status of Mongolian Livestock

Mongolian livestock reached 421958 thousand heads in 2008 and it increased by 48 percent compared with 2007 Figure 41 shows the livestock numbers of Mongolia during last 18 years Sheep goat and cattle population has increased while those of camel and horse are decreasing in Mongolia during the last few years (Appendix D and F)

Figure 41 The state of livestock number of Mongolia from 1990 to 2008

According to Figure 41 the total number of livestock dramatically increased between 1990 and 1999 However it decreased by 287 due to drought and Dzud during 2000 to 2002 During that period 35 million and 47 million heads of animals died in 2000 and 2001 respectively During the last 7 years the number of livestock increased by 31 By the way the number of livestock in 2008 reached highest number ever

Figure 42 The comparison of the livestock structure in 2008 with 1990

15

Figure 42 shows the comparison of livestock structure (by type) during 2008 and 1990 According to Figure 41 sheep were dominating in the livestock structure until 2003 However cattle and goats dominated the structure of livestock during the recent years This is because of cashmere become herderrsquos main income from livestock due to free market economy It explained that after privatization the herders prefer to herd productive kinds of livestock Although the livestock resist Mongolian weather especially adopted for the cold season the productivity of livestock is low Therefore the some preparations such as to build warm shelters and to prepare and store hay and fodder are most significant principal elements during the wintertime Moreover pastures are subjected to increased vulnerability to parasites and other diseases These issues affect the animal productivity

43 Comparison of Actual and Estimated Livestock Number

Three different estimation including the average of number of livestock comparison of actual and estimated livestock number of Mongolia between 1990 and 2008 and livestock number in 2009 by using the Microsoft Excel (AppendixG) are given below (Avdai et al 1999) Calculation 1 The average number livestock in Mongolia from 1990 to 2008

The average number of livestock estimated was 295501 thousand heads between 1990 and 2008 Calculation 2 The goal of this part is that to estimate the equalized livestock number (amount) on the actual livestock amount by using the straight-line equation

yt = a + bt - (42)

Where t - period and a b - the parametric constraints

To estimate the parametric constraints can be solving by using the following method The value obtained by using equation (43) Table 41 shows the results of estimation To solve this system of equation substitute sumt = 0 Moreover the estimated values such as Σ y Σt2 and Σyt are shown from the Table 41

16

yt = 2978564+57145t y ndashactual livestock amount yt - estimated livestock amount

The estimated livestock amount and actual livestock number of Mongolia between 1990 and 2008 are shown in Figure 43

Table 41 The calculation by using Equation 43

(thousand heads)

y t t2 yt yt=a+bt

1990 258549 -9 81 -2326941 2464259 1991 255279 -8 64 -2042232 2521404 1992 254941 -7 49 -1784587 2578549 1993 251747 -6 36 -1510482 2635694 1994 268081 -5 25 -1340405 2692839 1995 285723 -4 16 -1142892 2749984 1996 293001 -3 9 -879003 2807129 1997 312923 -2 4 -625846 2864274 1998 328975 -1 1 -328975 2921419 1999 33596 0 0 0 2978564 2000 303274 1 1 303274 3035709 2001 260752 2 4 521504 3092854 2002 238976 3 9 716928 3149999 2003 254277 4 16 1017108 3207144 2004 280199 5 25 1400995 3264289 2005 303988 6 36 1823928 3321434 2006 34803 7 49 243621 3378579 2007 402638 8 64 3221104 3435724 2008 421959 9 81 3797631 3492869 2009 10 3550014 2010 11 3607159 2011 12 3664304 2012 13 3721449 2013 14 3778594 2014 15 3835739 2015 16 3892884

TOTAL 5659272 91 570 3257319 82642859

17

Figure 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads)

bull Calculation 3 The last estimation is that how many heads of Mongolian livestock will be reach in 2009 by using the following Equation 44

yt plusmn tα δy -(44)

Where yt - estimated amount of livestock on 2009 (see from previous Table 41) tα ndash dispersion of Student

δy ndash standard deviation y + tα = 3550014+834668= 4384682 y - tα =3550014- 834668= 2715346 Calculation shows that the livestock number of Mongolia will reach from 271534 to 438468 thousand heads animals in 2009 Below three steps shows the steps of calculation 3 Step A To calculate δy (standard deviation) can be solved by using following equation 45 (45) Table 42 shows the result of this estimation by using Equation 45

Where n - total number of sample

Step B To find the dispersion of Student (Student is the name of person) (tα)

18

tα (q k) = tα (005 18)= 212 (Appendix I) Where k - degree of freedom k= n-1=18

q - significance level (Appendix I) Step C tα δy = 21 397461 = 834668

Table 42 Estimation by using Equation 45

y yt y-yt (y-yt)2

1990 258549 246426 12123 146967129 1991 255279 25214 3139 9853321 1992 254941 257855 -2914 8491396 1993 251747 263569 -11822 139759684 1994 268081 269284 -1203 1447209 1995 285723 274998 10725 115025625 1996 293001 280713 12288 150994944 1997 312923 286427 26496 702038016 1998 328975 292142 36833 1356669889 1999 33596 297856 38104 1451914816 2000 303274 303571 -297 88209 2001 260752 309285 -48533 2355452089 2002 238976 31500 -76024 5779648576 2003 254277 320714 -66437 4413874969 2004 280199 326429 -4623 21372129 2005 303988 332143 -28155 792704025 2006 34803 337858 10172 103469584 2007 402638 343572 59066 3488792356 2008 421959 349287 72672 5281219584

2843562432

44 Land Utilization

Mongolian total territory is 1564116 thousand hectares Of which in total 742 of total area is used for the agriculture 157 used for state special land 91 of total area is comprised forest land 03 land used for cities rural town and other settlements 04 land possesses water resources and 02 of total land is covered by transportation and networks in 2006 (NSO 2006) Currently Mongolian pastureland faced many significant problems such as grassland degradation soil erosion and desertification Main sources of them are overgrazing water

19

source and the population According to some survey approximately 120 million hectare land (70 percent) of total Mongolian territory is degraded

Figure 44 The comparison of utilized lands between 2000 and 2006 (by type)

Figure 44 shows utilization land between 2000 and 2006 For example the agriculture land and forestland decreased by 9 and 4 in 2006 compared to 2000 Generally the development of crop production and destruction the populationrsquos migration to urban areas and the nomadic livestock husbandry are leading to the overgrazing and degradation of the land Moreover livestock number in Mongolia is increasing during the last few years Especially in 2008 it reached the highest number of livestock for the first time in history Even though the herders are facing the shortage of fodder In addition the land for the natural pasture has slightly increased since 1989

441 The Impacts for the Land Degradation

There are many environmental factors affect on the agricultural sector in complex ways Most scientists and experts agreed that factors of land degradation in Mongolia could be divided into following two main categories including human and natural factors Today many factors affect the land degradation caused by the human activities such as excessive grazing deforestation poor irrigation and inappropriate land tenure in all sector The first significant factor is overgrazing Crop cultivation is one of the most important reasons of soil erosion and overgrazing Spring tilling coincides caused the seasonal higher speed wind and most planted areas are lack of windbreaks like trees For example the average wind speed of Gobi region is 3hellip4 meters per second it is one of the significant cause of soil moisture loss and erosion According to some survey an average of 35ndash50 tons of soils has been lost from each

20

hectare of cultivated land due to erosion during the past 30 years Half of all cultivated land degraded to some degree of erosion Another factor of overgrazing is the vehicle-induced degradation The second significant factor is the deforestation due to clear-cutting the trees fire and insect infestations The third important factor is inappropriate land tenure like mining and inadequate waste management Shagdar (2001) estimated approximately 100000 hectare of land have been degraded by mining and quarrying Moreover another significant factor of land degradation is bad or poor irrigation practices Salinization of irrigated land in arid climates as a result of poor drainage and evaporation and using highly toxic pesticide for vegetation protection from insects causes depletion of soil productivity The final factor of land degradation is the legal provision of ldquoopenness of pastureland which is public propertyrdquo Because of this legal provision the utilizing of pastureland is free for everyone (UNDP amp SIDA 2003) On the other hand the land degradation of Mongolia depends directly on nature and weather conditions Most important impact is the location It is located high above sea level and far away from the ocean Mongolia lies between 420 520N and almost 1200 E Another principal factor is the global warming and climatic change of the world Climate change can affect weeds insects plant diseases and pathogens in the environment especially in agricultural activities Another consequence on the pasture is the lack of rainfall Mongolia has low precipitation and short growing seasons especially long and cold winter and short and hot summer Therefore other significant causes are drought and Dzud in Mongolia They are the keys determinants of vulnerability of livestock to climate change They affect the livelihood of herdersrsquo household which is reduced livestock productivity especially milk and destroy pasture (AIACC 2006) The natural disasters like dzud and drought have occurred around 30 times in Mongolia with different level of harm (UNDPampSIDA 2003) (Figure 45)

Figure 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006)

During the disaster of harsh winter (dzud) in 1999- 2000 almost one third of the total livestock died in 1999 Figure 46 shows that the losses adult animals between 2000 and 2006 in Mongolia

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

ii

ACKNOWLEDGEMENT

First I would like to declare my sincere thanks to my dear Professor Vilas MSalokhe Chairman of my thesis advisory committee for suggesting this topic and his valuable guidance and priceless encouragement during my study His generous help and longsighted advice have successfully affected in this research Second I would like to express deepest gratitude to DrHPW Jayasuriya Professor Athapol Noomhorn and Dr Peeyush Soni This work would not have been possible without the support and assistance of my committee members and dear teachers Moreover I would like to say thanks to secretaries and all staffs of AIT- ASE for their friendship I am grateful to the AIT and Netherlands Ministry for Development Cooperation for providing the scholarship through AIT which enabled me to pursue my studies at this institute I hold the honest respect to all the farmers and herder households who participated in the questionnaire survey at Tuv provinces I am eternally thankful to my father DDorjsuren and mother GBilegnyam for their great love that I feel even this far away Finally I want to thank my entire classmates of AIT-ASE 2007 batch

iii

ABSTRACT

The livestock sector is the key to economic growth and essential component of a poverty- oriented rural development strategy Mongolia has five types of livestock (sheep goat horse cattle and camel) Total 348 million livestock animal were counted in 2006 including 148 million sheep 154 million goats 211 million horses 216 million cattle and 2535 thousand heads camels Most of livestock is located in central and western part of the country The Mongolian animal husbandry is divided in two main sectors including extensive animal husbandry and intensive animal husbandry Generally Mongolian climate is suitable for the extensive animal husbandry However during the last years intensive animal husbandry is developing in some provinces especially the nearest provinces with the bigger cities such as Tuv Selenge and Bulgan provinces Moreover Mongolia livestock sector faced many significant problems such as grassland degradation soil erosion and desertification Main sources of degradation are overgrazing water source and the population In addition the consequences such as poor infrastructures including road and storage facilities the availability of critical support like constructing wells and shelters and preparing hay are affecting the Mongolian livestock husbandry Agricultural products especially livestock products is one of the major sources of Mongolian economics Almost 90 of the total agricultural production of Mongolia produced from livestock sector and obtained the benefit approximately 980 million dollar in 2007 Productions differed by geographical location Almost all products of food industry consume on the domestic market Among the livestock raw materials of Mongolia only cashmere and raw cashmere have been recognized as a competitive sector in the world Keywords Livestock husbandry horse cattle sheep goat camel extensive intensive agriculture products land degradation and climate

iv

TABLE OF CONTENTS

Chapter Title Page

ACKNOWLEDGEMENT II

ABSTRACT III

ABBRIEVIATIONS VIII

TABLE OF CONTENTS IV

LIST OF FIGURES VI

LIST OF TABLES VII

CHAPTER I 1

INTRODUCTION 1 11 Brief Introduction of Mongolia 1 12 Background 2 13 Rationale 2 14 Objectives 3 15 Limitation of the Study 3

CHAPTER II 4

LITERATURE REVIEW 4 21 The Current Situation of Livestock Husbandry in Mongolia 4 22 Brief history of livestock husbandry development in Mongolia 5 23 Regional Distribution 6 24 Livestock Production 7

CHAPTER III 9

METHODOLOGY 9 31 Site selection 10 34 Data Collection 11 35 Data processing and analysis 12

CHAPTER IV 13

RESULT AND DISCUSSION 13 41 The current situation of Mongolian Animal Husbandry 13 42 The Present Status of Mongolian Livestock 14 43 Comparison of Actual and Estimated Livestock Number 15 44 Land Utilization 18 45 Mongolian Livestock Production 21 46 Past Policies and Strategies 26 47 The General View of Study Area 27 48 Veterinary Service 38 49 Problems and possibility of livestock sectorrsquos for the future 39 410 Suggested Strategies for Future Expansion 40 411 SWOT Analysis 40

CHAPTER V 43

CONCLUSIONS AND RECOMMENDATION 43

v

51 Conclusions 43 52 Recommendations 44

REFERENCES 45

APPENDICES 47

vi

LIST OF FIGURES

Chapter Title Page 11 Map of Mongolia 1 21 Percentage shares of major divisions to GDP (NSO 2005-2006) 4 22 GDP growth by percentage (NSO 2007) 5 23 The comparison of total livestock with number of privately owned livestock 5 24 Regional distribution of livestock in 2006 6 25 Share of domestic production versus imports in consumption of major products 7 41 The state of livestock number of Mongolia from 1990 to 2008 14 42 The comparison of the livestock structure in 2008 with 1990 14 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads) 17 44 The comparison of utilized lands between 2000 and 2006 (by type) 19 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006) 20 46 Losses adult animals of Mongolia (2000-2006) 21 47 The percentage of livestock products in agriculture (1990-2007) 21 48 The percentage of benefits from livestock types in economy (NSO 2006) 22 49 Main livestock production of Mongolia (1990- 2006) 22 410 Milk flow chart 23 411 The type of livestock which provide the milk products 24 412 The percentage of total slaughtered livestock by types (thousand tons) 25 413 The output of animal raw materials (1999-2006) 25 414 The livestock number of Tuv province by soum 28 415 The classification of herders household of Tuv aimag 28 416 Herdersrsquo age group and education level 29 417 The kind of livestock of herder households 31 418 The problems of herders in marketing 32 419 The income level of herders households 32 420 Major problems of herder households 33 421 Loan uses by households 33 422 Number of intensive farms of Mongolia 34 423 Number of intensive farms in Tuv province 34 424 Reason of establishment (a) and established year of dairy farms (b) 35 425 The reason which to initiate the dairy farm 36 426 Main customers of dairy farms 37 427 The problems which to faced by the farmers in marketing 38

vii

LIST OF TABLES

Chapter Title Page 41 The calculation by using Equation 43 16 42 Estimation by using Equation 45 18 43 Milk availability (FAOUN 2006) 23 44 Meat consumption in Asian first five countries (FAO Rome 2004) 24 45 The output of animalrsquos raw material in 2004 by stage (metric tons) 26 46 Production of main livestock commodities (Shagdar 2001) 26 47 The implemented projects in livestock sector of Mongolia (Bataa 2002) 27 48 The result of restocking program in Tuv aimag in 2005 to 2007 29 49 The comparison the education level with herderrsquos age 30 410 Households population and livelihood situation 30 411 The livestock composition of herder households (by animal type) 30 412 Main customer and customer area of herders 31 413 The income level of farms who include dairy activities and non-dairy activities 36 414 Potential area of interference for betterment of livestock sectorrsquos future growth 39

viii

ABBRIEVIATIONS

ADB Asian Development Bank ADO Asian Development Outlook AIP Asian Investment Program GDP Gross Domestic Product FAO Food and Agricultural Organization IFAD International Fund for Agricultural Development NSO National Statistical Office MIF Mongolian Investors Forum MSY Mongolian Statistical Yearbook MTG Mongolian Travel Guide MFA Ministry of Food and Agriculture WB World Bank WFP World Food Program EUP European Union Program AIACC Assessments of Impacts and Adaptations to Climate Change FAOSTAT Food and Agricultural Statistic Data RSSBP Rural sector strategy and business plan UN United Nations UNDP United Nations Development Program PRSP Poverty Reduction Strategy Paper MPVA Mongolian Private Veterinary Association Tugrug Mongolian currency (1$=1170 tugrug in 2007) Aimag Province Soum Sub-province Bag Subdivision of sub- province Dzud Harsh winter

1

CHAPTER I

INTRODUCTION

11 Brief Introduction of Mongolia

Figure 11 Map of Mongolia Mongolia is land-locked country of Central Asia It borders by China to the South and East and by Russia to the North and West It is situated between the longitude 874 to 1196 west and the latitude 521 to 414 north The main land is at an average elevation of 1580 meter above sea level

The current population is 264 million Total area is 15641 million km sq and 15 people stand per kilometer 608 people live in the urban areas and other 392 percent people live in the rural area of Mongolia (NSO 2007) The climate of Mongolia is too harsh and it characterized by a long-lasting cold winter dry and hot summer low precipitation high temperature fluctuations (day and night summer and winter) and a relatively high number of sunny days (on an average 260 days) per year The highest precipitation is approximately from 20 to 35 centimeters per year in north part and lowest precipitation is approximately from 10 to 20 centimeters south part of Mongolia Some regions of Gobi (the name Gobi means desert and steppe) which located in north part mostly receive no precipitation at all in years The effective vegetation growth period is a short around 80 to 130 days It is depend on the location of Mongolia Commonly in winter (January and February) the average temperature is -25 degC at night it reaches -40degC In summer time average temperature is +33 degC in central part of Mongolia such as Ulaanbaatar Moreover in Gobi region the temperature reaches +38degC

2

12 Background

The world is in the midst of what has been dubbed a livestock revolution with far reaching implications for human health development the environment and trade (Delgado et al 1999) Mongolia is one of the countries which stands at forefront of this revolution Therefore the role of livestock sector is very important in the Mongolian economy and this sector dominated on the agriculture The value added of agricultural sector is 188 of GDP of Mongolia The livestock products constitute 876 of total output of agriculture (NSO 2006) In 2006 there were 421400 herders constituting almost half of the countryrsquos economically active population (NSO 2006) Moreover there are two main sectors in the food and agricultural sector such as livestock and crop production Those sectors encourage the rural development of Mongolia such as to provide the economic growth Agro-processing industries generate value addition by the processing of agricultural raw materials both food and non-food into products which are marketable usable or edible have improved storability and or nutritive value and enhance income and profitability for producers An agro industrial system is modeled in order to illustrate the marketing the processing the production of agricultural materials and consumption in any countries (Salokhe and Hicks 2001) The Mongolian people to lead a nomadic lifestyle based on pastoral animal husbandry After privatization the intensive dairy farms became a significant issue which is now on the political agenda Keating and McCown (2001) remarked that there are 2 main components in agricultural system such as the production system and management system Production system contains pastureland livestock animals and the climate Today there are many significant problems such as the degradation of grassland desertification soil erosion and the lack for fodder of livestock Moreover the one of the problems is the impact of climate like drought and dzud (harsh winter) Drought occurs once every 2-3 years in the Gobi region and every 10 years in other regions (GOMampUNDP 2000) Nationwide drought occurred in 1944 and in 1972 (MFA 2001) Management system generates the knowledge regarding general principles and theory involving agricultural farmsrsquo management like agricultural economics animal science agronomy rural sociology psychology and engineering (Keating and McCown 2001)

13 Rationale

The livestock plays an important role in Mongolian agriculture and economy Furthermore meat and milk foodstuffs are important in Mongolian food sector and it generates the employment and income Therefore it is so important to know the past and current status potentials problems and constraints After that policies and strategies can be designed for better management and improvements of this sector Moreover this study contributes to the development by providing the information about status and problems of herder households and some intensive dairy farms

3

In addition Enkhjargal (1999) recommended that the government policy for livestock sector especially diary development should encourage and support research and development of dairy breeding stock pasture and farm management Involvements of farmers as producers need to be extending into economic activities that could provide better returns to them It should include feeding breeding health caring milk collecting transporting and processing

14 Objectives

The major objective is to investigate Mongolian livestock sector in Tuv province The specific

objectives are

bull To evaluate the present situation of livestock sub sector of Mongolia and to investigate the agricultural food and non-food products related with livestock animals

bull To analyze the future growth prospects of Mongolian livestock husbandry bull To present the environmental factors which affect the livestock sector

bull To conduct sector and SWOT analyses to identify strengths weaknesses opportunities and threats that the intensive and extensive livestock husbandry has been facing with

15 Limitation

Because of unavailable of data for the whole country this study was restricted only to Tuv province In addition information is limited about the herder households and farmers Therefore the study focuses on the main producers which are herder households and some intensive dairy farms

4

CHAPTER II

LITERATURE REVIEW

21 The Current Situation of Livestock Husbandry in Mongolia

The main source of Mongolian economy is coming from the agricultural sector (MIF 2006) The agricultural sector of Mongolia divided two main subsectors such as livestock sector and cropping sector (MIF 2006) At the end of 2006 approximately 40 of total population had lived in the rural areas Rural development is essential for Mongolia to achieve sustained economic growth and poverty reduction Livestock continues to provide rural households with an important source of herdersrsquo income jobs and food security and a means for investing and storing their wealth (WB 2006) Therefore animal husbandry plays the important role of the national economy Moreover agriculture still accounts for more than a fifth of GDP Some 40 per cent of the Mongolian workforce employ in traditional nomadic livestock herding Agriculture is produced 188 percent of GDP and contributed 30 percent of the total export of Mongolia Figure 21 demonstrates the comparison of the portion of divisions to GDP in 2005 with 2006

Figure 21 The comparison of the portion of divisions to GDP (NSO 2005-2006) The GDP growth due to contribution from all sectors was 99 in 2007 the average of GDP was 87 between 2003 and 2006 Especially agriculture sector provides almost half the population had a strong year extending by 16 and contributing 4 points to growth of GDP The data in Figure 22 shows that the ratio of GDP growth from 2003 to 2009 In addition it shows GDP for the forecast period in Mongolia The forecasts assume that the price will be comparatively higher for export goods (ADO 2008)

5

Figure 22 GDP growth by percentage (NSO 2007)

Enkhjargal (2005) noted that 35 of GDP and the agricultural sector contribute almost one fourth goods for export Moreover approximately 50 of the total labor force is employed in agricultural sector Barker (1997) remarked lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo In addition Mongolian livestock sector produces more than 901 of gross agricultural products and the source of income for more than 34 of all households in Mongolia In 2006 there are 348 million livestock counted in Mongolia The livestock number increased by 44 million heads of livestock animals compared to 2005 (NSO 2006) Furthermore as a result of census in 2006 there are 253000 camels 2114000 horses 2167000 cattle 14815000 sheep and 15451000 goats counted in Mongolia The number of horses increased by 86000 heads cattle increased by 204000 sheep and goat increased by 2 million heads respectively but the number of camel decreased by 07 thousand heads compared with 2005 (AIP 2006-2007)

Figure 23 The comparison of total livestock with number of privately owned livestock Moreover the statistical data shows (Figure 23) that almost 97 of the total livestock was private owned in 2006 and 31 of herder households have more than 100 livestock animals 22 Brief history of livestock husbandry development in Mongolia

6

Traditionally five types of domestic livestock in Mongolia are sheep goats cattle horses and camel Pigs hens and other birds seldom reared Horse is the first animal in Mongolia to be domesticated (Baasanjav et al 1999)

Shagdar (2001) remarked that the wild animals domesticated livestock animals such as sheep and horses in Mongolia between the 8th and 3rd centuries BC Shagdar (2001) argued that Mongolian herder households began the nomadic form in the 13th century and this system remained until present day In those times most livestock animals was private owned of herders However in 1951 the livestock animals transferred to the collective ownership form This collective ownership form was tended to develop more intensively managed production system This form gave diverse assistances to the herders For example to build the enclosures and wells to prepare hay (Shagdar 2001) However during the collectivization period the share of private livestock decreased to 17-30 of the total number of livestock (Shagdar 2001) The collective ownership form lasted till 1989 Due to tend of the decreasing livestock number Mongolian government privatized the livestock animals to the herders in 1991 Because of privatization 967 of total livestock shifted private owned form and 31 of herder households have more than 100 livestock animals After privatization the livestock number and number of herders rapidly increased in Mongolia

23 Regional Distribution

Mongolia divided 5 main regions named East West Central Khangai and Ulaanbaatar Figure 24 shows the regional distribution of livestock in Mongolia (NSO 2006) The forests and mountainous areas of Khangai region Central region and West region of Mongolia are most populous in terms of livestock

Figure 24 Regional distribution of livestock in 2006 The livestock is relatively distributed in comparison with the population size of each region Sheep and goats are the majority livestock and respectively accounted for 425 and 444 of

7

the total number of livestock in every region in 2006 Camels account for only 07 of total livestock and mainly rise in the southern part of the country (NSO 2006) Overgrazing is becoming problematic in areas close to major markets For example livestock density of Orkhon-Uul Darkhan and the capital city named of Ulaanbaatar which is 5 to 10 times lower than other regions

24 Livestock Production

Mongolian major livestock products include meat and meat products and milk and dairy products In addition wool hair cashmere hides and skins are the key input for animal processing industries ( Shagdar 2001) Agricultural production comprises of 30 meat and meat products 27 of them include milk and dairy products 2 skin and hides 1 animal and plants oil 31 flour and flour products 2 fruit and vegetables and 2 livestock feed and starches

Figure 25 Share of domestic production versus imports in consumption of major products (AIP

2006-2007)

From 1999 to 2004 all foodstuffs consumption except meat and milk has been below the recommended level Because of natural disasters such as drought and dzud in recent years the consumption of milk and meat products has declined during those years However the consumption of flour rise eggs potatoes and vegetables has increased in 1999-2002 Especially consumptions of potatoes vegetables and fruits are significantly below the recommendation (PRSP 2004) Mongolia imports some non-meat food products from Russia China and others Mongolia relies fully on imports for fruits and rice (WB 2008) Livestock production is entirely seasonal taking place in harmony with the Mongolian climate For example wool and hair collect in the late spring and early summer while most livestock

8

slaughter in the late autumn and early winter Milk and dairy products mainly produce during summer (Shagdar 2001) a) Meat and meat products On average 75 million head of livestock slaughter for consumption annually accounting for approximately 25 of the total livestock herd counted at the beginning of each year This equals 250000-300000 tons of meat which include mutton beef goat meat and horsemeat Camel meat is not so popular and consumed mostly during the winter Meat and meat products taken from of 30 beef 40 mutton 10 goat meat and 15 horsemeat (Shagdar 2001) b) Milk and dairy products Annually 250000-350000 tons milk produces in Mongolia Cowrsquos milk possesses more than 80 of the total of milk Moreover sheep and goat milk and horse milk accounting for about 10 and 8 respectively In addition more than 90 of all cows are accounted by native Mongolian cows which have an average milk yield of 19 liters per day in steppe and forest region and 13 liters in the Gobi region (Shagdar 2001) Dairy products include yogurt butter dried curds cheese etc Particularly in the rural areas milk consumes directly and converts to a wide range of traditional products Many of these have a long life and are stored for consumption in the winter and spring (WB 2003) Horse milk is used to produce the popular drink it contain a low alcohol that is similar the beer Rich content of amino acids vitamins and sugar found in horse milk makes airag a nutritious and healthy drink which is also low in fat Therefore it is used to treat many illnesses including tuberculosis diseases of digestive organs pharmaceutical toxicity and fatigue (Shagdar 2001) c) Wool hair and cashmere Approximately 25000 tons of wool hair and cashmere is produced in Mongolia annually more than 70 of which is accounted for by sheep wool Mongolia is the second largest producer of raw cashmere in the world Approximately 3300 tons of cashmere is produced annually That is accounting for about 20 of the total global supply Therefore cashmere is one of the main export commodities in Mongolia In wool and cashmere industry the productions of major items include spun threat camel wool blanket carpet felt etc (Shagdar 2001) d) Hides and skin One of valuable resource for producing luxury consumer goods is hides and skin About 65-85 million individual hides and skin are produced in Mongolia annually more than 80 of these are sheep and goatskins which are supplied to processing industries or exported Traditionally sheepskin was used for making warm winter coats and floor covering while various accessories for handling horses were made from cattle hides (Shagdar 2001)

9

CHAPTER III

METHODOLOGY The study conducted in four main stages such as the data collection analysis of the data and reporting and conclusions and recommendation part The general methodology used for specific objectives of the study is shown in Figure 31

Figure 31 Flow chart of methodology and procedure for survey and data collection

10

31 Site selection

The sites for the study selected included three sub-provinces named Jargalant Sumber and Bayanchandmani of Tuv province It is nearest province with the capital city (Figure 32) The site selection chose based on the following characteristics

bull Agricultural production bull The location of province bull Potentials for the development of livestock husbandry bull Financial constraints of the research bull Data availability

General information of Tuv province

Area 77300 sq km Number of livestock 1598000 Population 96500 Cropland 318100 hectare Center Zuunmod Number of sub-provinces 27

Tuv province is located in the centre of Mongolia In addition capital city named Ulaanbaatar located in this provincersquos territory Tuv province is one of the biggest and most productive provinces as this province is well positioned geographically to supply livestock production to nearest areas with high demand This province is situated 43 km from the capital city Moreover the major intensive animal farms are located in Tuv province

In this province have 201 household farms include dairy farms 152 pork farms 24 and chicken farm 1 respectively (MFA 2007) There are a total of 210000 camels 1979 thousand head of horses 1311 thousand head of cattle 10408 thousand of sheep and 8013 thousand heads of goats (NSO 2006)

33 Sampling Design and Procedures of Survey

Formal survey was conducted to collect the general information of herder householdsrsquo comprehension and the current development of agricultural products Herder household and farmers who own agribusiness were selected for interviews The number of herder households and number of farms in each province were determined by following formula

Where n= Number of total sample

N= Total number of farms and herders households E= Error (005)

80 herder households and 8 intensive farms from selected in Tuv province for this survey This size of samples of herders and farms provided statistical justification in order to generalize the results

11

Figure 32 Location of Tuv aimag

34 Data Collection

Data were collected from two sources (i) Secondary data was from the Mongolian National Statistical Office Mongolian State

University of Agriculture and the Ministry of Food and Agriculture Data used in this study included Urban and rural population Number of herder households (selected area) Total number of livestock and livestock distribution Land utilization Main agricultural production

12

(ii) Primary data was collected through questionnaires distributed to the randomly selected dairy farms and herder households in Tuv province and to determine the production processing and marketing (Appendix-A and B) Data collected in this part included

Present situation and the growth prospect of Livestock husbandry The suggestions and comments of herders and farmers who responded in this

research The comments The current problems faced by the herders and farmers

The survey aimed to question 80 herding households from the Tuv province and 8 intensive farmers of Tuv province were involved but in practice only 69 herders and 32 small and medium scale intensive dairy farms were surveyed Therefore around 10 relevant people including an official such as governor of soum and bag coordinator of household livelihood improvement related project and livestock expert were given an additional questionnaire

35 Data processing and analysis

351 Data processing The data of this study collected from the herder households and farmers of Tuv province The draft were analyzed to know the development future growth the influencing factors and special characteristics of the livestock sector SWOT analysis Around 80 questionnaires processed in the SPSS package and Microsoft Excel by using descriptive statistics Moreover in the survey investigated the herders and farmersrsquo opinions about the Mongolian livestock sub sector 352 Data analysis Data collections were analyzed quantitative and qualitative ways according to the field data The basis statistics data and the survey questionnaire results investigated the past and current performance of Mongolian livestock husbandry and calculated the future growth of livestock animals in Mongolia by showing the form of table figure flowchart mean and percentile 353 SWOT analysis The statistical data and the results of questionnaire determine the external factors such as Opportunity and Threat and internal factors such as Strength and Weakness of intensive and extensive livestock husbandry of Mongolia Moreover SWOT analyses provided the opportunity weakness and other factors of Tuv province for the livestock sector

13

CHAPTER IV

RESULT AND DISCUSSION

41 The current situation of Mongolian Animal Husbandry

Generally Mongolian animal husbandry divided two main sectors extensive animal husbandry and intensive animal husbandry Barker (1997) said lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo The extensive livestock management system of Mongolia includes main five species of livestock for most of the year The some herders and some relevant people believe that the extensive animal husbandry is most suitable sector in Mongolia The first reason is that approximately 80 of total territories are grassy area in Mongolia This is one of the biggest scales of the world Second Mongolian livestock systems is continuing with a long traditional nomadic livestock herding Hence the herders obtained the great knowledge and experiments during the several centuries Third Mongolian herder households are settled in the traditional pastoral system such as ldquokhot ailrdquo and ldquoneg goliinhonrdquo Two and more herder households including relatives and acquaintances called ldquokhot ailrdquo and ldquoneg goliinhonrdquo live together This system is most indigenous form This form of living served a variety of functions such as using pasture and seasonal movement of households Lastly the demand of livestock production is increasing during the last few years because of incomes of family are increasing and the increased demand from the neighbor countries Furthermore it has become the foundation of Mongolian livestock revolution Moreover Mongolian climate is suitable for the extensive animal husbandry On the other side the government of Mongolia begun to support intensive livestock farms to develop dairy and meat bread cattle pork and poultry Some people said the intensive livestock husbandry is better than the extensive livestock husbandry There are several reasons for this statement The first significant reason is that the increasing livestock number of Mongolia According to some researches it is possible to support around 38 million heads of livestock on the Mongolian whole grasslands However the number of livestock already reached 42 million heads in 2008 Therefore the growth of livestock is creating the degradation of pastureland by overgrazing in Mongolia Secondly since 1940 the average air temperature has been increasing in Mongolia caused by the climate change of the world Moreover the arid land is increasing due to decreasing of precipitation Therefore since last few years the yield of pasture is depleting gradually Thus grazing time of livestock is decreasing in Mongolia Finally the development of extensive farms directly depends on the supply and safety of the food Presently Mongolia is importing most of food products except the meat and meat products That is why the intensive animal husbandry is developing in some provinces especially the nearest provinces with the bigger cities such as Tuv Selenge and Bulgan According to research by the Ministry of Food and Agriculture (2007) Mongolia has 750 intensive animal husbandries Of which 494 farms for dairy 10 of them for meat cow 15 sheep farms for meat and wool 79 farms with pigs 111 farms with poultry and 40 farms with bees in Mongolia (AppendixC)

14

42 The Present Status of Mongolian Livestock

Mongolian livestock reached 421958 thousand heads in 2008 and it increased by 48 percent compared with 2007 Figure 41 shows the livestock numbers of Mongolia during last 18 years Sheep goat and cattle population has increased while those of camel and horse are decreasing in Mongolia during the last few years (Appendix D and F)

Figure 41 The state of livestock number of Mongolia from 1990 to 2008

According to Figure 41 the total number of livestock dramatically increased between 1990 and 1999 However it decreased by 287 due to drought and Dzud during 2000 to 2002 During that period 35 million and 47 million heads of animals died in 2000 and 2001 respectively During the last 7 years the number of livestock increased by 31 By the way the number of livestock in 2008 reached highest number ever

Figure 42 The comparison of the livestock structure in 2008 with 1990

15

Figure 42 shows the comparison of livestock structure (by type) during 2008 and 1990 According to Figure 41 sheep were dominating in the livestock structure until 2003 However cattle and goats dominated the structure of livestock during the recent years This is because of cashmere become herderrsquos main income from livestock due to free market economy It explained that after privatization the herders prefer to herd productive kinds of livestock Although the livestock resist Mongolian weather especially adopted for the cold season the productivity of livestock is low Therefore the some preparations such as to build warm shelters and to prepare and store hay and fodder are most significant principal elements during the wintertime Moreover pastures are subjected to increased vulnerability to parasites and other diseases These issues affect the animal productivity

43 Comparison of Actual and Estimated Livestock Number

Three different estimation including the average of number of livestock comparison of actual and estimated livestock number of Mongolia between 1990 and 2008 and livestock number in 2009 by using the Microsoft Excel (AppendixG) are given below (Avdai et al 1999) Calculation 1 The average number livestock in Mongolia from 1990 to 2008

The average number of livestock estimated was 295501 thousand heads between 1990 and 2008 Calculation 2 The goal of this part is that to estimate the equalized livestock number (amount) on the actual livestock amount by using the straight-line equation

yt = a + bt - (42)

Where t - period and a b - the parametric constraints

To estimate the parametric constraints can be solving by using the following method The value obtained by using equation (43) Table 41 shows the results of estimation To solve this system of equation substitute sumt = 0 Moreover the estimated values such as Σ y Σt2 and Σyt are shown from the Table 41

16

yt = 2978564+57145t y ndashactual livestock amount yt - estimated livestock amount

The estimated livestock amount and actual livestock number of Mongolia between 1990 and 2008 are shown in Figure 43

Table 41 The calculation by using Equation 43

(thousand heads)

y t t2 yt yt=a+bt

1990 258549 -9 81 -2326941 2464259 1991 255279 -8 64 -2042232 2521404 1992 254941 -7 49 -1784587 2578549 1993 251747 -6 36 -1510482 2635694 1994 268081 -5 25 -1340405 2692839 1995 285723 -4 16 -1142892 2749984 1996 293001 -3 9 -879003 2807129 1997 312923 -2 4 -625846 2864274 1998 328975 -1 1 -328975 2921419 1999 33596 0 0 0 2978564 2000 303274 1 1 303274 3035709 2001 260752 2 4 521504 3092854 2002 238976 3 9 716928 3149999 2003 254277 4 16 1017108 3207144 2004 280199 5 25 1400995 3264289 2005 303988 6 36 1823928 3321434 2006 34803 7 49 243621 3378579 2007 402638 8 64 3221104 3435724 2008 421959 9 81 3797631 3492869 2009 10 3550014 2010 11 3607159 2011 12 3664304 2012 13 3721449 2013 14 3778594 2014 15 3835739 2015 16 3892884

TOTAL 5659272 91 570 3257319 82642859

17

Figure 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads)

bull Calculation 3 The last estimation is that how many heads of Mongolian livestock will be reach in 2009 by using the following Equation 44

yt plusmn tα δy -(44)

Where yt - estimated amount of livestock on 2009 (see from previous Table 41) tα ndash dispersion of Student

δy ndash standard deviation y + tα = 3550014+834668= 4384682 y - tα =3550014- 834668= 2715346 Calculation shows that the livestock number of Mongolia will reach from 271534 to 438468 thousand heads animals in 2009 Below three steps shows the steps of calculation 3 Step A To calculate δy (standard deviation) can be solved by using following equation 45 (45) Table 42 shows the result of this estimation by using Equation 45

Where n - total number of sample

Step B To find the dispersion of Student (Student is the name of person) (tα)

18

tα (q k) = tα (005 18)= 212 (Appendix I) Where k - degree of freedom k= n-1=18

q - significance level (Appendix I) Step C tα δy = 21 397461 = 834668

Table 42 Estimation by using Equation 45

y yt y-yt (y-yt)2

1990 258549 246426 12123 146967129 1991 255279 25214 3139 9853321 1992 254941 257855 -2914 8491396 1993 251747 263569 -11822 139759684 1994 268081 269284 -1203 1447209 1995 285723 274998 10725 115025625 1996 293001 280713 12288 150994944 1997 312923 286427 26496 702038016 1998 328975 292142 36833 1356669889 1999 33596 297856 38104 1451914816 2000 303274 303571 -297 88209 2001 260752 309285 -48533 2355452089 2002 238976 31500 -76024 5779648576 2003 254277 320714 -66437 4413874969 2004 280199 326429 -4623 21372129 2005 303988 332143 -28155 792704025 2006 34803 337858 10172 103469584 2007 402638 343572 59066 3488792356 2008 421959 349287 72672 5281219584

2843562432

44 Land Utilization

Mongolian total territory is 1564116 thousand hectares Of which in total 742 of total area is used for the agriculture 157 used for state special land 91 of total area is comprised forest land 03 land used for cities rural town and other settlements 04 land possesses water resources and 02 of total land is covered by transportation and networks in 2006 (NSO 2006) Currently Mongolian pastureland faced many significant problems such as grassland degradation soil erosion and desertification Main sources of them are overgrazing water

19

source and the population According to some survey approximately 120 million hectare land (70 percent) of total Mongolian territory is degraded

Figure 44 The comparison of utilized lands between 2000 and 2006 (by type)

Figure 44 shows utilization land between 2000 and 2006 For example the agriculture land and forestland decreased by 9 and 4 in 2006 compared to 2000 Generally the development of crop production and destruction the populationrsquos migration to urban areas and the nomadic livestock husbandry are leading to the overgrazing and degradation of the land Moreover livestock number in Mongolia is increasing during the last few years Especially in 2008 it reached the highest number of livestock for the first time in history Even though the herders are facing the shortage of fodder In addition the land for the natural pasture has slightly increased since 1989

441 The Impacts for the Land Degradation

There are many environmental factors affect on the agricultural sector in complex ways Most scientists and experts agreed that factors of land degradation in Mongolia could be divided into following two main categories including human and natural factors Today many factors affect the land degradation caused by the human activities such as excessive grazing deforestation poor irrigation and inappropriate land tenure in all sector The first significant factor is overgrazing Crop cultivation is one of the most important reasons of soil erosion and overgrazing Spring tilling coincides caused the seasonal higher speed wind and most planted areas are lack of windbreaks like trees For example the average wind speed of Gobi region is 3hellip4 meters per second it is one of the significant cause of soil moisture loss and erosion According to some survey an average of 35ndash50 tons of soils has been lost from each

20

hectare of cultivated land due to erosion during the past 30 years Half of all cultivated land degraded to some degree of erosion Another factor of overgrazing is the vehicle-induced degradation The second significant factor is the deforestation due to clear-cutting the trees fire and insect infestations The third important factor is inappropriate land tenure like mining and inadequate waste management Shagdar (2001) estimated approximately 100000 hectare of land have been degraded by mining and quarrying Moreover another significant factor of land degradation is bad or poor irrigation practices Salinization of irrigated land in arid climates as a result of poor drainage and evaporation and using highly toxic pesticide for vegetation protection from insects causes depletion of soil productivity The final factor of land degradation is the legal provision of ldquoopenness of pastureland which is public propertyrdquo Because of this legal provision the utilizing of pastureland is free for everyone (UNDP amp SIDA 2003) On the other hand the land degradation of Mongolia depends directly on nature and weather conditions Most important impact is the location It is located high above sea level and far away from the ocean Mongolia lies between 420 520N and almost 1200 E Another principal factor is the global warming and climatic change of the world Climate change can affect weeds insects plant diseases and pathogens in the environment especially in agricultural activities Another consequence on the pasture is the lack of rainfall Mongolia has low precipitation and short growing seasons especially long and cold winter and short and hot summer Therefore other significant causes are drought and Dzud in Mongolia They are the keys determinants of vulnerability of livestock to climate change They affect the livelihood of herdersrsquo household which is reduced livestock productivity especially milk and destroy pasture (AIACC 2006) The natural disasters like dzud and drought have occurred around 30 times in Mongolia with different level of harm (UNDPampSIDA 2003) (Figure 45)

Figure 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006)

During the disaster of harsh winter (dzud) in 1999- 2000 almost one third of the total livestock died in 1999 Figure 46 shows that the losses adult animals between 2000 and 2006 in Mongolia

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

iii

ABSTRACT

The livestock sector is the key to economic growth and essential component of a poverty- oriented rural development strategy Mongolia has five types of livestock (sheep goat horse cattle and camel) Total 348 million livestock animal were counted in 2006 including 148 million sheep 154 million goats 211 million horses 216 million cattle and 2535 thousand heads camels Most of livestock is located in central and western part of the country The Mongolian animal husbandry is divided in two main sectors including extensive animal husbandry and intensive animal husbandry Generally Mongolian climate is suitable for the extensive animal husbandry However during the last years intensive animal husbandry is developing in some provinces especially the nearest provinces with the bigger cities such as Tuv Selenge and Bulgan provinces Moreover Mongolia livestock sector faced many significant problems such as grassland degradation soil erosion and desertification Main sources of degradation are overgrazing water source and the population In addition the consequences such as poor infrastructures including road and storage facilities the availability of critical support like constructing wells and shelters and preparing hay are affecting the Mongolian livestock husbandry Agricultural products especially livestock products is one of the major sources of Mongolian economics Almost 90 of the total agricultural production of Mongolia produced from livestock sector and obtained the benefit approximately 980 million dollar in 2007 Productions differed by geographical location Almost all products of food industry consume on the domestic market Among the livestock raw materials of Mongolia only cashmere and raw cashmere have been recognized as a competitive sector in the world Keywords Livestock husbandry horse cattle sheep goat camel extensive intensive agriculture products land degradation and climate

iv

TABLE OF CONTENTS

Chapter Title Page

ACKNOWLEDGEMENT II

ABSTRACT III

ABBRIEVIATIONS VIII

TABLE OF CONTENTS IV

LIST OF FIGURES VI

LIST OF TABLES VII

CHAPTER I 1

INTRODUCTION 1 11 Brief Introduction of Mongolia 1 12 Background 2 13 Rationale 2 14 Objectives 3 15 Limitation of the Study 3

CHAPTER II 4

LITERATURE REVIEW 4 21 The Current Situation of Livestock Husbandry in Mongolia 4 22 Brief history of livestock husbandry development in Mongolia 5 23 Regional Distribution 6 24 Livestock Production 7

CHAPTER III 9

METHODOLOGY 9 31 Site selection 10 34 Data Collection 11 35 Data processing and analysis 12

CHAPTER IV 13

RESULT AND DISCUSSION 13 41 The current situation of Mongolian Animal Husbandry 13 42 The Present Status of Mongolian Livestock 14 43 Comparison of Actual and Estimated Livestock Number 15 44 Land Utilization 18 45 Mongolian Livestock Production 21 46 Past Policies and Strategies 26 47 The General View of Study Area 27 48 Veterinary Service 38 49 Problems and possibility of livestock sectorrsquos for the future 39 410 Suggested Strategies for Future Expansion 40 411 SWOT Analysis 40

CHAPTER V 43

CONCLUSIONS AND RECOMMENDATION 43

v

51 Conclusions 43 52 Recommendations 44

REFERENCES 45

APPENDICES 47

vi

LIST OF FIGURES

Chapter Title Page 11 Map of Mongolia 1 21 Percentage shares of major divisions to GDP (NSO 2005-2006) 4 22 GDP growth by percentage (NSO 2007) 5 23 The comparison of total livestock with number of privately owned livestock 5 24 Regional distribution of livestock in 2006 6 25 Share of domestic production versus imports in consumption of major products 7 41 The state of livestock number of Mongolia from 1990 to 2008 14 42 The comparison of the livestock structure in 2008 with 1990 14 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads) 17 44 The comparison of utilized lands between 2000 and 2006 (by type) 19 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006) 20 46 Losses adult animals of Mongolia (2000-2006) 21 47 The percentage of livestock products in agriculture (1990-2007) 21 48 The percentage of benefits from livestock types in economy (NSO 2006) 22 49 Main livestock production of Mongolia (1990- 2006) 22 410 Milk flow chart 23 411 The type of livestock which provide the milk products 24 412 The percentage of total slaughtered livestock by types (thousand tons) 25 413 The output of animal raw materials (1999-2006) 25 414 The livestock number of Tuv province by soum 28 415 The classification of herders household of Tuv aimag 28 416 Herdersrsquo age group and education level 29 417 The kind of livestock of herder households 31 418 The problems of herders in marketing 32 419 The income level of herders households 32 420 Major problems of herder households 33 421 Loan uses by households 33 422 Number of intensive farms of Mongolia 34 423 Number of intensive farms in Tuv province 34 424 Reason of establishment (a) and established year of dairy farms (b) 35 425 The reason which to initiate the dairy farm 36 426 Main customers of dairy farms 37 427 The problems which to faced by the farmers in marketing 38

vii

LIST OF TABLES

Chapter Title Page 41 The calculation by using Equation 43 16 42 Estimation by using Equation 45 18 43 Milk availability (FAOUN 2006) 23 44 Meat consumption in Asian first five countries (FAO Rome 2004) 24 45 The output of animalrsquos raw material in 2004 by stage (metric tons) 26 46 Production of main livestock commodities (Shagdar 2001) 26 47 The implemented projects in livestock sector of Mongolia (Bataa 2002) 27 48 The result of restocking program in Tuv aimag in 2005 to 2007 29 49 The comparison the education level with herderrsquos age 30 410 Households population and livelihood situation 30 411 The livestock composition of herder households (by animal type) 30 412 Main customer and customer area of herders 31 413 The income level of farms who include dairy activities and non-dairy activities 36 414 Potential area of interference for betterment of livestock sectorrsquos future growth 39

viii

ABBRIEVIATIONS

ADB Asian Development Bank ADO Asian Development Outlook AIP Asian Investment Program GDP Gross Domestic Product FAO Food and Agricultural Organization IFAD International Fund for Agricultural Development NSO National Statistical Office MIF Mongolian Investors Forum MSY Mongolian Statistical Yearbook MTG Mongolian Travel Guide MFA Ministry of Food and Agriculture WB World Bank WFP World Food Program EUP European Union Program AIACC Assessments of Impacts and Adaptations to Climate Change FAOSTAT Food and Agricultural Statistic Data RSSBP Rural sector strategy and business plan UN United Nations UNDP United Nations Development Program PRSP Poverty Reduction Strategy Paper MPVA Mongolian Private Veterinary Association Tugrug Mongolian currency (1$=1170 tugrug in 2007) Aimag Province Soum Sub-province Bag Subdivision of sub- province Dzud Harsh winter

1

CHAPTER I

INTRODUCTION

11 Brief Introduction of Mongolia

Figure 11 Map of Mongolia Mongolia is land-locked country of Central Asia It borders by China to the South and East and by Russia to the North and West It is situated between the longitude 874 to 1196 west and the latitude 521 to 414 north The main land is at an average elevation of 1580 meter above sea level

The current population is 264 million Total area is 15641 million km sq and 15 people stand per kilometer 608 people live in the urban areas and other 392 percent people live in the rural area of Mongolia (NSO 2007) The climate of Mongolia is too harsh and it characterized by a long-lasting cold winter dry and hot summer low precipitation high temperature fluctuations (day and night summer and winter) and a relatively high number of sunny days (on an average 260 days) per year The highest precipitation is approximately from 20 to 35 centimeters per year in north part and lowest precipitation is approximately from 10 to 20 centimeters south part of Mongolia Some regions of Gobi (the name Gobi means desert and steppe) which located in north part mostly receive no precipitation at all in years The effective vegetation growth period is a short around 80 to 130 days It is depend on the location of Mongolia Commonly in winter (January and February) the average temperature is -25 degC at night it reaches -40degC In summer time average temperature is +33 degC in central part of Mongolia such as Ulaanbaatar Moreover in Gobi region the temperature reaches +38degC

2

12 Background

The world is in the midst of what has been dubbed a livestock revolution with far reaching implications for human health development the environment and trade (Delgado et al 1999) Mongolia is one of the countries which stands at forefront of this revolution Therefore the role of livestock sector is very important in the Mongolian economy and this sector dominated on the agriculture The value added of agricultural sector is 188 of GDP of Mongolia The livestock products constitute 876 of total output of agriculture (NSO 2006) In 2006 there were 421400 herders constituting almost half of the countryrsquos economically active population (NSO 2006) Moreover there are two main sectors in the food and agricultural sector such as livestock and crop production Those sectors encourage the rural development of Mongolia such as to provide the economic growth Agro-processing industries generate value addition by the processing of agricultural raw materials both food and non-food into products which are marketable usable or edible have improved storability and or nutritive value and enhance income and profitability for producers An agro industrial system is modeled in order to illustrate the marketing the processing the production of agricultural materials and consumption in any countries (Salokhe and Hicks 2001) The Mongolian people to lead a nomadic lifestyle based on pastoral animal husbandry After privatization the intensive dairy farms became a significant issue which is now on the political agenda Keating and McCown (2001) remarked that there are 2 main components in agricultural system such as the production system and management system Production system contains pastureland livestock animals and the climate Today there are many significant problems such as the degradation of grassland desertification soil erosion and the lack for fodder of livestock Moreover the one of the problems is the impact of climate like drought and dzud (harsh winter) Drought occurs once every 2-3 years in the Gobi region and every 10 years in other regions (GOMampUNDP 2000) Nationwide drought occurred in 1944 and in 1972 (MFA 2001) Management system generates the knowledge regarding general principles and theory involving agricultural farmsrsquo management like agricultural economics animal science agronomy rural sociology psychology and engineering (Keating and McCown 2001)

13 Rationale

The livestock plays an important role in Mongolian agriculture and economy Furthermore meat and milk foodstuffs are important in Mongolian food sector and it generates the employment and income Therefore it is so important to know the past and current status potentials problems and constraints After that policies and strategies can be designed for better management and improvements of this sector Moreover this study contributes to the development by providing the information about status and problems of herder households and some intensive dairy farms

3

In addition Enkhjargal (1999) recommended that the government policy for livestock sector especially diary development should encourage and support research and development of dairy breeding stock pasture and farm management Involvements of farmers as producers need to be extending into economic activities that could provide better returns to them It should include feeding breeding health caring milk collecting transporting and processing

14 Objectives

The major objective is to investigate Mongolian livestock sector in Tuv province The specific

objectives are

bull To evaluate the present situation of livestock sub sector of Mongolia and to investigate the agricultural food and non-food products related with livestock animals

bull To analyze the future growth prospects of Mongolian livestock husbandry bull To present the environmental factors which affect the livestock sector

bull To conduct sector and SWOT analyses to identify strengths weaknesses opportunities and threats that the intensive and extensive livestock husbandry has been facing with

15 Limitation

Because of unavailable of data for the whole country this study was restricted only to Tuv province In addition information is limited about the herder households and farmers Therefore the study focuses on the main producers which are herder households and some intensive dairy farms

4

CHAPTER II

LITERATURE REVIEW

21 The Current Situation of Livestock Husbandry in Mongolia

The main source of Mongolian economy is coming from the agricultural sector (MIF 2006) The agricultural sector of Mongolia divided two main subsectors such as livestock sector and cropping sector (MIF 2006) At the end of 2006 approximately 40 of total population had lived in the rural areas Rural development is essential for Mongolia to achieve sustained economic growth and poverty reduction Livestock continues to provide rural households with an important source of herdersrsquo income jobs and food security and a means for investing and storing their wealth (WB 2006) Therefore animal husbandry plays the important role of the national economy Moreover agriculture still accounts for more than a fifth of GDP Some 40 per cent of the Mongolian workforce employ in traditional nomadic livestock herding Agriculture is produced 188 percent of GDP and contributed 30 percent of the total export of Mongolia Figure 21 demonstrates the comparison of the portion of divisions to GDP in 2005 with 2006

Figure 21 The comparison of the portion of divisions to GDP (NSO 2005-2006) The GDP growth due to contribution from all sectors was 99 in 2007 the average of GDP was 87 between 2003 and 2006 Especially agriculture sector provides almost half the population had a strong year extending by 16 and contributing 4 points to growth of GDP The data in Figure 22 shows that the ratio of GDP growth from 2003 to 2009 In addition it shows GDP for the forecast period in Mongolia The forecasts assume that the price will be comparatively higher for export goods (ADO 2008)

5

Figure 22 GDP growth by percentage (NSO 2007)

Enkhjargal (2005) noted that 35 of GDP and the agricultural sector contribute almost one fourth goods for export Moreover approximately 50 of the total labor force is employed in agricultural sector Barker (1997) remarked lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo In addition Mongolian livestock sector produces more than 901 of gross agricultural products and the source of income for more than 34 of all households in Mongolia In 2006 there are 348 million livestock counted in Mongolia The livestock number increased by 44 million heads of livestock animals compared to 2005 (NSO 2006) Furthermore as a result of census in 2006 there are 253000 camels 2114000 horses 2167000 cattle 14815000 sheep and 15451000 goats counted in Mongolia The number of horses increased by 86000 heads cattle increased by 204000 sheep and goat increased by 2 million heads respectively but the number of camel decreased by 07 thousand heads compared with 2005 (AIP 2006-2007)

Figure 23 The comparison of total livestock with number of privately owned livestock Moreover the statistical data shows (Figure 23) that almost 97 of the total livestock was private owned in 2006 and 31 of herder households have more than 100 livestock animals 22 Brief history of livestock husbandry development in Mongolia

6

Traditionally five types of domestic livestock in Mongolia are sheep goats cattle horses and camel Pigs hens and other birds seldom reared Horse is the first animal in Mongolia to be domesticated (Baasanjav et al 1999)

Shagdar (2001) remarked that the wild animals domesticated livestock animals such as sheep and horses in Mongolia between the 8th and 3rd centuries BC Shagdar (2001) argued that Mongolian herder households began the nomadic form in the 13th century and this system remained until present day In those times most livestock animals was private owned of herders However in 1951 the livestock animals transferred to the collective ownership form This collective ownership form was tended to develop more intensively managed production system This form gave diverse assistances to the herders For example to build the enclosures and wells to prepare hay (Shagdar 2001) However during the collectivization period the share of private livestock decreased to 17-30 of the total number of livestock (Shagdar 2001) The collective ownership form lasted till 1989 Due to tend of the decreasing livestock number Mongolian government privatized the livestock animals to the herders in 1991 Because of privatization 967 of total livestock shifted private owned form and 31 of herder households have more than 100 livestock animals After privatization the livestock number and number of herders rapidly increased in Mongolia

23 Regional Distribution

Mongolia divided 5 main regions named East West Central Khangai and Ulaanbaatar Figure 24 shows the regional distribution of livestock in Mongolia (NSO 2006) The forests and mountainous areas of Khangai region Central region and West region of Mongolia are most populous in terms of livestock

Figure 24 Regional distribution of livestock in 2006 The livestock is relatively distributed in comparison with the population size of each region Sheep and goats are the majority livestock and respectively accounted for 425 and 444 of

7

the total number of livestock in every region in 2006 Camels account for only 07 of total livestock and mainly rise in the southern part of the country (NSO 2006) Overgrazing is becoming problematic in areas close to major markets For example livestock density of Orkhon-Uul Darkhan and the capital city named of Ulaanbaatar which is 5 to 10 times lower than other regions

24 Livestock Production

Mongolian major livestock products include meat and meat products and milk and dairy products In addition wool hair cashmere hides and skins are the key input for animal processing industries ( Shagdar 2001) Agricultural production comprises of 30 meat and meat products 27 of them include milk and dairy products 2 skin and hides 1 animal and plants oil 31 flour and flour products 2 fruit and vegetables and 2 livestock feed and starches

Figure 25 Share of domestic production versus imports in consumption of major products (AIP

2006-2007)

From 1999 to 2004 all foodstuffs consumption except meat and milk has been below the recommended level Because of natural disasters such as drought and dzud in recent years the consumption of milk and meat products has declined during those years However the consumption of flour rise eggs potatoes and vegetables has increased in 1999-2002 Especially consumptions of potatoes vegetables and fruits are significantly below the recommendation (PRSP 2004) Mongolia imports some non-meat food products from Russia China and others Mongolia relies fully on imports for fruits and rice (WB 2008) Livestock production is entirely seasonal taking place in harmony with the Mongolian climate For example wool and hair collect in the late spring and early summer while most livestock

8

slaughter in the late autumn and early winter Milk and dairy products mainly produce during summer (Shagdar 2001) a) Meat and meat products On average 75 million head of livestock slaughter for consumption annually accounting for approximately 25 of the total livestock herd counted at the beginning of each year This equals 250000-300000 tons of meat which include mutton beef goat meat and horsemeat Camel meat is not so popular and consumed mostly during the winter Meat and meat products taken from of 30 beef 40 mutton 10 goat meat and 15 horsemeat (Shagdar 2001) b) Milk and dairy products Annually 250000-350000 tons milk produces in Mongolia Cowrsquos milk possesses more than 80 of the total of milk Moreover sheep and goat milk and horse milk accounting for about 10 and 8 respectively In addition more than 90 of all cows are accounted by native Mongolian cows which have an average milk yield of 19 liters per day in steppe and forest region and 13 liters in the Gobi region (Shagdar 2001) Dairy products include yogurt butter dried curds cheese etc Particularly in the rural areas milk consumes directly and converts to a wide range of traditional products Many of these have a long life and are stored for consumption in the winter and spring (WB 2003) Horse milk is used to produce the popular drink it contain a low alcohol that is similar the beer Rich content of amino acids vitamins and sugar found in horse milk makes airag a nutritious and healthy drink which is also low in fat Therefore it is used to treat many illnesses including tuberculosis diseases of digestive organs pharmaceutical toxicity and fatigue (Shagdar 2001) c) Wool hair and cashmere Approximately 25000 tons of wool hair and cashmere is produced in Mongolia annually more than 70 of which is accounted for by sheep wool Mongolia is the second largest producer of raw cashmere in the world Approximately 3300 tons of cashmere is produced annually That is accounting for about 20 of the total global supply Therefore cashmere is one of the main export commodities in Mongolia In wool and cashmere industry the productions of major items include spun threat camel wool blanket carpet felt etc (Shagdar 2001) d) Hides and skin One of valuable resource for producing luxury consumer goods is hides and skin About 65-85 million individual hides and skin are produced in Mongolia annually more than 80 of these are sheep and goatskins which are supplied to processing industries or exported Traditionally sheepskin was used for making warm winter coats and floor covering while various accessories for handling horses were made from cattle hides (Shagdar 2001)

9

CHAPTER III

METHODOLOGY The study conducted in four main stages such as the data collection analysis of the data and reporting and conclusions and recommendation part The general methodology used for specific objectives of the study is shown in Figure 31

Figure 31 Flow chart of methodology and procedure for survey and data collection

10

31 Site selection

The sites for the study selected included three sub-provinces named Jargalant Sumber and Bayanchandmani of Tuv province It is nearest province with the capital city (Figure 32) The site selection chose based on the following characteristics

bull Agricultural production bull The location of province bull Potentials for the development of livestock husbandry bull Financial constraints of the research bull Data availability

General information of Tuv province

Area 77300 sq km Number of livestock 1598000 Population 96500 Cropland 318100 hectare Center Zuunmod Number of sub-provinces 27

Tuv province is located in the centre of Mongolia In addition capital city named Ulaanbaatar located in this provincersquos territory Tuv province is one of the biggest and most productive provinces as this province is well positioned geographically to supply livestock production to nearest areas with high demand This province is situated 43 km from the capital city Moreover the major intensive animal farms are located in Tuv province

In this province have 201 household farms include dairy farms 152 pork farms 24 and chicken farm 1 respectively (MFA 2007) There are a total of 210000 camels 1979 thousand head of horses 1311 thousand head of cattle 10408 thousand of sheep and 8013 thousand heads of goats (NSO 2006)

33 Sampling Design and Procedures of Survey

Formal survey was conducted to collect the general information of herder householdsrsquo comprehension and the current development of agricultural products Herder household and farmers who own agribusiness were selected for interviews The number of herder households and number of farms in each province were determined by following formula

Where n= Number of total sample

N= Total number of farms and herders households E= Error (005)

80 herder households and 8 intensive farms from selected in Tuv province for this survey This size of samples of herders and farms provided statistical justification in order to generalize the results

11

Figure 32 Location of Tuv aimag

34 Data Collection

Data were collected from two sources (i) Secondary data was from the Mongolian National Statistical Office Mongolian State

University of Agriculture and the Ministry of Food and Agriculture Data used in this study included Urban and rural population Number of herder households (selected area) Total number of livestock and livestock distribution Land utilization Main agricultural production

12

(ii) Primary data was collected through questionnaires distributed to the randomly selected dairy farms and herder households in Tuv province and to determine the production processing and marketing (Appendix-A and B) Data collected in this part included

Present situation and the growth prospect of Livestock husbandry The suggestions and comments of herders and farmers who responded in this

research The comments The current problems faced by the herders and farmers

The survey aimed to question 80 herding households from the Tuv province and 8 intensive farmers of Tuv province were involved but in practice only 69 herders and 32 small and medium scale intensive dairy farms were surveyed Therefore around 10 relevant people including an official such as governor of soum and bag coordinator of household livelihood improvement related project and livestock expert were given an additional questionnaire

35 Data processing and analysis

351 Data processing The data of this study collected from the herder households and farmers of Tuv province The draft were analyzed to know the development future growth the influencing factors and special characteristics of the livestock sector SWOT analysis Around 80 questionnaires processed in the SPSS package and Microsoft Excel by using descriptive statistics Moreover in the survey investigated the herders and farmersrsquo opinions about the Mongolian livestock sub sector 352 Data analysis Data collections were analyzed quantitative and qualitative ways according to the field data The basis statistics data and the survey questionnaire results investigated the past and current performance of Mongolian livestock husbandry and calculated the future growth of livestock animals in Mongolia by showing the form of table figure flowchart mean and percentile 353 SWOT analysis The statistical data and the results of questionnaire determine the external factors such as Opportunity and Threat and internal factors such as Strength and Weakness of intensive and extensive livestock husbandry of Mongolia Moreover SWOT analyses provided the opportunity weakness and other factors of Tuv province for the livestock sector

13

CHAPTER IV

RESULT AND DISCUSSION

41 The current situation of Mongolian Animal Husbandry

Generally Mongolian animal husbandry divided two main sectors extensive animal husbandry and intensive animal husbandry Barker (1997) said lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo The extensive livestock management system of Mongolia includes main five species of livestock for most of the year The some herders and some relevant people believe that the extensive animal husbandry is most suitable sector in Mongolia The first reason is that approximately 80 of total territories are grassy area in Mongolia This is one of the biggest scales of the world Second Mongolian livestock systems is continuing with a long traditional nomadic livestock herding Hence the herders obtained the great knowledge and experiments during the several centuries Third Mongolian herder households are settled in the traditional pastoral system such as ldquokhot ailrdquo and ldquoneg goliinhonrdquo Two and more herder households including relatives and acquaintances called ldquokhot ailrdquo and ldquoneg goliinhonrdquo live together This system is most indigenous form This form of living served a variety of functions such as using pasture and seasonal movement of households Lastly the demand of livestock production is increasing during the last few years because of incomes of family are increasing and the increased demand from the neighbor countries Furthermore it has become the foundation of Mongolian livestock revolution Moreover Mongolian climate is suitable for the extensive animal husbandry On the other side the government of Mongolia begun to support intensive livestock farms to develop dairy and meat bread cattle pork and poultry Some people said the intensive livestock husbandry is better than the extensive livestock husbandry There are several reasons for this statement The first significant reason is that the increasing livestock number of Mongolia According to some researches it is possible to support around 38 million heads of livestock on the Mongolian whole grasslands However the number of livestock already reached 42 million heads in 2008 Therefore the growth of livestock is creating the degradation of pastureland by overgrazing in Mongolia Secondly since 1940 the average air temperature has been increasing in Mongolia caused by the climate change of the world Moreover the arid land is increasing due to decreasing of precipitation Therefore since last few years the yield of pasture is depleting gradually Thus grazing time of livestock is decreasing in Mongolia Finally the development of extensive farms directly depends on the supply and safety of the food Presently Mongolia is importing most of food products except the meat and meat products That is why the intensive animal husbandry is developing in some provinces especially the nearest provinces with the bigger cities such as Tuv Selenge and Bulgan According to research by the Ministry of Food and Agriculture (2007) Mongolia has 750 intensive animal husbandries Of which 494 farms for dairy 10 of them for meat cow 15 sheep farms for meat and wool 79 farms with pigs 111 farms with poultry and 40 farms with bees in Mongolia (AppendixC)

14

42 The Present Status of Mongolian Livestock

Mongolian livestock reached 421958 thousand heads in 2008 and it increased by 48 percent compared with 2007 Figure 41 shows the livestock numbers of Mongolia during last 18 years Sheep goat and cattle population has increased while those of camel and horse are decreasing in Mongolia during the last few years (Appendix D and F)

Figure 41 The state of livestock number of Mongolia from 1990 to 2008

According to Figure 41 the total number of livestock dramatically increased between 1990 and 1999 However it decreased by 287 due to drought and Dzud during 2000 to 2002 During that period 35 million and 47 million heads of animals died in 2000 and 2001 respectively During the last 7 years the number of livestock increased by 31 By the way the number of livestock in 2008 reached highest number ever

Figure 42 The comparison of the livestock structure in 2008 with 1990

15

Figure 42 shows the comparison of livestock structure (by type) during 2008 and 1990 According to Figure 41 sheep were dominating in the livestock structure until 2003 However cattle and goats dominated the structure of livestock during the recent years This is because of cashmere become herderrsquos main income from livestock due to free market economy It explained that after privatization the herders prefer to herd productive kinds of livestock Although the livestock resist Mongolian weather especially adopted for the cold season the productivity of livestock is low Therefore the some preparations such as to build warm shelters and to prepare and store hay and fodder are most significant principal elements during the wintertime Moreover pastures are subjected to increased vulnerability to parasites and other diseases These issues affect the animal productivity

43 Comparison of Actual and Estimated Livestock Number

Three different estimation including the average of number of livestock comparison of actual and estimated livestock number of Mongolia between 1990 and 2008 and livestock number in 2009 by using the Microsoft Excel (AppendixG) are given below (Avdai et al 1999) Calculation 1 The average number livestock in Mongolia from 1990 to 2008

The average number of livestock estimated was 295501 thousand heads between 1990 and 2008 Calculation 2 The goal of this part is that to estimate the equalized livestock number (amount) on the actual livestock amount by using the straight-line equation

yt = a + bt - (42)

Where t - period and a b - the parametric constraints

To estimate the parametric constraints can be solving by using the following method The value obtained by using equation (43) Table 41 shows the results of estimation To solve this system of equation substitute sumt = 0 Moreover the estimated values such as Σ y Σt2 and Σyt are shown from the Table 41

16

yt = 2978564+57145t y ndashactual livestock amount yt - estimated livestock amount

The estimated livestock amount and actual livestock number of Mongolia between 1990 and 2008 are shown in Figure 43

Table 41 The calculation by using Equation 43

(thousand heads)

y t t2 yt yt=a+bt

1990 258549 -9 81 -2326941 2464259 1991 255279 -8 64 -2042232 2521404 1992 254941 -7 49 -1784587 2578549 1993 251747 -6 36 -1510482 2635694 1994 268081 -5 25 -1340405 2692839 1995 285723 -4 16 -1142892 2749984 1996 293001 -3 9 -879003 2807129 1997 312923 -2 4 -625846 2864274 1998 328975 -1 1 -328975 2921419 1999 33596 0 0 0 2978564 2000 303274 1 1 303274 3035709 2001 260752 2 4 521504 3092854 2002 238976 3 9 716928 3149999 2003 254277 4 16 1017108 3207144 2004 280199 5 25 1400995 3264289 2005 303988 6 36 1823928 3321434 2006 34803 7 49 243621 3378579 2007 402638 8 64 3221104 3435724 2008 421959 9 81 3797631 3492869 2009 10 3550014 2010 11 3607159 2011 12 3664304 2012 13 3721449 2013 14 3778594 2014 15 3835739 2015 16 3892884

TOTAL 5659272 91 570 3257319 82642859

17

Figure 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads)

bull Calculation 3 The last estimation is that how many heads of Mongolian livestock will be reach in 2009 by using the following Equation 44

yt plusmn tα δy -(44)

Where yt - estimated amount of livestock on 2009 (see from previous Table 41) tα ndash dispersion of Student

δy ndash standard deviation y + tα = 3550014+834668= 4384682 y - tα =3550014- 834668= 2715346 Calculation shows that the livestock number of Mongolia will reach from 271534 to 438468 thousand heads animals in 2009 Below three steps shows the steps of calculation 3 Step A To calculate δy (standard deviation) can be solved by using following equation 45 (45) Table 42 shows the result of this estimation by using Equation 45

Where n - total number of sample

Step B To find the dispersion of Student (Student is the name of person) (tα)

18

tα (q k) = tα (005 18)= 212 (Appendix I) Where k - degree of freedom k= n-1=18

q - significance level (Appendix I) Step C tα δy = 21 397461 = 834668

Table 42 Estimation by using Equation 45

y yt y-yt (y-yt)2

1990 258549 246426 12123 146967129 1991 255279 25214 3139 9853321 1992 254941 257855 -2914 8491396 1993 251747 263569 -11822 139759684 1994 268081 269284 -1203 1447209 1995 285723 274998 10725 115025625 1996 293001 280713 12288 150994944 1997 312923 286427 26496 702038016 1998 328975 292142 36833 1356669889 1999 33596 297856 38104 1451914816 2000 303274 303571 -297 88209 2001 260752 309285 -48533 2355452089 2002 238976 31500 -76024 5779648576 2003 254277 320714 -66437 4413874969 2004 280199 326429 -4623 21372129 2005 303988 332143 -28155 792704025 2006 34803 337858 10172 103469584 2007 402638 343572 59066 3488792356 2008 421959 349287 72672 5281219584

2843562432

44 Land Utilization

Mongolian total territory is 1564116 thousand hectares Of which in total 742 of total area is used for the agriculture 157 used for state special land 91 of total area is comprised forest land 03 land used for cities rural town and other settlements 04 land possesses water resources and 02 of total land is covered by transportation and networks in 2006 (NSO 2006) Currently Mongolian pastureland faced many significant problems such as grassland degradation soil erosion and desertification Main sources of them are overgrazing water

19

source and the population According to some survey approximately 120 million hectare land (70 percent) of total Mongolian territory is degraded

Figure 44 The comparison of utilized lands between 2000 and 2006 (by type)

Figure 44 shows utilization land between 2000 and 2006 For example the agriculture land and forestland decreased by 9 and 4 in 2006 compared to 2000 Generally the development of crop production and destruction the populationrsquos migration to urban areas and the nomadic livestock husbandry are leading to the overgrazing and degradation of the land Moreover livestock number in Mongolia is increasing during the last few years Especially in 2008 it reached the highest number of livestock for the first time in history Even though the herders are facing the shortage of fodder In addition the land for the natural pasture has slightly increased since 1989

441 The Impacts for the Land Degradation

There are many environmental factors affect on the agricultural sector in complex ways Most scientists and experts agreed that factors of land degradation in Mongolia could be divided into following two main categories including human and natural factors Today many factors affect the land degradation caused by the human activities such as excessive grazing deforestation poor irrigation and inappropriate land tenure in all sector The first significant factor is overgrazing Crop cultivation is one of the most important reasons of soil erosion and overgrazing Spring tilling coincides caused the seasonal higher speed wind and most planted areas are lack of windbreaks like trees For example the average wind speed of Gobi region is 3hellip4 meters per second it is one of the significant cause of soil moisture loss and erosion According to some survey an average of 35ndash50 tons of soils has been lost from each

20

hectare of cultivated land due to erosion during the past 30 years Half of all cultivated land degraded to some degree of erosion Another factor of overgrazing is the vehicle-induced degradation The second significant factor is the deforestation due to clear-cutting the trees fire and insect infestations The third important factor is inappropriate land tenure like mining and inadequate waste management Shagdar (2001) estimated approximately 100000 hectare of land have been degraded by mining and quarrying Moreover another significant factor of land degradation is bad or poor irrigation practices Salinization of irrigated land in arid climates as a result of poor drainage and evaporation and using highly toxic pesticide for vegetation protection from insects causes depletion of soil productivity The final factor of land degradation is the legal provision of ldquoopenness of pastureland which is public propertyrdquo Because of this legal provision the utilizing of pastureland is free for everyone (UNDP amp SIDA 2003) On the other hand the land degradation of Mongolia depends directly on nature and weather conditions Most important impact is the location It is located high above sea level and far away from the ocean Mongolia lies between 420 520N and almost 1200 E Another principal factor is the global warming and climatic change of the world Climate change can affect weeds insects plant diseases and pathogens in the environment especially in agricultural activities Another consequence on the pasture is the lack of rainfall Mongolia has low precipitation and short growing seasons especially long and cold winter and short and hot summer Therefore other significant causes are drought and Dzud in Mongolia They are the keys determinants of vulnerability of livestock to climate change They affect the livelihood of herdersrsquo household which is reduced livestock productivity especially milk and destroy pasture (AIACC 2006) The natural disasters like dzud and drought have occurred around 30 times in Mongolia with different level of harm (UNDPampSIDA 2003) (Figure 45)

Figure 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006)

During the disaster of harsh winter (dzud) in 1999- 2000 almost one third of the total livestock died in 1999 Figure 46 shows that the losses adult animals between 2000 and 2006 in Mongolia

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

iv

TABLE OF CONTENTS

Chapter Title Page

ACKNOWLEDGEMENT II

ABSTRACT III

ABBRIEVIATIONS VIII

TABLE OF CONTENTS IV

LIST OF FIGURES VI

LIST OF TABLES VII

CHAPTER I 1

INTRODUCTION 1 11 Brief Introduction of Mongolia 1 12 Background 2 13 Rationale 2 14 Objectives 3 15 Limitation of the Study 3

CHAPTER II 4

LITERATURE REVIEW 4 21 The Current Situation of Livestock Husbandry in Mongolia 4 22 Brief history of livestock husbandry development in Mongolia 5 23 Regional Distribution 6 24 Livestock Production 7

CHAPTER III 9

METHODOLOGY 9 31 Site selection 10 34 Data Collection 11 35 Data processing and analysis 12

CHAPTER IV 13

RESULT AND DISCUSSION 13 41 The current situation of Mongolian Animal Husbandry 13 42 The Present Status of Mongolian Livestock 14 43 Comparison of Actual and Estimated Livestock Number 15 44 Land Utilization 18 45 Mongolian Livestock Production 21 46 Past Policies and Strategies 26 47 The General View of Study Area 27 48 Veterinary Service 38 49 Problems and possibility of livestock sectorrsquos for the future 39 410 Suggested Strategies for Future Expansion 40 411 SWOT Analysis 40

CHAPTER V 43

CONCLUSIONS AND RECOMMENDATION 43

v

51 Conclusions 43 52 Recommendations 44

REFERENCES 45

APPENDICES 47

vi

LIST OF FIGURES

Chapter Title Page 11 Map of Mongolia 1 21 Percentage shares of major divisions to GDP (NSO 2005-2006) 4 22 GDP growth by percentage (NSO 2007) 5 23 The comparison of total livestock with number of privately owned livestock 5 24 Regional distribution of livestock in 2006 6 25 Share of domestic production versus imports in consumption of major products 7 41 The state of livestock number of Mongolia from 1990 to 2008 14 42 The comparison of the livestock structure in 2008 with 1990 14 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads) 17 44 The comparison of utilized lands between 2000 and 2006 (by type) 19 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006) 20 46 Losses adult animals of Mongolia (2000-2006) 21 47 The percentage of livestock products in agriculture (1990-2007) 21 48 The percentage of benefits from livestock types in economy (NSO 2006) 22 49 Main livestock production of Mongolia (1990- 2006) 22 410 Milk flow chart 23 411 The type of livestock which provide the milk products 24 412 The percentage of total slaughtered livestock by types (thousand tons) 25 413 The output of animal raw materials (1999-2006) 25 414 The livestock number of Tuv province by soum 28 415 The classification of herders household of Tuv aimag 28 416 Herdersrsquo age group and education level 29 417 The kind of livestock of herder households 31 418 The problems of herders in marketing 32 419 The income level of herders households 32 420 Major problems of herder households 33 421 Loan uses by households 33 422 Number of intensive farms of Mongolia 34 423 Number of intensive farms in Tuv province 34 424 Reason of establishment (a) and established year of dairy farms (b) 35 425 The reason which to initiate the dairy farm 36 426 Main customers of dairy farms 37 427 The problems which to faced by the farmers in marketing 38

vii

LIST OF TABLES

Chapter Title Page 41 The calculation by using Equation 43 16 42 Estimation by using Equation 45 18 43 Milk availability (FAOUN 2006) 23 44 Meat consumption in Asian first five countries (FAO Rome 2004) 24 45 The output of animalrsquos raw material in 2004 by stage (metric tons) 26 46 Production of main livestock commodities (Shagdar 2001) 26 47 The implemented projects in livestock sector of Mongolia (Bataa 2002) 27 48 The result of restocking program in Tuv aimag in 2005 to 2007 29 49 The comparison the education level with herderrsquos age 30 410 Households population and livelihood situation 30 411 The livestock composition of herder households (by animal type) 30 412 Main customer and customer area of herders 31 413 The income level of farms who include dairy activities and non-dairy activities 36 414 Potential area of interference for betterment of livestock sectorrsquos future growth 39

viii

ABBRIEVIATIONS

ADB Asian Development Bank ADO Asian Development Outlook AIP Asian Investment Program GDP Gross Domestic Product FAO Food and Agricultural Organization IFAD International Fund for Agricultural Development NSO National Statistical Office MIF Mongolian Investors Forum MSY Mongolian Statistical Yearbook MTG Mongolian Travel Guide MFA Ministry of Food and Agriculture WB World Bank WFP World Food Program EUP European Union Program AIACC Assessments of Impacts and Adaptations to Climate Change FAOSTAT Food and Agricultural Statistic Data RSSBP Rural sector strategy and business plan UN United Nations UNDP United Nations Development Program PRSP Poverty Reduction Strategy Paper MPVA Mongolian Private Veterinary Association Tugrug Mongolian currency (1$=1170 tugrug in 2007) Aimag Province Soum Sub-province Bag Subdivision of sub- province Dzud Harsh winter

1

CHAPTER I

INTRODUCTION

11 Brief Introduction of Mongolia

Figure 11 Map of Mongolia Mongolia is land-locked country of Central Asia It borders by China to the South and East and by Russia to the North and West It is situated between the longitude 874 to 1196 west and the latitude 521 to 414 north The main land is at an average elevation of 1580 meter above sea level

The current population is 264 million Total area is 15641 million km sq and 15 people stand per kilometer 608 people live in the urban areas and other 392 percent people live in the rural area of Mongolia (NSO 2007) The climate of Mongolia is too harsh and it characterized by a long-lasting cold winter dry and hot summer low precipitation high temperature fluctuations (day and night summer and winter) and a relatively high number of sunny days (on an average 260 days) per year The highest precipitation is approximately from 20 to 35 centimeters per year in north part and lowest precipitation is approximately from 10 to 20 centimeters south part of Mongolia Some regions of Gobi (the name Gobi means desert and steppe) which located in north part mostly receive no precipitation at all in years The effective vegetation growth period is a short around 80 to 130 days It is depend on the location of Mongolia Commonly in winter (January and February) the average temperature is -25 degC at night it reaches -40degC In summer time average temperature is +33 degC in central part of Mongolia such as Ulaanbaatar Moreover in Gobi region the temperature reaches +38degC

2

12 Background

The world is in the midst of what has been dubbed a livestock revolution with far reaching implications for human health development the environment and trade (Delgado et al 1999) Mongolia is one of the countries which stands at forefront of this revolution Therefore the role of livestock sector is very important in the Mongolian economy and this sector dominated on the agriculture The value added of agricultural sector is 188 of GDP of Mongolia The livestock products constitute 876 of total output of agriculture (NSO 2006) In 2006 there were 421400 herders constituting almost half of the countryrsquos economically active population (NSO 2006) Moreover there are two main sectors in the food and agricultural sector such as livestock and crop production Those sectors encourage the rural development of Mongolia such as to provide the economic growth Agro-processing industries generate value addition by the processing of agricultural raw materials both food and non-food into products which are marketable usable or edible have improved storability and or nutritive value and enhance income and profitability for producers An agro industrial system is modeled in order to illustrate the marketing the processing the production of agricultural materials and consumption in any countries (Salokhe and Hicks 2001) The Mongolian people to lead a nomadic lifestyle based on pastoral animal husbandry After privatization the intensive dairy farms became a significant issue which is now on the political agenda Keating and McCown (2001) remarked that there are 2 main components in agricultural system such as the production system and management system Production system contains pastureland livestock animals and the climate Today there are many significant problems such as the degradation of grassland desertification soil erosion and the lack for fodder of livestock Moreover the one of the problems is the impact of climate like drought and dzud (harsh winter) Drought occurs once every 2-3 years in the Gobi region and every 10 years in other regions (GOMampUNDP 2000) Nationwide drought occurred in 1944 and in 1972 (MFA 2001) Management system generates the knowledge regarding general principles and theory involving agricultural farmsrsquo management like agricultural economics animal science agronomy rural sociology psychology and engineering (Keating and McCown 2001)

13 Rationale

The livestock plays an important role in Mongolian agriculture and economy Furthermore meat and milk foodstuffs are important in Mongolian food sector and it generates the employment and income Therefore it is so important to know the past and current status potentials problems and constraints After that policies and strategies can be designed for better management and improvements of this sector Moreover this study contributes to the development by providing the information about status and problems of herder households and some intensive dairy farms

3

In addition Enkhjargal (1999) recommended that the government policy for livestock sector especially diary development should encourage and support research and development of dairy breeding stock pasture and farm management Involvements of farmers as producers need to be extending into economic activities that could provide better returns to them It should include feeding breeding health caring milk collecting transporting and processing

14 Objectives

The major objective is to investigate Mongolian livestock sector in Tuv province The specific

objectives are

bull To evaluate the present situation of livestock sub sector of Mongolia and to investigate the agricultural food and non-food products related with livestock animals

bull To analyze the future growth prospects of Mongolian livestock husbandry bull To present the environmental factors which affect the livestock sector

bull To conduct sector and SWOT analyses to identify strengths weaknesses opportunities and threats that the intensive and extensive livestock husbandry has been facing with

15 Limitation

Because of unavailable of data for the whole country this study was restricted only to Tuv province In addition information is limited about the herder households and farmers Therefore the study focuses on the main producers which are herder households and some intensive dairy farms

4

CHAPTER II

LITERATURE REVIEW

21 The Current Situation of Livestock Husbandry in Mongolia

The main source of Mongolian economy is coming from the agricultural sector (MIF 2006) The agricultural sector of Mongolia divided two main subsectors such as livestock sector and cropping sector (MIF 2006) At the end of 2006 approximately 40 of total population had lived in the rural areas Rural development is essential for Mongolia to achieve sustained economic growth and poverty reduction Livestock continues to provide rural households with an important source of herdersrsquo income jobs and food security and a means for investing and storing their wealth (WB 2006) Therefore animal husbandry plays the important role of the national economy Moreover agriculture still accounts for more than a fifth of GDP Some 40 per cent of the Mongolian workforce employ in traditional nomadic livestock herding Agriculture is produced 188 percent of GDP and contributed 30 percent of the total export of Mongolia Figure 21 demonstrates the comparison of the portion of divisions to GDP in 2005 with 2006

Figure 21 The comparison of the portion of divisions to GDP (NSO 2005-2006) The GDP growth due to contribution from all sectors was 99 in 2007 the average of GDP was 87 between 2003 and 2006 Especially agriculture sector provides almost half the population had a strong year extending by 16 and contributing 4 points to growth of GDP The data in Figure 22 shows that the ratio of GDP growth from 2003 to 2009 In addition it shows GDP for the forecast period in Mongolia The forecasts assume that the price will be comparatively higher for export goods (ADO 2008)

5

Figure 22 GDP growth by percentage (NSO 2007)

Enkhjargal (2005) noted that 35 of GDP and the agricultural sector contribute almost one fourth goods for export Moreover approximately 50 of the total labor force is employed in agricultural sector Barker (1997) remarked lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo In addition Mongolian livestock sector produces more than 901 of gross agricultural products and the source of income for more than 34 of all households in Mongolia In 2006 there are 348 million livestock counted in Mongolia The livestock number increased by 44 million heads of livestock animals compared to 2005 (NSO 2006) Furthermore as a result of census in 2006 there are 253000 camels 2114000 horses 2167000 cattle 14815000 sheep and 15451000 goats counted in Mongolia The number of horses increased by 86000 heads cattle increased by 204000 sheep and goat increased by 2 million heads respectively but the number of camel decreased by 07 thousand heads compared with 2005 (AIP 2006-2007)

Figure 23 The comparison of total livestock with number of privately owned livestock Moreover the statistical data shows (Figure 23) that almost 97 of the total livestock was private owned in 2006 and 31 of herder households have more than 100 livestock animals 22 Brief history of livestock husbandry development in Mongolia

6

Traditionally five types of domestic livestock in Mongolia are sheep goats cattle horses and camel Pigs hens and other birds seldom reared Horse is the first animal in Mongolia to be domesticated (Baasanjav et al 1999)

Shagdar (2001) remarked that the wild animals domesticated livestock animals such as sheep and horses in Mongolia between the 8th and 3rd centuries BC Shagdar (2001) argued that Mongolian herder households began the nomadic form in the 13th century and this system remained until present day In those times most livestock animals was private owned of herders However in 1951 the livestock animals transferred to the collective ownership form This collective ownership form was tended to develop more intensively managed production system This form gave diverse assistances to the herders For example to build the enclosures and wells to prepare hay (Shagdar 2001) However during the collectivization period the share of private livestock decreased to 17-30 of the total number of livestock (Shagdar 2001) The collective ownership form lasted till 1989 Due to tend of the decreasing livestock number Mongolian government privatized the livestock animals to the herders in 1991 Because of privatization 967 of total livestock shifted private owned form and 31 of herder households have more than 100 livestock animals After privatization the livestock number and number of herders rapidly increased in Mongolia

23 Regional Distribution

Mongolia divided 5 main regions named East West Central Khangai and Ulaanbaatar Figure 24 shows the regional distribution of livestock in Mongolia (NSO 2006) The forests and mountainous areas of Khangai region Central region and West region of Mongolia are most populous in terms of livestock

Figure 24 Regional distribution of livestock in 2006 The livestock is relatively distributed in comparison with the population size of each region Sheep and goats are the majority livestock and respectively accounted for 425 and 444 of

7

the total number of livestock in every region in 2006 Camels account for only 07 of total livestock and mainly rise in the southern part of the country (NSO 2006) Overgrazing is becoming problematic in areas close to major markets For example livestock density of Orkhon-Uul Darkhan and the capital city named of Ulaanbaatar which is 5 to 10 times lower than other regions

24 Livestock Production

Mongolian major livestock products include meat and meat products and milk and dairy products In addition wool hair cashmere hides and skins are the key input for animal processing industries ( Shagdar 2001) Agricultural production comprises of 30 meat and meat products 27 of them include milk and dairy products 2 skin and hides 1 animal and plants oil 31 flour and flour products 2 fruit and vegetables and 2 livestock feed and starches

Figure 25 Share of domestic production versus imports in consumption of major products (AIP

2006-2007)

From 1999 to 2004 all foodstuffs consumption except meat and milk has been below the recommended level Because of natural disasters such as drought and dzud in recent years the consumption of milk and meat products has declined during those years However the consumption of flour rise eggs potatoes and vegetables has increased in 1999-2002 Especially consumptions of potatoes vegetables and fruits are significantly below the recommendation (PRSP 2004) Mongolia imports some non-meat food products from Russia China and others Mongolia relies fully on imports for fruits and rice (WB 2008) Livestock production is entirely seasonal taking place in harmony with the Mongolian climate For example wool and hair collect in the late spring and early summer while most livestock

8

slaughter in the late autumn and early winter Milk and dairy products mainly produce during summer (Shagdar 2001) a) Meat and meat products On average 75 million head of livestock slaughter for consumption annually accounting for approximately 25 of the total livestock herd counted at the beginning of each year This equals 250000-300000 tons of meat which include mutton beef goat meat and horsemeat Camel meat is not so popular and consumed mostly during the winter Meat and meat products taken from of 30 beef 40 mutton 10 goat meat and 15 horsemeat (Shagdar 2001) b) Milk and dairy products Annually 250000-350000 tons milk produces in Mongolia Cowrsquos milk possesses more than 80 of the total of milk Moreover sheep and goat milk and horse milk accounting for about 10 and 8 respectively In addition more than 90 of all cows are accounted by native Mongolian cows which have an average milk yield of 19 liters per day in steppe and forest region and 13 liters in the Gobi region (Shagdar 2001) Dairy products include yogurt butter dried curds cheese etc Particularly in the rural areas milk consumes directly and converts to a wide range of traditional products Many of these have a long life and are stored for consumption in the winter and spring (WB 2003) Horse milk is used to produce the popular drink it contain a low alcohol that is similar the beer Rich content of amino acids vitamins and sugar found in horse milk makes airag a nutritious and healthy drink which is also low in fat Therefore it is used to treat many illnesses including tuberculosis diseases of digestive organs pharmaceutical toxicity and fatigue (Shagdar 2001) c) Wool hair and cashmere Approximately 25000 tons of wool hair and cashmere is produced in Mongolia annually more than 70 of which is accounted for by sheep wool Mongolia is the second largest producer of raw cashmere in the world Approximately 3300 tons of cashmere is produced annually That is accounting for about 20 of the total global supply Therefore cashmere is one of the main export commodities in Mongolia In wool and cashmere industry the productions of major items include spun threat camel wool blanket carpet felt etc (Shagdar 2001) d) Hides and skin One of valuable resource for producing luxury consumer goods is hides and skin About 65-85 million individual hides and skin are produced in Mongolia annually more than 80 of these are sheep and goatskins which are supplied to processing industries or exported Traditionally sheepskin was used for making warm winter coats and floor covering while various accessories for handling horses were made from cattle hides (Shagdar 2001)

9

CHAPTER III

METHODOLOGY The study conducted in four main stages such as the data collection analysis of the data and reporting and conclusions and recommendation part The general methodology used for specific objectives of the study is shown in Figure 31

Figure 31 Flow chart of methodology and procedure for survey and data collection

10

31 Site selection

The sites for the study selected included three sub-provinces named Jargalant Sumber and Bayanchandmani of Tuv province It is nearest province with the capital city (Figure 32) The site selection chose based on the following characteristics

bull Agricultural production bull The location of province bull Potentials for the development of livestock husbandry bull Financial constraints of the research bull Data availability

General information of Tuv province

Area 77300 sq km Number of livestock 1598000 Population 96500 Cropland 318100 hectare Center Zuunmod Number of sub-provinces 27

Tuv province is located in the centre of Mongolia In addition capital city named Ulaanbaatar located in this provincersquos territory Tuv province is one of the biggest and most productive provinces as this province is well positioned geographically to supply livestock production to nearest areas with high demand This province is situated 43 km from the capital city Moreover the major intensive animal farms are located in Tuv province

In this province have 201 household farms include dairy farms 152 pork farms 24 and chicken farm 1 respectively (MFA 2007) There are a total of 210000 camels 1979 thousand head of horses 1311 thousand head of cattle 10408 thousand of sheep and 8013 thousand heads of goats (NSO 2006)

33 Sampling Design and Procedures of Survey

Formal survey was conducted to collect the general information of herder householdsrsquo comprehension and the current development of agricultural products Herder household and farmers who own agribusiness were selected for interviews The number of herder households and number of farms in each province were determined by following formula

Where n= Number of total sample

N= Total number of farms and herders households E= Error (005)

80 herder households and 8 intensive farms from selected in Tuv province for this survey This size of samples of herders and farms provided statistical justification in order to generalize the results

11

Figure 32 Location of Tuv aimag

34 Data Collection

Data were collected from two sources (i) Secondary data was from the Mongolian National Statistical Office Mongolian State

University of Agriculture and the Ministry of Food and Agriculture Data used in this study included Urban and rural population Number of herder households (selected area) Total number of livestock and livestock distribution Land utilization Main agricultural production

12

(ii) Primary data was collected through questionnaires distributed to the randomly selected dairy farms and herder households in Tuv province and to determine the production processing and marketing (Appendix-A and B) Data collected in this part included

Present situation and the growth prospect of Livestock husbandry The suggestions and comments of herders and farmers who responded in this

research The comments The current problems faced by the herders and farmers

The survey aimed to question 80 herding households from the Tuv province and 8 intensive farmers of Tuv province were involved but in practice only 69 herders and 32 small and medium scale intensive dairy farms were surveyed Therefore around 10 relevant people including an official such as governor of soum and bag coordinator of household livelihood improvement related project and livestock expert were given an additional questionnaire

35 Data processing and analysis

351 Data processing The data of this study collected from the herder households and farmers of Tuv province The draft were analyzed to know the development future growth the influencing factors and special characteristics of the livestock sector SWOT analysis Around 80 questionnaires processed in the SPSS package and Microsoft Excel by using descriptive statistics Moreover in the survey investigated the herders and farmersrsquo opinions about the Mongolian livestock sub sector 352 Data analysis Data collections were analyzed quantitative and qualitative ways according to the field data The basis statistics data and the survey questionnaire results investigated the past and current performance of Mongolian livestock husbandry and calculated the future growth of livestock animals in Mongolia by showing the form of table figure flowchart mean and percentile 353 SWOT analysis The statistical data and the results of questionnaire determine the external factors such as Opportunity and Threat and internal factors such as Strength and Weakness of intensive and extensive livestock husbandry of Mongolia Moreover SWOT analyses provided the opportunity weakness and other factors of Tuv province for the livestock sector

13

CHAPTER IV

RESULT AND DISCUSSION

41 The current situation of Mongolian Animal Husbandry

Generally Mongolian animal husbandry divided two main sectors extensive animal husbandry and intensive animal husbandry Barker (1997) said lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo The extensive livestock management system of Mongolia includes main five species of livestock for most of the year The some herders and some relevant people believe that the extensive animal husbandry is most suitable sector in Mongolia The first reason is that approximately 80 of total territories are grassy area in Mongolia This is one of the biggest scales of the world Second Mongolian livestock systems is continuing with a long traditional nomadic livestock herding Hence the herders obtained the great knowledge and experiments during the several centuries Third Mongolian herder households are settled in the traditional pastoral system such as ldquokhot ailrdquo and ldquoneg goliinhonrdquo Two and more herder households including relatives and acquaintances called ldquokhot ailrdquo and ldquoneg goliinhonrdquo live together This system is most indigenous form This form of living served a variety of functions such as using pasture and seasonal movement of households Lastly the demand of livestock production is increasing during the last few years because of incomes of family are increasing and the increased demand from the neighbor countries Furthermore it has become the foundation of Mongolian livestock revolution Moreover Mongolian climate is suitable for the extensive animal husbandry On the other side the government of Mongolia begun to support intensive livestock farms to develop dairy and meat bread cattle pork and poultry Some people said the intensive livestock husbandry is better than the extensive livestock husbandry There are several reasons for this statement The first significant reason is that the increasing livestock number of Mongolia According to some researches it is possible to support around 38 million heads of livestock on the Mongolian whole grasslands However the number of livestock already reached 42 million heads in 2008 Therefore the growth of livestock is creating the degradation of pastureland by overgrazing in Mongolia Secondly since 1940 the average air temperature has been increasing in Mongolia caused by the climate change of the world Moreover the arid land is increasing due to decreasing of precipitation Therefore since last few years the yield of pasture is depleting gradually Thus grazing time of livestock is decreasing in Mongolia Finally the development of extensive farms directly depends on the supply and safety of the food Presently Mongolia is importing most of food products except the meat and meat products That is why the intensive animal husbandry is developing in some provinces especially the nearest provinces with the bigger cities such as Tuv Selenge and Bulgan According to research by the Ministry of Food and Agriculture (2007) Mongolia has 750 intensive animal husbandries Of which 494 farms for dairy 10 of them for meat cow 15 sheep farms for meat and wool 79 farms with pigs 111 farms with poultry and 40 farms with bees in Mongolia (AppendixC)

14

42 The Present Status of Mongolian Livestock

Mongolian livestock reached 421958 thousand heads in 2008 and it increased by 48 percent compared with 2007 Figure 41 shows the livestock numbers of Mongolia during last 18 years Sheep goat and cattle population has increased while those of camel and horse are decreasing in Mongolia during the last few years (Appendix D and F)

Figure 41 The state of livestock number of Mongolia from 1990 to 2008

According to Figure 41 the total number of livestock dramatically increased between 1990 and 1999 However it decreased by 287 due to drought and Dzud during 2000 to 2002 During that period 35 million and 47 million heads of animals died in 2000 and 2001 respectively During the last 7 years the number of livestock increased by 31 By the way the number of livestock in 2008 reached highest number ever

Figure 42 The comparison of the livestock structure in 2008 with 1990

15

Figure 42 shows the comparison of livestock structure (by type) during 2008 and 1990 According to Figure 41 sheep were dominating in the livestock structure until 2003 However cattle and goats dominated the structure of livestock during the recent years This is because of cashmere become herderrsquos main income from livestock due to free market economy It explained that after privatization the herders prefer to herd productive kinds of livestock Although the livestock resist Mongolian weather especially adopted for the cold season the productivity of livestock is low Therefore the some preparations such as to build warm shelters and to prepare and store hay and fodder are most significant principal elements during the wintertime Moreover pastures are subjected to increased vulnerability to parasites and other diseases These issues affect the animal productivity

43 Comparison of Actual and Estimated Livestock Number

Three different estimation including the average of number of livestock comparison of actual and estimated livestock number of Mongolia between 1990 and 2008 and livestock number in 2009 by using the Microsoft Excel (AppendixG) are given below (Avdai et al 1999) Calculation 1 The average number livestock in Mongolia from 1990 to 2008

The average number of livestock estimated was 295501 thousand heads between 1990 and 2008 Calculation 2 The goal of this part is that to estimate the equalized livestock number (amount) on the actual livestock amount by using the straight-line equation

yt = a + bt - (42)

Where t - period and a b - the parametric constraints

To estimate the parametric constraints can be solving by using the following method The value obtained by using equation (43) Table 41 shows the results of estimation To solve this system of equation substitute sumt = 0 Moreover the estimated values such as Σ y Σt2 and Σyt are shown from the Table 41

16

yt = 2978564+57145t y ndashactual livestock amount yt - estimated livestock amount

The estimated livestock amount and actual livestock number of Mongolia between 1990 and 2008 are shown in Figure 43

Table 41 The calculation by using Equation 43

(thousand heads)

y t t2 yt yt=a+bt

1990 258549 -9 81 -2326941 2464259 1991 255279 -8 64 -2042232 2521404 1992 254941 -7 49 -1784587 2578549 1993 251747 -6 36 -1510482 2635694 1994 268081 -5 25 -1340405 2692839 1995 285723 -4 16 -1142892 2749984 1996 293001 -3 9 -879003 2807129 1997 312923 -2 4 -625846 2864274 1998 328975 -1 1 -328975 2921419 1999 33596 0 0 0 2978564 2000 303274 1 1 303274 3035709 2001 260752 2 4 521504 3092854 2002 238976 3 9 716928 3149999 2003 254277 4 16 1017108 3207144 2004 280199 5 25 1400995 3264289 2005 303988 6 36 1823928 3321434 2006 34803 7 49 243621 3378579 2007 402638 8 64 3221104 3435724 2008 421959 9 81 3797631 3492869 2009 10 3550014 2010 11 3607159 2011 12 3664304 2012 13 3721449 2013 14 3778594 2014 15 3835739 2015 16 3892884

TOTAL 5659272 91 570 3257319 82642859

17

Figure 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads)

bull Calculation 3 The last estimation is that how many heads of Mongolian livestock will be reach in 2009 by using the following Equation 44

yt plusmn tα δy -(44)

Where yt - estimated amount of livestock on 2009 (see from previous Table 41) tα ndash dispersion of Student

δy ndash standard deviation y + tα = 3550014+834668= 4384682 y - tα =3550014- 834668= 2715346 Calculation shows that the livestock number of Mongolia will reach from 271534 to 438468 thousand heads animals in 2009 Below three steps shows the steps of calculation 3 Step A To calculate δy (standard deviation) can be solved by using following equation 45 (45) Table 42 shows the result of this estimation by using Equation 45

Where n - total number of sample

Step B To find the dispersion of Student (Student is the name of person) (tα)

18

tα (q k) = tα (005 18)= 212 (Appendix I) Where k - degree of freedom k= n-1=18

q - significance level (Appendix I) Step C tα δy = 21 397461 = 834668

Table 42 Estimation by using Equation 45

y yt y-yt (y-yt)2

1990 258549 246426 12123 146967129 1991 255279 25214 3139 9853321 1992 254941 257855 -2914 8491396 1993 251747 263569 -11822 139759684 1994 268081 269284 -1203 1447209 1995 285723 274998 10725 115025625 1996 293001 280713 12288 150994944 1997 312923 286427 26496 702038016 1998 328975 292142 36833 1356669889 1999 33596 297856 38104 1451914816 2000 303274 303571 -297 88209 2001 260752 309285 -48533 2355452089 2002 238976 31500 -76024 5779648576 2003 254277 320714 -66437 4413874969 2004 280199 326429 -4623 21372129 2005 303988 332143 -28155 792704025 2006 34803 337858 10172 103469584 2007 402638 343572 59066 3488792356 2008 421959 349287 72672 5281219584

2843562432

44 Land Utilization

Mongolian total territory is 1564116 thousand hectares Of which in total 742 of total area is used for the agriculture 157 used for state special land 91 of total area is comprised forest land 03 land used for cities rural town and other settlements 04 land possesses water resources and 02 of total land is covered by transportation and networks in 2006 (NSO 2006) Currently Mongolian pastureland faced many significant problems such as grassland degradation soil erosion and desertification Main sources of them are overgrazing water

19

source and the population According to some survey approximately 120 million hectare land (70 percent) of total Mongolian territory is degraded

Figure 44 The comparison of utilized lands between 2000 and 2006 (by type)

Figure 44 shows utilization land between 2000 and 2006 For example the agriculture land and forestland decreased by 9 and 4 in 2006 compared to 2000 Generally the development of crop production and destruction the populationrsquos migration to urban areas and the nomadic livestock husbandry are leading to the overgrazing and degradation of the land Moreover livestock number in Mongolia is increasing during the last few years Especially in 2008 it reached the highest number of livestock for the first time in history Even though the herders are facing the shortage of fodder In addition the land for the natural pasture has slightly increased since 1989

441 The Impacts for the Land Degradation

There are many environmental factors affect on the agricultural sector in complex ways Most scientists and experts agreed that factors of land degradation in Mongolia could be divided into following two main categories including human and natural factors Today many factors affect the land degradation caused by the human activities such as excessive grazing deforestation poor irrigation and inappropriate land tenure in all sector The first significant factor is overgrazing Crop cultivation is one of the most important reasons of soil erosion and overgrazing Spring tilling coincides caused the seasonal higher speed wind and most planted areas are lack of windbreaks like trees For example the average wind speed of Gobi region is 3hellip4 meters per second it is one of the significant cause of soil moisture loss and erosion According to some survey an average of 35ndash50 tons of soils has been lost from each

20

hectare of cultivated land due to erosion during the past 30 years Half of all cultivated land degraded to some degree of erosion Another factor of overgrazing is the vehicle-induced degradation The second significant factor is the deforestation due to clear-cutting the trees fire and insect infestations The third important factor is inappropriate land tenure like mining and inadequate waste management Shagdar (2001) estimated approximately 100000 hectare of land have been degraded by mining and quarrying Moreover another significant factor of land degradation is bad or poor irrigation practices Salinization of irrigated land in arid climates as a result of poor drainage and evaporation and using highly toxic pesticide for vegetation protection from insects causes depletion of soil productivity The final factor of land degradation is the legal provision of ldquoopenness of pastureland which is public propertyrdquo Because of this legal provision the utilizing of pastureland is free for everyone (UNDP amp SIDA 2003) On the other hand the land degradation of Mongolia depends directly on nature and weather conditions Most important impact is the location It is located high above sea level and far away from the ocean Mongolia lies between 420 520N and almost 1200 E Another principal factor is the global warming and climatic change of the world Climate change can affect weeds insects plant diseases and pathogens in the environment especially in agricultural activities Another consequence on the pasture is the lack of rainfall Mongolia has low precipitation and short growing seasons especially long and cold winter and short and hot summer Therefore other significant causes are drought and Dzud in Mongolia They are the keys determinants of vulnerability of livestock to climate change They affect the livelihood of herdersrsquo household which is reduced livestock productivity especially milk and destroy pasture (AIACC 2006) The natural disasters like dzud and drought have occurred around 30 times in Mongolia with different level of harm (UNDPampSIDA 2003) (Figure 45)

Figure 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006)

During the disaster of harsh winter (dzud) in 1999- 2000 almost one third of the total livestock died in 1999 Figure 46 shows that the losses adult animals between 2000 and 2006 in Mongolia

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

v

51 Conclusions 43 52 Recommendations 44

REFERENCES 45

APPENDICES 47

vi

LIST OF FIGURES

Chapter Title Page 11 Map of Mongolia 1 21 Percentage shares of major divisions to GDP (NSO 2005-2006) 4 22 GDP growth by percentage (NSO 2007) 5 23 The comparison of total livestock with number of privately owned livestock 5 24 Regional distribution of livestock in 2006 6 25 Share of domestic production versus imports in consumption of major products 7 41 The state of livestock number of Mongolia from 1990 to 2008 14 42 The comparison of the livestock structure in 2008 with 1990 14 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads) 17 44 The comparison of utilized lands between 2000 and 2006 (by type) 19 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006) 20 46 Losses adult animals of Mongolia (2000-2006) 21 47 The percentage of livestock products in agriculture (1990-2007) 21 48 The percentage of benefits from livestock types in economy (NSO 2006) 22 49 Main livestock production of Mongolia (1990- 2006) 22 410 Milk flow chart 23 411 The type of livestock which provide the milk products 24 412 The percentage of total slaughtered livestock by types (thousand tons) 25 413 The output of animal raw materials (1999-2006) 25 414 The livestock number of Tuv province by soum 28 415 The classification of herders household of Tuv aimag 28 416 Herdersrsquo age group and education level 29 417 The kind of livestock of herder households 31 418 The problems of herders in marketing 32 419 The income level of herders households 32 420 Major problems of herder households 33 421 Loan uses by households 33 422 Number of intensive farms of Mongolia 34 423 Number of intensive farms in Tuv province 34 424 Reason of establishment (a) and established year of dairy farms (b) 35 425 The reason which to initiate the dairy farm 36 426 Main customers of dairy farms 37 427 The problems which to faced by the farmers in marketing 38

vii

LIST OF TABLES

Chapter Title Page 41 The calculation by using Equation 43 16 42 Estimation by using Equation 45 18 43 Milk availability (FAOUN 2006) 23 44 Meat consumption in Asian first five countries (FAO Rome 2004) 24 45 The output of animalrsquos raw material in 2004 by stage (metric tons) 26 46 Production of main livestock commodities (Shagdar 2001) 26 47 The implemented projects in livestock sector of Mongolia (Bataa 2002) 27 48 The result of restocking program in Tuv aimag in 2005 to 2007 29 49 The comparison the education level with herderrsquos age 30 410 Households population and livelihood situation 30 411 The livestock composition of herder households (by animal type) 30 412 Main customer and customer area of herders 31 413 The income level of farms who include dairy activities and non-dairy activities 36 414 Potential area of interference for betterment of livestock sectorrsquos future growth 39

viii

ABBRIEVIATIONS

ADB Asian Development Bank ADO Asian Development Outlook AIP Asian Investment Program GDP Gross Domestic Product FAO Food and Agricultural Organization IFAD International Fund for Agricultural Development NSO National Statistical Office MIF Mongolian Investors Forum MSY Mongolian Statistical Yearbook MTG Mongolian Travel Guide MFA Ministry of Food and Agriculture WB World Bank WFP World Food Program EUP European Union Program AIACC Assessments of Impacts and Adaptations to Climate Change FAOSTAT Food and Agricultural Statistic Data RSSBP Rural sector strategy and business plan UN United Nations UNDP United Nations Development Program PRSP Poverty Reduction Strategy Paper MPVA Mongolian Private Veterinary Association Tugrug Mongolian currency (1$=1170 tugrug in 2007) Aimag Province Soum Sub-province Bag Subdivision of sub- province Dzud Harsh winter

1

CHAPTER I

INTRODUCTION

11 Brief Introduction of Mongolia

Figure 11 Map of Mongolia Mongolia is land-locked country of Central Asia It borders by China to the South and East and by Russia to the North and West It is situated between the longitude 874 to 1196 west and the latitude 521 to 414 north The main land is at an average elevation of 1580 meter above sea level

The current population is 264 million Total area is 15641 million km sq and 15 people stand per kilometer 608 people live in the urban areas and other 392 percent people live in the rural area of Mongolia (NSO 2007) The climate of Mongolia is too harsh and it characterized by a long-lasting cold winter dry and hot summer low precipitation high temperature fluctuations (day and night summer and winter) and a relatively high number of sunny days (on an average 260 days) per year The highest precipitation is approximately from 20 to 35 centimeters per year in north part and lowest precipitation is approximately from 10 to 20 centimeters south part of Mongolia Some regions of Gobi (the name Gobi means desert and steppe) which located in north part mostly receive no precipitation at all in years The effective vegetation growth period is a short around 80 to 130 days It is depend on the location of Mongolia Commonly in winter (January and February) the average temperature is -25 degC at night it reaches -40degC In summer time average temperature is +33 degC in central part of Mongolia such as Ulaanbaatar Moreover in Gobi region the temperature reaches +38degC

2

12 Background

The world is in the midst of what has been dubbed a livestock revolution with far reaching implications for human health development the environment and trade (Delgado et al 1999) Mongolia is one of the countries which stands at forefront of this revolution Therefore the role of livestock sector is very important in the Mongolian economy and this sector dominated on the agriculture The value added of agricultural sector is 188 of GDP of Mongolia The livestock products constitute 876 of total output of agriculture (NSO 2006) In 2006 there were 421400 herders constituting almost half of the countryrsquos economically active population (NSO 2006) Moreover there are two main sectors in the food and agricultural sector such as livestock and crop production Those sectors encourage the rural development of Mongolia such as to provide the economic growth Agro-processing industries generate value addition by the processing of agricultural raw materials both food and non-food into products which are marketable usable or edible have improved storability and or nutritive value and enhance income and profitability for producers An agro industrial system is modeled in order to illustrate the marketing the processing the production of agricultural materials and consumption in any countries (Salokhe and Hicks 2001) The Mongolian people to lead a nomadic lifestyle based on pastoral animal husbandry After privatization the intensive dairy farms became a significant issue which is now on the political agenda Keating and McCown (2001) remarked that there are 2 main components in agricultural system such as the production system and management system Production system contains pastureland livestock animals and the climate Today there are many significant problems such as the degradation of grassland desertification soil erosion and the lack for fodder of livestock Moreover the one of the problems is the impact of climate like drought and dzud (harsh winter) Drought occurs once every 2-3 years in the Gobi region and every 10 years in other regions (GOMampUNDP 2000) Nationwide drought occurred in 1944 and in 1972 (MFA 2001) Management system generates the knowledge regarding general principles and theory involving agricultural farmsrsquo management like agricultural economics animal science agronomy rural sociology psychology and engineering (Keating and McCown 2001)

13 Rationale

The livestock plays an important role in Mongolian agriculture and economy Furthermore meat and milk foodstuffs are important in Mongolian food sector and it generates the employment and income Therefore it is so important to know the past and current status potentials problems and constraints After that policies and strategies can be designed for better management and improvements of this sector Moreover this study contributes to the development by providing the information about status and problems of herder households and some intensive dairy farms

3

In addition Enkhjargal (1999) recommended that the government policy for livestock sector especially diary development should encourage and support research and development of dairy breeding stock pasture and farm management Involvements of farmers as producers need to be extending into economic activities that could provide better returns to them It should include feeding breeding health caring milk collecting transporting and processing

14 Objectives

The major objective is to investigate Mongolian livestock sector in Tuv province The specific

objectives are

bull To evaluate the present situation of livestock sub sector of Mongolia and to investigate the agricultural food and non-food products related with livestock animals

bull To analyze the future growth prospects of Mongolian livestock husbandry bull To present the environmental factors which affect the livestock sector

bull To conduct sector and SWOT analyses to identify strengths weaknesses opportunities and threats that the intensive and extensive livestock husbandry has been facing with

15 Limitation

Because of unavailable of data for the whole country this study was restricted only to Tuv province In addition information is limited about the herder households and farmers Therefore the study focuses on the main producers which are herder households and some intensive dairy farms

4

CHAPTER II

LITERATURE REVIEW

21 The Current Situation of Livestock Husbandry in Mongolia

The main source of Mongolian economy is coming from the agricultural sector (MIF 2006) The agricultural sector of Mongolia divided two main subsectors such as livestock sector and cropping sector (MIF 2006) At the end of 2006 approximately 40 of total population had lived in the rural areas Rural development is essential for Mongolia to achieve sustained economic growth and poverty reduction Livestock continues to provide rural households with an important source of herdersrsquo income jobs and food security and a means for investing and storing their wealth (WB 2006) Therefore animal husbandry plays the important role of the national economy Moreover agriculture still accounts for more than a fifth of GDP Some 40 per cent of the Mongolian workforce employ in traditional nomadic livestock herding Agriculture is produced 188 percent of GDP and contributed 30 percent of the total export of Mongolia Figure 21 demonstrates the comparison of the portion of divisions to GDP in 2005 with 2006

Figure 21 The comparison of the portion of divisions to GDP (NSO 2005-2006) The GDP growth due to contribution from all sectors was 99 in 2007 the average of GDP was 87 between 2003 and 2006 Especially agriculture sector provides almost half the population had a strong year extending by 16 and contributing 4 points to growth of GDP The data in Figure 22 shows that the ratio of GDP growth from 2003 to 2009 In addition it shows GDP for the forecast period in Mongolia The forecasts assume that the price will be comparatively higher for export goods (ADO 2008)

5

Figure 22 GDP growth by percentage (NSO 2007)

Enkhjargal (2005) noted that 35 of GDP and the agricultural sector contribute almost one fourth goods for export Moreover approximately 50 of the total labor force is employed in agricultural sector Barker (1997) remarked lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo In addition Mongolian livestock sector produces more than 901 of gross agricultural products and the source of income for more than 34 of all households in Mongolia In 2006 there are 348 million livestock counted in Mongolia The livestock number increased by 44 million heads of livestock animals compared to 2005 (NSO 2006) Furthermore as a result of census in 2006 there are 253000 camels 2114000 horses 2167000 cattle 14815000 sheep and 15451000 goats counted in Mongolia The number of horses increased by 86000 heads cattle increased by 204000 sheep and goat increased by 2 million heads respectively but the number of camel decreased by 07 thousand heads compared with 2005 (AIP 2006-2007)

Figure 23 The comparison of total livestock with number of privately owned livestock Moreover the statistical data shows (Figure 23) that almost 97 of the total livestock was private owned in 2006 and 31 of herder households have more than 100 livestock animals 22 Brief history of livestock husbandry development in Mongolia

6

Traditionally five types of domestic livestock in Mongolia are sheep goats cattle horses and camel Pigs hens and other birds seldom reared Horse is the first animal in Mongolia to be domesticated (Baasanjav et al 1999)

Shagdar (2001) remarked that the wild animals domesticated livestock animals such as sheep and horses in Mongolia between the 8th and 3rd centuries BC Shagdar (2001) argued that Mongolian herder households began the nomadic form in the 13th century and this system remained until present day In those times most livestock animals was private owned of herders However in 1951 the livestock animals transferred to the collective ownership form This collective ownership form was tended to develop more intensively managed production system This form gave diverse assistances to the herders For example to build the enclosures and wells to prepare hay (Shagdar 2001) However during the collectivization period the share of private livestock decreased to 17-30 of the total number of livestock (Shagdar 2001) The collective ownership form lasted till 1989 Due to tend of the decreasing livestock number Mongolian government privatized the livestock animals to the herders in 1991 Because of privatization 967 of total livestock shifted private owned form and 31 of herder households have more than 100 livestock animals After privatization the livestock number and number of herders rapidly increased in Mongolia

23 Regional Distribution

Mongolia divided 5 main regions named East West Central Khangai and Ulaanbaatar Figure 24 shows the regional distribution of livestock in Mongolia (NSO 2006) The forests and mountainous areas of Khangai region Central region and West region of Mongolia are most populous in terms of livestock

Figure 24 Regional distribution of livestock in 2006 The livestock is relatively distributed in comparison with the population size of each region Sheep and goats are the majority livestock and respectively accounted for 425 and 444 of

7

the total number of livestock in every region in 2006 Camels account for only 07 of total livestock and mainly rise in the southern part of the country (NSO 2006) Overgrazing is becoming problematic in areas close to major markets For example livestock density of Orkhon-Uul Darkhan and the capital city named of Ulaanbaatar which is 5 to 10 times lower than other regions

24 Livestock Production

Mongolian major livestock products include meat and meat products and milk and dairy products In addition wool hair cashmere hides and skins are the key input for animal processing industries ( Shagdar 2001) Agricultural production comprises of 30 meat and meat products 27 of them include milk and dairy products 2 skin and hides 1 animal and plants oil 31 flour and flour products 2 fruit and vegetables and 2 livestock feed and starches

Figure 25 Share of domestic production versus imports in consumption of major products (AIP

2006-2007)

From 1999 to 2004 all foodstuffs consumption except meat and milk has been below the recommended level Because of natural disasters such as drought and dzud in recent years the consumption of milk and meat products has declined during those years However the consumption of flour rise eggs potatoes and vegetables has increased in 1999-2002 Especially consumptions of potatoes vegetables and fruits are significantly below the recommendation (PRSP 2004) Mongolia imports some non-meat food products from Russia China and others Mongolia relies fully on imports for fruits and rice (WB 2008) Livestock production is entirely seasonal taking place in harmony with the Mongolian climate For example wool and hair collect in the late spring and early summer while most livestock

8

slaughter in the late autumn and early winter Milk and dairy products mainly produce during summer (Shagdar 2001) a) Meat and meat products On average 75 million head of livestock slaughter for consumption annually accounting for approximately 25 of the total livestock herd counted at the beginning of each year This equals 250000-300000 tons of meat which include mutton beef goat meat and horsemeat Camel meat is not so popular and consumed mostly during the winter Meat and meat products taken from of 30 beef 40 mutton 10 goat meat and 15 horsemeat (Shagdar 2001) b) Milk and dairy products Annually 250000-350000 tons milk produces in Mongolia Cowrsquos milk possesses more than 80 of the total of milk Moreover sheep and goat milk and horse milk accounting for about 10 and 8 respectively In addition more than 90 of all cows are accounted by native Mongolian cows which have an average milk yield of 19 liters per day in steppe and forest region and 13 liters in the Gobi region (Shagdar 2001) Dairy products include yogurt butter dried curds cheese etc Particularly in the rural areas milk consumes directly and converts to a wide range of traditional products Many of these have a long life and are stored for consumption in the winter and spring (WB 2003) Horse milk is used to produce the popular drink it contain a low alcohol that is similar the beer Rich content of amino acids vitamins and sugar found in horse milk makes airag a nutritious and healthy drink which is also low in fat Therefore it is used to treat many illnesses including tuberculosis diseases of digestive organs pharmaceutical toxicity and fatigue (Shagdar 2001) c) Wool hair and cashmere Approximately 25000 tons of wool hair and cashmere is produced in Mongolia annually more than 70 of which is accounted for by sheep wool Mongolia is the second largest producer of raw cashmere in the world Approximately 3300 tons of cashmere is produced annually That is accounting for about 20 of the total global supply Therefore cashmere is one of the main export commodities in Mongolia In wool and cashmere industry the productions of major items include spun threat camel wool blanket carpet felt etc (Shagdar 2001) d) Hides and skin One of valuable resource for producing luxury consumer goods is hides and skin About 65-85 million individual hides and skin are produced in Mongolia annually more than 80 of these are sheep and goatskins which are supplied to processing industries or exported Traditionally sheepskin was used for making warm winter coats and floor covering while various accessories for handling horses were made from cattle hides (Shagdar 2001)

9

CHAPTER III

METHODOLOGY The study conducted in four main stages such as the data collection analysis of the data and reporting and conclusions and recommendation part The general methodology used for specific objectives of the study is shown in Figure 31

Figure 31 Flow chart of methodology and procedure for survey and data collection

10

31 Site selection

The sites for the study selected included three sub-provinces named Jargalant Sumber and Bayanchandmani of Tuv province It is nearest province with the capital city (Figure 32) The site selection chose based on the following characteristics

bull Agricultural production bull The location of province bull Potentials for the development of livestock husbandry bull Financial constraints of the research bull Data availability

General information of Tuv province

Area 77300 sq km Number of livestock 1598000 Population 96500 Cropland 318100 hectare Center Zuunmod Number of sub-provinces 27

Tuv province is located in the centre of Mongolia In addition capital city named Ulaanbaatar located in this provincersquos territory Tuv province is one of the biggest and most productive provinces as this province is well positioned geographically to supply livestock production to nearest areas with high demand This province is situated 43 km from the capital city Moreover the major intensive animal farms are located in Tuv province

In this province have 201 household farms include dairy farms 152 pork farms 24 and chicken farm 1 respectively (MFA 2007) There are a total of 210000 camels 1979 thousand head of horses 1311 thousand head of cattle 10408 thousand of sheep and 8013 thousand heads of goats (NSO 2006)

33 Sampling Design and Procedures of Survey

Formal survey was conducted to collect the general information of herder householdsrsquo comprehension and the current development of agricultural products Herder household and farmers who own agribusiness were selected for interviews The number of herder households and number of farms in each province were determined by following formula

Where n= Number of total sample

N= Total number of farms and herders households E= Error (005)

80 herder households and 8 intensive farms from selected in Tuv province for this survey This size of samples of herders and farms provided statistical justification in order to generalize the results

11

Figure 32 Location of Tuv aimag

34 Data Collection

Data were collected from two sources (i) Secondary data was from the Mongolian National Statistical Office Mongolian State

University of Agriculture and the Ministry of Food and Agriculture Data used in this study included Urban and rural population Number of herder households (selected area) Total number of livestock and livestock distribution Land utilization Main agricultural production

12

(ii) Primary data was collected through questionnaires distributed to the randomly selected dairy farms and herder households in Tuv province and to determine the production processing and marketing (Appendix-A and B) Data collected in this part included

Present situation and the growth prospect of Livestock husbandry The suggestions and comments of herders and farmers who responded in this

research The comments The current problems faced by the herders and farmers

The survey aimed to question 80 herding households from the Tuv province and 8 intensive farmers of Tuv province were involved but in practice only 69 herders and 32 small and medium scale intensive dairy farms were surveyed Therefore around 10 relevant people including an official such as governor of soum and bag coordinator of household livelihood improvement related project and livestock expert were given an additional questionnaire

35 Data processing and analysis

351 Data processing The data of this study collected from the herder households and farmers of Tuv province The draft were analyzed to know the development future growth the influencing factors and special characteristics of the livestock sector SWOT analysis Around 80 questionnaires processed in the SPSS package and Microsoft Excel by using descriptive statistics Moreover in the survey investigated the herders and farmersrsquo opinions about the Mongolian livestock sub sector 352 Data analysis Data collections were analyzed quantitative and qualitative ways according to the field data The basis statistics data and the survey questionnaire results investigated the past and current performance of Mongolian livestock husbandry and calculated the future growth of livestock animals in Mongolia by showing the form of table figure flowchart mean and percentile 353 SWOT analysis The statistical data and the results of questionnaire determine the external factors such as Opportunity and Threat and internal factors such as Strength and Weakness of intensive and extensive livestock husbandry of Mongolia Moreover SWOT analyses provided the opportunity weakness and other factors of Tuv province for the livestock sector

13

CHAPTER IV

RESULT AND DISCUSSION

41 The current situation of Mongolian Animal Husbandry

Generally Mongolian animal husbandry divided two main sectors extensive animal husbandry and intensive animal husbandry Barker (1997) said lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo The extensive livestock management system of Mongolia includes main five species of livestock for most of the year The some herders and some relevant people believe that the extensive animal husbandry is most suitable sector in Mongolia The first reason is that approximately 80 of total territories are grassy area in Mongolia This is one of the biggest scales of the world Second Mongolian livestock systems is continuing with a long traditional nomadic livestock herding Hence the herders obtained the great knowledge and experiments during the several centuries Third Mongolian herder households are settled in the traditional pastoral system such as ldquokhot ailrdquo and ldquoneg goliinhonrdquo Two and more herder households including relatives and acquaintances called ldquokhot ailrdquo and ldquoneg goliinhonrdquo live together This system is most indigenous form This form of living served a variety of functions such as using pasture and seasonal movement of households Lastly the demand of livestock production is increasing during the last few years because of incomes of family are increasing and the increased demand from the neighbor countries Furthermore it has become the foundation of Mongolian livestock revolution Moreover Mongolian climate is suitable for the extensive animal husbandry On the other side the government of Mongolia begun to support intensive livestock farms to develop dairy and meat bread cattle pork and poultry Some people said the intensive livestock husbandry is better than the extensive livestock husbandry There are several reasons for this statement The first significant reason is that the increasing livestock number of Mongolia According to some researches it is possible to support around 38 million heads of livestock on the Mongolian whole grasslands However the number of livestock already reached 42 million heads in 2008 Therefore the growth of livestock is creating the degradation of pastureland by overgrazing in Mongolia Secondly since 1940 the average air temperature has been increasing in Mongolia caused by the climate change of the world Moreover the arid land is increasing due to decreasing of precipitation Therefore since last few years the yield of pasture is depleting gradually Thus grazing time of livestock is decreasing in Mongolia Finally the development of extensive farms directly depends on the supply and safety of the food Presently Mongolia is importing most of food products except the meat and meat products That is why the intensive animal husbandry is developing in some provinces especially the nearest provinces with the bigger cities such as Tuv Selenge and Bulgan According to research by the Ministry of Food and Agriculture (2007) Mongolia has 750 intensive animal husbandries Of which 494 farms for dairy 10 of them for meat cow 15 sheep farms for meat and wool 79 farms with pigs 111 farms with poultry and 40 farms with bees in Mongolia (AppendixC)

14

42 The Present Status of Mongolian Livestock

Mongolian livestock reached 421958 thousand heads in 2008 and it increased by 48 percent compared with 2007 Figure 41 shows the livestock numbers of Mongolia during last 18 years Sheep goat and cattle population has increased while those of camel and horse are decreasing in Mongolia during the last few years (Appendix D and F)

Figure 41 The state of livestock number of Mongolia from 1990 to 2008

According to Figure 41 the total number of livestock dramatically increased between 1990 and 1999 However it decreased by 287 due to drought and Dzud during 2000 to 2002 During that period 35 million and 47 million heads of animals died in 2000 and 2001 respectively During the last 7 years the number of livestock increased by 31 By the way the number of livestock in 2008 reached highest number ever

Figure 42 The comparison of the livestock structure in 2008 with 1990

15

Figure 42 shows the comparison of livestock structure (by type) during 2008 and 1990 According to Figure 41 sheep were dominating in the livestock structure until 2003 However cattle and goats dominated the structure of livestock during the recent years This is because of cashmere become herderrsquos main income from livestock due to free market economy It explained that after privatization the herders prefer to herd productive kinds of livestock Although the livestock resist Mongolian weather especially adopted for the cold season the productivity of livestock is low Therefore the some preparations such as to build warm shelters and to prepare and store hay and fodder are most significant principal elements during the wintertime Moreover pastures are subjected to increased vulnerability to parasites and other diseases These issues affect the animal productivity

43 Comparison of Actual and Estimated Livestock Number

Three different estimation including the average of number of livestock comparison of actual and estimated livestock number of Mongolia between 1990 and 2008 and livestock number in 2009 by using the Microsoft Excel (AppendixG) are given below (Avdai et al 1999) Calculation 1 The average number livestock in Mongolia from 1990 to 2008

The average number of livestock estimated was 295501 thousand heads between 1990 and 2008 Calculation 2 The goal of this part is that to estimate the equalized livestock number (amount) on the actual livestock amount by using the straight-line equation

yt = a + bt - (42)

Where t - period and a b - the parametric constraints

To estimate the parametric constraints can be solving by using the following method The value obtained by using equation (43) Table 41 shows the results of estimation To solve this system of equation substitute sumt = 0 Moreover the estimated values such as Σ y Σt2 and Σyt are shown from the Table 41

16

yt = 2978564+57145t y ndashactual livestock amount yt - estimated livestock amount

The estimated livestock amount and actual livestock number of Mongolia between 1990 and 2008 are shown in Figure 43

Table 41 The calculation by using Equation 43

(thousand heads)

y t t2 yt yt=a+bt

1990 258549 -9 81 -2326941 2464259 1991 255279 -8 64 -2042232 2521404 1992 254941 -7 49 -1784587 2578549 1993 251747 -6 36 -1510482 2635694 1994 268081 -5 25 -1340405 2692839 1995 285723 -4 16 -1142892 2749984 1996 293001 -3 9 -879003 2807129 1997 312923 -2 4 -625846 2864274 1998 328975 -1 1 -328975 2921419 1999 33596 0 0 0 2978564 2000 303274 1 1 303274 3035709 2001 260752 2 4 521504 3092854 2002 238976 3 9 716928 3149999 2003 254277 4 16 1017108 3207144 2004 280199 5 25 1400995 3264289 2005 303988 6 36 1823928 3321434 2006 34803 7 49 243621 3378579 2007 402638 8 64 3221104 3435724 2008 421959 9 81 3797631 3492869 2009 10 3550014 2010 11 3607159 2011 12 3664304 2012 13 3721449 2013 14 3778594 2014 15 3835739 2015 16 3892884

TOTAL 5659272 91 570 3257319 82642859

17

Figure 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads)

bull Calculation 3 The last estimation is that how many heads of Mongolian livestock will be reach in 2009 by using the following Equation 44

yt plusmn tα δy -(44)

Where yt - estimated amount of livestock on 2009 (see from previous Table 41) tα ndash dispersion of Student

δy ndash standard deviation y + tα = 3550014+834668= 4384682 y - tα =3550014- 834668= 2715346 Calculation shows that the livestock number of Mongolia will reach from 271534 to 438468 thousand heads animals in 2009 Below three steps shows the steps of calculation 3 Step A To calculate δy (standard deviation) can be solved by using following equation 45 (45) Table 42 shows the result of this estimation by using Equation 45

Where n - total number of sample

Step B To find the dispersion of Student (Student is the name of person) (tα)

18

tα (q k) = tα (005 18)= 212 (Appendix I) Where k - degree of freedom k= n-1=18

q - significance level (Appendix I) Step C tα δy = 21 397461 = 834668

Table 42 Estimation by using Equation 45

y yt y-yt (y-yt)2

1990 258549 246426 12123 146967129 1991 255279 25214 3139 9853321 1992 254941 257855 -2914 8491396 1993 251747 263569 -11822 139759684 1994 268081 269284 -1203 1447209 1995 285723 274998 10725 115025625 1996 293001 280713 12288 150994944 1997 312923 286427 26496 702038016 1998 328975 292142 36833 1356669889 1999 33596 297856 38104 1451914816 2000 303274 303571 -297 88209 2001 260752 309285 -48533 2355452089 2002 238976 31500 -76024 5779648576 2003 254277 320714 -66437 4413874969 2004 280199 326429 -4623 21372129 2005 303988 332143 -28155 792704025 2006 34803 337858 10172 103469584 2007 402638 343572 59066 3488792356 2008 421959 349287 72672 5281219584

2843562432

44 Land Utilization

Mongolian total territory is 1564116 thousand hectares Of which in total 742 of total area is used for the agriculture 157 used for state special land 91 of total area is comprised forest land 03 land used for cities rural town and other settlements 04 land possesses water resources and 02 of total land is covered by transportation and networks in 2006 (NSO 2006) Currently Mongolian pastureland faced many significant problems such as grassland degradation soil erosion and desertification Main sources of them are overgrazing water

19

source and the population According to some survey approximately 120 million hectare land (70 percent) of total Mongolian territory is degraded

Figure 44 The comparison of utilized lands between 2000 and 2006 (by type)

Figure 44 shows utilization land between 2000 and 2006 For example the agriculture land and forestland decreased by 9 and 4 in 2006 compared to 2000 Generally the development of crop production and destruction the populationrsquos migration to urban areas and the nomadic livestock husbandry are leading to the overgrazing and degradation of the land Moreover livestock number in Mongolia is increasing during the last few years Especially in 2008 it reached the highest number of livestock for the first time in history Even though the herders are facing the shortage of fodder In addition the land for the natural pasture has slightly increased since 1989

441 The Impacts for the Land Degradation

There are many environmental factors affect on the agricultural sector in complex ways Most scientists and experts agreed that factors of land degradation in Mongolia could be divided into following two main categories including human and natural factors Today many factors affect the land degradation caused by the human activities such as excessive grazing deforestation poor irrigation and inappropriate land tenure in all sector The first significant factor is overgrazing Crop cultivation is one of the most important reasons of soil erosion and overgrazing Spring tilling coincides caused the seasonal higher speed wind and most planted areas are lack of windbreaks like trees For example the average wind speed of Gobi region is 3hellip4 meters per second it is one of the significant cause of soil moisture loss and erosion According to some survey an average of 35ndash50 tons of soils has been lost from each

20

hectare of cultivated land due to erosion during the past 30 years Half of all cultivated land degraded to some degree of erosion Another factor of overgrazing is the vehicle-induced degradation The second significant factor is the deforestation due to clear-cutting the trees fire and insect infestations The third important factor is inappropriate land tenure like mining and inadequate waste management Shagdar (2001) estimated approximately 100000 hectare of land have been degraded by mining and quarrying Moreover another significant factor of land degradation is bad or poor irrigation practices Salinization of irrigated land in arid climates as a result of poor drainage and evaporation and using highly toxic pesticide for vegetation protection from insects causes depletion of soil productivity The final factor of land degradation is the legal provision of ldquoopenness of pastureland which is public propertyrdquo Because of this legal provision the utilizing of pastureland is free for everyone (UNDP amp SIDA 2003) On the other hand the land degradation of Mongolia depends directly on nature and weather conditions Most important impact is the location It is located high above sea level and far away from the ocean Mongolia lies between 420 520N and almost 1200 E Another principal factor is the global warming and climatic change of the world Climate change can affect weeds insects plant diseases and pathogens in the environment especially in agricultural activities Another consequence on the pasture is the lack of rainfall Mongolia has low precipitation and short growing seasons especially long and cold winter and short and hot summer Therefore other significant causes are drought and Dzud in Mongolia They are the keys determinants of vulnerability of livestock to climate change They affect the livelihood of herdersrsquo household which is reduced livestock productivity especially milk and destroy pasture (AIACC 2006) The natural disasters like dzud and drought have occurred around 30 times in Mongolia with different level of harm (UNDPampSIDA 2003) (Figure 45)

Figure 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006)

During the disaster of harsh winter (dzud) in 1999- 2000 almost one third of the total livestock died in 1999 Figure 46 shows that the losses adult animals between 2000 and 2006 in Mongolia

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

vi

LIST OF FIGURES

Chapter Title Page 11 Map of Mongolia 1 21 Percentage shares of major divisions to GDP (NSO 2005-2006) 4 22 GDP growth by percentage (NSO 2007) 5 23 The comparison of total livestock with number of privately owned livestock 5 24 Regional distribution of livestock in 2006 6 25 Share of domestic production versus imports in consumption of major products 7 41 The state of livestock number of Mongolia from 1990 to 2008 14 42 The comparison of the livestock structure in 2008 with 1990 14 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads) 17 44 The comparison of utilized lands between 2000 and 2006 (by type) 19 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006) 20 46 Losses adult animals of Mongolia (2000-2006) 21 47 The percentage of livestock products in agriculture (1990-2007) 21 48 The percentage of benefits from livestock types in economy (NSO 2006) 22 49 Main livestock production of Mongolia (1990- 2006) 22 410 Milk flow chart 23 411 The type of livestock which provide the milk products 24 412 The percentage of total slaughtered livestock by types (thousand tons) 25 413 The output of animal raw materials (1999-2006) 25 414 The livestock number of Tuv province by soum 28 415 The classification of herders household of Tuv aimag 28 416 Herdersrsquo age group and education level 29 417 The kind of livestock of herder households 31 418 The problems of herders in marketing 32 419 The income level of herders households 32 420 Major problems of herder households 33 421 Loan uses by households 33 422 Number of intensive farms of Mongolia 34 423 Number of intensive farms in Tuv province 34 424 Reason of establishment (a) and established year of dairy farms (b) 35 425 The reason which to initiate the dairy farm 36 426 Main customers of dairy farms 37 427 The problems which to faced by the farmers in marketing 38

vii

LIST OF TABLES

Chapter Title Page 41 The calculation by using Equation 43 16 42 Estimation by using Equation 45 18 43 Milk availability (FAOUN 2006) 23 44 Meat consumption in Asian first five countries (FAO Rome 2004) 24 45 The output of animalrsquos raw material in 2004 by stage (metric tons) 26 46 Production of main livestock commodities (Shagdar 2001) 26 47 The implemented projects in livestock sector of Mongolia (Bataa 2002) 27 48 The result of restocking program in Tuv aimag in 2005 to 2007 29 49 The comparison the education level with herderrsquos age 30 410 Households population and livelihood situation 30 411 The livestock composition of herder households (by animal type) 30 412 Main customer and customer area of herders 31 413 The income level of farms who include dairy activities and non-dairy activities 36 414 Potential area of interference for betterment of livestock sectorrsquos future growth 39

viii

ABBRIEVIATIONS

ADB Asian Development Bank ADO Asian Development Outlook AIP Asian Investment Program GDP Gross Domestic Product FAO Food and Agricultural Organization IFAD International Fund for Agricultural Development NSO National Statistical Office MIF Mongolian Investors Forum MSY Mongolian Statistical Yearbook MTG Mongolian Travel Guide MFA Ministry of Food and Agriculture WB World Bank WFP World Food Program EUP European Union Program AIACC Assessments of Impacts and Adaptations to Climate Change FAOSTAT Food and Agricultural Statistic Data RSSBP Rural sector strategy and business plan UN United Nations UNDP United Nations Development Program PRSP Poverty Reduction Strategy Paper MPVA Mongolian Private Veterinary Association Tugrug Mongolian currency (1$=1170 tugrug in 2007) Aimag Province Soum Sub-province Bag Subdivision of sub- province Dzud Harsh winter

1

CHAPTER I

INTRODUCTION

11 Brief Introduction of Mongolia

Figure 11 Map of Mongolia Mongolia is land-locked country of Central Asia It borders by China to the South and East and by Russia to the North and West It is situated between the longitude 874 to 1196 west and the latitude 521 to 414 north The main land is at an average elevation of 1580 meter above sea level

The current population is 264 million Total area is 15641 million km sq and 15 people stand per kilometer 608 people live in the urban areas and other 392 percent people live in the rural area of Mongolia (NSO 2007) The climate of Mongolia is too harsh and it characterized by a long-lasting cold winter dry and hot summer low precipitation high temperature fluctuations (day and night summer and winter) and a relatively high number of sunny days (on an average 260 days) per year The highest precipitation is approximately from 20 to 35 centimeters per year in north part and lowest precipitation is approximately from 10 to 20 centimeters south part of Mongolia Some regions of Gobi (the name Gobi means desert and steppe) which located in north part mostly receive no precipitation at all in years The effective vegetation growth period is a short around 80 to 130 days It is depend on the location of Mongolia Commonly in winter (January and February) the average temperature is -25 degC at night it reaches -40degC In summer time average temperature is +33 degC in central part of Mongolia such as Ulaanbaatar Moreover in Gobi region the temperature reaches +38degC

2

12 Background

The world is in the midst of what has been dubbed a livestock revolution with far reaching implications for human health development the environment and trade (Delgado et al 1999) Mongolia is one of the countries which stands at forefront of this revolution Therefore the role of livestock sector is very important in the Mongolian economy and this sector dominated on the agriculture The value added of agricultural sector is 188 of GDP of Mongolia The livestock products constitute 876 of total output of agriculture (NSO 2006) In 2006 there were 421400 herders constituting almost half of the countryrsquos economically active population (NSO 2006) Moreover there are two main sectors in the food and agricultural sector such as livestock and crop production Those sectors encourage the rural development of Mongolia such as to provide the economic growth Agro-processing industries generate value addition by the processing of agricultural raw materials both food and non-food into products which are marketable usable or edible have improved storability and or nutritive value and enhance income and profitability for producers An agro industrial system is modeled in order to illustrate the marketing the processing the production of agricultural materials and consumption in any countries (Salokhe and Hicks 2001) The Mongolian people to lead a nomadic lifestyle based on pastoral animal husbandry After privatization the intensive dairy farms became a significant issue which is now on the political agenda Keating and McCown (2001) remarked that there are 2 main components in agricultural system such as the production system and management system Production system contains pastureland livestock animals and the climate Today there are many significant problems such as the degradation of grassland desertification soil erosion and the lack for fodder of livestock Moreover the one of the problems is the impact of climate like drought and dzud (harsh winter) Drought occurs once every 2-3 years in the Gobi region and every 10 years in other regions (GOMampUNDP 2000) Nationwide drought occurred in 1944 and in 1972 (MFA 2001) Management system generates the knowledge regarding general principles and theory involving agricultural farmsrsquo management like agricultural economics animal science agronomy rural sociology psychology and engineering (Keating and McCown 2001)

13 Rationale

The livestock plays an important role in Mongolian agriculture and economy Furthermore meat and milk foodstuffs are important in Mongolian food sector and it generates the employment and income Therefore it is so important to know the past and current status potentials problems and constraints After that policies and strategies can be designed for better management and improvements of this sector Moreover this study contributes to the development by providing the information about status and problems of herder households and some intensive dairy farms

3

In addition Enkhjargal (1999) recommended that the government policy for livestock sector especially diary development should encourage and support research and development of dairy breeding stock pasture and farm management Involvements of farmers as producers need to be extending into economic activities that could provide better returns to them It should include feeding breeding health caring milk collecting transporting and processing

14 Objectives

The major objective is to investigate Mongolian livestock sector in Tuv province The specific

objectives are

bull To evaluate the present situation of livestock sub sector of Mongolia and to investigate the agricultural food and non-food products related with livestock animals

bull To analyze the future growth prospects of Mongolian livestock husbandry bull To present the environmental factors which affect the livestock sector

bull To conduct sector and SWOT analyses to identify strengths weaknesses opportunities and threats that the intensive and extensive livestock husbandry has been facing with

15 Limitation

Because of unavailable of data for the whole country this study was restricted only to Tuv province In addition information is limited about the herder households and farmers Therefore the study focuses on the main producers which are herder households and some intensive dairy farms

4

CHAPTER II

LITERATURE REVIEW

21 The Current Situation of Livestock Husbandry in Mongolia

The main source of Mongolian economy is coming from the agricultural sector (MIF 2006) The agricultural sector of Mongolia divided two main subsectors such as livestock sector and cropping sector (MIF 2006) At the end of 2006 approximately 40 of total population had lived in the rural areas Rural development is essential for Mongolia to achieve sustained economic growth and poverty reduction Livestock continues to provide rural households with an important source of herdersrsquo income jobs and food security and a means for investing and storing their wealth (WB 2006) Therefore animal husbandry plays the important role of the national economy Moreover agriculture still accounts for more than a fifth of GDP Some 40 per cent of the Mongolian workforce employ in traditional nomadic livestock herding Agriculture is produced 188 percent of GDP and contributed 30 percent of the total export of Mongolia Figure 21 demonstrates the comparison of the portion of divisions to GDP in 2005 with 2006

Figure 21 The comparison of the portion of divisions to GDP (NSO 2005-2006) The GDP growth due to contribution from all sectors was 99 in 2007 the average of GDP was 87 between 2003 and 2006 Especially agriculture sector provides almost half the population had a strong year extending by 16 and contributing 4 points to growth of GDP The data in Figure 22 shows that the ratio of GDP growth from 2003 to 2009 In addition it shows GDP for the forecast period in Mongolia The forecasts assume that the price will be comparatively higher for export goods (ADO 2008)

5

Figure 22 GDP growth by percentage (NSO 2007)

Enkhjargal (2005) noted that 35 of GDP and the agricultural sector contribute almost one fourth goods for export Moreover approximately 50 of the total labor force is employed in agricultural sector Barker (1997) remarked lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo In addition Mongolian livestock sector produces more than 901 of gross agricultural products and the source of income for more than 34 of all households in Mongolia In 2006 there are 348 million livestock counted in Mongolia The livestock number increased by 44 million heads of livestock animals compared to 2005 (NSO 2006) Furthermore as a result of census in 2006 there are 253000 camels 2114000 horses 2167000 cattle 14815000 sheep and 15451000 goats counted in Mongolia The number of horses increased by 86000 heads cattle increased by 204000 sheep and goat increased by 2 million heads respectively but the number of camel decreased by 07 thousand heads compared with 2005 (AIP 2006-2007)

Figure 23 The comparison of total livestock with number of privately owned livestock Moreover the statistical data shows (Figure 23) that almost 97 of the total livestock was private owned in 2006 and 31 of herder households have more than 100 livestock animals 22 Brief history of livestock husbandry development in Mongolia

6

Traditionally five types of domestic livestock in Mongolia are sheep goats cattle horses and camel Pigs hens and other birds seldom reared Horse is the first animal in Mongolia to be domesticated (Baasanjav et al 1999)

Shagdar (2001) remarked that the wild animals domesticated livestock animals such as sheep and horses in Mongolia between the 8th and 3rd centuries BC Shagdar (2001) argued that Mongolian herder households began the nomadic form in the 13th century and this system remained until present day In those times most livestock animals was private owned of herders However in 1951 the livestock animals transferred to the collective ownership form This collective ownership form was tended to develop more intensively managed production system This form gave diverse assistances to the herders For example to build the enclosures and wells to prepare hay (Shagdar 2001) However during the collectivization period the share of private livestock decreased to 17-30 of the total number of livestock (Shagdar 2001) The collective ownership form lasted till 1989 Due to tend of the decreasing livestock number Mongolian government privatized the livestock animals to the herders in 1991 Because of privatization 967 of total livestock shifted private owned form and 31 of herder households have more than 100 livestock animals After privatization the livestock number and number of herders rapidly increased in Mongolia

23 Regional Distribution

Mongolia divided 5 main regions named East West Central Khangai and Ulaanbaatar Figure 24 shows the regional distribution of livestock in Mongolia (NSO 2006) The forests and mountainous areas of Khangai region Central region and West region of Mongolia are most populous in terms of livestock

Figure 24 Regional distribution of livestock in 2006 The livestock is relatively distributed in comparison with the population size of each region Sheep and goats are the majority livestock and respectively accounted for 425 and 444 of

7

the total number of livestock in every region in 2006 Camels account for only 07 of total livestock and mainly rise in the southern part of the country (NSO 2006) Overgrazing is becoming problematic in areas close to major markets For example livestock density of Orkhon-Uul Darkhan and the capital city named of Ulaanbaatar which is 5 to 10 times lower than other regions

24 Livestock Production

Mongolian major livestock products include meat and meat products and milk and dairy products In addition wool hair cashmere hides and skins are the key input for animal processing industries ( Shagdar 2001) Agricultural production comprises of 30 meat and meat products 27 of them include milk and dairy products 2 skin and hides 1 animal and plants oil 31 flour and flour products 2 fruit and vegetables and 2 livestock feed and starches

Figure 25 Share of domestic production versus imports in consumption of major products (AIP

2006-2007)

From 1999 to 2004 all foodstuffs consumption except meat and milk has been below the recommended level Because of natural disasters such as drought and dzud in recent years the consumption of milk and meat products has declined during those years However the consumption of flour rise eggs potatoes and vegetables has increased in 1999-2002 Especially consumptions of potatoes vegetables and fruits are significantly below the recommendation (PRSP 2004) Mongolia imports some non-meat food products from Russia China and others Mongolia relies fully on imports for fruits and rice (WB 2008) Livestock production is entirely seasonal taking place in harmony with the Mongolian climate For example wool and hair collect in the late spring and early summer while most livestock

8

slaughter in the late autumn and early winter Milk and dairy products mainly produce during summer (Shagdar 2001) a) Meat and meat products On average 75 million head of livestock slaughter for consumption annually accounting for approximately 25 of the total livestock herd counted at the beginning of each year This equals 250000-300000 tons of meat which include mutton beef goat meat and horsemeat Camel meat is not so popular and consumed mostly during the winter Meat and meat products taken from of 30 beef 40 mutton 10 goat meat and 15 horsemeat (Shagdar 2001) b) Milk and dairy products Annually 250000-350000 tons milk produces in Mongolia Cowrsquos milk possesses more than 80 of the total of milk Moreover sheep and goat milk and horse milk accounting for about 10 and 8 respectively In addition more than 90 of all cows are accounted by native Mongolian cows which have an average milk yield of 19 liters per day in steppe and forest region and 13 liters in the Gobi region (Shagdar 2001) Dairy products include yogurt butter dried curds cheese etc Particularly in the rural areas milk consumes directly and converts to a wide range of traditional products Many of these have a long life and are stored for consumption in the winter and spring (WB 2003) Horse milk is used to produce the popular drink it contain a low alcohol that is similar the beer Rich content of amino acids vitamins and sugar found in horse milk makes airag a nutritious and healthy drink which is also low in fat Therefore it is used to treat many illnesses including tuberculosis diseases of digestive organs pharmaceutical toxicity and fatigue (Shagdar 2001) c) Wool hair and cashmere Approximately 25000 tons of wool hair and cashmere is produced in Mongolia annually more than 70 of which is accounted for by sheep wool Mongolia is the second largest producer of raw cashmere in the world Approximately 3300 tons of cashmere is produced annually That is accounting for about 20 of the total global supply Therefore cashmere is one of the main export commodities in Mongolia In wool and cashmere industry the productions of major items include spun threat camel wool blanket carpet felt etc (Shagdar 2001) d) Hides and skin One of valuable resource for producing luxury consumer goods is hides and skin About 65-85 million individual hides and skin are produced in Mongolia annually more than 80 of these are sheep and goatskins which are supplied to processing industries or exported Traditionally sheepskin was used for making warm winter coats and floor covering while various accessories for handling horses were made from cattle hides (Shagdar 2001)

9

CHAPTER III

METHODOLOGY The study conducted in four main stages such as the data collection analysis of the data and reporting and conclusions and recommendation part The general methodology used for specific objectives of the study is shown in Figure 31

Figure 31 Flow chart of methodology and procedure for survey and data collection

10

31 Site selection

The sites for the study selected included three sub-provinces named Jargalant Sumber and Bayanchandmani of Tuv province It is nearest province with the capital city (Figure 32) The site selection chose based on the following characteristics

bull Agricultural production bull The location of province bull Potentials for the development of livestock husbandry bull Financial constraints of the research bull Data availability

General information of Tuv province

Area 77300 sq km Number of livestock 1598000 Population 96500 Cropland 318100 hectare Center Zuunmod Number of sub-provinces 27

Tuv province is located in the centre of Mongolia In addition capital city named Ulaanbaatar located in this provincersquos territory Tuv province is one of the biggest and most productive provinces as this province is well positioned geographically to supply livestock production to nearest areas with high demand This province is situated 43 km from the capital city Moreover the major intensive animal farms are located in Tuv province

In this province have 201 household farms include dairy farms 152 pork farms 24 and chicken farm 1 respectively (MFA 2007) There are a total of 210000 camels 1979 thousand head of horses 1311 thousand head of cattle 10408 thousand of sheep and 8013 thousand heads of goats (NSO 2006)

33 Sampling Design and Procedures of Survey

Formal survey was conducted to collect the general information of herder householdsrsquo comprehension and the current development of agricultural products Herder household and farmers who own agribusiness were selected for interviews The number of herder households and number of farms in each province were determined by following formula

Where n= Number of total sample

N= Total number of farms and herders households E= Error (005)

80 herder households and 8 intensive farms from selected in Tuv province for this survey This size of samples of herders and farms provided statistical justification in order to generalize the results

11

Figure 32 Location of Tuv aimag

34 Data Collection

Data were collected from two sources (i) Secondary data was from the Mongolian National Statistical Office Mongolian State

University of Agriculture and the Ministry of Food and Agriculture Data used in this study included Urban and rural population Number of herder households (selected area) Total number of livestock and livestock distribution Land utilization Main agricultural production

12

(ii) Primary data was collected through questionnaires distributed to the randomly selected dairy farms and herder households in Tuv province and to determine the production processing and marketing (Appendix-A and B) Data collected in this part included

Present situation and the growth prospect of Livestock husbandry The suggestions and comments of herders and farmers who responded in this

research The comments The current problems faced by the herders and farmers

The survey aimed to question 80 herding households from the Tuv province and 8 intensive farmers of Tuv province were involved but in practice only 69 herders and 32 small and medium scale intensive dairy farms were surveyed Therefore around 10 relevant people including an official such as governor of soum and bag coordinator of household livelihood improvement related project and livestock expert were given an additional questionnaire

35 Data processing and analysis

351 Data processing The data of this study collected from the herder households and farmers of Tuv province The draft were analyzed to know the development future growth the influencing factors and special characteristics of the livestock sector SWOT analysis Around 80 questionnaires processed in the SPSS package and Microsoft Excel by using descriptive statistics Moreover in the survey investigated the herders and farmersrsquo opinions about the Mongolian livestock sub sector 352 Data analysis Data collections were analyzed quantitative and qualitative ways according to the field data The basis statistics data and the survey questionnaire results investigated the past and current performance of Mongolian livestock husbandry and calculated the future growth of livestock animals in Mongolia by showing the form of table figure flowchart mean and percentile 353 SWOT analysis The statistical data and the results of questionnaire determine the external factors such as Opportunity and Threat and internal factors such as Strength and Weakness of intensive and extensive livestock husbandry of Mongolia Moreover SWOT analyses provided the opportunity weakness and other factors of Tuv province for the livestock sector

13

CHAPTER IV

RESULT AND DISCUSSION

41 The current situation of Mongolian Animal Husbandry

Generally Mongolian animal husbandry divided two main sectors extensive animal husbandry and intensive animal husbandry Barker (1997) said lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo The extensive livestock management system of Mongolia includes main five species of livestock for most of the year The some herders and some relevant people believe that the extensive animal husbandry is most suitable sector in Mongolia The first reason is that approximately 80 of total territories are grassy area in Mongolia This is one of the biggest scales of the world Second Mongolian livestock systems is continuing with a long traditional nomadic livestock herding Hence the herders obtained the great knowledge and experiments during the several centuries Third Mongolian herder households are settled in the traditional pastoral system such as ldquokhot ailrdquo and ldquoneg goliinhonrdquo Two and more herder households including relatives and acquaintances called ldquokhot ailrdquo and ldquoneg goliinhonrdquo live together This system is most indigenous form This form of living served a variety of functions such as using pasture and seasonal movement of households Lastly the demand of livestock production is increasing during the last few years because of incomes of family are increasing and the increased demand from the neighbor countries Furthermore it has become the foundation of Mongolian livestock revolution Moreover Mongolian climate is suitable for the extensive animal husbandry On the other side the government of Mongolia begun to support intensive livestock farms to develop dairy and meat bread cattle pork and poultry Some people said the intensive livestock husbandry is better than the extensive livestock husbandry There are several reasons for this statement The first significant reason is that the increasing livestock number of Mongolia According to some researches it is possible to support around 38 million heads of livestock on the Mongolian whole grasslands However the number of livestock already reached 42 million heads in 2008 Therefore the growth of livestock is creating the degradation of pastureland by overgrazing in Mongolia Secondly since 1940 the average air temperature has been increasing in Mongolia caused by the climate change of the world Moreover the arid land is increasing due to decreasing of precipitation Therefore since last few years the yield of pasture is depleting gradually Thus grazing time of livestock is decreasing in Mongolia Finally the development of extensive farms directly depends on the supply and safety of the food Presently Mongolia is importing most of food products except the meat and meat products That is why the intensive animal husbandry is developing in some provinces especially the nearest provinces with the bigger cities such as Tuv Selenge and Bulgan According to research by the Ministry of Food and Agriculture (2007) Mongolia has 750 intensive animal husbandries Of which 494 farms for dairy 10 of them for meat cow 15 sheep farms for meat and wool 79 farms with pigs 111 farms with poultry and 40 farms with bees in Mongolia (AppendixC)

14

42 The Present Status of Mongolian Livestock

Mongolian livestock reached 421958 thousand heads in 2008 and it increased by 48 percent compared with 2007 Figure 41 shows the livestock numbers of Mongolia during last 18 years Sheep goat and cattle population has increased while those of camel and horse are decreasing in Mongolia during the last few years (Appendix D and F)

Figure 41 The state of livestock number of Mongolia from 1990 to 2008

According to Figure 41 the total number of livestock dramatically increased between 1990 and 1999 However it decreased by 287 due to drought and Dzud during 2000 to 2002 During that period 35 million and 47 million heads of animals died in 2000 and 2001 respectively During the last 7 years the number of livestock increased by 31 By the way the number of livestock in 2008 reached highest number ever

Figure 42 The comparison of the livestock structure in 2008 with 1990

15

Figure 42 shows the comparison of livestock structure (by type) during 2008 and 1990 According to Figure 41 sheep were dominating in the livestock structure until 2003 However cattle and goats dominated the structure of livestock during the recent years This is because of cashmere become herderrsquos main income from livestock due to free market economy It explained that after privatization the herders prefer to herd productive kinds of livestock Although the livestock resist Mongolian weather especially adopted for the cold season the productivity of livestock is low Therefore the some preparations such as to build warm shelters and to prepare and store hay and fodder are most significant principal elements during the wintertime Moreover pastures are subjected to increased vulnerability to parasites and other diseases These issues affect the animal productivity

43 Comparison of Actual and Estimated Livestock Number

Three different estimation including the average of number of livestock comparison of actual and estimated livestock number of Mongolia between 1990 and 2008 and livestock number in 2009 by using the Microsoft Excel (AppendixG) are given below (Avdai et al 1999) Calculation 1 The average number livestock in Mongolia from 1990 to 2008

The average number of livestock estimated was 295501 thousand heads between 1990 and 2008 Calculation 2 The goal of this part is that to estimate the equalized livestock number (amount) on the actual livestock amount by using the straight-line equation

yt = a + bt - (42)

Where t - period and a b - the parametric constraints

To estimate the parametric constraints can be solving by using the following method The value obtained by using equation (43) Table 41 shows the results of estimation To solve this system of equation substitute sumt = 0 Moreover the estimated values such as Σ y Σt2 and Σyt are shown from the Table 41

16

yt = 2978564+57145t y ndashactual livestock amount yt - estimated livestock amount

The estimated livestock amount and actual livestock number of Mongolia between 1990 and 2008 are shown in Figure 43

Table 41 The calculation by using Equation 43

(thousand heads)

y t t2 yt yt=a+bt

1990 258549 -9 81 -2326941 2464259 1991 255279 -8 64 -2042232 2521404 1992 254941 -7 49 -1784587 2578549 1993 251747 -6 36 -1510482 2635694 1994 268081 -5 25 -1340405 2692839 1995 285723 -4 16 -1142892 2749984 1996 293001 -3 9 -879003 2807129 1997 312923 -2 4 -625846 2864274 1998 328975 -1 1 -328975 2921419 1999 33596 0 0 0 2978564 2000 303274 1 1 303274 3035709 2001 260752 2 4 521504 3092854 2002 238976 3 9 716928 3149999 2003 254277 4 16 1017108 3207144 2004 280199 5 25 1400995 3264289 2005 303988 6 36 1823928 3321434 2006 34803 7 49 243621 3378579 2007 402638 8 64 3221104 3435724 2008 421959 9 81 3797631 3492869 2009 10 3550014 2010 11 3607159 2011 12 3664304 2012 13 3721449 2013 14 3778594 2014 15 3835739 2015 16 3892884

TOTAL 5659272 91 570 3257319 82642859

17

Figure 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads)

bull Calculation 3 The last estimation is that how many heads of Mongolian livestock will be reach in 2009 by using the following Equation 44

yt plusmn tα δy -(44)

Where yt - estimated amount of livestock on 2009 (see from previous Table 41) tα ndash dispersion of Student

δy ndash standard deviation y + tα = 3550014+834668= 4384682 y - tα =3550014- 834668= 2715346 Calculation shows that the livestock number of Mongolia will reach from 271534 to 438468 thousand heads animals in 2009 Below three steps shows the steps of calculation 3 Step A To calculate δy (standard deviation) can be solved by using following equation 45 (45) Table 42 shows the result of this estimation by using Equation 45

Where n - total number of sample

Step B To find the dispersion of Student (Student is the name of person) (tα)

18

tα (q k) = tα (005 18)= 212 (Appendix I) Where k - degree of freedom k= n-1=18

q - significance level (Appendix I) Step C tα δy = 21 397461 = 834668

Table 42 Estimation by using Equation 45

y yt y-yt (y-yt)2

1990 258549 246426 12123 146967129 1991 255279 25214 3139 9853321 1992 254941 257855 -2914 8491396 1993 251747 263569 -11822 139759684 1994 268081 269284 -1203 1447209 1995 285723 274998 10725 115025625 1996 293001 280713 12288 150994944 1997 312923 286427 26496 702038016 1998 328975 292142 36833 1356669889 1999 33596 297856 38104 1451914816 2000 303274 303571 -297 88209 2001 260752 309285 -48533 2355452089 2002 238976 31500 -76024 5779648576 2003 254277 320714 -66437 4413874969 2004 280199 326429 -4623 21372129 2005 303988 332143 -28155 792704025 2006 34803 337858 10172 103469584 2007 402638 343572 59066 3488792356 2008 421959 349287 72672 5281219584

2843562432

44 Land Utilization

Mongolian total territory is 1564116 thousand hectares Of which in total 742 of total area is used for the agriculture 157 used for state special land 91 of total area is comprised forest land 03 land used for cities rural town and other settlements 04 land possesses water resources and 02 of total land is covered by transportation and networks in 2006 (NSO 2006) Currently Mongolian pastureland faced many significant problems such as grassland degradation soil erosion and desertification Main sources of them are overgrazing water

19

source and the population According to some survey approximately 120 million hectare land (70 percent) of total Mongolian territory is degraded

Figure 44 The comparison of utilized lands between 2000 and 2006 (by type)

Figure 44 shows utilization land between 2000 and 2006 For example the agriculture land and forestland decreased by 9 and 4 in 2006 compared to 2000 Generally the development of crop production and destruction the populationrsquos migration to urban areas and the nomadic livestock husbandry are leading to the overgrazing and degradation of the land Moreover livestock number in Mongolia is increasing during the last few years Especially in 2008 it reached the highest number of livestock for the first time in history Even though the herders are facing the shortage of fodder In addition the land for the natural pasture has slightly increased since 1989

441 The Impacts for the Land Degradation

There are many environmental factors affect on the agricultural sector in complex ways Most scientists and experts agreed that factors of land degradation in Mongolia could be divided into following two main categories including human and natural factors Today many factors affect the land degradation caused by the human activities such as excessive grazing deforestation poor irrigation and inappropriate land tenure in all sector The first significant factor is overgrazing Crop cultivation is one of the most important reasons of soil erosion and overgrazing Spring tilling coincides caused the seasonal higher speed wind and most planted areas are lack of windbreaks like trees For example the average wind speed of Gobi region is 3hellip4 meters per second it is one of the significant cause of soil moisture loss and erosion According to some survey an average of 35ndash50 tons of soils has been lost from each

20

hectare of cultivated land due to erosion during the past 30 years Half of all cultivated land degraded to some degree of erosion Another factor of overgrazing is the vehicle-induced degradation The second significant factor is the deforestation due to clear-cutting the trees fire and insect infestations The third important factor is inappropriate land tenure like mining and inadequate waste management Shagdar (2001) estimated approximately 100000 hectare of land have been degraded by mining and quarrying Moreover another significant factor of land degradation is bad or poor irrigation practices Salinization of irrigated land in arid climates as a result of poor drainage and evaporation and using highly toxic pesticide for vegetation protection from insects causes depletion of soil productivity The final factor of land degradation is the legal provision of ldquoopenness of pastureland which is public propertyrdquo Because of this legal provision the utilizing of pastureland is free for everyone (UNDP amp SIDA 2003) On the other hand the land degradation of Mongolia depends directly on nature and weather conditions Most important impact is the location It is located high above sea level and far away from the ocean Mongolia lies between 420 520N and almost 1200 E Another principal factor is the global warming and climatic change of the world Climate change can affect weeds insects plant diseases and pathogens in the environment especially in agricultural activities Another consequence on the pasture is the lack of rainfall Mongolia has low precipitation and short growing seasons especially long and cold winter and short and hot summer Therefore other significant causes are drought and Dzud in Mongolia They are the keys determinants of vulnerability of livestock to climate change They affect the livelihood of herdersrsquo household which is reduced livestock productivity especially milk and destroy pasture (AIACC 2006) The natural disasters like dzud and drought have occurred around 30 times in Mongolia with different level of harm (UNDPampSIDA 2003) (Figure 45)

Figure 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006)

During the disaster of harsh winter (dzud) in 1999- 2000 almost one third of the total livestock died in 1999 Figure 46 shows that the losses adult animals between 2000 and 2006 in Mongolia

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

vii

LIST OF TABLES

Chapter Title Page 41 The calculation by using Equation 43 16 42 Estimation by using Equation 45 18 43 Milk availability (FAOUN 2006) 23 44 Meat consumption in Asian first five countries (FAO Rome 2004) 24 45 The output of animalrsquos raw material in 2004 by stage (metric tons) 26 46 Production of main livestock commodities (Shagdar 2001) 26 47 The implemented projects in livestock sector of Mongolia (Bataa 2002) 27 48 The result of restocking program in Tuv aimag in 2005 to 2007 29 49 The comparison the education level with herderrsquos age 30 410 Households population and livelihood situation 30 411 The livestock composition of herder households (by animal type) 30 412 Main customer and customer area of herders 31 413 The income level of farms who include dairy activities and non-dairy activities 36 414 Potential area of interference for betterment of livestock sectorrsquos future growth 39

viii

ABBRIEVIATIONS

ADB Asian Development Bank ADO Asian Development Outlook AIP Asian Investment Program GDP Gross Domestic Product FAO Food and Agricultural Organization IFAD International Fund for Agricultural Development NSO National Statistical Office MIF Mongolian Investors Forum MSY Mongolian Statistical Yearbook MTG Mongolian Travel Guide MFA Ministry of Food and Agriculture WB World Bank WFP World Food Program EUP European Union Program AIACC Assessments of Impacts and Adaptations to Climate Change FAOSTAT Food and Agricultural Statistic Data RSSBP Rural sector strategy and business plan UN United Nations UNDP United Nations Development Program PRSP Poverty Reduction Strategy Paper MPVA Mongolian Private Veterinary Association Tugrug Mongolian currency (1$=1170 tugrug in 2007) Aimag Province Soum Sub-province Bag Subdivision of sub- province Dzud Harsh winter

1

CHAPTER I

INTRODUCTION

11 Brief Introduction of Mongolia

Figure 11 Map of Mongolia Mongolia is land-locked country of Central Asia It borders by China to the South and East and by Russia to the North and West It is situated between the longitude 874 to 1196 west and the latitude 521 to 414 north The main land is at an average elevation of 1580 meter above sea level

The current population is 264 million Total area is 15641 million km sq and 15 people stand per kilometer 608 people live in the urban areas and other 392 percent people live in the rural area of Mongolia (NSO 2007) The climate of Mongolia is too harsh and it characterized by a long-lasting cold winter dry and hot summer low precipitation high temperature fluctuations (day and night summer and winter) and a relatively high number of sunny days (on an average 260 days) per year The highest precipitation is approximately from 20 to 35 centimeters per year in north part and lowest precipitation is approximately from 10 to 20 centimeters south part of Mongolia Some regions of Gobi (the name Gobi means desert and steppe) which located in north part mostly receive no precipitation at all in years The effective vegetation growth period is a short around 80 to 130 days It is depend on the location of Mongolia Commonly in winter (January and February) the average temperature is -25 degC at night it reaches -40degC In summer time average temperature is +33 degC in central part of Mongolia such as Ulaanbaatar Moreover in Gobi region the temperature reaches +38degC

2

12 Background

The world is in the midst of what has been dubbed a livestock revolution with far reaching implications for human health development the environment and trade (Delgado et al 1999) Mongolia is one of the countries which stands at forefront of this revolution Therefore the role of livestock sector is very important in the Mongolian economy and this sector dominated on the agriculture The value added of agricultural sector is 188 of GDP of Mongolia The livestock products constitute 876 of total output of agriculture (NSO 2006) In 2006 there were 421400 herders constituting almost half of the countryrsquos economically active population (NSO 2006) Moreover there are two main sectors in the food and agricultural sector such as livestock and crop production Those sectors encourage the rural development of Mongolia such as to provide the economic growth Agro-processing industries generate value addition by the processing of agricultural raw materials both food and non-food into products which are marketable usable or edible have improved storability and or nutritive value and enhance income and profitability for producers An agro industrial system is modeled in order to illustrate the marketing the processing the production of agricultural materials and consumption in any countries (Salokhe and Hicks 2001) The Mongolian people to lead a nomadic lifestyle based on pastoral animal husbandry After privatization the intensive dairy farms became a significant issue which is now on the political agenda Keating and McCown (2001) remarked that there are 2 main components in agricultural system such as the production system and management system Production system contains pastureland livestock animals and the climate Today there are many significant problems such as the degradation of grassland desertification soil erosion and the lack for fodder of livestock Moreover the one of the problems is the impact of climate like drought and dzud (harsh winter) Drought occurs once every 2-3 years in the Gobi region and every 10 years in other regions (GOMampUNDP 2000) Nationwide drought occurred in 1944 and in 1972 (MFA 2001) Management system generates the knowledge regarding general principles and theory involving agricultural farmsrsquo management like agricultural economics animal science agronomy rural sociology psychology and engineering (Keating and McCown 2001)

13 Rationale

The livestock plays an important role in Mongolian agriculture and economy Furthermore meat and milk foodstuffs are important in Mongolian food sector and it generates the employment and income Therefore it is so important to know the past and current status potentials problems and constraints After that policies and strategies can be designed for better management and improvements of this sector Moreover this study contributes to the development by providing the information about status and problems of herder households and some intensive dairy farms

3

In addition Enkhjargal (1999) recommended that the government policy for livestock sector especially diary development should encourage and support research and development of dairy breeding stock pasture and farm management Involvements of farmers as producers need to be extending into economic activities that could provide better returns to them It should include feeding breeding health caring milk collecting transporting and processing

14 Objectives

The major objective is to investigate Mongolian livestock sector in Tuv province The specific

objectives are

bull To evaluate the present situation of livestock sub sector of Mongolia and to investigate the agricultural food and non-food products related with livestock animals

bull To analyze the future growth prospects of Mongolian livestock husbandry bull To present the environmental factors which affect the livestock sector

bull To conduct sector and SWOT analyses to identify strengths weaknesses opportunities and threats that the intensive and extensive livestock husbandry has been facing with

15 Limitation

Because of unavailable of data for the whole country this study was restricted only to Tuv province In addition information is limited about the herder households and farmers Therefore the study focuses on the main producers which are herder households and some intensive dairy farms

4

CHAPTER II

LITERATURE REVIEW

21 The Current Situation of Livestock Husbandry in Mongolia

The main source of Mongolian economy is coming from the agricultural sector (MIF 2006) The agricultural sector of Mongolia divided two main subsectors such as livestock sector and cropping sector (MIF 2006) At the end of 2006 approximately 40 of total population had lived in the rural areas Rural development is essential for Mongolia to achieve sustained economic growth and poverty reduction Livestock continues to provide rural households with an important source of herdersrsquo income jobs and food security and a means for investing and storing their wealth (WB 2006) Therefore animal husbandry plays the important role of the national economy Moreover agriculture still accounts for more than a fifth of GDP Some 40 per cent of the Mongolian workforce employ in traditional nomadic livestock herding Agriculture is produced 188 percent of GDP and contributed 30 percent of the total export of Mongolia Figure 21 demonstrates the comparison of the portion of divisions to GDP in 2005 with 2006

Figure 21 The comparison of the portion of divisions to GDP (NSO 2005-2006) The GDP growth due to contribution from all sectors was 99 in 2007 the average of GDP was 87 between 2003 and 2006 Especially agriculture sector provides almost half the population had a strong year extending by 16 and contributing 4 points to growth of GDP The data in Figure 22 shows that the ratio of GDP growth from 2003 to 2009 In addition it shows GDP for the forecast period in Mongolia The forecasts assume that the price will be comparatively higher for export goods (ADO 2008)

5

Figure 22 GDP growth by percentage (NSO 2007)

Enkhjargal (2005) noted that 35 of GDP and the agricultural sector contribute almost one fourth goods for export Moreover approximately 50 of the total labor force is employed in agricultural sector Barker (1997) remarked lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo In addition Mongolian livestock sector produces more than 901 of gross agricultural products and the source of income for more than 34 of all households in Mongolia In 2006 there are 348 million livestock counted in Mongolia The livestock number increased by 44 million heads of livestock animals compared to 2005 (NSO 2006) Furthermore as a result of census in 2006 there are 253000 camels 2114000 horses 2167000 cattle 14815000 sheep and 15451000 goats counted in Mongolia The number of horses increased by 86000 heads cattle increased by 204000 sheep and goat increased by 2 million heads respectively but the number of camel decreased by 07 thousand heads compared with 2005 (AIP 2006-2007)

Figure 23 The comparison of total livestock with number of privately owned livestock Moreover the statistical data shows (Figure 23) that almost 97 of the total livestock was private owned in 2006 and 31 of herder households have more than 100 livestock animals 22 Brief history of livestock husbandry development in Mongolia

6

Traditionally five types of domestic livestock in Mongolia are sheep goats cattle horses and camel Pigs hens and other birds seldom reared Horse is the first animal in Mongolia to be domesticated (Baasanjav et al 1999)

Shagdar (2001) remarked that the wild animals domesticated livestock animals such as sheep and horses in Mongolia between the 8th and 3rd centuries BC Shagdar (2001) argued that Mongolian herder households began the nomadic form in the 13th century and this system remained until present day In those times most livestock animals was private owned of herders However in 1951 the livestock animals transferred to the collective ownership form This collective ownership form was tended to develop more intensively managed production system This form gave diverse assistances to the herders For example to build the enclosures and wells to prepare hay (Shagdar 2001) However during the collectivization period the share of private livestock decreased to 17-30 of the total number of livestock (Shagdar 2001) The collective ownership form lasted till 1989 Due to tend of the decreasing livestock number Mongolian government privatized the livestock animals to the herders in 1991 Because of privatization 967 of total livestock shifted private owned form and 31 of herder households have more than 100 livestock animals After privatization the livestock number and number of herders rapidly increased in Mongolia

23 Regional Distribution

Mongolia divided 5 main regions named East West Central Khangai and Ulaanbaatar Figure 24 shows the regional distribution of livestock in Mongolia (NSO 2006) The forests and mountainous areas of Khangai region Central region and West region of Mongolia are most populous in terms of livestock

Figure 24 Regional distribution of livestock in 2006 The livestock is relatively distributed in comparison with the population size of each region Sheep and goats are the majority livestock and respectively accounted for 425 and 444 of

7

the total number of livestock in every region in 2006 Camels account for only 07 of total livestock and mainly rise in the southern part of the country (NSO 2006) Overgrazing is becoming problematic in areas close to major markets For example livestock density of Orkhon-Uul Darkhan and the capital city named of Ulaanbaatar which is 5 to 10 times lower than other regions

24 Livestock Production

Mongolian major livestock products include meat and meat products and milk and dairy products In addition wool hair cashmere hides and skins are the key input for animal processing industries ( Shagdar 2001) Agricultural production comprises of 30 meat and meat products 27 of them include milk and dairy products 2 skin and hides 1 animal and plants oil 31 flour and flour products 2 fruit and vegetables and 2 livestock feed and starches

Figure 25 Share of domestic production versus imports in consumption of major products (AIP

2006-2007)

From 1999 to 2004 all foodstuffs consumption except meat and milk has been below the recommended level Because of natural disasters such as drought and dzud in recent years the consumption of milk and meat products has declined during those years However the consumption of flour rise eggs potatoes and vegetables has increased in 1999-2002 Especially consumptions of potatoes vegetables and fruits are significantly below the recommendation (PRSP 2004) Mongolia imports some non-meat food products from Russia China and others Mongolia relies fully on imports for fruits and rice (WB 2008) Livestock production is entirely seasonal taking place in harmony with the Mongolian climate For example wool and hair collect in the late spring and early summer while most livestock

8

slaughter in the late autumn and early winter Milk and dairy products mainly produce during summer (Shagdar 2001) a) Meat and meat products On average 75 million head of livestock slaughter for consumption annually accounting for approximately 25 of the total livestock herd counted at the beginning of each year This equals 250000-300000 tons of meat which include mutton beef goat meat and horsemeat Camel meat is not so popular and consumed mostly during the winter Meat and meat products taken from of 30 beef 40 mutton 10 goat meat and 15 horsemeat (Shagdar 2001) b) Milk and dairy products Annually 250000-350000 tons milk produces in Mongolia Cowrsquos milk possesses more than 80 of the total of milk Moreover sheep and goat milk and horse milk accounting for about 10 and 8 respectively In addition more than 90 of all cows are accounted by native Mongolian cows which have an average milk yield of 19 liters per day in steppe and forest region and 13 liters in the Gobi region (Shagdar 2001) Dairy products include yogurt butter dried curds cheese etc Particularly in the rural areas milk consumes directly and converts to a wide range of traditional products Many of these have a long life and are stored for consumption in the winter and spring (WB 2003) Horse milk is used to produce the popular drink it contain a low alcohol that is similar the beer Rich content of amino acids vitamins and sugar found in horse milk makes airag a nutritious and healthy drink which is also low in fat Therefore it is used to treat many illnesses including tuberculosis diseases of digestive organs pharmaceutical toxicity and fatigue (Shagdar 2001) c) Wool hair and cashmere Approximately 25000 tons of wool hair and cashmere is produced in Mongolia annually more than 70 of which is accounted for by sheep wool Mongolia is the second largest producer of raw cashmere in the world Approximately 3300 tons of cashmere is produced annually That is accounting for about 20 of the total global supply Therefore cashmere is one of the main export commodities in Mongolia In wool and cashmere industry the productions of major items include spun threat camel wool blanket carpet felt etc (Shagdar 2001) d) Hides and skin One of valuable resource for producing luxury consumer goods is hides and skin About 65-85 million individual hides and skin are produced in Mongolia annually more than 80 of these are sheep and goatskins which are supplied to processing industries or exported Traditionally sheepskin was used for making warm winter coats and floor covering while various accessories for handling horses were made from cattle hides (Shagdar 2001)

9

CHAPTER III

METHODOLOGY The study conducted in four main stages such as the data collection analysis of the data and reporting and conclusions and recommendation part The general methodology used for specific objectives of the study is shown in Figure 31

Figure 31 Flow chart of methodology and procedure for survey and data collection

10

31 Site selection

The sites for the study selected included three sub-provinces named Jargalant Sumber and Bayanchandmani of Tuv province It is nearest province with the capital city (Figure 32) The site selection chose based on the following characteristics

bull Agricultural production bull The location of province bull Potentials for the development of livestock husbandry bull Financial constraints of the research bull Data availability

General information of Tuv province

Area 77300 sq km Number of livestock 1598000 Population 96500 Cropland 318100 hectare Center Zuunmod Number of sub-provinces 27

Tuv province is located in the centre of Mongolia In addition capital city named Ulaanbaatar located in this provincersquos territory Tuv province is one of the biggest and most productive provinces as this province is well positioned geographically to supply livestock production to nearest areas with high demand This province is situated 43 km from the capital city Moreover the major intensive animal farms are located in Tuv province

In this province have 201 household farms include dairy farms 152 pork farms 24 and chicken farm 1 respectively (MFA 2007) There are a total of 210000 camels 1979 thousand head of horses 1311 thousand head of cattle 10408 thousand of sheep and 8013 thousand heads of goats (NSO 2006)

33 Sampling Design and Procedures of Survey

Formal survey was conducted to collect the general information of herder householdsrsquo comprehension and the current development of agricultural products Herder household and farmers who own agribusiness were selected for interviews The number of herder households and number of farms in each province were determined by following formula

Where n= Number of total sample

N= Total number of farms and herders households E= Error (005)

80 herder households and 8 intensive farms from selected in Tuv province for this survey This size of samples of herders and farms provided statistical justification in order to generalize the results

11

Figure 32 Location of Tuv aimag

34 Data Collection

Data were collected from two sources (i) Secondary data was from the Mongolian National Statistical Office Mongolian State

University of Agriculture and the Ministry of Food and Agriculture Data used in this study included Urban and rural population Number of herder households (selected area) Total number of livestock and livestock distribution Land utilization Main agricultural production

12

(ii) Primary data was collected through questionnaires distributed to the randomly selected dairy farms and herder households in Tuv province and to determine the production processing and marketing (Appendix-A and B) Data collected in this part included

Present situation and the growth prospect of Livestock husbandry The suggestions and comments of herders and farmers who responded in this

research The comments The current problems faced by the herders and farmers

The survey aimed to question 80 herding households from the Tuv province and 8 intensive farmers of Tuv province were involved but in practice only 69 herders and 32 small and medium scale intensive dairy farms were surveyed Therefore around 10 relevant people including an official such as governor of soum and bag coordinator of household livelihood improvement related project and livestock expert were given an additional questionnaire

35 Data processing and analysis

351 Data processing The data of this study collected from the herder households and farmers of Tuv province The draft were analyzed to know the development future growth the influencing factors and special characteristics of the livestock sector SWOT analysis Around 80 questionnaires processed in the SPSS package and Microsoft Excel by using descriptive statistics Moreover in the survey investigated the herders and farmersrsquo opinions about the Mongolian livestock sub sector 352 Data analysis Data collections were analyzed quantitative and qualitative ways according to the field data The basis statistics data and the survey questionnaire results investigated the past and current performance of Mongolian livestock husbandry and calculated the future growth of livestock animals in Mongolia by showing the form of table figure flowchart mean and percentile 353 SWOT analysis The statistical data and the results of questionnaire determine the external factors such as Opportunity and Threat and internal factors such as Strength and Weakness of intensive and extensive livestock husbandry of Mongolia Moreover SWOT analyses provided the opportunity weakness and other factors of Tuv province for the livestock sector

13

CHAPTER IV

RESULT AND DISCUSSION

41 The current situation of Mongolian Animal Husbandry

Generally Mongolian animal husbandry divided two main sectors extensive animal husbandry and intensive animal husbandry Barker (1997) said lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo The extensive livestock management system of Mongolia includes main five species of livestock for most of the year The some herders and some relevant people believe that the extensive animal husbandry is most suitable sector in Mongolia The first reason is that approximately 80 of total territories are grassy area in Mongolia This is one of the biggest scales of the world Second Mongolian livestock systems is continuing with a long traditional nomadic livestock herding Hence the herders obtained the great knowledge and experiments during the several centuries Third Mongolian herder households are settled in the traditional pastoral system such as ldquokhot ailrdquo and ldquoneg goliinhonrdquo Two and more herder households including relatives and acquaintances called ldquokhot ailrdquo and ldquoneg goliinhonrdquo live together This system is most indigenous form This form of living served a variety of functions such as using pasture and seasonal movement of households Lastly the demand of livestock production is increasing during the last few years because of incomes of family are increasing and the increased demand from the neighbor countries Furthermore it has become the foundation of Mongolian livestock revolution Moreover Mongolian climate is suitable for the extensive animal husbandry On the other side the government of Mongolia begun to support intensive livestock farms to develop dairy and meat bread cattle pork and poultry Some people said the intensive livestock husbandry is better than the extensive livestock husbandry There are several reasons for this statement The first significant reason is that the increasing livestock number of Mongolia According to some researches it is possible to support around 38 million heads of livestock on the Mongolian whole grasslands However the number of livestock already reached 42 million heads in 2008 Therefore the growth of livestock is creating the degradation of pastureland by overgrazing in Mongolia Secondly since 1940 the average air temperature has been increasing in Mongolia caused by the climate change of the world Moreover the arid land is increasing due to decreasing of precipitation Therefore since last few years the yield of pasture is depleting gradually Thus grazing time of livestock is decreasing in Mongolia Finally the development of extensive farms directly depends on the supply and safety of the food Presently Mongolia is importing most of food products except the meat and meat products That is why the intensive animal husbandry is developing in some provinces especially the nearest provinces with the bigger cities such as Tuv Selenge and Bulgan According to research by the Ministry of Food and Agriculture (2007) Mongolia has 750 intensive animal husbandries Of which 494 farms for dairy 10 of them for meat cow 15 sheep farms for meat and wool 79 farms with pigs 111 farms with poultry and 40 farms with bees in Mongolia (AppendixC)

14

42 The Present Status of Mongolian Livestock

Mongolian livestock reached 421958 thousand heads in 2008 and it increased by 48 percent compared with 2007 Figure 41 shows the livestock numbers of Mongolia during last 18 years Sheep goat and cattle population has increased while those of camel and horse are decreasing in Mongolia during the last few years (Appendix D and F)

Figure 41 The state of livestock number of Mongolia from 1990 to 2008

According to Figure 41 the total number of livestock dramatically increased between 1990 and 1999 However it decreased by 287 due to drought and Dzud during 2000 to 2002 During that period 35 million and 47 million heads of animals died in 2000 and 2001 respectively During the last 7 years the number of livestock increased by 31 By the way the number of livestock in 2008 reached highest number ever

Figure 42 The comparison of the livestock structure in 2008 with 1990

15

Figure 42 shows the comparison of livestock structure (by type) during 2008 and 1990 According to Figure 41 sheep were dominating in the livestock structure until 2003 However cattle and goats dominated the structure of livestock during the recent years This is because of cashmere become herderrsquos main income from livestock due to free market economy It explained that after privatization the herders prefer to herd productive kinds of livestock Although the livestock resist Mongolian weather especially adopted for the cold season the productivity of livestock is low Therefore the some preparations such as to build warm shelters and to prepare and store hay and fodder are most significant principal elements during the wintertime Moreover pastures are subjected to increased vulnerability to parasites and other diseases These issues affect the animal productivity

43 Comparison of Actual and Estimated Livestock Number

Three different estimation including the average of number of livestock comparison of actual and estimated livestock number of Mongolia between 1990 and 2008 and livestock number in 2009 by using the Microsoft Excel (AppendixG) are given below (Avdai et al 1999) Calculation 1 The average number livestock in Mongolia from 1990 to 2008

The average number of livestock estimated was 295501 thousand heads between 1990 and 2008 Calculation 2 The goal of this part is that to estimate the equalized livestock number (amount) on the actual livestock amount by using the straight-line equation

yt = a + bt - (42)

Where t - period and a b - the parametric constraints

To estimate the parametric constraints can be solving by using the following method The value obtained by using equation (43) Table 41 shows the results of estimation To solve this system of equation substitute sumt = 0 Moreover the estimated values such as Σ y Σt2 and Σyt are shown from the Table 41

16

yt = 2978564+57145t y ndashactual livestock amount yt - estimated livestock amount

The estimated livestock amount and actual livestock number of Mongolia between 1990 and 2008 are shown in Figure 43

Table 41 The calculation by using Equation 43

(thousand heads)

y t t2 yt yt=a+bt

1990 258549 -9 81 -2326941 2464259 1991 255279 -8 64 -2042232 2521404 1992 254941 -7 49 -1784587 2578549 1993 251747 -6 36 -1510482 2635694 1994 268081 -5 25 -1340405 2692839 1995 285723 -4 16 -1142892 2749984 1996 293001 -3 9 -879003 2807129 1997 312923 -2 4 -625846 2864274 1998 328975 -1 1 -328975 2921419 1999 33596 0 0 0 2978564 2000 303274 1 1 303274 3035709 2001 260752 2 4 521504 3092854 2002 238976 3 9 716928 3149999 2003 254277 4 16 1017108 3207144 2004 280199 5 25 1400995 3264289 2005 303988 6 36 1823928 3321434 2006 34803 7 49 243621 3378579 2007 402638 8 64 3221104 3435724 2008 421959 9 81 3797631 3492869 2009 10 3550014 2010 11 3607159 2011 12 3664304 2012 13 3721449 2013 14 3778594 2014 15 3835739 2015 16 3892884

TOTAL 5659272 91 570 3257319 82642859

17

Figure 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads)

bull Calculation 3 The last estimation is that how many heads of Mongolian livestock will be reach in 2009 by using the following Equation 44

yt plusmn tα δy -(44)

Where yt - estimated amount of livestock on 2009 (see from previous Table 41) tα ndash dispersion of Student

δy ndash standard deviation y + tα = 3550014+834668= 4384682 y - tα =3550014- 834668= 2715346 Calculation shows that the livestock number of Mongolia will reach from 271534 to 438468 thousand heads animals in 2009 Below three steps shows the steps of calculation 3 Step A To calculate δy (standard deviation) can be solved by using following equation 45 (45) Table 42 shows the result of this estimation by using Equation 45

Where n - total number of sample

Step B To find the dispersion of Student (Student is the name of person) (tα)

18

tα (q k) = tα (005 18)= 212 (Appendix I) Where k - degree of freedom k= n-1=18

q - significance level (Appendix I) Step C tα δy = 21 397461 = 834668

Table 42 Estimation by using Equation 45

y yt y-yt (y-yt)2

1990 258549 246426 12123 146967129 1991 255279 25214 3139 9853321 1992 254941 257855 -2914 8491396 1993 251747 263569 -11822 139759684 1994 268081 269284 -1203 1447209 1995 285723 274998 10725 115025625 1996 293001 280713 12288 150994944 1997 312923 286427 26496 702038016 1998 328975 292142 36833 1356669889 1999 33596 297856 38104 1451914816 2000 303274 303571 -297 88209 2001 260752 309285 -48533 2355452089 2002 238976 31500 -76024 5779648576 2003 254277 320714 -66437 4413874969 2004 280199 326429 -4623 21372129 2005 303988 332143 -28155 792704025 2006 34803 337858 10172 103469584 2007 402638 343572 59066 3488792356 2008 421959 349287 72672 5281219584

2843562432

44 Land Utilization

Mongolian total territory is 1564116 thousand hectares Of which in total 742 of total area is used for the agriculture 157 used for state special land 91 of total area is comprised forest land 03 land used for cities rural town and other settlements 04 land possesses water resources and 02 of total land is covered by transportation and networks in 2006 (NSO 2006) Currently Mongolian pastureland faced many significant problems such as grassland degradation soil erosion and desertification Main sources of them are overgrazing water

19

source and the population According to some survey approximately 120 million hectare land (70 percent) of total Mongolian territory is degraded

Figure 44 The comparison of utilized lands between 2000 and 2006 (by type)

Figure 44 shows utilization land between 2000 and 2006 For example the agriculture land and forestland decreased by 9 and 4 in 2006 compared to 2000 Generally the development of crop production and destruction the populationrsquos migration to urban areas and the nomadic livestock husbandry are leading to the overgrazing and degradation of the land Moreover livestock number in Mongolia is increasing during the last few years Especially in 2008 it reached the highest number of livestock for the first time in history Even though the herders are facing the shortage of fodder In addition the land for the natural pasture has slightly increased since 1989

441 The Impacts for the Land Degradation

There are many environmental factors affect on the agricultural sector in complex ways Most scientists and experts agreed that factors of land degradation in Mongolia could be divided into following two main categories including human and natural factors Today many factors affect the land degradation caused by the human activities such as excessive grazing deforestation poor irrigation and inappropriate land tenure in all sector The first significant factor is overgrazing Crop cultivation is one of the most important reasons of soil erosion and overgrazing Spring tilling coincides caused the seasonal higher speed wind and most planted areas are lack of windbreaks like trees For example the average wind speed of Gobi region is 3hellip4 meters per second it is one of the significant cause of soil moisture loss and erosion According to some survey an average of 35ndash50 tons of soils has been lost from each

20

hectare of cultivated land due to erosion during the past 30 years Half of all cultivated land degraded to some degree of erosion Another factor of overgrazing is the vehicle-induced degradation The second significant factor is the deforestation due to clear-cutting the trees fire and insect infestations The third important factor is inappropriate land tenure like mining and inadequate waste management Shagdar (2001) estimated approximately 100000 hectare of land have been degraded by mining and quarrying Moreover another significant factor of land degradation is bad or poor irrigation practices Salinization of irrigated land in arid climates as a result of poor drainage and evaporation and using highly toxic pesticide for vegetation protection from insects causes depletion of soil productivity The final factor of land degradation is the legal provision of ldquoopenness of pastureland which is public propertyrdquo Because of this legal provision the utilizing of pastureland is free for everyone (UNDP amp SIDA 2003) On the other hand the land degradation of Mongolia depends directly on nature and weather conditions Most important impact is the location It is located high above sea level and far away from the ocean Mongolia lies between 420 520N and almost 1200 E Another principal factor is the global warming and climatic change of the world Climate change can affect weeds insects plant diseases and pathogens in the environment especially in agricultural activities Another consequence on the pasture is the lack of rainfall Mongolia has low precipitation and short growing seasons especially long and cold winter and short and hot summer Therefore other significant causes are drought and Dzud in Mongolia They are the keys determinants of vulnerability of livestock to climate change They affect the livelihood of herdersrsquo household which is reduced livestock productivity especially milk and destroy pasture (AIACC 2006) The natural disasters like dzud and drought have occurred around 30 times in Mongolia with different level of harm (UNDPampSIDA 2003) (Figure 45)

Figure 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006)

During the disaster of harsh winter (dzud) in 1999- 2000 almost one third of the total livestock died in 1999 Figure 46 shows that the losses adult animals between 2000 and 2006 in Mongolia

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

viii

ABBRIEVIATIONS

ADB Asian Development Bank ADO Asian Development Outlook AIP Asian Investment Program GDP Gross Domestic Product FAO Food and Agricultural Organization IFAD International Fund for Agricultural Development NSO National Statistical Office MIF Mongolian Investors Forum MSY Mongolian Statistical Yearbook MTG Mongolian Travel Guide MFA Ministry of Food and Agriculture WB World Bank WFP World Food Program EUP European Union Program AIACC Assessments of Impacts and Adaptations to Climate Change FAOSTAT Food and Agricultural Statistic Data RSSBP Rural sector strategy and business plan UN United Nations UNDP United Nations Development Program PRSP Poverty Reduction Strategy Paper MPVA Mongolian Private Veterinary Association Tugrug Mongolian currency (1$=1170 tugrug in 2007) Aimag Province Soum Sub-province Bag Subdivision of sub- province Dzud Harsh winter

1

CHAPTER I

INTRODUCTION

11 Brief Introduction of Mongolia

Figure 11 Map of Mongolia Mongolia is land-locked country of Central Asia It borders by China to the South and East and by Russia to the North and West It is situated between the longitude 874 to 1196 west and the latitude 521 to 414 north The main land is at an average elevation of 1580 meter above sea level

The current population is 264 million Total area is 15641 million km sq and 15 people stand per kilometer 608 people live in the urban areas and other 392 percent people live in the rural area of Mongolia (NSO 2007) The climate of Mongolia is too harsh and it characterized by a long-lasting cold winter dry and hot summer low precipitation high temperature fluctuations (day and night summer and winter) and a relatively high number of sunny days (on an average 260 days) per year The highest precipitation is approximately from 20 to 35 centimeters per year in north part and lowest precipitation is approximately from 10 to 20 centimeters south part of Mongolia Some regions of Gobi (the name Gobi means desert and steppe) which located in north part mostly receive no precipitation at all in years The effective vegetation growth period is a short around 80 to 130 days It is depend on the location of Mongolia Commonly in winter (January and February) the average temperature is -25 degC at night it reaches -40degC In summer time average temperature is +33 degC in central part of Mongolia such as Ulaanbaatar Moreover in Gobi region the temperature reaches +38degC

2

12 Background

The world is in the midst of what has been dubbed a livestock revolution with far reaching implications for human health development the environment and trade (Delgado et al 1999) Mongolia is one of the countries which stands at forefront of this revolution Therefore the role of livestock sector is very important in the Mongolian economy and this sector dominated on the agriculture The value added of agricultural sector is 188 of GDP of Mongolia The livestock products constitute 876 of total output of agriculture (NSO 2006) In 2006 there were 421400 herders constituting almost half of the countryrsquos economically active population (NSO 2006) Moreover there are two main sectors in the food and agricultural sector such as livestock and crop production Those sectors encourage the rural development of Mongolia such as to provide the economic growth Agro-processing industries generate value addition by the processing of agricultural raw materials both food and non-food into products which are marketable usable or edible have improved storability and or nutritive value and enhance income and profitability for producers An agro industrial system is modeled in order to illustrate the marketing the processing the production of agricultural materials and consumption in any countries (Salokhe and Hicks 2001) The Mongolian people to lead a nomadic lifestyle based on pastoral animal husbandry After privatization the intensive dairy farms became a significant issue which is now on the political agenda Keating and McCown (2001) remarked that there are 2 main components in agricultural system such as the production system and management system Production system contains pastureland livestock animals and the climate Today there are many significant problems such as the degradation of grassland desertification soil erosion and the lack for fodder of livestock Moreover the one of the problems is the impact of climate like drought and dzud (harsh winter) Drought occurs once every 2-3 years in the Gobi region and every 10 years in other regions (GOMampUNDP 2000) Nationwide drought occurred in 1944 and in 1972 (MFA 2001) Management system generates the knowledge regarding general principles and theory involving agricultural farmsrsquo management like agricultural economics animal science agronomy rural sociology psychology and engineering (Keating and McCown 2001)

13 Rationale

The livestock plays an important role in Mongolian agriculture and economy Furthermore meat and milk foodstuffs are important in Mongolian food sector and it generates the employment and income Therefore it is so important to know the past and current status potentials problems and constraints After that policies and strategies can be designed for better management and improvements of this sector Moreover this study contributes to the development by providing the information about status and problems of herder households and some intensive dairy farms

3

In addition Enkhjargal (1999) recommended that the government policy for livestock sector especially diary development should encourage and support research and development of dairy breeding stock pasture and farm management Involvements of farmers as producers need to be extending into economic activities that could provide better returns to them It should include feeding breeding health caring milk collecting transporting and processing

14 Objectives

The major objective is to investigate Mongolian livestock sector in Tuv province The specific

objectives are

bull To evaluate the present situation of livestock sub sector of Mongolia and to investigate the agricultural food and non-food products related with livestock animals

bull To analyze the future growth prospects of Mongolian livestock husbandry bull To present the environmental factors which affect the livestock sector

bull To conduct sector and SWOT analyses to identify strengths weaknesses opportunities and threats that the intensive and extensive livestock husbandry has been facing with

15 Limitation

Because of unavailable of data for the whole country this study was restricted only to Tuv province In addition information is limited about the herder households and farmers Therefore the study focuses on the main producers which are herder households and some intensive dairy farms

4

CHAPTER II

LITERATURE REVIEW

21 The Current Situation of Livestock Husbandry in Mongolia

The main source of Mongolian economy is coming from the agricultural sector (MIF 2006) The agricultural sector of Mongolia divided two main subsectors such as livestock sector and cropping sector (MIF 2006) At the end of 2006 approximately 40 of total population had lived in the rural areas Rural development is essential for Mongolia to achieve sustained economic growth and poverty reduction Livestock continues to provide rural households with an important source of herdersrsquo income jobs and food security and a means for investing and storing their wealth (WB 2006) Therefore animal husbandry plays the important role of the national economy Moreover agriculture still accounts for more than a fifth of GDP Some 40 per cent of the Mongolian workforce employ in traditional nomadic livestock herding Agriculture is produced 188 percent of GDP and contributed 30 percent of the total export of Mongolia Figure 21 demonstrates the comparison of the portion of divisions to GDP in 2005 with 2006

Figure 21 The comparison of the portion of divisions to GDP (NSO 2005-2006) The GDP growth due to contribution from all sectors was 99 in 2007 the average of GDP was 87 between 2003 and 2006 Especially agriculture sector provides almost half the population had a strong year extending by 16 and contributing 4 points to growth of GDP The data in Figure 22 shows that the ratio of GDP growth from 2003 to 2009 In addition it shows GDP for the forecast period in Mongolia The forecasts assume that the price will be comparatively higher for export goods (ADO 2008)

5

Figure 22 GDP growth by percentage (NSO 2007)

Enkhjargal (2005) noted that 35 of GDP and the agricultural sector contribute almost one fourth goods for export Moreover approximately 50 of the total labor force is employed in agricultural sector Barker (1997) remarked lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo In addition Mongolian livestock sector produces more than 901 of gross agricultural products and the source of income for more than 34 of all households in Mongolia In 2006 there are 348 million livestock counted in Mongolia The livestock number increased by 44 million heads of livestock animals compared to 2005 (NSO 2006) Furthermore as a result of census in 2006 there are 253000 camels 2114000 horses 2167000 cattle 14815000 sheep and 15451000 goats counted in Mongolia The number of horses increased by 86000 heads cattle increased by 204000 sheep and goat increased by 2 million heads respectively but the number of camel decreased by 07 thousand heads compared with 2005 (AIP 2006-2007)

Figure 23 The comparison of total livestock with number of privately owned livestock Moreover the statistical data shows (Figure 23) that almost 97 of the total livestock was private owned in 2006 and 31 of herder households have more than 100 livestock animals 22 Brief history of livestock husbandry development in Mongolia

6

Traditionally five types of domestic livestock in Mongolia are sheep goats cattle horses and camel Pigs hens and other birds seldom reared Horse is the first animal in Mongolia to be domesticated (Baasanjav et al 1999)

Shagdar (2001) remarked that the wild animals domesticated livestock animals such as sheep and horses in Mongolia between the 8th and 3rd centuries BC Shagdar (2001) argued that Mongolian herder households began the nomadic form in the 13th century and this system remained until present day In those times most livestock animals was private owned of herders However in 1951 the livestock animals transferred to the collective ownership form This collective ownership form was tended to develop more intensively managed production system This form gave diverse assistances to the herders For example to build the enclosures and wells to prepare hay (Shagdar 2001) However during the collectivization period the share of private livestock decreased to 17-30 of the total number of livestock (Shagdar 2001) The collective ownership form lasted till 1989 Due to tend of the decreasing livestock number Mongolian government privatized the livestock animals to the herders in 1991 Because of privatization 967 of total livestock shifted private owned form and 31 of herder households have more than 100 livestock animals After privatization the livestock number and number of herders rapidly increased in Mongolia

23 Regional Distribution

Mongolia divided 5 main regions named East West Central Khangai and Ulaanbaatar Figure 24 shows the regional distribution of livestock in Mongolia (NSO 2006) The forests and mountainous areas of Khangai region Central region and West region of Mongolia are most populous in terms of livestock

Figure 24 Regional distribution of livestock in 2006 The livestock is relatively distributed in comparison with the population size of each region Sheep and goats are the majority livestock and respectively accounted for 425 and 444 of

7

the total number of livestock in every region in 2006 Camels account for only 07 of total livestock and mainly rise in the southern part of the country (NSO 2006) Overgrazing is becoming problematic in areas close to major markets For example livestock density of Orkhon-Uul Darkhan and the capital city named of Ulaanbaatar which is 5 to 10 times lower than other regions

24 Livestock Production

Mongolian major livestock products include meat and meat products and milk and dairy products In addition wool hair cashmere hides and skins are the key input for animal processing industries ( Shagdar 2001) Agricultural production comprises of 30 meat and meat products 27 of them include milk and dairy products 2 skin and hides 1 animal and plants oil 31 flour and flour products 2 fruit and vegetables and 2 livestock feed and starches

Figure 25 Share of domestic production versus imports in consumption of major products (AIP

2006-2007)

From 1999 to 2004 all foodstuffs consumption except meat and milk has been below the recommended level Because of natural disasters such as drought and dzud in recent years the consumption of milk and meat products has declined during those years However the consumption of flour rise eggs potatoes and vegetables has increased in 1999-2002 Especially consumptions of potatoes vegetables and fruits are significantly below the recommendation (PRSP 2004) Mongolia imports some non-meat food products from Russia China and others Mongolia relies fully on imports for fruits and rice (WB 2008) Livestock production is entirely seasonal taking place in harmony with the Mongolian climate For example wool and hair collect in the late spring and early summer while most livestock

8

slaughter in the late autumn and early winter Milk and dairy products mainly produce during summer (Shagdar 2001) a) Meat and meat products On average 75 million head of livestock slaughter for consumption annually accounting for approximately 25 of the total livestock herd counted at the beginning of each year This equals 250000-300000 tons of meat which include mutton beef goat meat and horsemeat Camel meat is not so popular and consumed mostly during the winter Meat and meat products taken from of 30 beef 40 mutton 10 goat meat and 15 horsemeat (Shagdar 2001) b) Milk and dairy products Annually 250000-350000 tons milk produces in Mongolia Cowrsquos milk possesses more than 80 of the total of milk Moreover sheep and goat milk and horse milk accounting for about 10 and 8 respectively In addition more than 90 of all cows are accounted by native Mongolian cows which have an average milk yield of 19 liters per day in steppe and forest region and 13 liters in the Gobi region (Shagdar 2001) Dairy products include yogurt butter dried curds cheese etc Particularly in the rural areas milk consumes directly and converts to a wide range of traditional products Many of these have a long life and are stored for consumption in the winter and spring (WB 2003) Horse milk is used to produce the popular drink it contain a low alcohol that is similar the beer Rich content of amino acids vitamins and sugar found in horse milk makes airag a nutritious and healthy drink which is also low in fat Therefore it is used to treat many illnesses including tuberculosis diseases of digestive organs pharmaceutical toxicity and fatigue (Shagdar 2001) c) Wool hair and cashmere Approximately 25000 tons of wool hair and cashmere is produced in Mongolia annually more than 70 of which is accounted for by sheep wool Mongolia is the second largest producer of raw cashmere in the world Approximately 3300 tons of cashmere is produced annually That is accounting for about 20 of the total global supply Therefore cashmere is one of the main export commodities in Mongolia In wool and cashmere industry the productions of major items include spun threat camel wool blanket carpet felt etc (Shagdar 2001) d) Hides and skin One of valuable resource for producing luxury consumer goods is hides and skin About 65-85 million individual hides and skin are produced in Mongolia annually more than 80 of these are sheep and goatskins which are supplied to processing industries or exported Traditionally sheepskin was used for making warm winter coats and floor covering while various accessories for handling horses were made from cattle hides (Shagdar 2001)

9

CHAPTER III

METHODOLOGY The study conducted in four main stages such as the data collection analysis of the data and reporting and conclusions and recommendation part The general methodology used for specific objectives of the study is shown in Figure 31

Figure 31 Flow chart of methodology and procedure for survey and data collection

10

31 Site selection

The sites for the study selected included three sub-provinces named Jargalant Sumber and Bayanchandmani of Tuv province It is nearest province with the capital city (Figure 32) The site selection chose based on the following characteristics

bull Agricultural production bull The location of province bull Potentials for the development of livestock husbandry bull Financial constraints of the research bull Data availability

General information of Tuv province

Area 77300 sq km Number of livestock 1598000 Population 96500 Cropland 318100 hectare Center Zuunmod Number of sub-provinces 27

Tuv province is located in the centre of Mongolia In addition capital city named Ulaanbaatar located in this provincersquos territory Tuv province is one of the biggest and most productive provinces as this province is well positioned geographically to supply livestock production to nearest areas with high demand This province is situated 43 km from the capital city Moreover the major intensive animal farms are located in Tuv province

In this province have 201 household farms include dairy farms 152 pork farms 24 and chicken farm 1 respectively (MFA 2007) There are a total of 210000 camels 1979 thousand head of horses 1311 thousand head of cattle 10408 thousand of sheep and 8013 thousand heads of goats (NSO 2006)

33 Sampling Design and Procedures of Survey

Formal survey was conducted to collect the general information of herder householdsrsquo comprehension and the current development of agricultural products Herder household and farmers who own agribusiness were selected for interviews The number of herder households and number of farms in each province were determined by following formula

Where n= Number of total sample

N= Total number of farms and herders households E= Error (005)

80 herder households and 8 intensive farms from selected in Tuv province for this survey This size of samples of herders and farms provided statistical justification in order to generalize the results

11

Figure 32 Location of Tuv aimag

34 Data Collection

Data were collected from two sources (i) Secondary data was from the Mongolian National Statistical Office Mongolian State

University of Agriculture and the Ministry of Food and Agriculture Data used in this study included Urban and rural population Number of herder households (selected area) Total number of livestock and livestock distribution Land utilization Main agricultural production

12

(ii) Primary data was collected through questionnaires distributed to the randomly selected dairy farms and herder households in Tuv province and to determine the production processing and marketing (Appendix-A and B) Data collected in this part included

Present situation and the growth prospect of Livestock husbandry The suggestions and comments of herders and farmers who responded in this

research The comments The current problems faced by the herders and farmers

The survey aimed to question 80 herding households from the Tuv province and 8 intensive farmers of Tuv province were involved but in practice only 69 herders and 32 small and medium scale intensive dairy farms were surveyed Therefore around 10 relevant people including an official such as governor of soum and bag coordinator of household livelihood improvement related project and livestock expert were given an additional questionnaire

35 Data processing and analysis

351 Data processing The data of this study collected from the herder households and farmers of Tuv province The draft were analyzed to know the development future growth the influencing factors and special characteristics of the livestock sector SWOT analysis Around 80 questionnaires processed in the SPSS package and Microsoft Excel by using descriptive statistics Moreover in the survey investigated the herders and farmersrsquo opinions about the Mongolian livestock sub sector 352 Data analysis Data collections were analyzed quantitative and qualitative ways according to the field data The basis statistics data and the survey questionnaire results investigated the past and current performance of Mongolian livestock husbandry and calculated the future growth of livestock animals in Mongolia by showing the form of table figure flowchart mean and percentile 353 SWOT analysis The statistical data and the results of questionnaire determine the external factors such as Opportunity and Threat and internal factors such as Strength and Weakness of intensive and extensive livestock husbandry of Mongolia Moreover SWOT analyses provided the opportunity weakness and other factors of Tuv province for the livestock sector

13

CHAPTER IV

RESULT AND DISCUSSION

41 The current situation of Mongolian Animal Husbandry

Generally Mongolian animal husbandry divided two main sectors extensive animal husbandry and intensive animal husbandry Barker (1997) said lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo The extensive livestock management system of Mongolia includes main five species of livestock for most of the year The some herders and some relevant people believe that the extensive animal husbandry is most suitable sector in Mongolia The first reason is that approximately 80 of total territories are grassy area in Mongolia This is one of the biggest scales of the world Second Mongolian livestock systems is continuing with a long traditional nomadic livestock herding Hence the herders obtained the great knowledge and experiments during the several centuries Third Mongolian herder households are settled in the traditional pastoral system such as ldquokhot ailrdquo and ldquoneg goliinhonrdquo Two and more herder households including relatives and acquaintances called ldquokhot ailrdquo and ldquoneg goliinhonrdquo live together This system is most indigenous form This form of living served a variety of functions such as using pasture and seasonal movement of households Lastly the demand of livestock production is increasing during the last few years because of incomes of family are increasing and the increased demand from the neighbor countries Furthermore it has become the foundation of Mongolian livestock revolution Moreover Mongolian climate is suitable for the extensive animal husbandry On the other side the government of Mongolia begun to support intensive livestock farms to develop dairy and meat bread cattle pork and poultry Some people said the intensive livestock husbandry is better than the extensive livestock husbandry There are several reasons for this statement The first significant reason is that the increasing livestock number of Mongolia According to some researches it is possible to support around 38 million heads of livestock on the Mongolian whole grasslands However the number of livestock already reached 42 million heads in 2008 Therefore the growth of livestock is creating the degradation of pastureland by overgrazing in Mongolia Secondly since 1940 the average air temperature has been increasing in Mongolia caused by the climate change of the world Moreover the arid land is increasing due to decreasing of precipitation Therefore since last few years the yield of pasture is depleting gradually Thus grazing time of livestock is decreasing in Mongolia Finally the development of extensive farms directly depends on the supply and safety of the food Presently Mongolia is importing most of food products except the meat and meat products That is why the intensive animal husbandry is developing in some provinces especially the nearest provinces with the bigger cities such as Tuv Selenge and Bulgan According to research by the Ministry of Food and Agriculture (2007) Mongolia has 750 intensive animal husbandries Of which 494 farms for dairy 10 of them for meat cow 15 sheep farms for meat and wool 79 farms with pigs 111 farms with poultry and 40 farms with bees in Mongolia (AppendixC)

14

42 The Present Status of Mongolian Livestock

Mongolian livestock reached 421958 thousand heads in 2008 and it increased by 48 percent compared with 2007 Figure 41 shows the livestock numbers of Mongolia during last 18 years Sheep goat and cattle population has increased while those of camel and horse are decreasing in Mongolia during the last few years (Appendix D and F)

Figure 41 The state of livestock number of Mongolia from 1990 to 2008

According to Figure 41 the total number of livestock dramatically increased between 1990 and 1999 However it decreased by 287 due to drought and Dzud during 2000 to 2002 During that period 35 million and 47 million heads of animals died in 2000 and 2001 respectively During the last 7 years the number of livestock increased by 31 By the way the number of livestock in 2008 reached highest number ever

Figure 42 The comparison of the livestock structure in 2008 with 1990

15

Figure 42 shows the comparison of livestock structure (by type) during 2008 and 1990 According to Figure 41 sheep were dominating in the livestock structure until 2003 However cattle and goats dominated the structure of livestock during the recent years This is because of cashmere become herderrsquos main income from livestock due to free market economy It explained that after privatization the herders prefer to herd productive kinds of livestock Although the livestock resist Mongolian weather especially adopted for the cold season the productivity of livestock is low Therefore the some preparations such as to build warm shelters and to prepare and store hay and fodder are most significant principal elements during the wintertime Moreover pastures are subjected to increased vulnerability to parasites and other diseases These issues affect the animal productivity

43 Comparison of Actual and Estimated Livestock Number

Three different estimation including the average of number of livestock comparison of actual and estimated livestock number of Mongolia between 1990 and 2008 and livestock number in 2009 by using the Microsoft Excel (AppendixG) are given below (Avdai et al 1999) Calculation 1 The average number livestock in Mongolia from 1990 to 2008

The average number of livestock estimated was 295501 thousand heads between 1990 and 2008 Calculation 2 The goal of this part is that to estimate the equalized livestock number (amount) on the actual livestock amount by using the straight-line equation

yt = a + bt - (42)

Where t - period and a b - the parametric constraints

To estimate the parametric constraints can be solving by using the following method The value obtained by using equation (43) Table 41 shows the results of estimation To solve this system of equation substitute sumt = 0 Moreover the estimated values such as Σ y Σt2 and Σyt are shown from the Table 41

16

yt = 2978564+57145t y ndashactual livestock amount yt - estimated livestock amount

The estimated livestock amount and actual livestock number of Mongolia between 1990 and 2008 are shown in Figure 43

Table 41 The calculation by using Equation 43

(thousand heads)

y t t2 yt yt=a+bt

1990 258549 -9 81 -2326941 2464259 1991 255279 -8 64 -2042232 2521404 1992 254941 -7 49 -1784587 2578549 1993 251747 -6 36 -1510482 2635694 1994 268081 -5 25 -1340405 2692839 1995 285723 -4 16 -1142892 2749984 1996 293001 -3 9 -879003 2807129 1997 312923 -2 4 -625846 2864274 1998 328975 -1 1 -328975 2921419 1999 33596 0 0 0 2978564 2000 303274 1 1 303274 3035709 2001 260752 2 4 521504 3092854 2002 238976 3 9 716928 3149999 2003 254277 4 16 1017108 3207144 2004 280199 5 25 1400995 3264289 2005 303988 6 36 1823928 3321434 2006 34803 7 49 243621 3378579 2007 402638 8 64 3221104 3435724 2008 421959 9 81 3797631 3492869 2009 10 3550014 2010 11 3607159 2011 12 3664304 2012 13 3721449 2013 14 3778594 2014 15 3835739 2015 16 3892884

TOTAL 5659272 91 570 3257319 82642859

17

Figure 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads)

bull Calculation 3 The last estimation is that how many heads of Mongolian livestock will be reach in 2009 by using the following Equation 44

yt plusmn tα δy -(44)

Where yt - estimated amount of livestock on 2009 (see from previous Table 41) tα ndash dispersion of Student

δy ndash standard deviation y + tα = 3550014+834668= 4384682 y - tα =3550014- 834668= 2715346 Calculation shows that the livestock number of Mongolia will reach from 271534 to 438468 thousand heads animals in 2009 Below three steps shows the steps of calculation 3 Step A To calculate δy (standard deviation) can be solved by using following equation 45 (45) Table 42 shows the result of this estimation by using Equation 45

Where n - total number of sample

Step B To find the dispersion of Student (Student is the name of person) (tα)

18

tα (q k) = tα (005 18)= 212 (Appendix I) Where k - degree of freedom k= n-1=18

q - significance level (Appendix I) Step C tα δy = 21 397461 = 834668

Table 42 Estimation by using Equation 45

y yt y-yt (y-yt)2

1990 258549 246426 12123 146967129 1991 255279 25214 3139 9853321 1992 254941 257855 -2914 8491396 1993 251747 263569 -11822 139759684 1994 268081 269284 -1203 1447209 1995 285723 274998 10725 115025625 1996 293001 280713 12288 150994944 1997 312923 286427 26496 702038016 1998 328975 292142 36833 1356669889 1999 33596 297856 38104 1451914816 2000 303274 303571 -297 88209 2001 260752 309285 -48533 2355452089 2002 238976 31500 -76024 5779648576 2003 254277 320714 -66437 4413874969 2004 280199 326429 -4623 21372129 2005 303988 332143 -28155 792704025 2006 34803 337858 10172 103469584 2007 402638 343572 59066 3488792356 2008 421959 349287 72672 5281219584

2843562432

44 Land Utilization

Mongolian total territory is 1564116 thousand hectares Of which in total 742 of total area is used for the agriculture 157 used for state special land 91 of total area is comprised forest land 03 land used for cities rural town and other settlements 04 land possesses water resources and 02 of total land is covered by transportation and networks in 2006 (NSO 2006) Currently Mongolian pastureland faced many significant problems such as grassland degradation soil erosion and desertification Main sources of them are overgrazing water

19

source and the population According to some survey approximately 120 million hectare land (70 percent) of total Mongolian territory is degraded

Figure 44 The comparison of utilized lands between 2000 and 2006 (by type)

Figure 44 shows utilization land between 2000 and 2006 For example the agriculture land and forestland decreased by 9 and 4 in 2006 compared to 2000 Generally the development of crop production and destruction the populationrsquos migration to urban areas and the nomadic livestock husbandry are leading to the overgrazing and degradation of the land Moreover livestock number in Mongolia is increasing during the last few years Especially in 2008 it reached the highest number of livestock for the first time in history Even though the herders are facing the shortage of fodder In addition the land for the natural pasture has slightly increased since 1989

441 The Impacts for the Land Degradation

There are many environmental factors affect on the agricultural sector in complex ways Most scientists and experts agreed that factors of land degradation in Mongolia could be divided into following two main categories including human and natural factors Today many factors affect the land degradation caused by the human activities such as excessive grazing deforestation poor irrigation and inappropriate land tenure in all sector The first significant factor is overgrazing Crop cultivation is one of the most important reasons of soil erosion and overgrazing Spring tilling coincides caused the seasonal higher speed wind and most planted areas are lack of windbreaks like trees For example the average wind speed of Gobi region is 3hellip4 meters per second it is one of the significant cause of soil moisture loss and erosion According to some survey an average of 35ndash50 tons of soils has been lost from each

20

hectare of cultivated land due to erosion during the past 30 years Half of all cultivated land degraded to some degree of erosion Another factor of overgrazing is the vehicle-induced degradation The second significant factor is the deforestation due to clear-cutting the trees fire and insect infestations The third important factor is inappropriate land tenure like mining and inadequate waste management Shagdar (2001) estimated approximately 100000 hectare of land have been degraded by mining and quarrying Moreover another significant factor of land degradation is bad or poor irrigation practices Salinization of irrigated land in arid climates as a result of poor drainage and evaporation and using highly toxic pesticide for vegetation protection from insects causes depletion of soil productivity The final factor of land degradation is the legal provision of ldquoopenness of pastureland which is public propertyrdquo Because of this legal provision the utilizing of pastureland is free for everyone (UNDP amp SIDA 2003) On the other hand the land degradation of Mongolia depends directly on nature and weather conditions Most important impact is the location It is located high above sea level and far away from the ocean Mongolia lies between 420 520N and almost 1200 E Another principal factor is the global warming and climatic change of the world Climate change can affect weeds insects plant diseases and pathogens in the environment especially in agricultural activities Another consequence on the pasture is the lack of rainfall Mongolia has low precipitation and short growing seasons especially long and cold winter and short and hot summer Therefore other significant causes are drought and Dzud in Mongolia They are the keys determinants of vulnerability of livestock to climate change They affect the livelihood of herdersrsquo household which is reduced livestock productivity especially milk and destroy pasture (AIACC 2006) The natural disasters like dzud and drought have occurred around 30 times in Mongolia with different level of harm (UNDPampSIDA 2003) (Figure 45)

Figure 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006)

During the disaster of harsh winter (dzud) in 1999- 2000 almost one third of the total livestock died in 1999 Figure 46 shows that the losses adult animals between 2000 and 2006 in Mongolia

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

1

CHAPTER I

INTRODUCTION

11 Brief Introduction of Mongolia

Figure 11 Map of Mongolia Mongolia is land-locked country of Central Asia It borders by China to the South and East and by Russia to the North and West It is situated between the longitude 874 to 1196 west and the latitude 521 to 414 north The main land is at an average elevation of 1580 meter above sea level

The current population is 264 million Total area is 15641 million km sq and 15 people stand per kilometer 608 people live in the urban areas and other 392 percent people live in the rural area of Mongolia (NSO 2007) The climate of Mongolia is too harsh and it characterized by a long-lasting cold winter dry and hot summer low precipitation high temperature fluctuations (day and night summer and winter) and a relatively high number of sunny days (on an average 260 days) per year The highest precipitation is approximately from 20 to 35 centimeters per year in north part and lowest precipitation is approximately from 10 to 20 centimeters south part of Mongolia Some regions of Gobi (the name Gobi means desert and steppe) which located in north part mostly receive no precipitation at all in years The effective vegetation growth period is a short around 80 to 130 days It is depend on the location of Mongolia Commonly in winter (January and February) the average temperature is -25 degC at night it reaches -40degC In summer time average temperature is +33 degC in central part of Mongolia such as Ulaanbaatar Moreover in Gobi region the temperature reaches +38degC

2

12 Background

The world is in the midst of what has been dubbed a livestock revolution with far reaching implications for human health development the environment and trade (Delgado et al 1999) Mongolia is one of the countries which stands at forefront of this revolution Therefore the role of livestock sector is very important in the Mongolian economy and this sector dominated on the agriculture The value added of agricultural sector is 188 of GDP of Mongolia The livestock products constitute 876 of total output of agriculture (NSO 2006) In 2006 there were 421400 herders constituting almost half of the countryrsquos economically active population (NSO 2006) Moreover there are two main sectors in the food and agricultural sector such as livestock and crop production Those sectors encourage the rural development of Mongolia such as to provide the economic growth Agro-processing industries generate value addition by the processing of agricultural raw materials both food and non-food into products which are marketable usable or edible have improved storability and or nutritive value and enhance income and profitability for producers An agro industrial system is modeled in order to illustrate the marketing the processing the production of agricultural materials and consumption in any countries (Salokhe and Hicks 2001) The Mongolian people to lead a nomadic lifestyle based on pastoral animal husbandry After privatization the intensive dairy farms became a significant issue which is now on the political agenda Keating and McCown (2001) remarked that there are 2 main components in agricultural system such as the production system and management system Production system contains pastureland livestock animals and the climate Today there are many significant problems such as the degradation of grassland desertification soil erosion and the lack for fodder of livestock Moreover the one of the problems is the impact of climate like drought and dzud (harsh winter) Drought occurs once every 2-3 years in the Gobi region and every 10 years in other regions (GOMampUNDP 2000) Nationwide drought occurred in 1944 and in 1972 (MFA 2001) Management system generates the knowledge regarding general principles and theory involving agricultural farmsrsquo management like agricultural economics animal science agronomy rural sociology psychology and engineering (Keating and McCown 2001)

13 Rationale

The livestock plays an important role in Mongolian agriculture and economy Furthermore meat and milk foodstuffs are important in Mongolian food sector and it generates the employment and income Therefore it is so important to know the past and current status potentials problems and constraints After that policies and strategies can be designed for better management and improvements of this sector Moreover this study contributes to the development by providing the information about status and problems of herder households and some intensive dairy farms

3

In addition Enkhjargal (1999) recommended that the government policy for livestock sector especially diary development should encourage and support research and development of dairy breeding stock pasture and farm management Involvements of farmers as producers need to be extending into economic activities that could provide better returns to them It should include feeding breeding health caring milk collecting transporting and processing

14 Objectives

The major objective is to investigate Mongolian livestock sector in Tuv province The specific

objectives are

bull To evaluate the present situation of livestock sub sector of Mongolia and to investigate the agricultural food and non-food products related with livestock animals

bull To analyze the future growth prospects of Mongolian livestock husbandry bull To present the environmental factors which affect the livestock sector

bull To conduct sector and SWOT analyses to identify strengths weaknesses opportunities and threats that the intensive and extensive livestock husbandry has been facing with

15 Limitation

Because of unavailable of data for the whole country this study was restricted only to Tuv province In addition information is limited about the herder households and farmers Therefore the study focuses on the main producers which are herder households and some intensive dairy farms

4

CHAPTER II

LITERATURE REVIEW

21 The Current Situation of Livestock Husbandry in Mongolia

The main source of Mongolian economy is coming from the agricultural sector (MIF 2006) The agricultural sector of Mongolia divided two main subsectors such as livestock sector and cropping sector (MIF 2006) At the end of 2006 approximately 40 of total population had lived in the rural areas Rural development is essential for Mongolia to achieve sustained economic growth and poverty reduction Livestock continues to provide rural households with an important source of herdersrsquo income jobs and food security and a means for investing and storing their wealth (WB 2006) Therefore animal husbandry plays the important role of the national economy Moreover agriculture still accounts for more than a fifth of GDP Some 40 per cent of the Mongolian workforce employ in traditional nomadic livestock herding Agriculture is produced 188 percent of GDP and contributed 30 percent of the total export of Mongolia Figure 21 demonstrates the comparison of the portion of divisions to GDP in 2005 with 2006

Figure 21 The comparison of the portion of divisions to GDP (NSO 2005-2006) The GDP growth due to contribution from all sectors was 99 in 2007 the average of GDP was 87 between 2003 and 2006 Especially agriculture sector provides almost half the population had a strong year extending by 16 and contributing 4 points to growth of GDP The data in Figure 22 shows that the ratio of GDP growth from 2003 to 2009 In addition it shows GDP for the forecast period in Mongolia The forecasts assume that the price will be comparatively higher for export goods (ADO 2008)

5

Figure 22 GDP growth by percentage (NSO 2007)

Enkhjargal (2005) noted that 35 of GDP and the agricultural sector contribute almost one fourth goods for export Moreover approximately 50 of the total labor force is employed in agricultural sector Barker (1997) remarked lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo In addition Mongolian livestock sector produces more than 901 of gross agricultural products and the source of income for more than 34 of all households in Mongolia In 2006 there are 348 million livestock counted in Mongolia The livestock number increased by 44 million heads of livestock animals compared to 2005 (NSO 2006) Furthermore as a result of census in 2006 there are 253000 camels 2114000 horses 2167000 cattle 14815000 sheep and 15451000 goats counted in Mongolia The number of horses increased by 86000 heads cattle increased by 204000 sheep and goat increased by 2 million heads respectively but the number of camel decreased by 07 thousand heads compared with 2005 (AIP 2006-2007)

Figure 23 The comparison of total livestock with number of privately owned livestock Moreover the statistical data shows (Figure 23) that almost 97 of the total livestock was private owned in 2006 and 31 of herder households have more than 100 livestock animals 22 Brief history of livestock husbandry development in Mongolia

6

Traditionally five types of domestic livestock in Mongolia are sheep goats cattle horses and camel Pigs hens and other birds seldom reared Horse is the first animal in Mongolia to be domesticated (Baasanjav et al 1999)

Shagdar (2001) remarked that the wild animals domesticated livestock animals such as sheep and horses in Mongolia between the 8th and 3rd centuries BC Shagdar (2001) argued that Mongolian herder households began the nomadic form in the 13th century and this system remained until present day In those times most livestock animals was private owned of herders However in 1951 the livestock animals transferred to the collective ownership form This collective ownership form was tended to develop more intensively managed production system This form gave diverse assistances to the herders For example to build the enclosures and wells to prepare hay (Shagdar 2001) However during the collectivization period the share of private livestock decreased to 17-30 of the total number of livestock (Shagdar 2001) The collective ownership form lasted till 1989 Due to tend of the decreasing livestock number Mongolian government privatized the livestock animals to the herders in 1991 Because of privatization 967 of total livestock shifted private owned form and 31 of herder households have more than 100 livestock animals After privatization the livestock number and number of herders rapidly increased in Mongolia

23 Regional Distribution

Mongolia divided 5 main regions named East West Central Khangai and Ulaanbaatar Figure 24 shows the regional distribution of livestock in Mongolia (NSO 2006) The forests and mountainous areas of Khangai region Central region and West region of Mongolia are most populous in terms of livestock

Figure 24 Regional distribution of livestock in 2006 The livestock is relatively distributed in comparison with the population size of each region Sheep and goats are the majority livestock and respectively accounted for 425 and 444 of

7

the total number of livestock in every region in 2006 Camels account for only 07 of total livestock and mainly rise in the southern part of the country (NSO 2006) Overgrazing is becoming problematic in areas close to major markets For example livestock density of Orkhon-Uul Darkhan and the capital city named of Ulaanbaatar which is 5 to 10 times lower than other regions

24 Livestock Production

Mongolian major livestock products include meat and meat products and milk and dairy products In addition wool hair cashmere hides and skins are the key input for animal processing industries ( Shagdar 2001) Agricultural production comprises of 30 meat and meat products 27 of them include milk and dairy products 2 skin and hides 1 animal and plants oil 31 flour and flour products 2 fruit and vegetables and 2 livestock feed and starches

Figure 25 Share of domestic production versus imports in consumption of major products (AIP

2006-2007)

From 1999 to 2004 all foodstuffs consumption except meat and milk has been below the recommended level Because of natural disasters such as drought and dzud in recent years the consumption of milk and meat products has declined during those years However the consumption of flour rise eggs potatoes and vegetables has increased in 1999-2002 Especially consumptions of potatoes vegetables and fruits are significantly below the recommendation (PRSP 2004) Mongolia imports some non-meat food products from Russia China and others Mongolia relies fully on imports for fruits and rice (WB 2008) Livestock production is entirely seasonal taking place in harmony with the Mongolian climate For example wool and hair collect in the late spring and early summer while most livestock

8

slaughter in the late autumn and early winter Milk and dairy products mainly produce during summer (Shagdar 2001) a) Meat and meat products On average 75 million head of livestock slaughter for consumption annually accounting for approximately 25 of the total livestock herd counted at the beginning of each year This equals 250000-300000 tons of meat which include mutton beef goat meat and horsemeat Camel meat is not so popular and consumed mostly during the winter Meat and meat products taken from of 30 beef 40 mutton 10 goat meat and 15 horsemeat (Shagdar 2001) b) Milk and dairy products Annually 250000-350000 tons milk produces in Mongolia Cowrsquos milk possesses more than 80 of the total of milk Moreover sheep and goat milk and horse milk accounting for about 10 and 8 respectively In addition more than 90 of all cows are accounted by native Mongolian cows which have an average milk yield of 19 liters per day in steppe and forest region and 13 liters in the Gobi region (Shagdar 2001) Dairy products include yogurt butter dried curds cheese etc Particularly in the rural areas milk consumes directly and converts to a wide range of traditional products Many of these have a long life and are stored for consumption in the winter and spring (WB 2003) Horse milk is used to produce the popular drink it contain a low alcohol that is similar the beer Rich content of amino acids vitamins and sugar found in horse milk makes airag a nutritious and healthy drink which is also low in fat Therefore it is used to treat many illnesses including tuberculosis diseases of digestive organs pharmaceutical toxicity and fatigue (Shagdar 2001) c) Wool hair and cashmere Approximately 25000 tons of wool hair and cashmere is produced in Mongolia annually more than 70 of which is accounted for by sheep wool Mongolia is the second largest producer of raw cashmere in the world Approximately 3300 tons of cashmere is produced annually That is accounting for about 20 of the total global supply Therefore cashmere is one of the main export commodities in Mongolia In wool and cashmere industry the productions of major items include spun threat camel wool blanket carpet felt etc (Shagdar 2001) d) Hides and skin One of valuable resource for producing luxury consumer goods is hides and skin About 65-85 million individual hides and skin are produced in Mongolia annually more than 80 of these are sheep and goatskins which are supplied to processing industries or exported Traditionally sheepskin was used for making warm winter coats and floor covering while various accessories for handling horses were made from cattle hides (Shagdar 2001)

9

CHAPTER III

METHODOLOGY The study conducted in four main stages such as the data collection analysis of the data and reporting and conclusions and recommendation part The general methodology used for specific objectives of the study is shown in Figure 31

Figure 31 Flow chart of methodology and procedure for survey and data collection

10

31 Site selection

The sites for the study selected included three sub-provinces named Jargalant Sumber and Bayanchandmani of Tuv province It is nearest province with the capital city (Figure 32) The site selection chose based on the following characteristics

bull Agricultural production bull The location of province bull Potentials for the development of livestock husbandry bull Financial constraints of the research bull Data availability

General information of Tuv province

Area 77300 sq km Number of livestock 1598000 Population 96500 Cropland 318100 hectare Center Zuunmod Number of sub-provinces 27

Tuv province is located in the centre of Mongolia In addition capital city named Ulaanbaatar located in this provincersquos territory Tuv province is one of the biggest and most productive provinces as this province is well positioned geographically to supply livestock production to nearest areas with high demand This province is situated 43 km from the capital city Moreover the major intensive animal farms are located in Tuv province

In this province have 201 household farms include dairy farms 152 pork farms 24 and chicken farm 1 respectively (MFA 2007) There are a total of 210000 camels 1979 thousand head of horses 1311 thousand head of cattle 10408 thousand of sheep and 8013 thousand heads of goats (NSO 2006)

33 Sampling Design and Procedures of Survey

Formal survey was conducted to collect the general information of herder householdsrsquo comprehension and the current development of agricultural products Herder household and farmers who own agribusiness were selected for interviews The number of herder households and number of farms in each province were determined by following formula

Where n= Number of total sample

N= Total number of farms and herders households E= Error (005)

80 herder households and 8 intensive farms from selected in Tuv province for this survey This size of samples of herders and farms provided statistical justification in order to generalize the results

11

Figure 32 Location of Tuv aimag

34 Data Collection

Data were collected from two sources (i) Secondary data was from the Mongolian National Statistical Office Mongolian State

University of Agriculture and the Ministry of Food and Agriculture Data used in this study included Urban and rural population Number of herder households (selected area) Total number of livestock and livestock distribution Land utilization Main agricultural production

12

(ii) Primary data was collected through questionnaires distributed to the randomly selected dairy farms and herder households in Tuv province and to determine the production processing and marketing (Appendix-A and B) Data collected in this part included

Present situation and the growth prospect of Livestock husbandry The suggestions and comments of herders and farmers who responded in this

research The comments The current problems faced by the herders and farmers

The survey aimed to question 80 herding households from the Tuv province and 8 intensive farmers of Tuv province were involved but in practice only 69 herders and 32 small and medium scale intensive dairy farms were surveyed Therefore around 10 relevant people including an official such as governor of soum and bag coordinator of household livelihood improvement related project and livestock expert were given an additional questionnaire

35 Data processing and analysis

351 Data processing The data of this study collected from the herder households and farmers of Tuv province The draft were analyzed to know the development future growth the influencing factors and special characteristics of the livestock sector SWOT analysis Around 80 questionnaires processed in the SPSS package and Microsoft Excel by using descriptive statistics Moreover in the survey investigated the herders and farmersrsquo opinions about the Mongolian livestock sub sector 352 Data analysis Data collections were analyzed quantitative and qualitative ways according to the field data The basis statistics data and the survey questionnaire results investigated the past and current performance of Mongolian livestock husbandry and calculated the future growth of livestock animals in Mongolia by showing the form of table figure flowchart mean and percentile 353 SWOT analysis The statistical data and the results of questionnaire determine the external factors such as Opportunity and Threat and internal factors such as Strength and Weakness of intensive and extensive livestock husbandry of Mongolia Moreover SWOT analyses provided the opportunity weakness and other factors of Tuv province for the livestock sector

13

CHAPTER IV

RESULT AND DISCUSSION

41 The current situation of Mongolian Animal Husbandry

Generally Mongolian animal husbandry divided two main sectors extensive animal husbandry and intensive animal husbandry Barker (1997) said lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo The extensive livestock management system of Mongolia includes main five species of livestock for most of the year The some herders and some relevant people believe that the extensive animal husbandry is most suitable sector in Mongolia The first reason is that approximately 80 of total territories are grassy area in Mongolia This is one of the biggest scales of the world Second Mongolian livestock systems is continuing with a long traditional nomadic livestock herding Hence the herders obtained the great knowledge and experiments during the several centuries Third Mongolian herder households are settled in the traditional pastoral system such as ldquokhot ailrdquo and ldquoneg goliinhonrdquo Two and more herder households including relatives and acquaintances called ldquokhot ailrdquo and ldquoneg goliinhonrdquo live together This system is most indigenous form This form of living served a variety of functions such as using pasture and seasonal movement of households Lastly the demand of livestock production is increasing during the last few years because of incomes of family are increasing and the increased demand from the neighbor countries Furthermore it has become the foundation of Mongolian livestock revolution Moreover Mongolian climate is suitable for the extensive animal husbandry On the other side the government of Mongolia begun to support intensive livestock farms to develop dairy and meat bread cattle pork and poultry Some people said the intensive livestock husbandry is better than the extensive livestock husbandry There are several reasons for this statement The first significant reason is that the increasing livestock number of Mongolia According to some researches it is possible to support around 38 million heads of livestock on the Mongolian whole grasslands However the number of livestock already reached 42 million heads in 2008 Therefore the growth of livestock is creating the degradation of pastureland by overgrazing in Mongolia Secondly since 1940 the average air temperature has been increasing in Mongolia caused by the climate change of the world Moreover the arid land is increasing due to decreasing of precipitation Therefore since last few years the yield of pasture is depleting gradually Thus grazing time of livestock is decreasing in Mongolia Finally the development of extensive farms directly depends on the supply and safety of the food Presently Mongolia is importing most of food products except the meat and meat products That is why the intensive animal husbandry is developing in some provinces especially the nearest provinces with the bigger cities such as Tuv Selenge and Bulgan According to research by the Ministry of Food and Agriculture (2007) Mongolia has 750 intensive animal husbandries Of which 494 farms for dairy 10 of them for meat cow 15 sheep farms for meat and wool 79 farms with pigs 111 farms with poultry and 40 farms with bees in Mongolia (AppendixC)

14

42 The Present Status of Mongolian Livestock

Mongolian livestock reached 421958 thousand heads in 2008 and it increased by 48 percent compared with 2007 Figure 41 shows the livestock numbers of Mongolia during last 18 years Sheep goat and cattle population has increased while those of camel and horse are decreasing in Mongolia during the last few years (Appendix D and F)

Figure 41 The state of livestock number of Mongolia from 1990 to 2008

According to Figure 41 the total number of livestock dramatically increased between 1990 and 1999 However it decreased by 287 due to drought and Dzud during 2000 to 2002 During that period 35 million and 47 million heads of animals died in 2000 and 2001 respectively During the last 7 years the number of livestock increased by 31 By the way the number of livestock in 2008 reached highest number ever

Figure 42 The comparison of the livestock structure in 2008 with 1990

15

Figure 42 shows the comparison of livestock structure (by type) during 2008 and 1990 According to Figure 41 sheep were dominating in the livestock structure until 2003 However cattle and goats dominated the structure of livestock during the recent years This is because of cashmere become herderrsquos main income from livestock due to free market economy It explained that after privatization the herders prefer to herd productive kinds of livestock Although the livestock resist Mongolian weather especially adopted for the cold season the productivity of livestock is low Therefore the some preparations such as to build warm shelters and to prepare and store hay and fodder are most significant principal elements during the wintertime Moreover pastures are subjected to increased vulnerability to parasites and other diseases These issues affect the animal productivity

43 Comparison of Actual and Estimated Livestock Number

Three different estimation including the average of number of livestock comparison of actual and estimated livestock number of Mongolia between 1990 and 2008 and livestock number in 2009 by using the Microsoft Excel (AppendixG) are given below (Avdai et al 1999) Calculation 1 The average number livestock in Mongolia from 1990 to 2008

The average number of livestock estimated was 295501 thousand heads between 1990 and 2008 Calculation 2 The goal of this part is that to estimate the equalized livestock number (amount) on the actual livestock amount by using the straight-line equation

yt = a + bt - (42)

Where t - period and a b - the parametric constraints

To estimate the parametric constraints can be solving by using the following method The value obtained by using equation (43) Table 41 shows the results of estimation To solve this system of equation substitute sumt = 0 Moreover the estimated values such as Σ y Σt2 and Σyt are shown from the Table 41

16

yt = 2978564+57145t y ndashactual livestock amount yt - estimated livestock amount

The estimated livestock amount and actual livestock number of Mongolia between 1990 and 2008 are shown in Figure 43

Table 41 The calculation by using Equation 43

(thousand heads)

y t t2 yt yt=a+bt

1990 258549 -9 81 -2326941 2464259 1991 255279 -8 64 -2042232 2521404 1992 254941 -7 49 -1784587 2578549 1993 251747 -6 36 -1510482 2635694 1994 268081 -5 25 -1340405 2692839 1995 285723 -4 16 -1142892 2749984 1996 293001 -3 9 -879003 2807129 1997 312923 -2 4 -625846 2864274 1998 328975 -1 1 -328975 2921419 1999 33596 0 0 0 2978564 2000 303274 1 1 303274 3035709 2001 260752 2 4 521504 3092854 2002 238976 3 9 716928 3149999 2003 254277 4 16 1017108 3207144 2004 280199 5 25 1400995 3264289 2005 303988 6 36 1823928 3321434 2006 34803 7 49 243621 3378579 2007 402638 8 64 3221104 3435724 2008 421959 9 81 3797631 3492869 2009 10 3550014 2010 11 3607159 2011 12 3664304 2012 13 3721449 2013 14 3778594 2014 15 3835739 2015 16 3892884

TOTAL 5659272 91 570 3257319 82642859

17

Figure 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads)

bull Calculation 3 The last estimation is that how many heads of Mongolian livestock will be reach in 2009 by using the following Equation 44

yt plusmn tα δy -(44)

Where yt - estimated amount of livestock on 2009 (see from previous Table 41) tα ndash dispersion of Student

δy ndash standard deviation y + tα = 3550014+834668= 4384682 y - tα =3550014- 834668= 2715346 Calculation shows that the livestock number of Mongolia will reach from 271534 to 438468 thousand heads animals in 2009 Below three steps shows the steps of calculation 3 Step A To calculate δy (standard deviation) can be solved by using following equation 45 (45) Table 42 shows the result of this estimation by using Equation 45

Where n - total number of sample

Step B To find the dispersion of Student (Student is the name of person) (tα)

18

tα (q k) = tα (005 18)= 212 (Appendix I) Where k - degree of freedom k= n-1=18

q - significance level (Appendix I) Step C tα δy = 21 397461 = 834668

Table 42 Estimation by using Equation 45

y yt y-yt (y-yt)2

1990 258549 246426 12123 146967129 1991 255279 25214 3139 9853321 1992 254941 257855 -2914 8491396 1993 251747 263569 -11822 139759684 1994 268081 269284 -1203 1447209 1995 285723 274998 10725 115025625 1996 293001 280713 12288 150994944 1997 312923 286427 26496 702038016 1998 328975 292142 36833 1356669889 1999 33596 297856 38104 1451914816 2000 303274 303571 -297 88209 2001 260752 309285 -48533 2355452089 2002 238976 31500 -76024 5779648576 2003 254277 320714 -66437 4413874969 2004 280199 326429 -4623 21372129 2005 303988 332143 -28155 792704025 2006 34803 337858 10172 103469584 2007 402638 343572 59066 3488792356 2008 421959 349287 72672 5281219584

2843562432

44 Land Utilization

Mongolian total territory is 1564116 thousand hectares Of which in total 742 of total area is used for the agriculture 157 used for state special land 91 of total area is comprised forest land 03 land used for cities rural town and other settlements 04 land possesses water resources and 02 of total land is covered by transportation and networks in 2006 (NSO 2006) Currently Mongolian pastureland faced many significant problems such as grassland degradation soil erosion and desertification Main sources of them are overgrazing water

19

source and the population According to some survey approximately 120 million hectare land (70 percent) of total Mongolian territory is degraded

Figure 44 The comparison of utilized lands between 2000 and 2006 (by type)

Figure 44 shows utilization land between 2000 and 2006 For example the agriculture land and forestland decreased by 9 and 4 in 2006 compared to 2000 Generally the development of crop production and destruction the populationrsquos migration to urban areas and the nomadic livestock husbandry are leading to the overgrazing and degradation of the land Moreover livestock number in Mongolia is increasing during the last few years Especially in 2008 it reached the highest number of livestock for the first time in history Even though the herders are facing the shortage of fodder In addition the land for the natural pasture has slightly increased since 1989

441 The Impacts for the Land Degradation

There are many environmental factors affect on the agricultural sector in complex ways Most scientists and experts agreed that factors of land degradation in Mongolia could be divided into following two main categories including human and natural factors Today many factors affect the land degradation caused by the human activities such as excessive grazing deforestation poor irrigation and inappropriate land tenure in all sector The first significant factor is overgrazing Crop cultivation is one of the most important reasons of soil erosion and overgrazing Spring tilling coincides caused the seasonal higher speed wind and most planted areas are lack of windbreaks like trees For example the average wind speed of Gobi region is 3hellip4 meters per second it is one of the significant cause of soil moisture loss and erosion According to some survey an average of 35ndash50 tons of soils has been lost from each

20

hectare of cultivated land due to erosion during the past 30 years Half of all cultivated land degraded to some degree of erosion Another factor of overgrazing is the vehicle-induced degradation The second significant factor is the deforestation due to clear-cutting the trees fire and insect infestations The third important factor is inappropriate land tenure like mining and inadequate waste management Shagdar (2001) estimated approximately 100000 hectare of land have been degraded by mining and quarrying Moreover another significant factor of land degradation is bad or poor irrigation practices Salinization of irrigated land in arid climates as a result of poor drainage and evaporation and using highly toxic pesticide for vegetation protection from insects causes depletion of soil productivity The final factor of land degradation is the legal provision of ldquoopenness of pastureland which is public propertyrdquo Because of this legal provision the utilizing of pastureland is free for everyone (UNDP amp SIDA 2003) On the other hand the land degradation of Mongolia depends directly on nature and weather conditions Most important impact is the location It is located high above sea level and far away from the ocean Mongolia lies between 420 520N and almost 1200 E Another principal factor is the global warming and climatic change of the world Climate change can affect weeds insects plant diseases and pathogens in the environment especially in agricultural activities Another consequence on the pasture is the lack of rainfall Mongolia has low precipitation and short growing seasons especially long and cold winter and short and hot summer Therefore other significant causes are drought and Dzud in Mongolia They are the keys determinants of vulnerability of livestock to climate change They affect the livelihood of herdersrsquo household which is reduced livestock productivity especially milk and destroy pasture (AIACC 2006) The natural disasters like dzud and drought have occurred around 30 times in Mongolia with different level of harm (UNDPampSIDA 2003) (Figure 45)

Figure 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006)

During the disaster of harsh winter (dzud) in 1999- 2000 almost one third of the total livestock died in 1999 Figure 46 shows that the losses adult animals between 2000 and 2006 in Mongolia

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

2

12 Background

The world is in the midst of what has been dubbed a livestock revolution with far reaching implications for human health development the environment and trade (Delgado et al 1999) Mongolia is one of the countries which stands at forefront of this revolution Therefore the role of livestock sector is very important in the Mongolian economy and this sector dominated on the agriculture The value added of agricultural sector is 188 of GDP of Mongolia The livestock products constitute 876 of total output of agriculture (NSO 2006) In 2006 there were 421400 herders constituting almost half of the countryrsquos economically active population (NSO 2006) Moreover there are two main sectors in the food and agricultural sector such as livestock and crop production Those sectors encourage the rural development of Mongolia such as to provide the economic growth Agro-processing industries generate value addition by the processing of agricultural raw materials both food and non-food into products which are marketable usable or edible have improved storability and or nutritive value and enhance income and profitability for producers An agro industrial system is modeled in order to illustrate the marketing the processing the production of agricultural materials and consumption in any countries (Salokhe and Hicks 2001) The Mongolian people to lead a nomadic lifestyle based on pastoral animal husbandry After privatization the intensive dairy farms became a significant issue which is now on the political agenda Keating and McCown (2001) remarked that there are 2 main components in agricultural system such as the production system and management system Production system contains pastureland livestock animals and the climate Today there are many significant problems such as the degradation of grassland desertification soil erosion and the lack for fodder of livestock Moreover the one of the problems is the impact of climate like drought and dzud (harsh winter) Drought occurs once every 2-3 years in the Gobi region and every 10 years in other regions (GOMampUNDP 2000) Nationwide drought occurred in 1944 and in 1972 (MFA 2001) Management system generates the knowledge regarding general principles and theory involving agricultural farmsrsquo management like agricultural economics animal science agronomy rural sociology psychology and engineering (Keating and McCown 2001)

13 Rationale

The livestock plays an important role in Mongolian agriculture and economy Furthermore meat and milk foodstuffs are important in Mongolian food sector and it generates the employment and income Therefore it is so important to know the past and current status potentials problems and constraints After that policies and strategies can be designed for better management and improvements of this sector Moreover this study contributes to the development by providing the information about status and problems of herder households and some intensive dairy farms

3

In addition Enkhjargal (1999) recommended that the government policy for livestock sector especially diary development should encourage and support research and development of dairy breeding stock pasture and farm management Involvements of farmers as producers need to be extending into economic activities that could provide better returns to them It should include feeding breeding health caring milk collecting transporting and processing

14 Objectives

The major objective is to investigate Mongolian livestock sector in Tuv province The specific

objectives are

bull To evaluate the present situation of livestock sub sector of Mongolia and to investigate the agricultural food and non-food products related with livestock animals

bull To analyze the future growth prospects of Mongolian livestock husbandry bull To present the environmental factors which affect the livestock sector

bull To conduct sector and SWOT analyses to identify strengths weaknesses opportunities and threats that the intensive and extensive livestock husbandry has been facing with

15 Limitation

Because of unavailable of data for the whole country this study was restricted only to Tuv province In addition information is limited about the herder households and farmers Therefore the study focuses on the main producers which are herder households and some intensive dairy farms

4

CHAPTER II

LITERATURE REVIEW

21 The Current Situation of Livestock Husbandry in Mongolia

The main source of Mongolian economy is coming from the agricultural sector (MIF 2006) The agricultural sector of Mongolia divided two main subsectors such as livestock sector and cropping sector (MIF 2006) At the end of 2006 approximately 40 of total population had lived in the rural areas Rural development is essential for Mongolia to achieve sustained economic growth and poverty reduction Livestock continues to provide rural households with an important source of herdersrsquo income jobs and food security and a means for investing and storing their wealth (WB 2006) Therefore animal husbandry plays the important role of the national economy Moreover agriculture still accounts for more than a fifth of GDP Some 40 per cent of the Mongolian workforce employ in traditional nomadic livestock herding Agriculture is produced 188 percent of GDP and contributed 30 percent of the total export of Mongolia Figure 21 demonstrates the comparison of the portion of divisions to GDP in 2005 with 2006

Figure 21 The comparison of the portion of divisions to GDP (NSO 2005-2006) The GDP growth due to contribution from all sectors was 99 in 2007 the average of GDP was 87 between 2003 and 2006 Especially agriculture sector provides almost half the population had a strong year extending by 16 and contributing 4 points to growth of GDP The data in Figure 22 shows that the ratio of GDP growth from 2003 to 2009 In addition it shows GDP for the forecast period in Mongolia The forecasts assume that the price will be comparatively higher for export goods (ADO 2008)

5

Figure 22 GDP growth by percentage (NSO 2007)

Enkhjargal (2005) noted that 35 of GDP and the agricultural sector contribute almost one fourth goods for export Moreover approximately 50 of the total labor force is employed in agricultural sector Barker (1997) remarked lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo In addition Mongolian livestock sector produces more than 901 of gross agricultural products and the source of income for more than 34 of all households in Mongolia In 2006 there are 348 million livestock counted in Mongolia The livestock number increased by 44 million heads of livestock animals compared to 2005 (NSO 2006) Furthermore as a result of census in 2006 there are 253000 camels 2114000 horses 2167000 cattle 14815000 sheep and 15451000 goats counted in Mongolia The number of horses increased by 86000 heads cattle increased by 204000 sheep and goat increased by 2 million heads respectively but the number of camel decreased by 07 thousand heads compared with 2005 (AIP 2006-2007)

Figure 23 The comparison of total livestock with number of privately owned livestock Moreover the statistical data shows (Figure 23) that almost 97 of the total livestock was private owned in 2006 and 31 of herder households have more than 100 livestock animals 22 Brief history of livestock husbandry development in Mongolia

6

Traditionally five types of domestic livestock in Mongolia are sheep goats cattle horses and camel Pigs hens and other birds seldom reared Horse is the first animal in Mongolia to be domesticated (Baasanjav et al 1999)

Shagdar (2001) remarked that the wild animals domesticated livestock animals such as sheep and horses in Mongolia between the 8th and 3rd centuries BC Shagdar (2001) argued that Mongolian herder households began the nomadic form in the 13th century and this system remained until present day In those times most livestock animals was private owned of herders However in 1951 the livestock animals transferred to the collective ownership form This collective ownership form was tended to develop more intensively managed production system This form gave diverse assistances to the herders For example to build the enclosures and wells to prepare hay (Shagdar 2001) However during the collectivization period the share of private livestock decreased to 17-30 of the total number of livestock (Shagdar 2001) The collective ownership form lasted till 1989 Due to tend of the decreasing livestock number Mongolian government privatized the livestock animals to the herders in 1991 Because of privatization 967 of total livestock shifted private owned form and 31 of herder households have more than 100 livestock animals After privatization the livestock number and number of herders rapidly increased in Mongolia

23 Regional Distribution

Mongolia divided 5 main regions named East West Central Khangai and Ulaanbaatar Figure 24 shows the regional distribution of livestock in Mongolia (NSO 2006) The forests and mountainous areas of Khangai region Central region and West region of Mongolia are most populous in terms of livestock

Figure 24 Regional distribution of livestock in 2006 The livestock is relatively distributed in comparison with the population size of each region Sheep and goats are the majority livestock and respectively accounted for 425 and 444 of

7

the total number of livestock in every region in 2006 Camels account for only 07 of total livestock and mainly rise in the southern part of the country (NSO 2006) Overgrazing is becoming problematic in areas close to major markets For example livestock density of Orkhon-Uul Darkhan and the capital city named of Ulaanbaatar which is 5 to 10 times lower than other regions

24 Livestock Production

Mongolian major livestock products include meat and meat products and milk and dairy products In addition wool hair cashmere hides and skins are the key input for animal processing industries ( Shagdar 2001) Agricultural production comprises of 30 meat and meat products 27 of them include milk and dairy products 2 skin and hides 1 animal and plants oil 31 flour and flour products 2 fruit and vegetables and 2 livestock feed and starches

Figure 25 Share of domestic production versus imports in consumption of major products (AIP

2006-2007)

From 1999 to 2004 all foodstuffs consumption except meat and milk has been below the recommended level Because of natural disasters such as drought and dzud in recent years the consumption of milk and meat products has declined during those years However the consumption of flour rise eggs potatoes and vegetables has increased in 1999-2002 Especially consumptions of potatoes vegetables and fruits are significantly below the recommendation (PRSP 2004) Mongolia imports some non-meat food products from Russia China and others Mongolia relies fully on imports for fruits and rice (WB 2008) Livestock production is entirely seasonal taking place in harmony with the Mongolian climate For example wool and hair collect in the late spring and early summer while most livestock

8

slaughter in the late autumn and early winter Milk and dairy products mainly produce during summer (Shagdar 2001) a) Meat and meat products On average 75 million head of livestock slaughter for consumption annually accounting for approximately 25 of the total livestock herd counted at the beginning of each year This equals 250000-300000 tons of meat which include mutton beef goat meat and horsemeat Camel meat is not so popular and consumed mostly during the winter Meat and meat products taken from of 30 beef 40 mutton 10 goat meat and 15 horsemeat (Shagdar 2001) b) Milk and dairy products Annually 250000-350000 tons milk produces in Mongolia Cowrsquos milk possesses more than 80 of the total of milk Moreover sheep and goat milk and horse milk accounting for about 10 and 8 respectively In addition more than 90 of all cows are accounted by native Mongolian cows which have an average milk yield of 19 liters per day in steppe and forest region and 13 liters in the Gobi region (Shagdar 2001) Dairy products include yogurt butter dried curds cheese etc Particularly in the rural areas milk consumes directly and converts to a wide range of traditional products Many of these have a long life and are stored for consumption in the winter and spring (WB 2003) Horse milk is used to produce the popular drink it contain a low alcohol that is similar the beer Rich content of amino acids vitamins and sugar found in horse milk makes airag a nutritious and healthy drink which is also low in fat Therefore it is used to treat many illnesses including tuberculosis diseases of digestive organs pharmaceutical toxicity and fatigue (Shagdar 2001) c) Wool hair and cashmere Approximately 25000 tons of wool hair and cashmere is produced in Mongolia annually more than 70 of which is accounted for by sheep wool Mongolia is the second largest producer of raw cashmere in the world Approximately 3300 tons of cashmere is produced annually That is accounting for about 20 of the total global supply Therefore cashmere is one of the main export commodities in Mongolia In wool and cashmere industry the productions of major items include spun threat camel wool blanket carpet felt etc (Shagdar 2001) d) Hides and skin One of valuable resource for producing luxury consumer goods is hides and skin About 65-85 million individual hides and skin are produced in Mongolia annually more than 80 of these are sheep and goatskins which are supplied to processing industries or exported Traditionally sheepskin was used for making warm winter coats and floor covering while various accessories for handling horses were made from cattle hides (Shagdar 2001)

9

CHAPTER III

METHODOLOGY The study conducted in four main stages such as the data collection analysis of the data and reporting and conclusions and recommendation part The general methodology used for specific objectives of the study is shown in Figure 31

Figure 31 Flow chart of methodology and procedure for survey and data collection

10

31 Site selection

The sites for the study selected included three sub-provinces named Jargalant Sumber and Bayanchandmani of Tuv province It is nearest province with the capital city (Figure 32) The site selection chose based on the following characteristics

bull Agricultural production bull The location of province bull Potentials for the development of livestock husbandry bull Financial constraints of the research bull Data availability

General information of Tuv province

Area 77300 sq km Number of livestock 1598000 Population 96500 Cropland 318100 hectare Center Zuunmod Number of sub-provinces 27

Tuv province is located in the centre of Mongolia In addition capital city named Ulaanbaatar located in this provincersquos territory Tuv province is one of the biggest and most productive provinces as this province is well positioned geographically to supply livestock production to nearest areas with high demand This province is situated 43 km from the capital city Moreover the major intensive animal farms are located in Tuv province

In this province have 201 household farms include dairy farms 152 pork farms 24 and chicken farm 1 respectively (MFA 2007) There are a total of 210000 camels 1979 thousand head of horses 1311 thousand head of cattle 10408 thousand of sheep and 8013 thousand heads of goats (NSO 2006)

33 Sampling Design and Procedures of Survey

Formal survey was conducted to collect the general information of herder householdsrsquo comprehension and the current development of agricultural products Herder household and farmers who own agribusiness were selected for interviews The number of herder households and number of farms in each province were determined by following formula

Where n= Number of total sample

N= Total number of farms and herders households E= Error (005)

80 herder households and 8 intensive farms from selected in Tuv province for this survey This size of samples of herders and farms provided statistical justification in order to generalize the results

11

Figure 32 Location of Tuv aimag

34 Data Collection

Data were collected from two sources (i) Secondary data was from the Mongolian National Statistical Office Mongolian State

University of Agriculture and the Ministry of Food and Agriculture Data used in this study included Urban and rural population Number of herder households (selected area) Total number of livestock and livestock distribution Land utilization Main agricultural production

12

(ii) Primary data was collected through questionnaires distributed to the randomly selected dairy farms and herder households in Tuv province and to determine the production processing and marketing (Appendix-A and B) Data collected in this part included

Present situation and the growth prospect of Livestock husbandry The suggestions and comments of herders and farmers who responded in this

research The comments The current problems faced by the herders and farmers

The survey aimed to question 80 herding households from the Tuv province and 8 intensive farmers of Tuv province were involved but in practice only 69 herders and 32 small and medium scale intensive dairy farms were surveyed Therefore around 10 relevant people including an official such as governor of soum and bag coordinator of household livelihood improvement related project and livestock expert were given an additional questionnaire

35 Data processing and analysis

351 Data processing The data of this study collected from the herder households and farmers of Tuv province The draft were analyzed to know the development future growth the influencing factors and special characteristics of the livestock sector SWOT analysis Around 80 questionnaires processed in the SPSS package and Microsoft Excel by using descriptive statistics Moreover in the survey investigated the herders and farmersrsquo opinions about the Mongolian livestock sub sector 352 Data analysis Data collections were analyzed quantitative and qualitative ways according to the field data The basis statistics data and the survey questionnaire results investigated the past and current performance of Mongolian livestock husbandry and calculated the future growth of livestock animals in Mongolia by showing the form of table figure flowchart mean and percentile 353 SWOT analysis The statistical data and the results of questionnaire determine the external factors such as Opportunity and Threat and internal factors such as Strength and Weakness of intensive and extensive livestock husbandry of Mongolia Moreover SWOT analyses provided the opportunity weakness and other factors of Tuv province for the livestock sector

13

CHAPTER IV

RESULT AND DISCUSSION

41 The current situation of Mongolian Animal Husbandry

Generally Mongolian animal husbandry divided two main sectors extensive animal husbandry and intensive animal husbandry Barker (1997) said lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo The extensive livestock management system of Mongolia includes main five species of livestock for most of the year The some herders and some relevant people believe that the extensive animal husbandry is most suitable sector in Mongolia The first reason is that approximately 80 of total territories are grassy area in Mongolia This is one of the biggest scales of the world Second Mongolian livestock systems is continuing with a long traditional nomadic livestock herding Hence the herders obtained the great knowledge and experiments during the several centuries Third Mongolian herder households are settled in the traditional pastoral system such as ldquokhot ailrdquo and ldquoneg goliinhonrdquo Two and more herder households including relatives and acquaintances called ldquokhot ailrdquo and ldquoneg goliinhonrdquo live together This system is most indigenous form This form of living served a variety of functions such as using pasture and seasonal movement of households Lastly the demand of livestock production is increasing during the last few years because of incomes of family are increasing and the increased demand from the neighbor countries Furthermore it has become the foundation of Mongolian livestock revolution Moreover Mongolian climate is suitable for the extensive animal husbandry On the other side the government of Mongolia begun to support intensive livestock farms to develop dairy and meat bread cattle pork and poultry Some people said the intensive livestock husbandry is better than the extensive livestock husbandry There are several reasons for this statement The first significant reason is that the increasing livestock number of Mongolia According to some researches it is possible to support around 38 million heads of livestock on the Mongolian whole grasslands However the number of livestock already reached 42 million heads in 2008 Therefore the growth of livestock is creating the degradation of pastureland by overgrazing in Mongolia Secondly since 1940 the average air temperature has been increasing in Mongolia caused by the climate change of the world Moreover the arid land is increasing due to decreasing of precipitation Therefore since last few years the yield of pasture is depleting gradually Thus grazing time of livestock is decreasing in Mongolia Finally the development of extensive farms directly depends on the supply and safety of the food Presently Mongolia is importing most of food products except the meat and meat products That is why the intensive animal husbandry is developing in some provinces especially the nearest provinces with the bigger cities such as Tuv Selenge and Bulgan According to research by the Ministry of Food and Agriculture (2007) Mongolia has 750 intensive animal husbandries Of which 494 farms for dairy 10 of them for meat cow 15 sheep farms for meat and wool 79 farms with pigs 111 farms with poultry and 40 farms with bees in Mongolia (AppendixC)

14

42 The Present Status of Mongolian Livestock

Mongolian livestock reached 421958 thousand heads in 2008 and it increased by 48 percent compared with 2007 Figure 41 shows the livestock numbers of Mongolia during last 18 years Sheep goat and cattle population has increased while those of camel and horse are decreasing in Mongolia during the last few years (Appendix D and F)

Figure 41 The state of livestock number of Mongolia from 1990 to 2008

According to Figure 41 the total number of livestock dramatically increased between 1990 and 1999 However it decreased by 287 due to drought and Dzud during 2000 to 2002 During that period 35 million and 47 million heads of animals died in 2000 and 2001 respectively During the last 7 years the number of livestock increased by 31 By the way the number of livestock in 2008 reached highest number ever

Figure 42 The comparison of the livestock structure in 2008 with 1990

15

Figure 42 shows the comparison of livestock structure (by type) during 2008 and 1990 According to Figure 41 sheep were dominating in the livestock structure until 2003 However cattle and goats dominated the structure of livestock during the recent years This is because of cashmere become herderrsquos main income from livestock due to free market economy It explained that after privatization the herders prefer to herd productive kinds of livestock Although the livestock resist Mongolian weather especially adopted for the cold season the productivity of livestock is low Therefore the some preparations such as to build warm shelters and to prepare and store hay and fodder are most significant principal elements during the wintertime Moreover pastures are subjected to increased vulnerability to parasites and other diseases These issues affect the animal productivity

43 Comparison of Actual and Estimated Livestock Number

Three different estimation including the average of number of livestock comparison of actual and estimated livestock number of Mongolia between 1990 and 2008 and livestock number in 2009 by using the Microsoft Excel (AppendixG) are given below (Avdai et al 1999) Calculation 1 The average number livestock in Mongolia from 1990 to 2008

The average number of livestock estimated was 295501 thousand heads between 1990 and 2008 Calculation 2 The goal of this part is that to estimate the equalized livestock number (amount) on the actual livestock amount by using the straight-line equation

yt = a + bt - (42)

Where t - period and a b - the parametric constraints

To estimate the parametric constraints can be solving by using the following method The value obtained by using equation (43) Table 41 shows the results of estimation To solve this system of equation substitute sumt = 0 Moreover the estimated values such as Σ y Σt2 and Σyt are shown from the Table 41

16

yt = 2978564+57145t y ndashactual livestock amount yt - estimated livestock amount

The estimated livestock amount and actual livestock number of Mongolia between 1990 and 2008 are shown in Figure 43

Table 41 The calculation by using Equation 43

(thousand heads)

y t t2 yt yt=a+bt

1990 258549 -9 81 -2326941 2464259 1991 255279 -8 64 -2042232 2521404 1992 254941 -7 49 -1784587 2578549 1993 251747 -6 36 -1510482 2635694 1994 268081 -5 25 -1340405 2692839 1995 285723 -4 16 -1142892 2749984 1996 293001 -3 9 -879003 2807129 1997 312923 -2 4 -625846 2864274 1998 328975 -1 1 -328975 2921419 1999 33596 0 0 0 2978564 2000 303274 1 1 303274 3035709 2001 260752 2 4 521504 3092854 2002 238976 3 9 716928 3149999 2003 254277 4 16 1017108 3207144 2004 280199 5 25 1400995 3264289 2005 303988 6 36 1823928 3321434 2006 34803 7 49 243621 3378579 2007 402638 8 64 3221104 3435724 2008 421959 9 81 3797631 3492869 2009 10 3550014 2010 11 3607159 2011 12 3664304 2012 13 3721449 2013 14 3778594 2014 15 3835739 2015 16 3892884

TOTAL 5659272 91 570 3257319 82642859

17

Figure 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads)

bull Calculation 3 The last estimation is that how many heads of Mongolian livestock will be reach in 2009 by using the following Equation 44

yt plusmn tα δy -(44)

Where yt - estimated amount of livestock on 2009 (see from previous Table 41) tα ndash dispersion of Student

δy ndash standard deviation y + tα = 3550014+834668= 4384682 y - tα =3550014- 834668= 2715346 Calculation shows that the livestock number of Mongolia will reach from 271534 to 438468 thousand heads animals in 2009 Below three steps shows the steps of calculation 3 Step A To calculate δy (standard deviation) can be solved by using following equation 45 (45) Table 42 shows the result of this estimation by using Equation 45

Where n - total number of sample

Step B To find the dispersion of Student (Student is the name of person) (tα)

18

tα (q k) = tα (005 18)= 212 (Appendix I) Where k - degree of freedom k= n-1=18

q - significance level (Appendix I) Step C tα δy = 21 397461 = 834668

Table 42 Estimation by using Equation 45

y yt y-yt (y-yt)2

1990 258549 246426 12123 146967129 1991 255279 25214 3139 9853321 1992 254941 257855 -2914 8491396 1993 251747 263569 -11822 139759684 1994 268081 269284 -1203 1447209 1995 285723 274998 10725 115025625 1996 293001 280713 12288 150994944 1997 312923 286427 26496 702038016 1998 328975 292142 36833 1356669889 1999 33596 297856 38104 1451914816 2000 303274 303571 -297 88209 2001 260752 309285 -48533 2355452089 2002 238976 31500 -76024 5779648576 2003 254277 320714 -66437 4413874969 2004 280199 326429 -4623 21372129 2005 303988 332143 -28155 792704025 2006 34803 337858 10172 103469584 2007 402638 343572 59066 3488792356 2008 421959 349287 72672 5281219584

2843562432

44 Land Utilization

Mongolian total territory is 1564116 thousand hectares Of which in total 742 of total area is used for the agriculture 157 used for state special land 91 of total area is comprised forest land 03 land used for cities rural town and other settlements 04 land possesses water resources and 02 of total land is covered by transportation and networks in 2006 (NSO 2006) Currently Mongolian pastureland faced many significant problems such as grassland degradation soil erosion and desertification Main sources of them are overgrazing water

19

source and the population According to some survey approximately 120 million hectare land (70 percent) of total Mongolian territory is degraded

Figure 44 The comparison of utilized lands between 2000 and 2006 (by type)

Figure 44 shows utilization land between 2000 and 2006 For example the agriculture land and forestland decreased by 9 and 4 in 2006 compared to 2000 Generally the development of crop production and destruction the populationrsquos migration to urban areas and the nomadic livestock husbandry are leading to the overgrazing and degradation of the land Moreover livestock number in Mongolia is increasing during the last few years Especially in 2008 it reached the highest number of livestock for the first time in history Even though the herders are facing the shortage of fodder In addition the land for the natural pasture has slightly increased since 1989

441 The Impacts for the Land Degradation

There are many environmental factors affect on the agricultural sector in complex ways Most scientists and experts agreed that factors of land degradation in Mongolia could be divided into following two main categories including human and natural factors Today many factors affect the land degradation caused by the human activities such as excessive grazing deforestation poor irrigation and inappropriate land tenure in all sector The first significant factor is overgrazing Crop cultivation is one of the most important reasons of soil erosion and overgrazing Spring tilling coincides caused the seasonal higher speed wind and most planted areas are lack of windbreaks like trees For example the average wind speed of Gobi region is 3hellip4 meters per second it is one of the significant cause of soil moisture loss and erosion According to some survey an average of 35ndash50 tons of soils has been lost from each

20

hectare of cultivated land due to erosion during the past 30 years Half of all cultivated land degraded to some degree of erosion Another factor of overgrazing is the vehicle-induced degradation The second significant factor is the deforestation due to clear-cutting the trees fire and insect infestations The third important factor is inappropriate land tenure like mining and inadequate waste management Shagdar (2001) estimated approximately 100000 hectare of land have been degraded by mining and quarrying Moreover another significant factor of land degradation is bad or poor irrigation practices Salinization of irrigated land in arid climates as a result of poor drainage and evaporation and using highly toxic pesticide for vegetation protection from insects causes depletion of soil productivity The final factor of land degradation is the legal provision of ldquoopenness of pastureland which is public propertyrdquo Because of this legal provision the utilizing of pastureland is free for everyone (UNDP amp SIDA 2003) On the other hand the land degradation of Mongolia depends directly on nature and weather conditions Most important impact is the location It is located high above sea level and far away from the ocean Mongolia lies between 420 520N and almost 1200 E Another principal factor is the global warming and climatic change of the world Climate change can affect weeds insects plant diseases and pathogens in the environment especially in agricultural activities Another consequence on the pasture is the lack of rainfall Mongolia has low precipitation and short growing seasons especially long and cold winter and short and hot summer Therefore other significant causes are drought and Dzud in Mongolia They are the keys determinants of vulnerability of livestock to climate change They affect the livelihood of herdersrsquo household which is reduced livestock productivity especially milk and destroy pasture (AIACC 2006) The natural disasters like dzud and drought have occurred around 30 times in Mongolia with different level of harm (UNDPampSIDA 2003) (Figure 45)

Figure 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006)

During the disaster of harsh winter (dzud) in 1999- 2000 almost one third of the total livestock died in 1999 Figure 46 shows that the losses adult animals between 2000 and 2006 in Mongolia

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

3

In addition Enkhjargal (1999) recommended that the government policy for livestock sector especially diary development should encourage and support research and development of dairy breeding stock pasture and farm management Involvements of farmers as producers need to be extending into economic activities that could provide better returns to them It should include feeding breeding health caring milk collecting transporting and processing

14 Objectives

The major objective is to investigate Mongolian livestock sector in Tuv province The specific

objectives are

bull To evaluate the present situation of livestock sub sector of Mongolia and to investigate the agricultural food and non-food products related with livestock animals

bull To analyze the future growth prospects of Mongolian livestock husbandry bull To present the environmental factors which affect the livestock sector

bull To conduct sector and SWOT analyses to identify strengths weaknesses opportunities and threats that the intensive and extensive livestock husbandry has been facing with

15 Limitation

Because of unavailable of data for the whole country this study was restricted only to Tuv province In addition information is limited about the herder households and farmers Therefore the study focuses on the main producers which are herder households and some intensive dairy farms

4

CHAPTER II

LITERATURE REVIEW

21 The Current Situation of Livestock Husbandry in Mongolia

The main source of Mongolian economy is coming from the agricultural sector (MIF 2006) The agricultural sector of Mongolia divided two main subsectors such as livestock sector and cropping sector (MIF 2006) At the end of 2006 approximately 40 of total population had lived in the rural areas Rural development is essential for Mongolia to achieve sustained economic growth and poverty reduction Livestock continues to provide rural households with an important source of herdersrsquo income jobs and food security and a means for investing and storing their wealth (WB 2006) Therefore animal husbandry plays the important role of the national economy Moreover agriculture still accounts for more than a fifth of GDP Some 40 per cent of the Mongolian workforce employ in traditional nomadic livestock herding Agriculture is produced 188 percent of GDP and contributed 30 percent of the total export of Mongolia Figure 21 demonstrates the comparison of the portion of divisions to GDP in 2005 with 2006

Figure 21 The comparison of the portion of divisions to GDP (NSO 2005-2006) The GDP growth due to contribution from all sectors was 99 in 2007 the average of GDP was 87 between 2003 and 2006 Especially agriculture sector provides almost half the population had a strong year extending by 16 and contributing 4 points to growth of GDP The data in Figure 22 shows that the ratio of GDP growth from 2003 to 2009 In addition it shows GDP for the forecast period in Mongolia The forecasts assume that the price will be comparatively higher for export goods (ADO 2008)

5

Figure 22 GDP growth by percentage (NSO 2007)

Enkhjargal (2005) noted that 35 of GDP and the agricultural sector contribute almost one fourth goods for export Moreover approximately 50 of the total labor force is employed in agricultural sector Barker (1997) remarked lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo In addition Mongolian livestock sector produces more than 901 of gross agricultural products and the source of income for more than 34 of all households in Mongolia In 2006 there are 348 million livestock counted in Mongolia The livestock number increased by 44 million heads of livestock animals compared to 2005 (NSO 2006) Furthermore as a result of census in 2006 there are 253000 camels 2114000 horses 2167000 cattle 14815000 sheep and 15451000 goats counted in Mongolia The number of horses increased by 86000 heads cattle increased by 204000 sheep and goat increased by 2 million heads respectively but the number of camel decreased by 07 thousand heads compared with 2005 (AIP 2006-2007)

Figure 23 The comparison of total livestock with number of privately owned livestock Moreover the statistical data shows (Figure 23) that almost 97 of the total livestock was private owned in 2006 and 31 of herder households have more than 100 livestock animals 22 Brief history of livestock husbandry development in Mongolia

6

Traditionally five types of domestic livestock in Mongolia are sheep goats cattle horses and camel Pigs hens and other birds seldom reared Horse is the first animal in Mongolia to be domesticated (Baasanjav et al 1999)

Shagdar (2001) remarked that the wild animals domesticated livestock animals such as sheep and horses in Mongolia between the 8th and 3rd centuries BC Shagdar (2001) argued that Mongolian herder households began the nomadic form in the 13th century and this system remained until present day In those times most livestock animals was private owned of herders However in 1951 the livestock animals transferred to the collective ownership form This collective ownership form was tended to develop more intensively managed production system This form gave diverse assistances to the herders For example to build the enclosures and wells to prepare hay (Shagdar 2001) However during the collectivization period the share of private livestock decreased to 17-30 of the total number of livestock (Shagdar 2001) The collective ownership form lasted till 1989 Due to tend of the decreasing livestock number Mongolian government privatized the livestock animals to the herders in 1991 Because of privatization 967 of total livestock shifted private owned form and 31 of herder households have more than 100 livestock animals After privatization the livestock number and number of herders rapidly increased in Mongolia

23 Regional Distribution

Mongolia divided 5 main regions named East West Central Khangai and Ulaanbaatar Figure 24 shows the regional distribution of livestock in Mongolia (NSO 2006) The forests and mountainous areas of Khangai region Central region and West region of Mongolia are most populous in terms of livestock

Figure 24 Regional distribution of livestock in 2006 The livestock is relatively distributed in comparison with the population size of each region Sheep and goats are the majority livestock and respectively accounted for 425 and 444 of

7

the total number of livestock in every region in 2006 Camels account for only 07 of total livestock and mainly rise in the southern part of the country (NSO 2006) Overgrazing is becoming problematic in areas close to major markets For example livestock density of Orkhon-Uul Darkhan and the capital city named of Ulaanbaatar which is 5 to 10 times lower than other regions

24 Livestock Production

Mongolian major livestock products include meat and meat products and milk and dairy products In addition wool hair cashmere hides and skins are the key input for animal processing industries ( Shagdar 2001) Agricultural production comprises of 30 meat and meat products 27 of them include milk and dairy products 2 skin and hides 1 animal and plants oil 31 flour and flour products 2 fruit and vegetables and 2 livestock feed and starches

Figure 25 Share of domestic production versus imports in consumption of major products (AIP

2006-2007)

From 1999 to 2004 all foodstuffs consumption except meat and milk has been below the recommended level Because of natural disasters such as drought and dzud in recent years the consumption of milk and meat products has declined during those years However the consumption of flour rise eggs potatoes and vegetables has increased in 1999-2002 Especially consumptions of potatoes vegetables and fruits are significantly below the recommendation (PRSP 2004) Mongolia imports some non-meat food products from Russia China and others Mongolia relies fully on imports for fruits and rice (WB 2008) Livestock production is entirely seasonal taking place in harmony with the Mongolian climate For example wool and hair collect in the late spring and early summer while most livestock

8

slaughter in the late autumn and early winter Milk and dairy products mainly produce during summer (Shagdar 2001) a) Meat and meat products On average 75 million head of livestock slaughter for consumption annually accounting for approximately 25 of the total livestock herd counted at the beginning of each year This equals 250000-300000 tons of meat which include mutton beef goat meat and horsemeat Camel meat is not so popular and consumed mostly during the winter Meat and meat products taken from of 30 beef 40 mutton 10 goat meat and 15 horsemeat (Shagdar 2001) b) Milk and dairy products Annually 250000-350000 tons milk produces in Mongolia Cowrsquos milk possesses more than 80 of the total of milk Moreover sheep and goat milk and horse milk accounting for about 10 and 8 respectively In addition more than 90 of all cows are accounted by native Mongolian cows which have an average milk yield of 19 liters per day in steppe and forest region and 13 liters in the Gobi region (Shagdar 2001) Dairy products include yogurt butter dried curds cheese etc Particularly in the rural areas milk consumes directly and converts to a wide range of traditional products Many of these have a long life and are stored for consumption in the winter and spring (WB 2003) Horse milk is used to produce the popular drink it contain a low alcohol that is similar the beer Rich content of amino acids vitamins and sugar found in horse milk makes airag a nutritious and healthy drink which is also low in fat Therefore it is used to treat many illnesses including tuberculosis diseases of digestive organs pharmaceutical toxicity and fatigue (Shagdar 2001) c) Wool hair and cashmere Approximately 25000 tons of wool hair and cashmere is produced in Mongolia annually more than 70 of which is accounted for by sheep wool Mongolia is the second largest producer of raw cashmere in the world Approximately 3300 tons of cashmere is produced annually That is accounting for about 20 of the total global supply Therefore cashmere is one of the main export commodities in Mongolia In wool and cashmere industry the productions of major items include spun threat camel wool blanket carpet felt etc (Shagdar 2001) d) Hides and skin One of valuable resource for producing luxury consumer goods is hides and skin About 65-85 million individual hides and skin are produced in Mongolia annually more than 80 of these are sheep and goatskins which are supplied to processing industries or exported Traditionally sheepskin was used for making warm winter coats and floor covering while various accessories for handling horses were made from cattle hides (Shagdar 2001)

9

CHAPTER III

METHODOLOGY The study conducted in four main stages such as the data collection analysis of the data and reporting and conclusions and recommendation part The general methodology used for specific objectives of the study is shown in Figure 31

Figure 31 Flow chart of methodology and procedure for survey and data collection

10

31 Site selection

The sites for the study selected included three sub-provinces named Jargalant Sumber and Bayanchandmani of Tuv province It is nearest province with the capital city (Figure 32) The site selection chose based on the following characteristics

bull Agricultural production bull The location of province bull Potentials for the development of livestock husbandry bull Financial constraints of the research bull Data availability

General information of Tuv province

Area 77300 sq km Number of livestock 1598000 Population 96500 Cropland 318100 hectare Center Zuunmod Number of sub-provinces 27

Tuv province is located in the centre of Mongolia In addition capital city named Ulaanbaatar located in this provincersquos territory Tuv province is one of the biggest and most productive provinces as this province is well positioned geographically to supply livestock production to nearest areas with high demand This province is situated 43 km from the capital city Moreover the major intensive animal farms are located in Tuv province

In this province have 201 household farms include dairy farms 152 pork farms 24 and chicken farm 1 respectively (MFA 2007) There are a total of 210000 camels 1979 thousand head of horses 1311 thousand head of cattle 10408 thousand of sheep and 8013 thousand heads of goats (NSO 2006)

33 Sampling Design and Procedures of Survey

Formal survey was conducted to collect the general information of herder householdsrsquo comprehension and the current development of agricultural products Herder household and farmers who own agribusiness were selected for interviews The number of herder households and number of farms in each province were determined by following formula

Where n= Number of total sample

N= Total number of farms and herders households E= Error (005)

80 herder households and 8 intensive farms from selected in Tuv province for this survey This size of samples of herders and farms provided statistical justification in order to generalize the results

11

Figure 32 Location of Tuv aimag

34 Data Collection

Data were collected from two sources (i) Secondary data was from the Mongolian National Statistical Office Mongolian State

University of Agriculture and the Ministry of Food and Agriculture Data used in this study included Urban and rural population Number of herder households (selected area) Total number of livestock and livestock distribution Land utilization Main agricultural production

12

(ii) Primary data was collected through questionnaires distributed to the randomly selected dairy farms and herder households in Tuv province and to determine the production processing and marketing (Appendix-A and B) Data collected in this part included

Present situation and the growth prospect of Livestock husbandry The suggestions and comments of herders and farmers who responded in this

research The comments The current problems faced by the herders and farmers

The survey aimed to question 80 herding households from the Tuv province and 8 intensive farmers of Tuv province were involved but in practice only 69 herders and 32 small and medium scale intensive dairy farms were surveyed Therefore around 10 relevant people including an official such as governor of soum and bag coordinator of household livelihood improvement related project and livestock expert were given an additional questionnaire

35 Data processing and analysis

351 Data processing The data of this study collected from the herder households and farmers of Tuv province The draft were analyzed to know the development future growth the influencing factors and special characteristics of the livestock sector SWOT analysis Around 80 questionnaires processed in the SPSS package and Microsoft Excel by using descriptive statistics Moreover in the survey investigated the herders and farmersrsquo opinions about the Mongolian livestock sub sector 352 Data analysis Data collections were analyzed quantitative and qualitative ways according to the field data The basis statistics data and the survey questionnaire results investigated the past and current performance of Mongolian livestock husbandry and calculated the future growth of livestock animals in Mongolia by showing the form of table figure flowchart mean and percentile 353 SWOT analysis The statistical data and the results of questionnaire determine the external factors such as Opportunity and Threat and internal factors such as Strength and Weakness of intensive and extensive livestock husbandry of Mongolia Moreover SWOT analyses provided the opportunity weakness and other factors of Tuv province for the livestock sector

13

CHAPTER IV

RESULT AND DISCUSSION

41 The current situation of Mongolian Animal Husbandry

Generally Mongolian animal husbandry divided two main sectors extensive animal husbandry and intensive animal husbandry Barker (1997) said lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo The extensive livestock management system of Mongolia includes main five species of livestock for most of the year The some herders and some relevant people believe that the extensive animal husbandry is most suitable sector in Mongolia The first reason is that approximately 80 of total territories are grassy area in Mongolia This is one of the biggest scales of the world Second Mongolian livestock systems is continuing with a long traditional nomadic livestock herding Hence the herders obtained the great knowledge and experiments during the several centuries Third Mongolian herder households are settled in the traditional pastoral system such as ldquokhot ailrdquo and ldquoneg goliinhonrdquo Two and more herder households including relatives and acquaintances called ldquokhot ailrdquo and ldquoneg goliinhonrdquo live together This system is most indigenous form This form of living served a variety of functions such as using pasture and seasonal movement of households Lastly the demand of livestock production is increasing during the last few years because of incomes of family are increasing and the increased demand from the neighbor countries Furthermore it has become the foundation of Mongolian livestock revolution Moreover Mongolian climate is suitable for the extensive animal husbandry On the other side the government of Mongolia begun to support intensive livestock farms to develop dairy and meat bread cattle pork and poultry Some people said the intensive livestock husbandry is better than the extensive livestock husbandry There are several reasons for this statement The first significant reason is that the increasing livestock number of Mongolia According to some researches it is possible to support around 38 million heads of livestock on the Mongolian whole grasslands However the number of livestock already reached 42 million heads in 2008 Therefore the growth of livestock is creating the degradation of pastureland by overgrazing in Mongolia Secondly since 1940 the average air temperature has been increasing in Mongolia caused by the climate change of the world Moreover the arid land is increasing due to decreasing of precipitation Therefore since last few years the yield of pasture is depleting gradually Thus grazing time of livestock is decreasing in Mongolia Finally the development of extensive farms directly depends on the supply and safety of the food Presently Mongolia is importing most of food products except the meat and meat products That is why the intensive animal husbandry is developing in some provinces especially the nearest provinces with the bigger cities such as Tuv Selenge and Bulgan According to research by the Ministry of Food and Agriculture (2007) Mongolia has 750 intensive animal husbandries Of which 494 farms for dairy 10 of them for meat cow 15 sheep farms for meat and wool 79 farms with pigs 111 farms with poultry and 40 farms with bees in Mongolia (AppendixC)

14

42 The Present Status of Mongolian Livestock

Mongolian livestock reached 421958 thousand heads in 2008 and it increased by 48 percent compared with 2007 Figure 41 shows the livestock numbers of Mongolia during last 18 years Sheep goat and cattle population has increased while those of camel and horse are decreasing in Mongolia during the last few years (Appendix D and F)

Figure 41 The state of livestock number of Mongolia from 1990 to 2008

According to Figure 41 the total number of livestock dramatically increased between 1990 and 1999 However it decreased by 287 due to drought and Dzud during 2000 to 2002 During that period 35 million and 47 million heads of animals died in 2000 and 2001 respectively During the last 7 years the number of livestock increased by 31 By the way the number of livestock in 2008 reached highest number ever

Figure 42 The comparison of the livestock structure in 2008 with 1990

15

Figure 42 shows the comparison of livestock structure (by type) during 2008 and 1990 According to Figure 41 sheep were dominating in the livestock structure until 2003 However cattle and goats dominated the structure of livestock during the recent years This is because of cashmere become herderrsquos main income from livestock due to free market economy It explained that after privatization the herders prefer to herd productive kinds of livestock Although the livestock resist Mongolian weather especially adopted for the cold season the productivity of livestock is low Therefore the some preparations such as to build warm shelters and to prepare and store hay and fodder are most significant principal elements during the wintertime Moreover pastures are subjected to increased vulnerability to parasites and other diseases These issues affect the animal productivity

43 Comparison of Actual and Estimated Livestock Number

Three different estimation including the average of number of livestock comparison of actual and estimated livestock number of Mongolia between 1990 and 2008 and livestock number in 2009 by using the Microsoft Excel (AppendixG) are given below (Avdai et al 1999) Calculation 1 The average number livestock in Mongolia from 1990 to 2008

The average number of livestock estimated was 295501 thousand heads between 1990 and 2008 Calculation 2 The goal of this part is that to estimate the equalized livestock number (amount) on the actual livestock amount by using the straight-line equation

yt = a + bt - (42)

Where t - period and a b - the parametric constraints

To estimate the parametric constraints can be solving by using the following method The value obtained by using equation (43) Table 41 shows the results of estimation To solve this system of equation substitute sumt = 0 Moreover the estimated values such as Σ y Σt2 and Σyt are shown from the Table 41

16

yt = 2978564+57145t y ndashactual livestock amount yt - estimated livestock amount

The estimated livestock amount and actual livestock number of Mongolia between 1990 and 2008 are shown in Figure 43

Table 41 The calculation by using Equation 43

(thousand heads)

y t t2 yt yt=a+bt

1990 258549 -9 81 -2326941 2464259 1991 255279 -8 64 -2042232 2521404 1992 254941 -7 49 -1784587 2578549 1993 251747 -6 36 -1510482 2635694 1994 268081 -5 25 -1340405 2692839 1995 285723 -4 16 -1142892 2749984 1996 293001 -3 9 -879003 2807129 1997 312923 -2 4 -625846 2864274 1998 328975 -1 1 -328975 2921419 1999 33596 0 0 0 2978564 2000 303274 1 1 303274 3035709 2001 260752 2 4 521504 3092854 2002 238976 3 9 716928 3149999 2003 254277 4 16 1017108 3207144 2004 280199 5 25 1400995 3264289 2005 303988 6 36 1823928 3321434 2006 34803 7 49 243621 3378579 2007 402638 8 64 3221104 3435724 2008 421959 9 81 3797631 3492869 2009 10 3550014 2010 11 3607159 2011 12 3664304 2012 13 3721449 2013 14 3778594 2014 15 3835739 2015 16 3892884

TOTAL 5659272 91 570 3257319 82642859

17

Figure 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads)

bull Calculation 3 The last estimation is that how many heads of Mongolian livestock will be reach in 2009 by using the following Equation 44

yt plusmn tα δy -(44)

Where yt - estimated amount of livestock on 2009 (see from previous Table 41) tα ndash dispersion of Student

δy ndash standard deviation y + tα = 3550014+834668= 4384682 y - tα =3550014- 834668= 2715346 Calculation shows that the livestock number of Mongolia will reach from 271534 to 438468 thousand heads animals in 2009 Below three steps shows the steps of calculation 3 Step A To calculate δy (standard deviation) can be solved by using following equation 45 (45) Table 42 shows the result of this estimation by using Equation 45

Where n - total number of sample

Step B To find the dispersion of Student (Student is the name of person) (tα)

18

tα (q k) = tα (005 18)= 212 (Appendix I) Where k - degree of freedom k= n-1=18

q - significance level (Appendix I) Step C tα δy = 21 397461 = 834668

Table 42 Estimation by using Equation 45

y yt y-yt (y-yt)2

1990 258549 246426 12123 146967129 1991 255279 25214 3139 9853321 1992 254941 257855 -2914 8491396 1993 251747 263569 -11822 139759684 1994 268081 269284 -1203 1447209 1995 285723 274998 10725 115025625 1996 293001 280713 12288 150994944 1997 312923 286427 26496 702038016 1998 328975 292142 36833 1356669889 1999 33596 297856 38104 1451914816 2000 303274 303571 -297 88209 2001 260752 309285 -48533 2355452089 2002 238976 31500 -76024 5779648576 2003 254277 320714 -66437 4413874969 2004 280199 326429 -4623 21372129 2005 303988 332143 -28155 792704025 2006 34803 337858 10172 103469584 2007 402638 343572 59066 3488792356 2008 421959 349287 72672 5281219584

2843562432

44 Land Utilization

Mongolian total territory is 1564116 thousand hectares Of which in total 742 of total area is used for the agriculture 157 used for state special land 91 of total area is comprised forest land 03 land used for cities rural town and other settlements 04 land possesses water resources and 02 of total land is covered by transportation and networks in 2006 (NSO 2006) Currently Mongolian pastureland faced many significant problems such as grassland degradation soil erosion and desertification Main sources of them are overgrazing water

19

source and the population According to some survey approximately 120 million hectare land (70 percent) of total Mongolian territory is degraded

Figure 44 The comparison of utilized lands between 2000 and 2006 (by type)

Figure 44 shows utilization land between 2000 and 2006 For example the agriculture land and forestland decreased by 9 and 4 in 2006 compared to 2000 Generally the development of crop production and destruction the populationrsquos migration to urban areas and the nomadic livestock husbandry are leading to the overgrazing and degradation of the land Moreover livestock number in Mongolia is increasing during the last few years Especially in 2008 it reached the highest number of livestock for the first time in history Even though the herders are facing the shortage of fodder In addition the land for the natural pasture has slightly increased since 1989

441 The Impacts for the Land Degradation

There are many environmental factors affect on the agricultural sector in complex ways Most scientists and experts agreed that factors of land degradation in Mongolia could be divided into following two main categories including human and natural factors Today many factors affect the land degradation caused by the human activities such as excessive grazing deforestation poor irrigation and inappropriate land tenure in all sector The first significant factor is overgrazing Crop cultivation is one of the most important reasons of soil erosion and overgrazing Spring tilling coincides caused the seasonal higher speed wind and most planted areas are lack of windbreaks like trees For example the average wind speed of Gobi region is 3hellip4 meters per second it is one of the significant cause of soil moisture loss and erosion According to some survey an average of 35ndash50 tons of soils has been lost from each

20

hectare of cultivated land due to erosion during the past 30 years Half of all cultivated land degraded to some degree of erosion Another factor of overgrazing is the vehicle-induced degradation The second significant factor is the deforestation due to clear-cutting the trees fire and insect infestations The third important factor is inappropriate land tenure like mining and inadequate waste management Shagdar (2001) estimated approximately 100000 hectare of land have been degraded by mining and quarrying Moreover another significant factor of land degradation is bad or poor irrigation practices Salinization of irrigated land in arid climates as a result of poor drainage and evaporation and using highly toxic pesticide for vegetation protection from insects causes depletion of soil productivity The final factor of land degradation is the legal provision of ldquoopenness of pastureland which is public propertyrdquo Because of this legal provision the utilizing of pastureland is free for everyone (UNDP amp SIDA 2003) On the other hand the land degradation of Mongolia depends directly on nature and weather conditions Most important impact is the location It is located high above sea level and far away from the ocean Mongolia lies between 420 520N and almost 1200 E Another principal factor is the global warming and climatic change of the world Climate change can affect weeds insects plant diseases and pathogens in the environment especially in agricultural activities Another consequence on the pasture is the lack of rainfall Mongolia has low precipitation and short growing seasons especially long and cold winter and short and hot summer Therefore other significant causes are drought and Dzud in Mongolia They are the keys determinants of vulnerability of livestock to climate change They affect the livelihood of herdersrsquo household which is reduced livestock productivity especially milk and destroy pasture (AIACC 2006) The natural disasters like dzud and drought have occurred around 30 times in Mongolia with different level of harm (UNDPampSIDA 2003) (Figure 45)

Figure 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006)

During the disaster of harsh winter (dzud) in 1999- 2000 almost one third of the total livestock died in 1999 Figure 46 shows that the losses adult animals between 2000 and 2006 in Mongolia

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

4

CHAPTER II

LITERATURE REVIEW

21 The Current Situation of Livestock Husbandry in Mongolia

The main source of Mongolian economy is coming from the agricultural sector (MIF 2006) The agricultural sector of Mongolia divided two main subsectors such as livestock sector and cropping sector (MIF 2006) At the end of 2006 approximately 40 of total population had lived in the rural areas Rural development is essential for Mongolia to achieve sustained economic growth and poverty reduction Livestock continues to provide rural households with an important source of herdersrsquo income jobs and food security and a means for investing and storing their wealth (WB 2006) Therefore animal husbandry plays the important role of the national economy Moreover agriculture still accounts for more than a fifth of GDP Some 40 per cent of the Mongolian workforce employ in traditional nomadic livestock herding Agriculture is produced 188 percent of GDP and contributed 30 percent of the total export of Mongolia Figure 21 demonstrates the comparison of the portion of divisions to GDP in 2005 with 2006

Figure 21 The comparison of the portion of divisions to GDP (NSO 2005-2006) The GDP growth due to contribution from all sectors was 99 in 2007 the average of GDP was 87 between 2003 and 2006 Especially agriculture sector provides almost half the population had a strong year extending by 16 and contributing 4 points to growth of GDP The data in Figure 22 shows that the ratio of GDP growth from 2003 to 2009 In addition it shows GDP for the forecast period in Mongolia The forecasts assume that the price will be comparatively higher for export goods (ADO 2008)

5

Figure 22 GDP growth by percentage (NSO 2007)

Enkhjargal (2005) noted that 35 of GDP and the agricultural sector contribute almost one fourth goods for export Moreover approximately 50 of the total labor force is employed in agricultural sector Barker (1997) remarked lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo In addition Mongolian livestock sector produces more than 901 of gross agricultural products and the source of income for more than 34 of all households in Mongolia In 2006 there are 348 million livestock counted in Mongolia The livestock number increased by 44 million heads of livestock animals compared to 2005 (NSO 2006) Furthermore as a result of census in 2006 there are 253000 camels 2114000 horses 2167000 cattle 14815000 sheep and 15451000 goats counted in Mongolia The number of horses increased by 86000 heads cattle increased by 204000 sheep and goat increased by 2 million heads respectively but the number of camel decreased by 07 thousand heads compared with 2005 (AIP 2006-2007)

Figure 23 The comparison of total livestock with number of privately owned livestock Moreover the statistical data shows (Figure 23) that almost 97 of the total livestock was private owned in 2006 and 31 of herder households have more than 100 livestock animals 22 Brief history of livestock husbandry development in Mongolia

6

Traditionally five types of domestic livestock in Mongolia are sheep goats cattle horses and camel Pigs hens and other birds seldom reared Horse is the first animal in Mongolia to be domesticated (Baasanjav et al 1999)

Shagdar (2001) remarked that the wild animals domesticated livestock animals such as sheep and horses in Mongolia between the 8th and 3rd centuries BC Shagdar (2001) argued that Mongolian herder households began the nomadic form in the 13th century and this system remained until present day In those times most livestock animals was private owned of herders However in 1951 the livestock animals transferred to the collective ownership form This collective ownership form was tended to develop more intensively managed production system This form gave diverse assistances to the herders For example to build the enclosures and wells to prepare hay (Shagdar 2001) However during the collectivization period the share of private livestock decreased to 17-30 of the total number of livestock (Shagdar 2001) The collective ownership form lasted till 1989 Due to tend of the decreasing livestock number Mongolian government privatized the livestock animals to the herders in 1991 Because of privatization 967 of total livestock shifted private owned form and 31 of herder households have more than 100 livestock animals After privatization the livestock number and number of herders rapidly increased in Mongolia

23 Regional Distribution

Mongolia divided 5 main regions named East West Central Khangai and Ulaanbaatar Figure 24 shows the regional distribution of livestock in Mongolia (NSO 2006) The forests and mountainous areas of Khangai region Central region and West region of Mongolia are most populous in terms of livestock

Figure 24 Regional distribution of livestock in 2006 The livestock is relatively distributed in comparison with the population size of each region Sheep and goats are the majority livestock and respectively accounted for 425 and 444 of

7

the total number of livestock in every region in 2006 Camels account for only 07 of total livestock and mainly rise in the southern part of the country (NSO 2006) Overgrazing is becoming problematic in areas close to major markets For example livestock density of Orkhon-Uul Darkhan and the capital city named of Ulaanbaatar which is 5 to 10 times lower than other regions

24 Livestock Production

Mongolian major livestock products include meat and meat products and milk and dairy products In addition wool hair cashmere hides and skins are the key input for animal processing industries ( Shagdar 2001) Agricultural production comprises of 30 meat and meat products 27 of them include milk and dairy products 2 skin and hides 1 animal and plants oil 31 flour and flour products 2 fruit and vegetables and 2 livestock feed and starches

Figure 25 Share of domestic production versus imports in consumption of major products (AIP

2006-2007)

From 1999 to 2004 all foodstuffs consumption except meat and milk has been below the recommended level Because of natural disasters such as drought and dzud in recent years the consumption of milk and meat products has declined during those years However the consumption of flour rise eggs potatoes and vegetables has increased in 1999-2002 Especially consumptions of potatoes vegetables and fruits are significantly below the recommendation (PRSP 2004) Mongolia imports some non-meat food products from Russia China and others Mongolia relies fully on imports for fruits and rice (WB 2008) Livestock production is entirely seasonal taking place in harmony with the Mongolian climate For example wool and hair collect in the late spring and early summer while most livestock

8

slaughter in the late autumn and early winter Milk and dairy products mainly produce during summer (Shagdar 2001) a) Meat and meat products On average 75 million head of livestock slaughter for consumption annually accounting for approximately 25 of the total livestock herd counted at the beginning of each year This equals 250000-300000 tons of meat which include mutton beef goat meat and horsemeat Camel meat is not so popular and consumed mostly during the winter Meat and meat products taken from of 30 beef 40 mutton 10 goat meat and 15 horsemeat (Shagdar 2001) b) Milk and dairy products Annually 250000-350000 tons milk produces in Mongolia Cowrsquos milk possesses more than 80 of the total of milk Moreover sheep and goat milk and horse milk accounting for about 10 and 8 respectively In addition more than 90 of all cows are accounted by native Mongolian cows which have an average milk yield of 19 liters per day in steppe and forest region and 13 liters in the Gobi region (Shagdar 2001) Dairy products include yogurt butter dried curds cheese etc Particularly in the rural areas milk consumes directly and converts to a wide range of traditional products Many of these have a long life and are stored for consumption in the winter and spring (WB 2003) Horse milk is used to produce the popular drink it contain a low alcohol that is similar the beer Rich content of amino acids vitamins and sugar found in horse milk makes airag a nutritious and healthy drink which is also low in fat Therefore it is used to treat many illnesses including tuberculosis diseases of digestive organs pharmaceutical toxicity and fatigue (Shagdar 2001) c) Wool hair and cashmere Approximately 25000 tons of wool hair and cashmere is produced in Mongolia annually more than 70 of which is accounted for by sheep wool Mongolia is the second largest producer of raw cashmere in the world Approximately 3300 tons of cashmere is produced annually That is accounting for about 20 of the total global supply Therefore cashmere is one of the main export commodities in Mongolia In wool and cashmere industry the productions of major items include spun threat camel wool blanket carpet felt etc (Shagdar 2001) d) Hides and skin One of valuable resource for producing luxury consumer goods is hides and skin About 65-85 million individual hides and skin are produced in Mongolia annually more than 80 of these are sheep and goatskins which are supplied to processing industries or exported Traditionally sheepskin was used for making warm winter coats and floor covering while various accessories for handling horses were made from cattle hides (Shagdar 2001)

9

CHAPTER III

METHODOLOGY The study conducted in four main stages such as the data collection analysis of the data and reporting and conclusions and recommendation part The general methodology used for specific objectives of the study is shown in Figure 31

Figure 31 Flow chart of methodology and procedure for survey and data collection

10

31 Site selection

The sites for the study selected included three sub-provinces named Jargalant Sumber and Bayanchandmani of Tuv province It is nearest province with the capital city (Figure 32) The site selection chose based on the following characteristics

bull Agricultural production bull The location of province bull Potentials for the development of livestock husbandry bull Financial constraints of the research bull Data availability

General information of Tuv province

Area 77300 sq km Number of livestock 1598000 Population 96500 Cropland 318100 hectare Center Zuunmod Number of sub-provinces 27

Tuv province is located in the centre of Mongolia In addition capital city named Ulaanbaatar located in this provincersquos territory Tuv province is one of the biggest and most productive provinces as this province is well positioned geographically to supply livestock production to nearest areas with high demand This province is situated 43 km from the capital city Moreover the major intensive animal farms are located in Tuv province

In this province have 201 household farms include dairy farms 152 pork farms 24 and chicken farm 1 respectively (MFA 2007) There are a total of 210000 camels 1979 thousand head of horses 1311 thousand head of cattle 10408 thousand of sheep and 8013 thousand heads of goats (NSO 2006)

33 Sampling Design and Procedures of Survey

Formal survey was conducted to collect the general information of herder householdsrsquo comprehension and the current development of agricultural products Herder household and farmers who own agribusiness were selected for interviews The number of herder households and number of farms in each province were determined by following formula

Where n= Number of total sample

N= Total number of farms and herders households E= Error (005)

80 herder households and 8 intensive farms from selected in Tuv province for this survey This size of samples of herders and farms provided statistical justification in order to generalize the results

11

Figure 32 Location of Tuv aimag

34 Data Collection

Data were collected from two sources (i) Secondary data was from the Mongolian National Statistical Office Mongolian State

University of Agriculture and the Ministry of Food and Agriculture Data used in this study included Urban and rural population Number of herder households (selected area) Total number of livestock and livestock distribution Land utilization Main agricultural production

12

(ii) Primary data was collected through questionnaires distributed to the randomly selected dairy farms and herder households in Tuv province and to determine the production processing and marketing (Appendix-A and B) Data collected in this part included

Present situation and the growth prospect of Livestock husbandry The suggestions and comments of herders and farmers who responded in this

research The comments The current problems faced by the herders and farmers

The survey aimed to question 80 herding households from the Tuv province and 8 intensive farmers of Tuv province were involved but in practice only 69 herders and 32 small and medium scale intensive dairy farms were surveyed Therefore around 10 relevant people including an official such as governor of soum and bag coordinator of household livelihood improvement related project and livestock expert were given an additional questionnaire

35 Data processing and analysis

351 Data processing The data of this study collected from the herder households and farmers of Tuv province The draft were analyzed to know the development future growth the influencing factors and special characteristics of the livestock sector SWOT analysis Around 80 questionnaires processed in the SPSS package and Microsoft Excel by using descriptive statistics Moreover in the survey investigated the herders and farmersrsquo opinions about the Mongolian livestock sub sector 352 Data analysis Data collections were analyzed quantitative and qualitative ways according to the field data The basis statistics data and the survey questionnaire results investigated the past and current performance of Mongolian livestock husbandry and calculated the future growth of livestock animals in Mongolia by showing the form of table figure flowchart mean and percentile 353 SWOT analysis The statistical data and the results of questionnaire determine the external factors such as Opportunity and Threat and internal factors such as Strength and Weakness of intensive and extensive livestock husbandry of Mongolia Moreover SWOT analyses provided the opportunity weakness and other factors of Tuv province for the livestock sector

13

CHAPTER IV

RESULT AND DISCUSSION

41 The current situation of Mongolian Animal Husbandry

Generally Mongolian animal husbandry divided two main sectors extensive animal husbandry and intensive animal husbandry Barker (1997) said lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo The extensive livestock management system of Mongolia includes main five species of livestock for most of the year The some herders and some relevant people believe that the extensive animal husbandry is most suitable sector in Mongolia The first reason is that approximately 80 of total territories are grassy area in Mongolia This is one of the biggest scales of the world Second Mongolian livestock systems is continuing with a long traditional nomadic livestock herding Hence the herders obtained the great knowledge and experiments during the several centuries Third Mongolian herder households are settled in the traditional pastoral system such as ldquokhot ailrdquo and ldquoneg goliinhonrdquo Two and more herder households including relatives and acquaintances called ldquokhot ailrdquo and ldquoneg goliinhonrdquo live together This system is most indigenous form This form of living served a variety of functions such as using pasture and seasonal movement of households Lastly the demand of livestock production is increasing during the last few years because of incomes of family are increasing and the increased demand from the neighbor countries Furthermore it has become the foundation of Mongolian livestock revolution Moreover Mongolian climate is suitable for the extensive animal husbandry On the other side the government of Mongolia begun to support intensive livestock farms to develop dairy and meat bread cattle pork and poultry Some people said the intensive livestock husbandry is better than the extensive livestock husbandry There are several reasons for this statement The first significant reason is that the increasing livestock number of Mongolia According to some researches it is possible to support around 38 million heads of livestock on the Mongolian whole grasslands However the number of livestock already reached 42 million heads in 2008 Therefore the growth of livestock is creating the degradation of pastureland by overgrazing in Mongolia Secondly since 1940 the average air temperature has been increasing in Mongolia caused by the climate change of the world Moreover the arid land is increasing due to decreasing of precipitation Therefore since last few years the yield of pasture is depleting gradually Thus grazing time of livestock is decreasing in Mongolia Finally the development of extensive farms directly depends on the supply and safety of the food Presently Mongolia is importing most of food products except the meat and meat products That is why the intensive animal husbandry is developing in some provinces especially the nearest provinces with the bigger cities such as Tuv Selenge and Bulgan According to research by the Ministry of Food and Agriculture (2007) Mongolia has 750 intensive animal husbandries Of which 494 farms for dairy 10 of them for meat cow 15 sheep farms for meat and wool 79 farms with pigs 111 farms with poultry and 40 farms with bees in Mongolia (AppendixC)

14

42 The Present Status of Mongolian Livestock

Mongolian livestock reached 421958 thousand heads in 2008 and it increased by 48 percent compared with 2007 Figure 41 shows the livestock numbers of Mongolia during last 18 years Sheep goat and cattle population has increased while those of camel and horse are decreasing in Mongolia during the last few years (Appendix D and F)

Figure 41 The state of livestock number of Mongolia from 1990 to 2008

According to Figure 41 the total number of livestock dramatically increased between 1990 and 1999 However it decreased by 287 due to drought and Dzud during 2000 to 2002 During that period 35 million and 47 million heads of animals died in 2000 and 2001 respectively During the last 7 years the number of livestock increased by 31 By the way the number of livestock in 2008 reached highest number ever

Figure 42 The comparison of the livestock structure in 2008 with 1990

15

Figure 42 shows the comparison of livestock structure (by type) during 2008 and 1990 According to Figure 41 sheep were dominating in the livestock structure until 2003 However cattle and goats dominated the structure of livestock during the recent years This is because of cashmere become herderrsquos main income from livestock due to free market economy It explained that after privatization the herders prefer to herd productive kinds of livestock Although the livestock resist Mongolian weather especially adopted for the cold season the productivity of livestock is low Therefore the some preparations such as to build warm shelters and to prepare and store hay and fodder are most significant principal elements during the wintertime Moreover pastures are subjected to increased vulnerability to parasites and other diseases These issues affect the animal productivity

43 Comparison of Actual and Estimated Livestock Number

Three different estimation including the average of number of livestock comparison of actual and estimated livestock number of Mongolia between 1990 and 2008 and livestock number in 2009 by using the Microsoft Excel (AppendixG) are given below (Avdai et al 1999) Calculation 1 The average number livestock in Mongolia from 1990 to 2008

The average number of livestock estimated was 295501 thousand heads between 1990 and 2008 Calculation 2 The goal of this part is that to estimate the equalized livestock number (amount) on the actual livestock amount by using the straight-line equation

yt = a + bt - (42)

Where t - period and a b - the parametric constraints

To estimate the parametric constraints can be solving by using the following method The value obtained by using equation (43) Table 41 shows the results of estimation To solve this system of equation substitute sumt = 0 Moreover the estimated values such as Σ y Σt2 and Σyt are shown from the Table 41

16

yt = 2978564+57145t y ndashactual livestock amount yt - estimated livestock amount

The estimated livestock amount and actual livestock number of Mongolia between 1990 and 2008 are shown in Figure 43

Table 41 The calculation by using Equation 43

(thousand heads)

y t t2 yt yt=a+bt

1990 258549 -9 81 -2326941 2464259 1991 255279 -8 64 -2042232 2521404 1992 254941 -7 49 -1784587 2578549 1993 251747 -6 36 -1510482 2635694 1994 268081 -5 25 -1340405 2692839 1995 285723 -4 16 -1142892 2749984 1996 293001 -3 9 -879003 2807129 1997 312923 -2 4 -625846 2864274 1998 328975 -1 1 -328975 2921419 1999 33596 0 0 0 2978564 2000 303274 1 1 303274 3035709 2001 260752 2 4 521504 3092854 2002 238976 3 9 716928 3149999 2003 254277 4 16 1017108 3207144 2004 280199 5 25 1400995 3264289 2005 303988 6 36 1823928 3321434 2006 34803 7 49 243621 3378579 2007 402638 8 64 3221104 3435724 2008 421959 9 81 3797631 3492869 2009 10 3550014 2010 11 3607159 2011 12 3664304 2012 13 3721449 2013 14 3778594 2014 15 3835739 2015 16 3892884

TOTAL 5659272 91 570 3257319 82642859

17

Figure 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads)

bull Calculation 3 The last estimation is that how many heads of Mongolian livestock will be reach in 2009 by using the following Equation 44

yt plusmn tα δy -(44)

Where yt - estimated amount of livestock on 2009 (see from previous Table 41) tα ndash dispersion of Student

δy ndash standard deviation y + tα = 3550014+834668= 4384682 y - tα =3550014- 834668= 2715346 Calculation shows that the livestock number of Mongolia will reach from 271534 to 438468 thousand heads animals in 2009 Below three steps shows the steps of calculation 3 Step A To calculate δy (standard deviation) can be solved by using following equation 45 (45) Table 42 shows the result of this estimation by using Equation 45

Where n - total number of sample

Step B To find the dispersion of Student (Student is the name of person) (tα)

18

tα (q k) = tα (005 18)= 212 (Appendix I) Where k - degree of freedom k= n-1=18

q - significance level (Appendix I) Step C tα δy = 21 397461 = 834668

Table 42 Estimation by using Equation 45

y yt y-yt (y-yt)2

1990 258549 246426 12123 146967129 1991 255279 25214 3139 9853321 1992 254941 257855 -2914 8491396 1993 251747 263569 -11822 139759684 1994 268081 269284 -1203 1447209 1995 285723 274998 10725 115025625 1996 293001 280713 12288 150994944 1997 312923 286427 26496 702038016 1998 328975 292142 36833 1356669889 1999 33596 297856 38104 1451914816 2000 303274 303571 -297 88209 2001 260752 309285 -48533 2355452089 2002 238976 31500 -76024 5779648576 2003 254277 320714 -66437 4413874969 2004 280199 326429 -4623 21372129 2005 303988 332143 -28155 792704025 2006 34803 337858 10172 103469584 2007 402638 343572 59066 3488792356 2008 421959 349287 72672 5281219584

2843562432

44 Land Utilization

Mongolian total territory is 1564116 thousand hectares Of which in total 742 of total area is used for the agriculture 157 used for state special land 91 of total area is comprised forest land 03 land used for cities rural town and other settlements 04 land possesses water resources and 02 of total land is covered by transportation and networks in 2006 (NSO 2006) Currently Mongolian pastureland faced many significant problems such as grassland degradation soil erosion and desertification Main sources of them are overgrazing water

19

source and the population According to some survey approximately 120 million hectare land (70 percent) of total Mongolian territory is degraded

Figure 44 The comparison of utilized lands between 2000 and 2006 (by type)

Figure 44 shows utilization land between 2000 and 2006 For example the agriculture land and forestland decreased by 9 and 4 in 2006 compared to 2000 Generally the development of crop production and destruction the populationrsquos migration to urban areas and the nomadic livestock husbandry are leading to the overgrazing and degradation of the land Moreover livestock number in Mongolia is increasing during the last few years Especially in 2008 it reached the highest number of livestock for the first time in history Even though the herders are facing the shortage of fodder In addition the land for the natural pasture has slightly increased since 1989

441 The Impacts for the Land Degradation

There are many environmental factors affect on the agricultural sector in complex ways Most scientists and experts agreed that factors of land degradation in Mongolia could be divided into following two main categories including human and natural factors Today many factors affect the land degradation caused by the human activities such as excessive grazing deforestation poor irrigation and inappropriate land tenure in all sector The first significant factor is overgrazing Crop cultivation is one of the most important reasons of soil erosion and overgrazing Spring tilling coincides caused the seasonal higher speed wind and most planted areas are lack of windbreaks like trees For example the average wind speed of Gobi region is 3hellip4 meters per second it is one of the significant cause of soil moisture loss and erosion According to some survey an average of 35ndash50 tons of soils has been lost from each

20

hectare of cultivated land due to erosion during the past 30 years Half of all cultivated land degraded to some degree of erosion Another factor of overgrazing is the vehicle-induced degradation The second significant factor is the deforestation due to clear-cutting the trees fire and insect infestations The third important factor is inappropriate land tenure like mining and inadequate waste management Shagdar (2001) estimated approximately 100000 hectare of land have been degraded by mining and quarrying Moreover another significant factor of land degradation is bad or poor irrigation practices Salinization of irrigated land in arid climates as a result of poor drainage and evaporation and using highly toxic pesticide for vegetation protection from insects causes depletion of soil productivity The final factor of land degradation is the legal provision of ldquoopenness of pastureland which is public propertyrdquo Because of this legal provision the utilizing of pastureland is free for everyone (UNDP amp SIDA 2003) On the other hand the land degradation of Mongolia depends directly on nature and weather conditions Most important impact is the location It is located high above sea level and far away from the ocean Mongolia lies between 420 520N and almost 1200 E Another principal factor is the global warming and climatic change of the world Climate change can affect weeds insects plant diseases and pathogens in the environment especially in agricultural activities Another consequence on the pasture is the lack of rainfall Mongolia has low precipitation and short growing seasons especially long and cold winter and short and hot summer Therefore other significant causes are drought and Dzud in Mongolia They are the keys determinants of vulnerability of livestock to climate change They affect the livelihood of herdersrsquo household which is reduced livestock productivity especially milk and destroy pasture (AIACC 2006) The natural disasters like dzud and drought have occurred around 30 times in Mongolia with different level of harm (UNDPampSIDA 2003) (Figure 45)

Figure 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006)

During the disaster of harsh winter (dzud) in 1999- 2000 almost one third of the total livestock died in 1999 Figure 46 shows that the losses adult animals between 2000 and 2006 in Mongolia

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

5

Figure 22 GDP growth by percentage (NSO 2007)

Enkhjargal (2005) noted that 35 of GDP and the agricultural sector contribute almost one fourth goods for export Moreover approximately 50 of the total labor force is employed in agricultural sector Barker (1997) remarked lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo In addition Mongolian livestock sector produces more than 901 of gross agricultural products and the source of income for more than 34 of all households in Mongolia In 2006 there are 348 million livestock counted in Mongolia The livestock number increased by 44 million heads of livestock animals compared to 2005 (NSO 2006) Furthermore as a result of census in 2006 there are 253000 camels 2114000 horses 2167000 cattle 14815000 sheep and 15451000 goats counted in Mongolia The number of horses increased by 86000 heads cattle increased by 204000 sheep and goat increased by 2 million heads respectively but the number of camel decreased by 07 thousand heads compared with 2005 (AIP 2006-2007)

Figure 23 The comparison of total livestock with number of privately owned livestock Moreover the statistical data shows (Figure 23) that almost 97 of the total livestock was private owned in 2006 and 31 of herder households have more than 100 livestock animals 22 Brief history of livestock husbandry development in Mongolia

6

Traditionally five types of domestic livestock in Mongolia are sheep goats cattle horses and camel Pigs hens and other birds seldom reared Horse is the first animal in Mongolia to be domesticated (Baasanjav et al 1999)

Shagdar (2001) remarked that the wild animals domesticated livestock animals such as sheep and horses in Mongolia between the 8th and 3rd centuries BC Shagdar (2001) argued that Mongolian herder households began the nomadic form in the 13th century and this system remained until present day In those times most livestock animals was private owned of herders However in 1951 the livestock animals transferred to the collective ownership form This collective ownership form was tended to develop more intensively managed production system This form gave diverse assistances to the herders For example to build the enclosures and wells to prepare hay (Shagdar 2001) However during the collectivization period the share of private livestock decreased to 17-30 of the total number of livestock (Shagdar 2001) The collective ownership form lasted till 1989 Due to tend of the decreasing livestock number Mongolian government privatized the livestock animals to the herders in 1991 Because of privatization 967 of total livestock shifted private owned form and 31 of herder households have more than 100 livestock animals After privatization the livestock number and number of herders rapidly increased in Mongolia

23 Regional Distribution

Mongolia divided 5 main regions named East West Central Khangai and Ulaanbaatar Figure 24 shows the regional distribution of livestock in Mongolia (NSO 2006) The forests and mountainous areas of Khangai region Central region and West region of Mongolia are most populous in terms of livestock

Figure 24 Regional distribution of livestock in 2006 The livestock is relatively distributed in comparison with the population size of each region Sheep and goats are the majority livestock and respectively accounted for 425 and 444 of

7

the total number of livestock in every region in 2006 Camels account for only 07 of total livestock and mainly rise in the southern part of the country (NSO 2006) Overgrazing is becoming problematic in areas close to major markets For example livestock density of Orkhon-Uul Darkhan and the capital city named of Ulaanbaatar which is 5 to 10 times lower than other regions

24 Livestock Production

Mongolian major livestock products include meat and meat products and milk and dairy products In addition wool hair cashmere hides and skins are the key input for animal processing industries ( Shagdar 2001) Agricultural production comprises of 30 meat and meat products 27 of them include milk and dairy products 2 skin and hides 1 animal and plants oil 31 flour and flour products 2 fruit and vegetables and 2 livestock feed and starches

Figure 25 Share of domestic production versus imports in consumption of major products (AIP

2006-2007)

From 1999 to 2004 all foodstuffs consumption except meat and milk has been below the recommended level Because of natural disasters such as drought and dzud in recent years the consumption of milk and meat products has declined during those years However the consumption of flour rise eggs potatoes and vegetables has increased in 1999-2002 Especially consumptions of potatoes vegetables and fruits are significantly below the recommendation (PRSP 2004) Mongolia imports some non-meat food products from Russia China and others Mongolia relies fully on imports for fruits and rice (WB 2008) Livestock production is entirely seasonal taking place in harmony with the Mongolian climate For example wool and hair collect in the late spring and early summer while most livestock

8

slaughter in the late autumn and early winter Milk and dairy products mainly produce during summer (Shagdar 2001) a) Meat and meat products On average 75 million head of livestock slaughter for consumption annually accounting for approximately 25 of the total livestock herd counted at the beginning of each year This equals 250000-300000 tons of meat which include mutton beef goat meat and horsemeat Camel meat is not so popular and consumed mostly during the winter Meat and meat products taken from of 30 beef 40 mutton 10 goat meat and 15 horsemeat (Shagdar 2001) b) Milk and dairy products Annually 250000-350000 tons milk produces in Mongolia Cowrsquos milk possesses more than 80 of the total of milk Moreover sheep and goat milk and horse milk accounting for about 10 and 8 respectively In addition more than 90 of all cows are accounted by native Mongolian cows which have an average milk yield of 19 liters per day in steppe and forest region and 13 liters in the Gobi region (Shagdar 2001) Dairy products include yogurt butter dried curds cheese etc Particularly in the rural areas milk consumes directly and converts to a wide range of traditional products Many of these have a long life and are stored for consumption in the winter and spring (WB 2003) Horse milk is used to produce the popular drink it contain a low alcohol that is similar the beer Rich content of amino acids vitamins and sugar found in horse milk makes airag a nutritious and healthy drink which is also low in fat Therefore it is used to treat many illnesses including tuberculosis diseases of digestive organs pharmaceutical toxicity and fatigue (Shagdar 2001) c) Wool hair and cashmere Approximately 25000 tons of wool hair and cashmere is produced in Mongolia annually more than 70 of which is accounted for by sheep wool Mongolia is the second largest producer of raw cashmere in the world Approximately 3300 tons of cashmere is produced annually That is accounting for about 20 of the total global supply Therefore cashmere is one of the main export commodities in Mongolia In wool and cashmere industry the productions of major items include spun threat camel wool blanket carpet felt etc (Shagdar 2001) d) Hides and skin One of valuable resource for producing luxury consumer goods is hides and skin About 65-85 million individual hides and skin are produced in Mongolia annually more than 80 of these are sheep and goatskins which are supplied to processing industries or exported Traditionally sheepskin was used for making warm winter coats and floor covering while various accessories for handling horses were made from cattle hides (Shagdar 2001)

9

CHAPTER III

METHODOLOGY The study conducted in four main stages such as the data collection analysis of the data and reporting and conclusions and recommendation part The general methodology used for specific objectives of the study is shown in Figure 31

Figure 31 Flow chart of methodology and procedure for survey and data collection

10

31 Site selection

The sites for the study selected included three sub-provinces named Jargalant Sumber and Bayanchandmani of Tuv province It is nearest province with the capital city (Figure 32) The site selection chose based on the following characteristics

bull Agricultural production bull The location of province bull Potentials for the development of livestock husbandry bull Financial constraints of the research bull Data availability

General information of Tuv province

Area 77300 sq km Number of livestock 1598000 Population 96500 Cropland 318100 hectare Center Zuunmod Number of sub-provinces 27

Tuv province is located in the centre of Mongolia In addition capital city named Ulaanbaatar located in this provincersquos territory Tuv province is one of the biggest and most productive provinces as this province is well positioned geographically to supply livestock production to nearest areas with high demand This province is situated 43 km from the capital city Moreover the major intensive animal farms are located in Tuv province

In this province have 201 household farms include dairy farms 152 pork farms 24 and chicken farm 1 respectively (MFA 2007) There are a total of 210000 camels 1979 thousand head of horses 1311 thousand head of cattle 10408 thousand of sheep and 8013 thousand heads of goats (NSO 2006)

33 Sampling Design and Procedures of Survey

Formal survey was conducted to collect the general information of herder householdsrsquo comprehension and the current development of agricultural products Herder household and farmers who own agribusiness were selected for interviews The number of herder households and number of farms in each province were determined by following formula

Where n= Number of total sample

N= Total number of farms and herders households E= Error (005)

80 herder households and 8 intensive farms from selected in Tuv province for this survey This size of samples of herders and farms provided statistical justification in order to generalize the results

11

Figure 32 Location of Tuv aimag

34 Data Collection

Data were collected from two sources (i) Secondary data was from the Mongolian National Statistical Office Mongolian State

University of Agriculture and the Ministry of Food and Agriculture Data used in this study included Urban and rural population Number of herder households (selected area) Total number of livestock and livestock distribution Land utilization Main agricultural production

12

(ii) Primary data was collected through questionnaires distributed to the randomly selected dairy farms and herder households in Tuv province and to determine the production processing and marketing (Appendix-A and B) Data collected in this part included

Present situation and the growth prospect of Livestock husbandry The suggestions and comments of herders and farmers who responded in this

research The comments The current problems faced by the herders and farmers

The survey aimed to question 80 herding households from the Tuv province and 8 intensive farmers of Tuv province were involved but in practice only 69 herders and 32 small and medium scale intensive dairy farms were surveyed Therefore around 10 relevant people including an official such as governor of soum and bag coordinator of household livelihood improvement related project and livestock expert were given an additional questionnaire

35 Data processing and analysis

351 Data processing The data of this study collected from the herder households and farmers of Tuv province The draft were analyzed to know the development future growth the influencing factors and special characteristics of the livestock sector SWOT analysis Around 80 questionnaires processed in the SPSS package and Microsoft Excel by using descriptive statistics Moreover in the survey investigated the herders and farmersrsquo opinions about the Mongolian livestock sub sector 352 Data analysis Data collections were analyzed quantitative and qualitative ways according to the field data The basis statistics data and the survey questionnaire results investigated the past and current performance of Mongolian livestock husbandry and calculated the future growth of livestock animals in Mongolia by showing the form of table figure flowchart mean and percentile 353 SWOT analysis The statistical data and the results of questionnaire determine the external factors such as Opportunity and Threat and internal factors such as Strength and Weakness of intensive and extensive livestock husbandry of Mongolia Moreover SWOT analyses provided the opportunity weakness and other factors of Tuv province for the livestock sector

13

CHAPTER IV

RESULT AND DISCUSSION

41 The current situation of Mongolian Animal Husbandry

Generally Mongolian animal husbandry divided two main sectors extensive animal husbandry and intensive animal husbandry Barker (1997) said lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo The extensive livestock management system of Mongolia includes main five species of livestock for most of the year The some herders and some relevant people believe that the extensive animal husbandry is most suitable sector in Mongolia The first reason is that approximately 80 of total territories are grassy area in Mongolia This is one of the biggest scales of the world Second Mongolian livestock systems is continuing with a long traditional nomadic livestock herding Hence the herders obtained the great knowledge and experiments during the several centuries Third Mongolian herder households are settled in the traditional pastoral system such as ldquokhot ailrdquo and ldquoneg goliinhonrdquo Two and more herder households including relatives and acquaintances called ldquokhot ailrdquo and ldquoneg goliinhonrdquo live together This system is most indigenous form This form of living served a variety of functions such as using pasture and seasonal movement of households Lastly the demand of livestock production is increasing during the last few years because of incomes of family are increasing and the increased demand from the neighbor countries Furthermore it has become the foundation of Mongolian livestock revolution Moreover Mongolian climate is suitable for the extensive animal husbandry On the other side the government of Mongolia begun to support intensive livestock farms to develop dairy and meat bread cattle pork and poultry Some people said the intensive livestock husbandry is better than the extensive livestock husbandry There are several reasons for this statement The first significant reason is that the increasing livestock number of Mongolia According to some researches it is possible to support around 38 million heads of livestock on the Mongolian whole grasslands However the number of livestock already reached 42 million heads in 2008 Therefore the growth of livestock is creating the degradation of pastureland by overgrazing in Mongolia Secondly since 1940 the average air temperature has been increasing in Mongolia caused by the climate change of the world Moreover the arid land is increasing due to decreasing of precipitation Therefore since last few years the yield of pasture is depleting gradually Thus grazing time of livestock is decreasing in Mongolia Finally the development of extensive farms directly depends on the supply and safety of the food Presently Mongolia is importing most of food products except the meat and meat products That is why the intensive animal husbandry is developing in some provinces especially the nearest provinces with the bigger cities such as Tuv Selenge and Bulgan According to research by the Ministry of Food and Agriculture (2007) Mongolia has 750 intensive animal husbandries Of which 494 farms for dairy 10 of them for meat cow 15 sheep farms for meat and wool 79 farms with pigs 111 farms with poultry and 40 farms with bees in Mongolia (AppendixC)

14

42 The Present Status of Mongolian Livestock

Mongolian livestock reached 421958 thousand heads in 2008 and it increased by 48 percent compared with 2007 Figure 41 shows the livestock numbers of Mongolia during last 18 years Sheep goat and cattle population has increased while those of camel and horse are decreasing in Mongolia during the last few years (Appendix D and F)

Figure 41 The state of livestock number of Mongolia from 1990 to 2008

According to Figure 41 the total number of livestock dramatically increased between 1990 and 1999 However it decreased by 287 due to drought and Dzud during 2000 to 2002 During that period 35 million and 47 million heads of animals died in 2000 and 2001 respectively During the last 7 years the number of livestock increased by 31 By the way the number of livestock in 2008 reached highest number ever

Figure 42 The comparison of the livestock structure in 2008 with 1990

15

Figure 42 shows the comparison of livestock structure (by type) during 2008 and 1990 According to Figure 41 sheep were dominating in the livestock structure until 2003 However cattle and goats dominated the structure of livestock during the recent years This is because of cashmere become herderrsquos main income from livestock due to free market economy It explained that after privatization the herders prefer to herd productive kinds of livestock Although the livestock resist Mongolian weather especially adopted for the cold season the productivity of livestock is low Therefore the some preparations such as to build warm shelters and to prepare and store hay and fodder are most significant principal elements during the wintertime Moreover pastures are subjected to increased vulnerability to parasites and other diseases These issues affect the animal productivity

43 Comparison of Actual and Estimated Livestock Number

Three different estimation including the average of number of livestock comparison of actual and estimated livestock number of Mongolia between 1990 and 2008 and livestock number in 2009 by using the Microsoft Excel (AppendixG) are given below (Avdai et al 1999) Calculation 1 The average number livestock in Mongolia from 1990 to 2008

The average number of livestock estimated was 295501 thousand heads between 1990 and 2008 Calculation 2 The goal of this part is that to estimate the equalized livestock number (amount) on the actual livestock amount by using the straight-line equation

yt = a + bt - (42)

Where t - period and a b - the parametric constraints

To estimate the parametric constraints can be solving by using the following method The value obtained by using equation (43) Table 41 shows the results of estimation To solve this system of equation substitute sumt = 0 Moreover the estimated values such as Σ y Σt2 and Σyt are shown from the Table 41

16

yt = 2978564+57145t y ndashactual livestock amount yt - estimated livestock amount

The estimated livestock amount and actual livestock number of Mongolia between 1990 and 2008 are shown in Figure 43

Table 41 The calculation by using Equation 43

(thousand heads)

y t t2 yt yt=a+bt

1990 258549 -9 81 -2326941 2464259 1991 255279 -8 64 -2042232 2521404 1992 254941 -7 49 -1784587 2578549 1993 251747 -6 36 -1510482 2635694 1994 268081 -5 25 -1340405 2692839 1995 285723 -4 16 -1142892 2749984 1996 293001 -3 9 -879003 2807129 1997 312923 -2 4 -625846 2864274 1998 328975 -1 1 -328975 2921419 1999 33596 0 0 0 2978564 2000 303274 1 1 303274 3035709 2001 260752 2 4 521504 3092854 2002 238976 3 9 716928 3149999 2003 254277 4 16 1017108 3207144 2004 280199 5 25 1400995 3264289 2005 303988 6 36 1823928 3321434 2006 34803 7 49 243621 3378579 2007 402638 8 64 3221104 3435724 2008 421959 9 81 3797631 3492869 2009 10 3550014 2010 11 3607159 2011 12 3664304 2012 13 3721449 2013 14 3778594 2014 15 3835739 2015 16 3892884

TOTAL 5659272 91 570 3257319 82642859

17

Figure 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads)

bull Calculation 3 The last estimation is that how many heads of Mongolian livestock will be reach in 2009 by using the following Equation 44

yt plusmn tα δy -(44)

Where yt - estimated amount of livestock on 2009 (see from previous Table 41) tα ndash dispersion of Student

δy ndash standard deviation y + tα = 3550014+834668= 4384682 y - tα =3550014- 834668= 2715346 Calculation shows that the livestock number of Mongolia will reach from 271534 to 438468 thousand heads animals in 2009 Below three steps shows the steps of calculation 3 Step A To calculate δy (standard deviation) can be solved by using following equation 45 (45) Table 42 shows the result of this estimation by using Equation 45

Where n - total number of sample

Step B To find the dispersion of Student (Student is the name of person) (tα)

18

tα (q k) = tα (005 18)= 212 (Appendix I) Where k - degree of freedom k= n-1=18

q - significance level (Appendix I) Step C tα δy = 21 397461 = 834668

Table 42 Estimation by using Equation 45

y yt y-yt (y-yt)2

1990 258549 246426 12123 146967129 1991 255279 25214 3139 9853321 1992 254941 257855 -2914 8491396 1993 251747 263569 -11822 139759684 1994 268081 269284 -1203 1447209 1995 285723 274998 10725 115025625 1996 293001 280713 12288 150994944 1997 312923 286427 26496 702038016 1998 328975 292142 36833 1356669889 1999 33596 297856 38104 1451914816 2000 303274 303571 -297 88209 2001 260752 309285 -48533 2355452089 2002 238976 31500 -76024 5779648576 2003 254277 320714 -66437 4413874969 2004 280199 326429 -4623 21372129 2005 303988 332143 -28155 792704025 2006 34803 337858 10172 103469584 2007 402638 343572 59066 3488792356 2008 421959 349287 72672 5281219584

2843562432

44 Land Utilization

Mongolian total territory is 1564116 thousand hectares Of which in total 742 of total area is used for the agriculture 157 used for state special land 91 of total area is comprised forest land 03 land used for cities rural town and other settlements 04 land possesses water resources and 02 of total land is covered by transportation and networks in 2006 (NSO 2006) Currently Mongolian pastureland faced many significant problems such as grassland degradation soil erosion and desertification Main sources of them are overgrazing water

19

source and the population According to some survey approximately 120 million hectare land (70 percent) of total Mongolian territory is degraded

Figure 44 The comparison of utilized lands between 2000 and 2006 (by type)

Figure 44 shows utilization land between 2000 and 2006 For example the agriculture land and forestland decreased by 9 and 4 in 2006 compared to 2000 Generally the development of crop production and destruction the populationrsquos migration to urban areas and the nomadic livestock husbandry are leading to the overgrazing and degradation of the land Moreover livestock number in Mongolia is increasing during the last few years Especially in 2008 it reached the highest number of livestock for the first time in history Even though the herders are facing the shortage of fodder In addition the land for the natural pasture has slightly increased since 1989

441 The Impacts for the Land Degradation

There are many environmental factors affect on the agricultural sector in complex ways Most scientists and experts agreed that factors of land degradation in Mongolia could be divided into following two main categories including human and natural factors Today many factors affect the land degradation caused by the human activities such as excessive grazing deforestation poor irrigation and inappropriate land tenure in all sector The first significant factor is overgrazing Crop cultivation is one of the most important reasons of soil erosion and overgrazing Spring tilling coincides caused the seasonal higher speed wind and most planted areas are lack of windbreaks like trees For example the average wind speed of Gobi region is 3hellip4 meters per second it is one of the significant cause of soil moisture loss and erosion According to some survey an average of 35ndash50 tons of soils has been lost from each

20

hectare of cultivated land due to erosion during the past 30 years Half of all cultivated land degraded to some degree of erosion Another factor of overgrazing is the vehicle-induced degradation The second significant factor is the deforestation due to clear-cutting the trees fire and insect infestations The third important factor is inappropriate land tenure like mining and inadequate waste management Shagdar (2001) estimated approximately 100000 hectare of land have been degraded by mining and quarrying Moreover another significant factor of land degradation is bad or poor irrigation practices Salinization of irrigated land in arid climates as a result of poor drainage and evaporation and using highly toxic pesticide for vegetation protection from insects causes depletion of soil productivity The final factor of land degradation is the legal provision of ldquoopenness of pastureland which is public propertyrdquo Because of this legal provision the utilizing of pastureland is free for everyone (UNDP amp SIDA 2003) On the other hand the land degradation of Mongolia depends directly on nature and weather conditions Most important impact is the location It is located high above sea level and far away from the ocean Mongolia lies between 420 520N and almost 1200 E Another principal factor is the global warming and climatic change of the world Climate change can affect weeds insects plant diseases and pathogens in the environment especially in agricultural activities Another consequence on the pasture is the lack of rainfall Mongolia has low precipitation and short growing seasons especially long and cold winter and short and hot summer Therefore other significant causes are drought and Dzud in Mongolia They are the keys determinants of vulnerability of livestock to climate change They affect the livelihood of herdersrsquo household which is reduced livestock productivity especially milk and destroy pasture (AIACC 2006) The natural disasters like dzud and drought have occurred around 30 times in Mongolia with different level of harm (UNDPampSIDA 2003) (Figure 45)

Figure 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006)

During the disaster of harsh winter (dzud) in 1999- 2000 almost one third of the total livestock died in 1999 Figure 46 shows that the losses adult animals between 2000 and 2006 in Mongolia

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

6

Traditionally five types of domestic livestock in Mongolia are sheep goats cattle horses and camel Pigs hens and other birds seldom reared Horse is the first animal in Mongolia to be domesticated (Baasanjav et al 1999)

Shagdar (2001) remarked that the wild animals domesticated livestock animals such as sheep and horses in Mongolia between the 8th and 3rd centuries BC Shagdar (2001) argued that Mongolian herder households began the nomadic form in the 13th century and this system remained until present day In those times most livestock animals was private owned of herders However in 1951 the livestock animals transferred to the collective ownership form This collective ownership form was tended to develop more intensively managed production system This form gave diverse assistances to the herders For example to build the enclosures and wells to prepare hay (Shagdar 2001) However during the collectivization period the share of private livestock decreased to 17-30 of the total number of livestock (Shagdar 2001) The collective ownership form lasted till 1989 Due to tend of the decreasing livestock number Mongolian government privatized the livestock animals to the herders in 1991 Because of privatization 967 of total livestock shifted private owned form and 31 of herder households have more than 100 livestock animals After privatization the livestock number and number of herders rapidly increased in Mongolia

23 Regional Distribution

Mongolia divided 5 main regions named East West Central Khangai and Ulaanbaatar Figure 24 shows the regional distribution of livestock in Mongolia (NSO 2006) The forests and mountainous areas of Khangai region Central region and West region of Mongolia are most populous in terms of livestock

Figure 24 Regional distribution of livestock in 2006 The livestock is relatively distributed in comparison with the population size of each region Sheep and goats are the majority livestock and respectively accounted for 425 and 444 of

7

the total number of livestock in every region in 2006 Camels account for only 07 of total livestock and mainly rise in the southern part of the country (NSO 2006) Overgrazing is becoming problematic in areas close to major markets For example livestock density of Orkhon-Uul Darkhan and the capital city named of Ulaanbaatar which is 5 to 10 times lower than other regions

24 Livestock Production

Mongolian major livestock products include meat and meat products and milk and dairy products In addition wool hair cashmere hides and skins are the key input for animal processing industries ( Shagdar 2001) Agricultural production comprises of 30 meat and meat products 27 of them include milk and dairy products 2 skin and hides 1 animal and plants oil 31 flour and flour products 2 fruit and vegetables and 2 livestock feed and starches

Figure 25 Share of domestic production versus imports in consumption of major products (AIP

2006-2007)

From 1999 to 2004 all foodstuffs consumption except meat and milk has been below the recommended level Because of natural disasters such as drought and dzud in recent years the consumption of milk and meat products has declined during those years However the consumption of flour rise eggs potatoes and vegetables has increased in 1999-2002 Especially consumptions of potatoes vegetables and fruits are significantly below the recommendation (PRSP 2004) Mongolia imports some non-meat food products from Russia China and others Mongolia relies fully on imports for fruits and rice (WB 2008) Livestock production is entirely seasonal taking place in harmony with the Mongolian climate For example wool and hair collect in the late spring and early summer while most livestock

8

slaughter in the late autumn and early winter Milk and dairy products mainly produce during summer (Shagdar 2001) a) Meat and meat products On average 75 million head of livestock slaughter for consumption annually accounting for approximately 25 of the total livestock herd counted at the beginning of each year This equals 250000-300000 tons of meat which include mutton beef goat meat and horsemeat Camel meat is not so popular and consumed mostly during the winter Meat and meat products taken from of 30 beef 40 mutton 10 goat meat and 15 horsemeat (Shagdar 2001) b) Milk and dairy products Annually 250000-350000 tons milk produces in Mongolia Cowrsquos milk possesses more than 80 of the total of milk Moreover sheep and goat milk and horse milk accounting for about 10 and 8 respectively In addition more than 90 of all cows are accounted by native Mongolian cows which have an average milk yield of 19 liters per day in steppe and forest region and 13 liters in the Gobi region (Shagdar 2001) Dairy products include yogurt butter dried curds cheese etc Particularly in the rural areas milk consumes directly and converts to a wide range of traditional products Many of these have a long life and are stored for consumption in the winter and spring (WB 2003) Horse milk is used to produce the popular drink it contain a low alcohol that is similar the beer Rich content of amino acids vitamins and sugar found in horse milk makes airag a nutritious and healthy drink which is also low in fat Therefore it is used to treat many illnesses including tuberculosis diseases of digestive organs pharmaceutical toxicity and fatigue (Shagdar 2001) c) Wool hair and cashmere Approximately 25000 tons of wool hair and cashmere is produced in Mongolia annually more than 70 of which is accounted for by sheep wool Mongolia is the second largest producer of raw cashmere in the world Approximately 3300 tons of cashmere is produced annually That is accounting for about 20 of the total global supply Therefore cashmere is one of the main export commodities in Mongolia In wool and cashmere industry the productions of major items include spun threat camel wool blanket carpet felt etc (Shagdar 2001) d) Hides and skin One of valuable resource for producing luxury consumer goods is hides and skin About 65-85 million individual hides and skin are produced in Mongolia annually more than 80 of these are sheep and goatskins which are supplied to processing industries or exported Traditionally sheepskin was used for making warm winter coats and floor covering while various accessories for handling horses were made from cattle hides (Shagdar 2001)

9

CHAPTER III

METHODOLOGY The study conducted in four main stages such as the data collection analysis of the data and reporting and conclusions and recommendation part The general methodology used for specific objectives of the study is shown in Figure 31

Figure 31 Flow chart of methodology and procedure for survey and data collection

10

31 Site selection

The sites for the study selected included three sub-provinces named Jargalant Sumber and Bayanchandmani of Tuv province It is nearest province with the capital city (Figure 32) The site selection chose based on the following characteristics

bull Agricultural production bull The location of province bull Potentials for the development of livestock husbandry bull Financial constraints of the research bull Data availability

General information of Tuv province

Area 77300 sq km Number of livestock 1598000 Population 96500 Cropland 318100 hectare Center Zuunmod Number of sub-provinces 27

Tuv province is located in the centre of Mongolia In addition capital city named Ulaanbaatar located in this provincersquos territory Tuv province is one of the biggest and most productive provinces as this province is well positioned geographically to supply livestock production to nearest areas with high demand This province is situated 43 km from the capital city Moreover the major intensive animal farms are located in Tuv province

In this province have 201 household farms include dairy farms 152 pork farms 24 and chicken farm 1 respectively (MFA 2007) There are a total of 210000 camels 1979 thousand head of horses 1311 thousand head of cattle 10408 thousand of sheep and 8013 thousand heads of goats (NSO 2006)

33 Sampling Design and Procedures of Survey

Formal survey was conducted to collect the general information of herder householdsrsquo comprehension and the current development of agricultural products Herder household and farmers who own agribusiness were selected for interviews The number of herder households and number of farms in each province were determined by following formula

Where n= Number of total sample

N= Total number of farms and herders households E= Error (005)

80 herder households and 8 intensive farms from selected in Tuv province for this survey This size of samples of herders and farms provided statistical justification in order to generalize the results

11

Figure 32 Location of Tuv aimag

34 Data Collection

Data were collected from two sources (i) Secondary data was from the Mongolian National Statistical Office Mongolian State

University of Agriculture and the Ministry of Food and Agriculture Data used in this study included Urban and rural population Number of herder households (selected area) Total number of livestock and livestock distribution Land utilization Main agricultural production

12

(ii) Primary data was collected through questionnaires distributed to the randomly selected dairy farms and herder households in Tuv province and to determine the production processing and marketing (Appendix-A and B) Data collected in this part included

Present situation and the growth prospect of Livestock husbandry The suggestions and comments of herders and farmers who responded in this

research The comments The current problems faced by the herders and farmers

The survey aimed to question 80 herding households from the Tuv province and 8 intensive farmers of Tuv province were involved but in practice only 69 herders and 32 small and medium scale intensive dairy farms were surveyed Therefore around 10 relevant people including an official such as governor of soum and bag coordinator of household livelihood improvement related project and livestock expert were given an additional questionnaire

35 Data processing and analysis

351 Data processing The data of this study collected from the herder households and farmers of Tuv province The draft were analyzed to know the development future growth the influencing factors and special characteristics of the livestock sector SWOT analysis Around 80 questionnaires processed in the SPSS package and Microsoft Excel by using descriptive statistics Moreover in the survey investigated the herders and farmersrsquo opinions about the Mongolian livestock sub sector 352 Data analysis Data collections were analyzed quantitative and qualitative ways according to the field data The basis statistics data and the survey questionnaire results investigated the past and current performance of Mongolian livestock husbandry and calculated the future growth of livestock animals in Mongolia by showing the form of table figure flowchart mean and percentile 353 SWOT analysis The statistical data and the results of questionnaire determine the external factors such as Opportunity and Threat and internal factors such as Strength and Weakness of intensive and extensive livestock husbandry of Mongolia Moreover SWOT analyses provided the opportunity weakness and other factors of Tuv province for the livestock sector

13

CHAPTER IV

RESULT AND DISCUSSION

41 The current situation of Mongolian Animal Husbandry

Generally Mongolian animal husbandry divided two main sectors extensive animal husbandry and intensive animal husbandry Barker (1997) said lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo The extensive livestock management system of Mongolia includes main five species of livestock for most of the year The some herders and some relevant people believe that the extensive animal husbandry is most suitable sector in Mongolia The first reason is that approximately 80 of total territories are grassy area in Mongolia This is one of the biggest scales of the world Second Mongolian livestock systems is continuing with a long traditional nomadic livestock herding Hence the herders obtained the great knowledge and experiments during the several centuries Third Mongolian herder households are settled in the traditional pastoral system such as ldquokhot ailrdquo and ldquoneg goliinhonrdquo Two and more herder households including relatives and acquaintances called ldquokhot ailrdquo and ldquoneg goliinhonrdquo live together This system is most indigenous form This form of living served a variety of functions such as using pasture and seasonal movement of households Lastly the demand of livestock production is increasing during the last few years because of incomes of family are increasing and the increased demand from the neighbor countries Furthermore it has become the foundation of Mongolian livestock revolution Moreover Mongolian climate is suitable for the extensive animal husbandry On the other side the government of Mongolia begun to support intensive livestock farms to develop dairy and meat bread cattle pork and poultry Some people said the intensive livestock husbandry is better than the extensive livestock husbandry There are several reasons for this statement The first significant reason is that the increasing livestock number of Mongolia According to some researches it is possible to support around 38 million heads of livestock on the Mongolian whole grasslands However the number of livestock already reached 42 million heads in 2008 Therefore the growth of livestock is creating the degradation of pastureland by overgrazing in Mongolia Secondly since 1940 the average air temperature has been increasing in Mongolia caused by the climate change of the world Moreover the arid land is increasing due to decreasing of precipitation Therefore since last few years the yield of pasture is depleting gradually Thus grazing time of livestock is decreasing in Mongolia Finally the development of extensive farms directly depends on the supply and safety of the food Presently Mongolia is importing most of food products except the meat and meat products That is why the intensive animal husbandry is developing in some provinces especially the nearest provinces with the bigger cities such as Tuv Selenge and Bulgan According to research by the Ministry of Food and Agriculture (2007) Mongolia has 750 intensive animal husbandries Of which 494 farms for dairy 10 of them for meat cow 15 sheep farms for meat and wool 79 farms with pigs 111 farms with poultry and 40 farms with bees in Mongolia (AppendixC)

14

42 The Present Status of Mongolian Livestock

Mongolian livestock reached 421958 thousand heads in 2008 and it increased by 48 percent compared with 2007 Figure 41 shows the livestock numbers of Mongolia during last 18 years Sheep goat and cattle population has increased while those of camel and horse are decreasing in Mongolia during the last few years (Appendix D and F)

Figure 41 The state of livestock number of Mongolia from 1990 to 2008

According to Figure 41 the total number of livestock dramatically increased between 1990 and 1999 However it decreased by 287 due to drought and Dzud during 2000 to 2002 During that period 35 million and 47 million heads of animals died in 2000 and 2001 respectively During the last 7 years the number of livestock increased by 31 By the way the number of livestock in 2008 reached highest number ever

Figure 42 The comparison of the livestock structure in 2008 with 1990

15

Figure 42 shows the comparison of livestock structure (by type) during 2008 and 1990 According to Figure 41 sheep were dominating in the livestock structure until 2003 However cattle and goats dominated the structure of livestock during the recent years This is because of cashmere become herderrsquos main income from livestock due to free market economy It explained that after privatization the herders prefer to herd productive kinds of livestock Although the livestock resist Mongolian weather especially adopted for the cold season the productivity of livestock is low Therefore the some preparations such as to build warm shelters and to prepare and store hay and fodder are most significant principal elements during the wintertime Moreover pastures are subjected to increased vulnerability to parasites and other diseases These issues affect the animal productivity

43 Comparison of Actual and Estimated Livestock Number

Three different estimation including the average of number of livestock comparison of actual and estimated livestock number of Mongolia between 1990 and 2008 and livestock number in 2009 by using the Microsoft Excel (AppendixG) are given below (Avdai et al 1999) Calculation 1 The average number livestock in Mongolia from 1990 to 2008

The average number of livestock estimated was 295501 thousand heads between 1990 and 2008 Calculation 2 The goal of this part is that to estimate the equalized livestock number (amount) on the actual livestock amount by using the straight-line equation

yt = a + bt - (42)

Where t - period and a b - the parametric constraints

To estimate the parametric constraints can be solving by using the following method The value obtained by using equation (43) Table 41 shows the results of estimation To solve this system of equation substitute sumt = 0 Moreover the estimated values such as Σ y Σt2 and Σyt are shown from the Table 41

16

yt = 2978564+57145t y ndashactual livestock amount yt - estimated livestock amount

The estimated livestock amount and actual livestock number of Mongolia between 1990 and 2008 are shown in Figure 43

Table 41 The calculation by using Equation 43

(thousand heads)

y t t2 yt yt=a+bt

1990 258549 -9 81 -2326941 2464259 1991 255279 -8 64 -2042232 2521404 1992 254941 -7 49 -1784587 2578549 1993 251747 -6 36 -1510482 2635694 1994 268081 -5 25 -1340405 2692839 1995 285723 -4 16 -1142892 2749984 1996 293001 -3 9 -879003 2807129 1997 312923 -2 4 -625846 2864274 1998 328975 -1 1 -328975 2921419 1999 33596 0 0 0 2978564 2000 303274 1 1 303274 3035709 2001 260752 2 4 521504 3092854 2002 238976 3 9 716928 3149999 2003 254277 4 16 1017108 3207144 2004 280199 5 25 1400995 3264289 2005 303988 6 36 1823928 3321434 2006 34803 7 49 243621 3378579 2007 402638 8 64 3221104 3435724 2008 421959 9 81 3797631 3492869 2009 10 3550014 2010 11 3607159 2011 12 3664304 2012 13 3721449 2013 14 3778594 2014 15 3835739 2015 16 3892884

TOTAL 5659272 91 570 3257319 82642859

17

Figure 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads)

bull Calculation 3 The last estimation is that how many heads of Mongolian livestock will be reach in 2009 by using the following Equation 44

yt plusmn tα δy -(44)

Where yt - estimated amount of livestock on 2009 (see from previous Table 41) tα ndash dispersion of Student

δy ndash standard deviation y + tα = 3550014+834668= 4384682 y - tα =3550014- 834668= 2715346 Calculation shows that the livestock number of Mongolia will reach from 271534 to 438468 thousand heads animals in 2009 Below three steps shows the steps of calculation 3 Step A To calculate δy (standard deviation) can be solved by using following equation 45 (45) Table 42 shows the result of this estimation by using Equation 45

Where n - total number of sample

Step B To find the dispersion of Student (Student is the name of person) (tα)

18

tα (q k) = tα (005 18)= 212 (Appendix I) Where k - degree of freedom k= n-1=18

q - significance level (Appendix I) Step C tα δy = 21 397461 = 834668

Table 42 Estimation by using Equation 45

y yt y-yt (y-yt)2

1990 258549 246426 12123 146967129 1991 255279 25214 3139 9853321 1992 254941 257855 -2914 8491396 1993 251747 263569 -11822 139759684 1994 268081 269284 -1203 1447209 1995 285723 274998 10725 115025625 1996 293001 280713 12288 150994944 1997 312923 286427 26496 702038016 1998 328975 292142 36833 1356669889 1999 33596 297856 38104 1451914816 2000 303274 303571 -297 88209 2001 260752 309285 -48533 2355452089 2002 238976 31500 -76024 5779648576 2003 254277 320714 -66437 4413874969 2004 280199 326429 -4623 21372129 2005 303988 332143 -28155 792704025 2006 34803 337858 10172 103469584 2007 402638 343572 59066 3488792356 2008 421959 349287 72672 5281219584

2843562432

44 Land Utilization

Mongolian total territory is 1564116 thousand hectares Of which in total 742 of total area is used for the agriculture 157 used for state special land 91 of total area is comprised forest land 03 land used for cities rural town and other settlements 04 land possesses water resources and 02 of total land is covered by transportation and networks in 2006 (NSO 2006) Currently Mongolian pastureland faced many significant problems such as grassland degradation soil erosion and desertification Main sources of them are overgrazing water

19

source and the population According to some survey approximately 120 million hectare land (70 percent) of total Mongolian territory is degraded

Figure 44 The comparison of utilized lands between 2000 and 2006 (by type)

Figure 44 shows utilization land between 2000 and 2006 For example the agriculture land and forestland decreased by 9 and 4 in 2006 compared to 2000 Generally the development of crop production and destruction the populationrsquos migration to urban areas and the nomadic livestock husbandry are leading to the overgrazing and degradation of the land Moreover livestock number in Mongolia is increasing during the last few years Especially in 2008 it reached the highest number of livestock for the first time in history Even though the herders are facing the shortage of fodder In addition the land for the natural pasture has slightly increased since 1989

441 The Impacts for the Land Degradation

There are many environmental factors affect on the agricultural sector in complex ways Most scientists and experts agreed that factors of land degradation in Mongolia could be divided into following two main categories including human and natural factors Today many factors affect the land degradation caused by the human activities such as excessive grazing deforestation poor irrigation and inappropriate land tenure in all sector The first significant factor is overgrazing Crop cultivation is one of the most important reasons of soil erosion and overgrazing Spring tilling coincides caused the seasonal higher speed wind and most planted areas are lack of windbreaks like trees For example the average wind speed of Gobi region is 3hellip4 meters per second it is one of the significant cause of soil moisture loss and erosion According to some survey an average of 35ndash50 tons of soils has been lost from each

20

hectare of cultivated land due to erosion during the past 30 years Half of all cultivated land degraded to some degree of erosion Another factor of overgrazing is the vehicle-induced degradation The second significant factor is the deforestation due to clear-cutting the trees fire and insect infestations The third important factor is inappropriate land tenure like mining and inadequate waste management Shagdar (2001) estimated approximately 100000 hectare of land have been degraded by mining and quarrying Moreover another significant factor of land degradation is bad or poor irrigation practices Salinization of irrigated land in arid climates as a result of poor drainage and evaporation and using highly toxic pesticide for vegetation protection from insects causes depletion of soil productivity The final factor of land degradation is the legal provision of ldquoopenness of pastureland which is public propertyrdquo Because of this legal provision the utilizing of pastureland is free for everyone (UNDP amp SIDA 2003) On the other hand the land degradation of Mongolia depends directly on nature and weather conditions Most important impact is the location It is located high above sea level and far away from the ocean Mongolia lies between 420 520N and almost 1200 E Another principal factor is the global warming and climatic change of the world Climate change can affect weeds insects plant diseases and pathogens in the environment especially in agricultural activities Another consequence on the pasture is the lack of rainfall Mongolia has low precipitation and short growing seasons especially long and cold winter and short and hot summer Therefore other significant causes are drought and Dzud in Mongolia They are the keys determinants of vulnerability of livestock to climate change They affect the livelihood of herdersrsquo household which is reduced livestock productivity especially milk and destroy pasture (AIACC 2006) The natural disasters like dzud and drought have occurred around 30 times in Mongolia with different level of harm (UNDPampSIDA 2003) (Figure 45)

Figure 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006)

During the disaster of harsh winter (dzud) in 1999- 2000 almost one third of the total livestock died in 1999 Figure 46 shows that the losses adult animals between 2000 and 2006 in Mongolia

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

7

the total number of livestock in every region in 2006 Camels account for only 07 of total livestock and mainly rise in the southern part of the country (NSO 2006) Overgrazing is becoming problematic in areas close to major markets For example livestock density of Orkhon-Uul Darkhan and the capital city named of Ulaanbaatar which is 5 to 10 times lower than other regions

24 Livestock Production

Mongolian major livestock products include meat and meat products and milk and dairy products In addition wool hair cashmere hides and skins are the key input for animal processing industries ( Shagdar 2001) Agricultural production comprises of 30 meat and meat products 27 of them include milk and dairy products 2 skin and hides 1 animal and plants oil 31 flour and flour products 2 fruit and vegetables and 2 livestock feed and starches

Figure 25 Share of domestic production versus imports in consumption of major products (AIP

2006-2007)

From 1999 to 2004 all foodstuffs consumption except meat and milk has been below the recommended level Because of natural disasters such as drought and dzud in recent years the consumption of milk and meat products has declined during those years However the consumption of flour rise eggs potatoes and vegetables has increased in 1999-2002 Especially consumptions of potatoes vegetables and fruits are significantly below the recommendation (PRSP 2004) Mongolia imports some non-meat food products from Russia China and others Mongolia relies fully on imports for fruits and rice (WB 2008) Livestock production is entirely seasonal taking place in harmony with the Mongolian climate For example wool and hair collect in the late spring and early summer while most livestock

8

slaughter in the late autumn and early winter Milk and dairy products mainly produce during summer (Shagdar 2001) a) Meat and meat products On average 75 million head of livestock slaughter for consumption annually accounting for approximately 25 of the total livestock herd counted at the beginning of each year This equals 250000-300000 tons of meat which include mutton beef goat meat and horsemeat Camel meat is not so popular and consumed mostly during the winter Meat and meat products taken from of 30 beef 40 mutton 10 goat meat and 15 horsemeat (Shagdar 2001) b) Milk and dairy products Annually 250000-350000 tons milk produces in Mongolia Cowrsquos milk possesses more than 80 of the total of milk Moreover sheep and goat milk and horse milk accounting for about 10 and 8 respectively In addition more than 90 of all cows are accounted by native Mongolian cows which have an average milk yield of 19 liters per day in steppe and forest region and 13 liters in the Gobi region (Shagdar 2001) Dairy products include yogurt butter dried curds cheese etc Particularly in the rural areas milk consumes directly and converts to a wide range of traditional products Many of these have a long life and are stored for consumption in the winter and spring (WB 2003) Horse milk is used to produce the popular drink it contain a low alcohol that is similar the beer Rich content of amino acids vitamins and sugar found in horse milk makes airag a nutritious and healthy drink which is also low in fat Therefore it is used to treat many illnesses including tuberculosis diseases of digestive organs pharmaceutical toxicity and fatigue (Shagdar 2001) c) Wool hair and cashmere Approximately 25000 tons of wool hair and cashmere is produced in Mongolia annually more than 70 of which is accounted for by sheep wool Mongolia is the second largest producer of raw cashmere in the world Approximately 3300 tons of cashmere is produced annually That is accounting for about 20 of the total global supply Therefore cashmere is one of the main export commodities in Mongolia In wool and cashmere industry the productions of major items include spun threat camel wool blanket carpet felt etc (Shagdar 2001) d) Hides and skin One of valuable resource for producing luxury consumer goods is hides and skin About 65-85 million individual hides and skin are produced in Mongolia annually more than 80 of these are sheep and goatskins which are supplied to processing industries or exported Traditionally sheepskin was used for making warm winter coats and floor covering while various accessories for handling horses were made from cattle hides (Shagdar 2001)

9

CHAPTER III

METHODOLOGY The study conducted in four main stages such as the data collection analysis of the data and reporting and conclusions and recommendation part The general methodology used for specific objectives of the study is shown in Figure 31

Figure 31 Flow chart of methodology and procedure for survey and data collection

10

31 Site selection

The sites for the study selected included three sub-provinces named Jargalant Sumber and Bayanchandmani of Tuv province It is nearest province with the capital city (Figure 32) The site selection chose based on the following characteristics

bull Agricultural production bull The location of province bull Potentials for the development of livestock husbandry bull Financial constraints of the research bull Data availability

General information of Tuv province

Area 77300 sq km Number of livestock 1598000 Population 96500 Cropland 318100 hectare Center Zuunmod Number of sub-provinces 27

Tuv province is located in the centre of Mongolia In addition capital city named Ulaanbaatar located in this provincersquos territory Tuv province is one of the biggest and most productive provinces as this province is well positioned geographically to supply livestock production to nearest areas with high demand This province is situated 43 km from the capital city Moreover the major intensive animal farms are located in Tuv province

In this province have 201 household farms include dairy farms 152 pork farms 24 and chicken farm 1 respectively (MFA 2007) There are a total of 210000 camels 1979 thousand head of horses 1311 thousand head of cattle 10408 thousand of sheep and 8013 thousand heads of goats (NSO 2006)

33 Sampling Design and Procedures of Survey

Formal survey was conducted to collect the general information of herder householdsrsquo comprehension and the current development of agricultural products Herder household and farmers who own agribusiness were selected for interviews The number of herder households and number of farms in each province were determined by following formula

Where n= Number of total sample

N= Total number of farms and herders households E= Error (005)

80 herder households and 8 intensive farms from selected in Tuv province for this survey This size of samples of herders and farms provided statistical justification in order to generalize the results

11

Figure 32 Location of Tuv aimag

34 Data Collection

Data were collected from two sources (i) Secondary data was from the Mongolian National Statistical Office Mongolian State

University of Agriculture and the Ministry of Food and Agriculture Data used in this study included Urban and rural population Number of herder households (selected area) Total number of livestock and livestock distribution Land utilization Main agricultural production

12

(ii) Primary data was collected through questionnaires distributed to the randomly selected dairy farms and herder households in Tuv province and to determine the production processing and marketing (Appendix-A and B) Data collected in this part included

Present situation and the growth prospect of Livestock husbandry The suggestions and comments of herders and farmers who responded in this

research The comments The current problems faced by the herders and farmers

The survey aimed to question 80 herding households from the Tuv province and 8 intensive farmers of Tuv province were involved but in practice only 69 herders and 32 small and medium scale intensive dairy farms were surveyed Therefore around 10 relevant people including an official such as governor of soum and bag coordinator of household livelihood improvement related project and livestock expert were given an additional questionnaire

35 Data processing and analysis

351 Data processing The data of this study collected from the herder households and farmers of Tuv province The draft were analyzed to know the development future growth the influencing factors and special characteristics of the livestock sector SWOT analysis Around 80 questionnaires processed in the SPSS package and Microsoft Excel by using descriptive statistics Moreover in the survey investigated the herders and farmersrsquo opinions about the Mongolian livestock sub sector 352 Data analysis Data collections were analyzed quantitative and qualitative ways according to the field data The basis statistics data and the survey questionnaire results investigated the past and current performance of Mongolian livestock husbandry and calculated the future growth of livestock animals in Mongolia by showing the form of table figure flowchart mean and percentile 353 SWOT analysis The statistical data and the results of questionnaire determine the external factors such as Opportunity and Threat and internal factors such as Strength and Weakness of intensive and extensive livestock husbandry of Mongolia Moreover SWOT analyses provided the opportunity weakness and other factors of Tuv province for the livestock sector

13

CHAPTER IV

RESULT AND DISCUSSION

41 The current situation of Mongolian Animal Husbandry

Generally Mongolian animal husbandry divided two main sectors extensive animal husbandry and intensive animal husbandry Barker (1997) said lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo The extensive livestock management system of Mongolia includes main five species of livestock for most of the year The some herders and some relevant people believe that the extensive animal husbandry is most suitable sector in Mongolia The first reason is that approximately 80 of total territories are grassy area in Mongolia This is one of the biggest scales of the world Second Mongolian livestock systems is continuing with a long traditional nomadic livestock herding Hence the herders obtained the great knowledge and experiments during the several centuries Third Mongolian herder households are settled in the traditional pastoral system such as ldquokhot ailrdquo and ldquoneg goliinhonrdquo Two and more herder households including relatives and acquaintances called ldquokhot ailrdquo and ldquoneg goliinhonrdquo live together This system is most indigenous form This form of living served a variety of functions such as using pasture and seasonal movement of households Lastly the demand of livestock production is increasing during the last few years because of incomes of family are increasing and the increased demand from the neighbor countries Furthermore it has become the foundation of Mongolian livestock revolution Moreover Mongolian climate is suitable for the extensive animal husbandry On the other side the government of Mongolia begun to support intensive livestock farms to develop dairy and meat bread cattle pork and poultry Some people said the intensive livestock husbandry is better than the extensive livestock husbandry There are several reasons for this statement The first significant reason is that the increasing livestock number of Mongolia According to some researches it is possible to support around 38 million heads of livestock on the Mongolian whole grasslands However the number of livestock already reached 42 million heads in 2008 Therefore the growth of livestock is creating the degradation of pastureland by overgrazing in Mongolia Secondly since 1940 the average air temperature has been increasing in Mongolia caused by the climate change of the world Moreover the arid land is increasing due to decreasing of precipitation Therefore since last few years the yield of pasture is depleting gradually Thus grazing time of livestock is decreasing in Mongolia Finally the development of extensive farms directly depends on the supply and safety of the food Presently Mongolia is importing most of food products except the meat and meat products That is why the intensive animal husbandry is developing in some provinces especially the nearest provinces with the bigger cities such as Tuv Selenge and Bulgan According to research by the Ministry of Food and Agriculture (2007) Mongolia has 750 intensive animal husbandries Of which 494 farms for dairy 10 of them for meat cow 15 sheep farms for meat and wool 79 farms with pigs 111 farms with poultry and 40 farms with bees in Mongolia (AppendixC)

14

42 The Present Status of Mongolian Livestock

Mongolian livestock reached 421958 thousand heads in 2008 and it increased by 48 percent compared with 2007 Figure 41 shows the livestock numbers of Mongolia during last 18 years Sheep goat and cattle population has increased while those of camel and horse are decreasing in Mongolia during the last few years (Appendix D and F)

Figure 41 The state of livestock number of Mongolia from 1990 to 2008

According to Figure 41 the total number of livestock dramatically increased between 1990 and 1999 However it decreased by 287 due to drought and Dzud during 2000 to 2002 During that period 35 million and 47 million heads of animals died in 2000 and 2001 respectively During the last 7 years the number of livestock increased by 31 By the way the number of livestock in 2008 reached highest number ever

Figure 42 The comparison of the livestock structure in 2008 with 1990

15

Figure 42 shows the comparison of livestock structure (by type) during 2008 and 1990 According to Figure 41 sheep were dominating in the livestock structure until 2003 However cattle and goats dominated the structure of livestock during the recent years This is because of cashmere become herderrsquos main income from livestock due to free market economy It explained that after privatization the herders prefer to herd productive kinds of livestock Although the livestock resist Mongolian weather especially adopted for the cold season the productivity of livestock is low Therefore the some preparations such as to build warm shelters and to prepare and store hay and fodder are most significant principal elements during the wintertime Moreover pastures are subjected to increased vulnerability to parasites and other diseases These issues affect the animal productivity

43 Comparison of Actual and Estimated Livestock Number

Three different estimation including the average of number of livestock comparison of actual and estimated livestock number of Mongolia between 1990 and 2008 and livestock number in 2009 by using the Microsoft Excel (AppendixG) are given below (Avdai et al 1999) Calculation 1 The average number livestock in Mongolia from 1990 to 2008

The average number of livestock estimated was 295501 thousand heads between 1990 and 2008 Calculation 2 The goal of this part is that to estimate the equalized livestock number (amount) on the actual livestock amount by using the straight-line equation

yt = a + bt - (42)

Where t - period and a b - the parametric constraints

To estimate the parametric constraints can be solving by using the following method The value obtained by using equation (43) Table 41 shows the results of estimation To solve this system of equation substitute sumt = 0 Moreover the estimated values such as Σ y Σt2 and Σyt are shown from the Table 41

16

yt = 2978564+57145t y ndashactual livestock amount yt - estimated livestock amount

The estimated livestock amount and actual livestock number of Mongolia between 1990 and 2008 are shown in Figure 43

Table 41 The calculation by using Equation 43

(thousand heads)

y t t2 yt yt=a+bt

1990 258549 -9 81 -2326941 2464259 1991 255279 -8 64 -2042232 2521404 1992 254941 -7 49 -1784587 2578549 1993 251747 -6 36 -1510482 2635694 1994 268081 -5 25 -1340405 2692839 1995 285723 -4 16 -1142892 2749984 1996 293001 -3 9 -879003 2807129 1997 312923 -2 4 -625846 2864274 1998 328975 -1 1 -328975 2921419 1999 33596 0 0 0 2978564 2000 303274 1 1 303274 3035709 2001 260752 2 4 521504 3092854 2002 238976 3 9 716928 3149999 2003 254277 4 16 1017108 3207144 2004 280199 5 25 1400995 3264289 2005 303988 6 36 1823928 3321434 2006 34803 7 49 243621 3378579 2007 402638 8 64 3221104 3435724 2008 421959 9 81 3797631 3492869 2009 10 3550014 2010 11 3607159 2011 12 3664304 2012 13 3721449 2013 14 3778594 2014 15 3835739 2015 16 3892884

TOTAL 5659272 91 570 3257319 82642859

17

Figure 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads)

bull Calculation 3 The last estimation is that how many heads of Mongolian livestock will be reach in 2009 by using the following Equation 44

yt plusmn tα δy -(44)

Where yt - estimated amount of livestock on 2009 (see from previous Table 41) tα ndash dispersion of Student

δy ndash standard deviation y + tα = 3550014+834668= 4384682 y - tα =3550014- 834668= 2715346 Calculation shows that the livestock number of Mongolia will reach from 271534 to 438468 thousand heads animals in 2009 Below three steps shows the steps of calculation 3 Step A To calculate δy (standard deviation) can be solved by using following equation 45 (45) Table 42 shows the result of this estimation by using Equation 45

Where n - total number of sample

Step B To find the dispersion of Student (Student is the name of person) (tα)

18

tα (q k) = tα (005 18)= 212 (Appendix I) Where k - degree of freedom k= n-1=18

q - significance level (Appendix I) Step C tα δy = 21 397461 = 834668

Table 42 Estimation by using Equation 45

y yt y-yt (y-yt)2

1990 258549 246426 12123 146967129 1991 255279 25214 3139 9853321 1992 254941 257855 -2914 8491396 1993 251747 263569 -11822 139759684 1994 268081 269284 -1203 1447209 1995 285723 274998 10725 115025625 1996 293001 280713 12288 150994944 1997 312923 286427 26496 702038016 1998 328975 292142 36833 1356669889 1999 33596 297856 38104 1451914816 2000 303274 303571 -297 88209 2001 260752 309285 -48533 2355452089 2002 238976 31500 -76024 5779648576 2003 254277 320714 -66437 4413874969 2004 280199 326429 -4623 21372129 2005 303988 332143 -28155 792704025 2006 34803 337858 10172 103469584 2007 402638 343572 59066 3488792356 2008 421959 349287 72672 5281219584

2843562432

44 Land Utilization

Mongolian total territory is 1564116 thousand hectares Of which in total 742 of total area is used for the agriculture 157 used for state special land 91 of total area is comprised forest land 03 land used for cities rural town and other settlements 04 land possesses water resources and 02 of total land is covered by transportation and networks in 2006 (NSO 2006) Currently Mongolian pastureland faced many significant problems such as grassland degradation soil erosion and desertification Main sources of them are overgrazing water

19

source and the population According to some survey approximately 120 million hectare land (70 percent) of total Mongolian territory is degraded

Figure 44 The comparison of utilized lands between 2000 and 2006 (by type)

Figure 44 shows utilization land between 2000 and 2006 For example the agriculture land and forestland decreased by 9 and 4 in 2006 compared to 2000 Generally the development of crop production and destruction the populationrsquos migration to urban areas and the nomadic livestock husbandry are leading to the overgrazing and degradation of the land Moreover livestock number in Mongolia is increasing during the last few years Especially in 2008 it reached the highest number of livestock for the first time in history Even though the herders are facing the shortage of fodder In addition the land for the natural pasture has slightly increased since 1989

441 The Impacts for the Land Degradation

There are many environmental factors affect on the agricultural sector in complex ways Most scientists and experts agreed that factors of land degradation in Mongolia could be divided into following two main categories including human and natural factors Today many factors affect the land degradation caused by the human activities such as excessive grazing deforestation poor irrigation and inappropriate land tenure in all sector The first significant factor is overgrazing Crop cultivation is one of the most important reasons of soil erosion and overgrazing Spring tilling coincides caused the seasonal higher speed wind and most planted areas are lack of windbreaks like trees For example the average wind speed of Gobi region is 3hellip4 meters per second it is one of the significant cause of soil moisture loss and erosion According to some survey an average of 35ndash50 tons of soils has been lost from each

20

hectare of cultivated land due to erosion during the past 30 years Half of all cultivated land degraded to some degree of erosion Another factor of overgrazing is the vehicle-induced degradation The second significant factor is the deforestation due to clear-cutting the trees fire and insect infestations The third important factor is inappropriate land tenure like mining and inadequate waste management Shagdar (2001) estimated approximately 100000 hectare of land have been degraded by mining and quarrying Moreover another significant factor of land degradation is bad or poor irrigation practices Salinization of irrigated land in arid climates as a result of poor drainage and evaporation and using highly toxic pesticide for vegetation protection from insects causes depletion of soil productivity The final factor of land degradation is the legal provision of ldquoopenness of pastureland which is public propertyrdquo Because of this legal provision the utilizing of pastureland is free for everyone (UNDP amp SIDA 2003) On the other hand the land degradation of Mongolia depends directly on nature and weather conditions Most important impact is the location It is located high above sea level and far away from the ocean Mongolia lies between 420 520N and almost 1200 E Another principal factor is the global warming and climatic change of the world Climate change can affect weeds insects plant diseases and pathogens in the environment especially in agricultural activities Another consequence on the pasture is the lack of rainfall Mongolia has low precipitation and short growing seasons especially long and cold winter and short and hot summer Therefore other significant causes are drought and Dzud in Mongolia They are the keys determinants of vulnerability of livestock to climate change They affect the livelihood of herdersrsquo household which is reduced livestock productivity especially milk and destroy pasture (AIACC 2006) The natural disasters like dzud and drought have occurred around 30 times in Mongolia with different level of harm (UNDPampSIDA 2003) (Figure 45)

Figure 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006)

During the disaster of harsh winter (dzud) in 1999- 2000 almost one third of the total livestock died in 1999 Figure 46 shows that the losses adult animals between 2000 and 2006 in Mongolia

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

8

slaughter in the late autumn and early winter Milk and dairy products mainly produce during summer (Shagdar 2001) a) Meat and meat products On average 75 million head of livestock slaughter for consumption annually accounting for approximately 25 of the total livestock herd counted at the beginning of each year This equals 250000-300000 tons of meat which include mutton beef goat meat and horsemeat Camel meat is not so popular and consumed mostly during the winter Meat and meat products taken from of 30 beef 40 mutton 10 goat meat and 15 horsemeat (Shagdar 2001) b) Milk and dairy products Annually 250000-350000 tons milk produces in Mongolia Cowrsquos milk possesses more than 80 of the total of milk Moreover sheep and goat milk and horse milk accounting for about 10 and 8 respectively In addition more than 90 of all cows are accounted by native Mongolian cows which have an average milk yield of 19 liters per day in steppe and forest region and 13 liters in the Gobi region (Shagdar 2001) Dairy products include yogurt butter dried curds cheese etc Particularly in the rural areas milk consumes directly and converts to a wide range of traditional products Many of these have a long life and are stored for consumption in the winter and spring (WB 2003) Horse milk is used to produce the popular drink it contain a low alcohol that is similar the beer Rich content of amino acids vitamins and sugar found in horse milk makes airag a nutritious and healthy drink which is also low in fat Therefore it is used to treat many illnesses including tuberculosis diseases of digestive organs pharmaceutical toxicity and fatigue (Shagdar 2001) c) Wool hair and cashmere Approximately 25000 tons of wool hair and cashmere is produced in Mongolia annually more than 70 of which is accounted for by sheep wool Mongolia is the second largest producer of raw cashmere in the world Approximately 3300 tons of cashmere is produced annually That is accounting for about 20 of the total global supply Therefore cashmere is one of the main export commodities in Mongolia In wool and cashmere industry the productions of major items include spun threat camel wool blanket carpet felt etc (Shagdar 2001) d) Hides and skin One of valuable resource for producing luxury consumer goods is hides and skin About 65-85 million individual hides and skin are produced in Mongolia annually more than 80 of these are sheep and goatskins which are supplied to processing industries or exported Traditionally sheepskin was used for making warm winter coats and floor covering while various accessories for handling horses were made from cattle hides (Shagdar 2001)

9

CHAPTER III

METHODOLOGY The study conducted in four main stages such as the data collection analysis of the data and reporting and conclusions and recommendation part The general methodology used for specific objectives of the study is shown in Figure 31

Figure 31 Flow chart of methodology and procedure for survey and data collection

10

31 Site selection

The sites for the study selected included three sub-provinces named Jargalant Sumber and Bayanchandmani of Tuv province It is nearest province with the capital city (Figure 32) The site selection chose based on the following characteristics

bull Agricultural production bull The location of province bull Potentials for the development of livestock husbandry bull Financial constraints of the research bull Data availability

General information of Tuv province

Area 77300 sq km Number of livestock 1598000 Population 96500 Cropland 318100 hectare Center Zuunmod Number of sub-provinces 27

Tuv province is located in the centre of Mongolia In addition capital city named Ulaanbaatar located in this provincersquos territory Tuv province is one of the biggest and most productive provinces as this province is well positioned geographically to supply livestock production to nearest areas with high demand This province is situated 43 km from the capital city Moreover the major intensive animal farms are located in Tuv province

In this province have 201 household farms include dairy farms 152 pork farms 24 and chicken farm 1 respectively (MFA 2007) There are a total of 210000 camels 1979 thousand head of horses 1311 thousand head of cattle 10408 thousand of sheep and 8013 thousand heads of goats (NSO 2006)

33 Sampling Design and Procedures of Survey

Formal survey was conducted to collect the general information of herder householdsrsquo comprehension and the current development of agricultural products Herder household and farmers who own agribusiness were selected for interviews The number of herder households and number of farms in each province were determined by following formula

Where n= Number of total sample

N= Total number of farms and herders households E= Error (005)

80 herder households and 8 intensive farms from selected in Tuv province for this survey This size of samples of herders and farms provided statistical justification in order to generalize the results

11

Figure 32 Location of Tuv aimag

34 Data Collection

Data were collected from two sources (i) Secondary data was from the Mongolian National Statistical Office Mongolian State

University of Agriculture and the Ministry of Food and Agriculture Data used in this study included Urban and rural population Number of herder households (selected area) Total number of livestock and livestock distribution Land utilization Main agricultural production

12

(ii) Primary data was collected through questionnaires distributed to the randomly selected dairy farms and herder households in Tuv province and to determine the production processing and marketing (Appendix-A and B) Data collected in this part included

Present situation and the growth prospect of Livestock husbandry The suggestions and comments of herders and farmers who responded in this

research The comments The current problems faced by the herders and farmers

The survey aimed to question 80 herding households from the Tuv province and 8 intensive farmers of Tuv province were involved but in practice only 69 herders and 32 small and medium scale intensive dairy farms were surveyed Therefore around 10 relevant people including an official such as governor of soum and bag coordinator of household livelihood improvement related project and livestock expert were given an additional questionnaire

35 Data processing and analysis

351 Data processing The data of this study collected from the herder households and farmers of Tuv province The draft were analyzed to know the development future growth the influencing factors and special characteristics of the livestock sector SWOT analysis Around 80 questionnaires processed in the SPSS package and Microsoft Excel by using descriptive statistics Moreover in the survey investigated the herders and farmersrsquo opinions about the Mongolian livestock sub sector 352 Data analysis Data collections were analyzed quantitative and qualitative ways according to the field data The basis statistics data and the survey questionnaire results investigated the past and current performance of Mongolian livestock husbandry and calculated the future growth of livestock animals in Mongolia by showing the form of table figure flowchart mean and percentile 353 SWOT analysis The statistical data and the results of questionnaire determine the external factors such as Opportunity and Threat and internal factors such as Strength and Weakness of intensive and extensive livestock husbandry of Mongolia Moreover SWOT analyses provided the opportunity weakness and other factors of Tuv province for the livestock sector

13

CHAPTER IV

RESULT AND DISCUSSION

41 The current situation of Mongolian Animal Husbandry

Generally Mongolian animal husbandry divided two main sectors extensive animal husbandry and intensive animal husbandry Barker (1997) said lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo The extensive livestock management system of Mongolia includes main five species of livestock for most of the year The some herders and some relevant people believe that the extensive animal husbandry is most suitable sector in Mongolia The first reason is that approximately 80 of total territories are grassy area in Mongolia This is one of the biggest scales of the world Second Mongolian livestock systems is continuing with a long traditional nomadic livestock herding Hence the herders obtained the great knowledge and experiments during the several centuries Third Mongolian herder households are settled in the traditional pastoral system such as ldquokhot ailrdquo and ldquoneg goliinhonrdquo Two and more herder households including relatives and acquaintances called ldquokhot ailrdquo and ldquoneg goliinhonrdquo live together This system is most indigenous form This form of living served a variety of functions such as using pasture and seasonal movement of households Lastly the demand of livestock production is increasing during the last few years because of incomes of family are increasing and the increased demand from the neighbor countries Furthermore it has become the foundation of Mongolian livestock revolution Moreover Mongolian climate is suitable for the extensive animal husbandry On the other side the government of Mongolia begun to support intensive livestock farms to develop dairy and meat bread cattle pork and poultry Some people said the intensive livestock husbandry is better than the extensive livestock husbandry There are several reasons for this statement The first significant reason is that the increasing livestock number of Mongolia According to some researches it is possible to support around 38 million heads of livestock on the Mongolian whole grasslands However the number of livestock already reached 42 million heads in 2008 Therefore the growth of livestock is creating the degradation of pastureland by overgrazing in Mongolia Secondly since 1940 the average air temperature has been increasing in Mongolia caused by the climate change of the world Moreover the arid land is increasing due to decreasing of precipitation Therefore since last few years the yield of pasture is depleting gradually Thus grazing time of livestock is decreasing in Mongolia Finally the development of extensive farms directly depends on the supply and safety of the food Presently Mongolia is importing most of food products except the meat and meat products That is why the intensive animal husbandry is developing in some provinces especially the nearest provinces with the bigger cities such as Tuv Selenge and Bulgan According to research by the Ministry of Food and Agriculture (2007) Mongolia has 750 intensive animal husbandries Of which 494 farms for dairy 10 of them for meat cow 15 sheep farms for meat and wool 79 farms with pigs 111 farms with poultry and 40 farms with bees in Mongolia (AppendixC)

14

42 The Present Status of Mongolian Livestock

Mongolian livestock reached 421958 thousand heads in 2008 and it increased by 48 percent compared with 2007 Figure 41 shows the livestock numbers of Mongolia during last 18 years Sheep goat and cattle population has increased while those of camel and horse are decreasing in Mongolia during the last few years (Appendix D and F)

Figure 41 The state of livestock number of Mongolia from 1990 to 2008

According to Figure 41 the total number of livestock dramatically increased between 1990 and 1999 However it decreased by 287 due to drought and Dzud during 2000 to 2002 During that period 35 million and 47 million heads of animals died in 2000 and 2001 respectively During the last 7 years the number of livestock increased by 31 By the way the number of livestock in 2008 reached highest number ever

Figure 42 The comparison of the livestock structure in 2008 with 1990

15

Figure 42 shows the comparison of livestock structure (by type) during 2008 and 1990 According to Figure 41 sheep were dominating in the livestock structure until 2003 However cattle and goats dominated the structure of livestock during the recent years This is because of cashmere become herderrsquos main income from livestock due to free market economy It explained that after privatization the herders prefer to herd productive kinds of livestock Although the livestock resist Mongolian weather especially adopted for the cold season the productivity of livestock is low Therefore the some preparations such as to build warm shelters and to prepare and store hay and fodder are most significant principal elements during the wintertime Moreover pastures are subjected to increased vulnerability to parasites and other diseases These issues affect the animal productivity

43 Comparison of Actual and Estimated Livestock Number

Three different estimation including the average of number of livestock comparison of actual and estimated livestock number of Mongolia between 1990 and 2008 and livestock number in 2009 by using the Microsoft Excel (AppendixG) are given below (Avdai et al 1999) Calculation 1 The average number livestock in Mongolia from 1990 to 2008

The average number of livestock estimated was 295501 thousand heads between 1990 and 2008 Calculation 2 The goal of this part is that to estimate the equalized livestock number (amount) on the actual livestock amount by using the straight-line equation

yt = a + bt - (42)

Where t - period and a b - the parametric constraints

To estimate the parametric constraints can be solving by using the following method The value obtained by using equation (43) Table 41 shows the results of estimation To solve this system of equation substitute sumt = 0 Moreover the estimated values such as Σ y Σt2 and Σyt are shown from the Table 41

16

yt = 2978564+57145t y ndashactual livestock amount yt - estimated livestock amount

The estimated livestock amount and actual livestock number of Mongolia between 1990 and 2008 are shown in Figure 43

Table 41 The calculation by using Equation 43

(thousand heads)

y t t2 yt yt=a+bt

1990 258549 -9 81 -2326941 2464259 1991 255279 -8 64 -2042232 2521404 1992 254941 -7 49 -1784587 2578549 1993 251747 -6 36 -1510482 2635694 1994 268081 -5 25 -1340405 2692839 1995 285723 -4 16 -1142892 2749984 1996 293001 -3 9 -879003 2807129 1997 312923 -2 4 -625846 2864274 1998 328975 -1 1 -328975 2921419 1999 33596 0 0 0 2978564 2000 303274 1 1 303274 3035709 2001 260752 2 4 521504 3092854 2002 238976 3 9 716928 3149999 2003 254277 4 16 1017108 3207144 2004 280199 5 25 1400995 3264289 2005 303988 6 36 1823928 3321434 2006 34803 7 49 243621 3378579 2007 402638 8 64 3221104 3435724 2008 421959 9 81 3797631 3492869 2009 10 3550014 2010 11 3607159 2011 12 3664304 2012 13 3721449 2013 14 3778594 2014 15 3835739 2015 16 3892884

TOTAL 5659272 91 570 3257319 82642859

17

Figure 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads)

bull Calculation 3 The last estimation is that how many heads of Mongolian livestock will be reach in 2009 by using the following Equation 44

yt plusmn tα δy -(44)

Where yt - estimated amount of livestock on 2009 (see from previous Table 41) tα ndash dispersion of Student

δy ndash standard deviation y + tα = 3550014+834668= 4384682 y - tα =3550014- 834668= 2715346 Calculation shows that the livestock number of Mongolia will reach from 271534 to 438468 thousand heads animals in 2009 Below three steps shows the steps of calculation 3 Step A To calculate δy (standard deviation) can be solved by using following equation 45 (45) Table 42 shows the result of this estimation by using Equation 45

Where n - total number of sample

Step B To find the dispersion of Student (Student is the name of person) (tα)

18

tα (q k) = tα (005 18)= 212 (Appendix I) Where k - degree of freedom k= n-1=18

q - significance level (Appendix I) Step C tα δy = 21 397461 = 834668

Table 42 Estimation by using Equation 45

y yt y-yt (y-yt)2

1990 258549 246426 12123 146967129 1991 255279 25214 3139 9853321 1992 254941 257855 -2914 8491396 1993 251747 263569 -11822 139759684 1994 268081 269284 -1203 1447209 1995 285723 274998 10725 115025625 1996 293001 280713 12288 150994944 1997 312923 286427 26496 702038016 1998 328975 292142 36833 1356669889 1999 33596 297856 38104 1451914816 2000 303274 303571 -297 88209 2001 260752 309285 -48533 2355452089 2002 238976 31500 -76024 5779648576 2003 254277 320714 -66437 4413874969 2004 280199 326429 -4623 21372129 2005 303988 332143 -28155 792704025 2006 34803 337858 10172 103469584 2007 402638 343572 59066 3488792356 2008 421959 349287 72672 5281219584

2843562432

44 Land Utilization

Mongolian total territory is 1564116 thousand hectares Of which in total 742 of total area is used for the agriculture 157 used for state special land 91 of total area is comprised forest land 03 land used for cities rural town and other settlements 04 land possesses water resources and 02 of total land is covered by transportation and networks in 2006 (NSO 2006) Currently Mongolian pastureland faced many significant problems such as grassland degradation soil erosion and desertification Main sources of them are overgrazing water

19

source and the population According to some survey approximately 120 million hectare land (70 percent) of total Mongolian territory is degraded

Figure 44 The comparison of utilized lands between 2000 and 2006 (by type)

Figure 44 shows utilization land between 2000 and 2006 For example the agriculture land and forestland decreased by 9 and 4 in 2006 compared to 2000 Generally the development of crop production and destruction the populationrsquos migration to urban areas and the nomadic livestock husbandry are leading to the overgrazing and degradation of the land Moreover livestock number in Mongolia is increasing during the last few years Especially in 2008 it reached the highest number of livestock for the first time in history Even though the herders are facing the shortage of fodder In addition the land for the natural pasture has slightly increased since 1989

441 The Impacts for the Land Degradation

There are many environmental factors affect on the agricultural sector in complex ways Most scientists and experts agreed that factors of land degradation in Mongolia could be divided into following two main categories including human and natural factors Today many factors affect the land degradation caused by the human activities such as excessive grazing deforestation poor irrigation and inappropriate land tenure in all sector The first significant factor is overgrazing Crop cultivation is one of the most important reasons of soil erosion and overgrazing Spring tilling coincides caused the seasonal higher speed wind and most planted areas are lack of windbreaks like trees For example the average wind speed of Gobi region is 3hellip4 meters per second it is one of the significant cause of soil moisture loss and erosion According to some survey an average of 35ndash50 tons of soils has been lost from each

20

hectare of cultivated land due to erosion during the past 30 years Half of all cultivated land degraded to some degree of erosion Another factor of overgrazing is the vehicle-induced degradation The second significant factor is the deforestation due to clear-cutting the trees fire and insect infestations The third important factor is inappropriate land tenure like mining and inadequate waste management Shagdar (2001) estimated approximately 100000 hectare of land have been degraded by mining and quarrying Moreover another significant factor of land degradation is bad or poor irrigation practices Salinization of irrigated land in arid climates as a result of poor drainage and evaporation and using highly toxic pesticide for vegetation protection from insects causes depletion of soil productivity The final factor of land degradation is the legal provision of ldquoopenness of pastureland which is public propertyrdquo Because of this legal provision the utilizing of pastureland is free for everyone (UNDP amp SIDA 2003) On the other hand the land degradation of Mongolia depends directly on nature and weather conditions Most important impact is the location It is located high above sea level and far away from the ocean Mongolia lies between 420 520N and almost 1200 E Another principal factor is the global warming and climatic change of the world Climate change can affect weeds insects plant diseases and pathogens in the environment especially in agricultural activities Another consequence on the pasture is the lack of rainfall Mongolia has low precipitation and short growing seasons especially long and cold winter and short and hot summer Therefore other significant causes are drought and Dzud in Mongolia They are the keys determinants of vulnerability of livestock to climate change They affect the livelihood of herdersrsquo household which is reduced livestock productivity especially milk and destroy pasture (AIACC 2006) The natural disasters like dzud and drought have occurred around 30 times in Mongolia with different level of harm (UNDPampSIDA 2003) (Figure 45)

Figure 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006)

During the disaster of harsh winter (dzud) in 1999- 2000 almost one third of the total livestock died in 1999 Figure 46 shows that the losses adult animals between 2000 and 2006 in Mongolia

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

9

CHAPTER III

METHODOLOGY The study conducted in four main stages such as the data collection analysis of the data and reporting and conclusions and recommendation part The general methodology used for specific objectives of the study is shown in Figure 31

Figure 31 Flow chart of methodology and procedure for survey and data collection

10

31 Site selection

The sites for the study selected included three sub-provinces named Jargalant Sumber and Bayanchandmani of Tuv province It is nearest province with the capital city (Figure 32) The site selection chose based on the following characteristics

bull Agricultural production bull The location of province bull Potentials for the development of livestock husbandry bull Financial constraints of the research bull Data availability

General information of Tuv province

Area 77300 sq km Number of livestock 1598000 Population 96500 Cropland 318100 hectare Center Zuunmod Number of sub-provinces 27

Tuv province is located in the centre of Mongolia In addition capital city named Ulaanbaatar located in this provincersquos territory Tuv province is one of the biggest and most productive provinces as this province is well positioned geographically to supply livestock production to nearest areas with high demand This province is situated 43 km from the capital city Moreover the major intensive animal farms are located in Tuv province

In this province have 201 household farms include dairy farms 152 pork farms 24 and chicken farm 1 respectively (MFA 2007) There are a total of 210000 camels 1979 thousand head of horses 1311 thousand head of cattle 10408 thousand of sheep and 8013 thousand heads of goats (NSO 2006)

33 Sampling Design and Procedures of Survey

Formal survey was conducted to collect the general information of herder householdsrsquo comprehension and the current development of agricultural products Herder household and farmers who own agribusiness were selected for interviews The number of herder households and number of farms in each province were determined by following formula

Where n= Number of total sample

N= Total number of farms and herders households E= Error (005)

80 herder households and 8 intensive farms from selected in Tuv province for this survey This size of samples of herders and farms provided statistical justification in order to generalize the results

11

Figure 32 Location of Tuv aimag

34 Data Collection

Data were collected from two sources (i) Secondary data was from the Mongolian National Statistical Office Mongolian State

University of Agriculture and the Ministry of Food and Agriculture Data used in this study included Urban and rural population Number of herder households (selected area) Total number of livestock and livestock distribution Land utilization Main agricultural production

12

(ii) Primary data was collected through questionnaires distributed to the randomly selected dairy farms and herder households in Tuv province and to determine the production processing and marketing (Appendix-A and B) Data collected in this part included

Present situation and the growth prospect of Livestock husbandry The suggestions and comments of herders and farmers who responded in this

research The comments The current problems faced by the herders and farmers

The survey aimed to question 80 herding households from the Tuv province and 8 intensive farmers of Tuv province were involved but in practice only 69 herders and 32 small and medium scale intensive dairy farms were surveyed Therefore around 10 relevant people including an official such as governor of soum and bag coordinator of household livelihood improvement related project and livestock expert were given an additional questionnaire

35 Data processing and analysis

351 Data processing The data of this study collected from the herder households and farmers of Tuv province The draft were analyzed to know the development future growth the influencing factors and special characteristics of the livestock sector SWOT analysis Around 80 questionnaires processed in the SPSS package and Microsoft Excel by using descriptive statistics Moreover in the survey investigated the herders and farmersrsquo opinions about the Mongolian livestock sub sector 352 Data analysis Data collections were analyzed quantitative and qualitative ways according to the field data The basis statistics data and the survey questionnaire results investigated the past and current performance of Mongolian livestock husbandry and calculated the future growth of livestock animals in Mongolia by showing the form of table figure flowchart mean and percentile 353 SWOT analysis The statistical data and the results of questionnaire determine the external factors such as Opportunity and Threat and internal factors such as Strength and Weakness of intensive and extensive livestock husbandry of Mongolia Moreover SWOT analyses provided the opportunity weakness and other factors of Tuv province for the livestock sector

13

CHAPTER IV

RESULT AND DISCUSSION

41 The current situation of Mongolian Animal Husbandry

Generally Mongolian animal husbandry divided two main sectors extensive animal husbandry and intensive animal husbandry Barker (1997) said lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo The extensive livestock management system of Mongolia includes main five species of livestock for most of the year The some herders and some relevant people believe that the extensive animal husbandry is most suitable sector in Mongolia The first reason is that approximately 80 of total territories are grassy area in Mongolia This is one of the biggest scales of the world Second Mongolian livestock systems is continuing with a long traditional nomadic livestock herding Hence the herders obtained the great knowledge and experiments during the several centuries Third Mongolian herder households are settled in the traditional pastoral system such as ldquokhot ailrdquo and ldquoneg goliinhonrdquo Two and more herder households including relatives and acquaintances called ldquokhot ailrdquo and ldquoneg goliinhonrdquo live together This system is most indigenous form This form of living served a variety of functions such as using pasture and seasonal movement of households Lastly the demand of livestock production is increasing during the last few years because of incomes of family are increasing and the increased demand from the neighbor countries Furthermore it has become the foundation of Mongolian livestock revolution Moreover Mongolian climate is suitable for the extensive animal husbandry On the other side the government of Mongolia begun to support intensive livestock farms to develop dairy and meat bread cattle pork and poultry Some people said the intensive livestock husbandry is better than the extensive livestock husbandry There are several reasons for this statement The first significant reason is that the increasing livestock number of Mongolia According to some researches it is possible to support around 38 million heads of livestock on the Mongolian whole grasslands However the number of livestock already reached 42 million heads in 2008 Therefore the growth of livestock is creating the degradation of pastureland by overgrazing in Mongolia Secondly since 1940 the average air temperature has been increasing in Mongolia caused by the climate change of the world Moreover the arid land is increasing due to decreasing of precipitation Therefore since last few years the yield of pasture is depleting gradually Thus grazing time of livestock is decreasing in Mongolia Finally the development of extensive farms directly depends on the supply and safety of the food Presently Mongolia is importing most of food products except the meat and meat products That is why the intensive animal husbandry is developing in some provinces especially the nearest provinces with the bigger cities such as Tuv Selenge and Bulgan According to research by the Ministry of Food and Agriculture (2007) Mongolia has 750 intensive animal husbandries Of which 494 farms for dairy 10 of them for meat cow 15 sheep farms for meat and wool 79 farms with pigs 111 farms with poultry and 40 farms with bees in Mongolia (AppendixC)

14

42 The Present Status of Mongolian Livestock

Mongolian livestock reached 421958 thousand heads in 2008 and it increased by 48 percent compared with 2007 Figure 41 shows the livestock numbers of Mongolia during last 18 years Sheep goat and cattle population has increased while those of camel and horse are decreasing in Mongolia during the last few years (Appendix D and F)

Figure 41 The state of livestock number of Mongolia from 1990 to 2008

According to Figure 41 the total number of livestock dramatically increased between 1990 and 1999 However it decreased by 287 due to drought and Dzud during 2000 to 2002 During that period 35 million and 47 million heads of animals died in 2000 and 2001 respectively During the last 7 years the number of livestock increased by 31 By the way the number of livestock in 2008 reached highest number ever

Figure 42 The comparison of the livestock structure in 2008 with 1990

15

Figure 42 shows the comparison of livestock structure (by type) during 2008 and 1990 According to Figure 41 sheep were dominating in the livestock structure until 2003 However cattle and goats dominated the structure of livestock during the recent years This is because of cashmere become herderrsquos main income from livestock due to free market economy It explained that after privatization the herders prefer to herd productive kinds of livestock Although the livestock resist Mongolian weather especially adopted for the cold season the productivity of livestock is low Therefore the some preparations such as to build warm shelters and to prepare and store hay and fodder are most significant principal elements during the wintertime Moreover pastures are subjected to increased vulnerability to parasites and other diseases These issues affect the animal productivity

43 Comparison of Actual and Estimated Livestock Number

Three different estimation including the average of number of livestock comparison of actual and estimated livestock number of Mongolia between 1990 and 2008 and livestock number in 2009 by using the Microsoft Excel (AppendixG) are given below (Avdai et al 1999) Calculation 1 The average number livestock in Mongolia from 1990 to 2008

The average number of livestock estimated was 295501 thousand heads between 1990 and 2008 Calculation 2 The goal of this part is that to estimate the equalized livestock number (amount) on the actual livestock amount by using the straight-line equation

yt = a + bt - (42)

Where t - period and a b - the parametric constraints

To estimate the parametric constraints can be solving by using the following method The value obtained by using equation (43) Table 41 shows the results of estimation To solve this system of equation substitute sumt = 0 Moreover the estimated values such as Σ y Σt2 and Σyt are shown from the Table 41

16

yt = 2978564+57145t y ndashactual livestock amount yt - estimated livestock amount

The estimated livestock amount and actual livestock number of Mongolia between 1990 and 2008 are shown in Figure 43

Table 41 The calculation by using Equation 43

(thousand heads)

y t t2 yt yt=a+bt

1990 258549 -9 81 -2326941 2464259 1991 255279 -8 64 -2042232 2521404 1992 254941 -7 49 -1784587 2578549 1993 251747 -6 36 -1510482 2635694 1994 268081 -5 25 -1340405 2692839 1995 285723 -4 16 -1142892 2749984 1996 293001 -3 9 -879003 2807129 1997 312923 -2 4 -625846 2864274 1998 328975 -1 1 -328975 2921419 1999 33596 0 0 0 2978564 2000 303274 1 1 303274 3035709 2001 260752 2 4 521504 3092854 2002 238976 3 9 716928 3149999 2003 254277 4 16 1017108 3207144 2004 280199 5 25 1400995 3264289 2005 303988 6 36 1823928 3321434 2006 34803 7 49 243621 3378579 2007 402638 8 64 3221104 3435724 2008 421959 9 81 3797631 3492869 2009 10 3550014 2010 11 3607159 2011 12 3664304 2012 13 3721449 2013 14 3778594 2014 15 3835739 2015 16 3892884

TOTAL 5659272 91 570 3257319 82642859

17

Figure 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads)

bull Calculation 3 The last estimation is that how many heads of Mongolian livestock will be reach in 2009 by using the following Equation 44

yt plusmn tα δy -(44)

Where yt - estimated amount of livestock on 2009 (see from previous Table 41) tα ndash dispersion of Student

δy ndash standard deviation y + tα = 3550014+834668= 4384682 y - tα =3550014- 834668= 2715346 Calculation shows that the livestock number of Mongolia will reach from 271534 to 438468 thousand heads animals in 2009 Below three steps shows the steps of calculation 3 Step A To calculate δy (standard deviation) can be solved by using following equation 45 (45) Table 42 shows the result of this estimation by using Equation 45

Where n - total number of sample

Step B To find the dispersion of Student (Student is the name of person) (tα)

18

tα (q k) = tα (005 18)= 212 (Appendix I) Where k - degree of freedom k= n-1=18

q - significance level (Appendix I) Step C tα δy = 21 397461 = 834668

Table 42 Estimation by using Equation 45

y yt y-yt (y-yt)2

1990 258549 246426 12123 146967129 1991 255279 25214 3139 9853321 1992 254941 257855 -2914 8491396 1993 251747 263569 -11822 139759684 1994 268081 269284 -1203 1447209 1995 285723 274998 10725 115025625 1996 293001 280713 12288 150994944 1997 312923 286427 26496 702038016 1998 328975 292142 36833 1356669889 1999 33596 297856 38104 1451914816 2000 303274 303571 -297 88209 2001 260752 309285 -48533 2355452089 2002 238976 31500 -76024 5779648576 2003 254277 320714 -66437 4413874969 2004 280199 326429 -4623 21372129 2005 303988 332143 -28155 792704025 2006 34803 337858 10172 103469584 2007 402638 343572 59066 3488792356 2008 421959 349287 72672 5281219584

2843562432

44 Land Utilization

Mongolian total territory is 1564116 thousand hectares Of which in total 742 of total area is used for the agriculture 157 used for state special land 91 of total area is comprised forest land 03 land used for cities rural town and other settlements 04 land possesses water resources and 02 of total land is covered by transportation and networks in 2006 (NSO 2006) Currently Mongolian pastureland faced many significant problems such as grassland degradation soil erosion and desertification Main sources of them are overgrazing water

19

source and the population According to some survey approximately 120 million hectare land (70 percent) of total Mongolian territory is degraded

Figure 44 The comparison of utilized lands between 2000 and 2006 (by type)

Figure 44 shows utilization land between 2000 and 2006 For example the agriculture land and forestland decreased by 9 and 4 in 2006 compared to 2000 Generally the development of crop production and destruction the populationrsquos migration to urban areas and the nomadic livestock husbandry are leading to the overgrazing and degradation of the land Moreover livestock number in Mongolia is increasing during the last few years Especially in 2008 it reached the highest number of livestock for the first time in history Even though the herders are facing the shortage of fodder In addition the land for the natural pasture has slightly increased since 1989

441 The Impacts for the Land Degradation

There are many environmental factors affect on the agricultural sector in complex ways Most scientists and experts agreed that factors of land degradation in Mongolia could be divided into following two main categories including human and natural factors Today many factors affect the land degradation caused by the human activities such as excessive grazing deforestation poor irrigation and inappropriate land tenure in all sector The first significant factor is overgrazing Crop cultivation is one of the most important reasons of soil erosion and overgrazing Spring tilling coincides caused the seasonal higher speed wind and most planted areas are lack of windbreaks like trees For example the average wind speed of Gobi region is 3hellip4 meters per second it is one of the significant cause of soil moisture loss and erosion According to some survey an average of 35ndash50 tons of soils has been lost from each

20

hectare of cultivated land due to erosion during the past 30 years Half of all cultivated land degraded to some degree of erosion Another factor of overgrazing is the vehicle-induced degradation The second significant factor is the deforestation due to clear-cutting the trees fire and insect infestations The third important factor is inappropriate land tenure like mining and inadequate waste management Shagdar (2001) estimated approximately 100000 hectare of land have been degraded by mining and quarrying Moreover another significant factor of land degradation is bad or poor irrigation practices Salinization of irrigated land in arid climates as a result of poor drainage and evaporation and using highly toxic pesticide for vegetation protection from insects causes depletion of soil productivity The final factor of land degradation is the legal provision of ldquoopenness of pastureland which is public propertyrdquo Because of this legal provision the utilizing of pastureland is free for everyone (UNDP amp SIDA 2003) On the other hand the land degradation of Mongolia depends directly on nature and weather conditions Most important impact is the location It is located high above sea level and far away from the ocean Mongolia lies between 420 520N and almost 1200 E Another principal factor is the global warming and climatic change of the world Climate change can affect weeds insects plant diseases and pathogens in the environment especially in agricultural activities Another consequence on the pasture is the lack of rainfall Mongolia has low precipitation and short growing seasons especially long and cold winter and short and hot summer Therefore other significant causes are drought and Dzud in Mongolia They are the keys determinants of vulnerability of livestock to climate change They affect the livelihood of herdersrsquo household which is reduced livestock productivity especially milk and destroy pasture (AIACC 2006) The natural disasters like dzud and drought have occurred around 30 times in Mongolia with different level of harm (UNDPampSIDA 2003) (Figure 45)

Figure 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006)

During the disaster of harsh winter (dzud) in 1999- 2000 almost one third of the total livestock died in 1999 Figure 46 shows that the losses adult animals between 2000 and 2006 in Mongolia

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

10

31 Site selection

The sites for the study selected included three sub-provinces named Jargalant Sumber and Bayanchandmani of Tuv province It is nearest province with the capital city (Figure 32) The site selection chose based on the following characteristics

bull Agricultural production bull The location of province bull Potentials for the development of livestock husbandry bull Financial constraints of the research bull Data availability

General information of Tuv province

Area 77300 sq km Number of livestock 1598000 Population 96500 Cropland 318100 hectare Center Zuunmod Number of sub-provinces 27

Tuv province is located in the centre of Mongolia In addition capital city named Ulaanbaatar located in this provincersquos territory Tuv province is one of the biggest and most productive provinces as this province is well positioned geographically to supply livestock production to nearest areas with high demand This province is situated 43 km from the capital city Moreover the major intensive animal farms are located in Tuv province

In this province have 201 household farms include dairy farms 152 pork farms 24 and chicken farm 1 respectively (MFA 2007) There are a total of 210000 camels 1979 thousand head of horses 1311 thousand head of cattle 10408 thousand of sheep and 8013 thousand heads of goats (NSO 2006)

33 Sampling Design and Procedures of Survey

Formal survey was conducted to collect the general information of herder householdsrsquo comprehension and the current development of agricultural products Herder household and farmers who own agribusiness were selected for interviews The number of herder households and number of farms in each province were determined by following formula

Where n= Number of total sample

N= Total number of farms and herders households E= Error (005)

80 herder households and 8 intensive farms from selected in Tuv province for this survey This size of samples of herders and farms provided statistical justification in order to generalize the results

11

Figure 32 Location of Tuv aimag

34 Data Collection

Data were collected from two sources (i) Secondary data was from the Mongolian National Statistical Office Mongolian State

University of Agriculture and the Ministry of Food and Agriculture Data used in this study included Urban and rural population Number of herder households (selected area) Total number of livestock and livestock distribution Land utilization Main agricultural production

12

(ii) Primary data was collected through questionnaires distributed to the randomly selected dairy farms and herder households in Tuv province and to determine the production processing and marketing (Appendix-A and B) Data collected in this part included

Present situation and the growth prospect of Livestock husbandry The suggestions and comments of herders and farmers who responded in this

research The comments The current problems faced by the herders and farmers

The survey aimed to question 80 herding households from the Tuv province and 8 intensive farmers of Tuv province were involved but in practice only 69 herders and 32 small and medium scale intensive dairy farms were surveyed Therefore around 10 relevant people including an official such as governor of soum and bag coordinator of household livelihood improvement related project and livestock expert were given an additional questionnaire

35 Data processing and analysis

351 Data processing The data of this study collected from the herder households and farmers of Tuv province The draft were analyzed to know the development future growth the influencing factors and special characteristics of the livestock sector SWOT analysis Around 80 questionnaires processed in the SPSS package and Microsoft Excel by using descriptive statistics Moreover in the survey investigated the herders and farmersrsquo opinions about the Mongolian livestock sub sector 352 Data analysis Data collections were analyzed quantitative and qualitative ways according to the field data The basis statistics data and the survey questionnaire results investigated the past and current performance of Mongolian livestock husbandry and calculated the future growth of livestock animals in Mongolia by showing the form of table figure flowchart mean and percentile 353 SWOT analysis The statistical data and the results of questionnaire determine the external factors such as Opportunity and Threat and internal factors such as Strength and Weakness of intensive and extensive livestock husbandry of Mongolia Moreover SWOT analyses provided the opportunity weakness and other factors of Tuv province for the livestock sector

13

CHAPTER IV

RESULT AND DISCUSSION

41 The current situation of Mongolian Animal Husbandry

Generally Mongolian animal husbandry divided two main sectors extensive animal husbandry and intensive animal husbandry Barker (1997) said lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo The extensive livestock management system of Mongolia includes main five species of livestock for most of the year The some herders and some relevant people believe that the extensive animal husbandry is most suitable sector in Mongolia The first reason is that approximately 80 of total territories are grassy area in Mongolia This is one of the biggest scales of the world Second Mongolian livestock systems is continuing with a long traditional nomadic livestock herding Hence the herders obtained the great knowledge and experiments during the several centuries Third Mongolian herder households are settled in the traditional pastoral system such as ldquokhot ailrdquo and ldquoneg goliinhonrdquo Two and more herder households including relatives and acquaintances called ldquokhot ailrdquo and ldquoneg goliinhonrdquo live together This system is most indigenous form This form of living served a variety of functions such as using pasture and seasonal movement of households Lastly the demand of livestock production is increasing during the last few years because of incomes of family are increasing and the increased demand from the neighbor countries Furthermore it has become the foundation of Mongolian livestock revolution Moreover Mongolian climate is suitable for the extensive animal husbandry On the other side the government of Mongolia begun to support intensive livestock farms to develop dairy and meat bread cattle pork and poultry Some people said the intensive livestock husbandry is better than the extensive livestock husbandry There are several reasons for this statement The first significant reason is that the increasing livestock number of Mongolia According to some researches it is possible to support around 38 million heads of livestock on the Mongolian whole grasslands However the number of livestock already reached 42 million heads in 2008 Therefore the growth of livestock is creating the degradation of pastureland by overgrazing in Mongolia Secondly since 1940 the average air temperature has been increasing in Mongolia caused by the climate change of the world Moreover the arid land is increasing due to decreasing of precipitation Therefore since last few years the yield of pasture is depleting gradually Thus grazing time of livestock is decreasing in Mongolia Finally the development of extensive farms directly depends on the supply and safety of the food Presently Mongolia is importing most of food products except the meat and meat products That is why the intensive animal husbandry is developing in some provinces especially the nearest provinces with the bigger cities such as Tuv Selenge and Bulgan According to research by the Ministry of Food and Agriculture (2007) Mongolia has 750 intensive animal husbandries Of which 494 farms for dairy 10 of them for meat cow 15 sheep farms for meat and wool 79 farms with pigs 111 farms with poultry and 40 farms with bees in Mongolia (AppendixC)

14

42 The Present Status of Mongolian Livestock

Mongolian livestock reached 421958 thousand heads in 2008 and it increased by 48 percent compared with 2007 Figure 41 shows the livestock numbers of Mongolia during last 18 years Sheep goat and cattle population has increased while those of camel and horse are decreasing in Mongolia during the last few years (Appendix D and F)

Figure 41 The state of livestock number of Mongolia from 1990 to 2008

According to Figure 41 the total number of livestock dramatically increased between 1990 and 1999 However it decreased by 287 due to drought and Dzud during 2000 to 2002 During that period 35 million and 47 million heads of animals died in 2000 and 2001 respectively During the last 7 years the number of livestock increased by 31 By the way the number of livestock in 2008 reached highest number ever

Figure 42 The comparison of the livestock structure in 2008 with 1990

15

Figure 42 shows the comparison of livestock structure (by type) during 2008 and 1990 According to Figure 41 sheep were dominating in the livestock structure until 2003 However cattle and goats dominated the structure of livestock during the recent years This is because of cashmere become herderrsquos main income from livestock due to free market economy It explained that after privatization the herders prefer to herd productive kinds of livestock Although the livestock resist Mongolian weather especially adopted for the cold season the productivity of livestock is low Therefore the some preparations such as to build warm shelters and to prepare and store hay and fodder are most significant principal elements during the wintertime Moreover pastures are subjected to increased vulnerability to parasites and other diseases These issues affect the animal productivity

43 Comparison of Actual and Estimated Livestock Number

Three different estimation including the average of number of livestock comparison of actual and estimated livestock number of Mongolia between 1990 and 2008 and livestock number in 2009 by using the Microsoft Excel (AppendixG) are given below (Avdai et al 1999) Calculation 1 The average number livestock in Mongolia from 1990 to 2008

The average number of livestock estimated was 295501 thousand heads between 1990 and 2008 Calculation 2 The goal of this part is that to estimate the equalized livestock number (amount) on the actual livestock amount by using the straight-line equation

yt = a + bt - (42)

Where t - period and a b - the parametric constraints

To estimate the parametric constraints can be solving by using the following method The value obtained by using equation (43) Table 41 shows the results of estimation To solve this system of equation substitute sumt = 0 Moreover the estimated values such as Σ y Σt2 and Σyt are shown from the Table 41

16

yt = 2978564+57145t y ndashactual livestock amount yt - estimated livestock amount

The estimated livestock amount and actual livestock number of Mongolia between 1990 and 2008 are shown in Figure 43

Table 41 The calculation by using Equation 43

(thousand heads)

y t t2 yt yt=a+bt

1990 258549 -9 81 -2326941 2464259 1991 255279 -8 64 -2042232 2521404 1992 254941 -7 49 -1784587 2578549 1993 251747 -6 36 -1510482 2635694 1994 268081 -5 25 -1340405 2692839 1995 285723 -4 16 -1142892 2749984 1996 293001 -3 9 -879003 2807129 1997 312923 -2 4 -625846 2864274 1998 328975 -1 1 -328975 2921419 1999 33596 0 0 0 2978564 2000 303274 1 1 303274 3035709 2001 260752 2 4 521504 3092854 2002 238976 3 9 716928 3149999 2003 254277 4 16 1017108 3207144 2004 280199 5 25 1400995 3264289 2005 303988 6 36 1823928 3321434 2006 34803 7 49 243621 3378579 2007 402638 8 64 3221104 3435724 2008 421959 9 81 3797631 3492869 2009 10 3550014 2010 11 3607159 2011 12 3664304 2012 13 3721449 2013 14 3778594 2014 15 3835739 2015 16 3892884

TOTAL 5659272 91 570 3257319 82642859

17

Figure 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads)

bull Calculation 3 The last estimation is that how many heads of Mongolian livestock will be reach in 2009 by using the following Equation 44

yt plusmn tα δy -(44)

Where yt - estimated amount of livestock on 2009 (see from previous Table 41) tα ndash dispersion of Student

δy ndash standard deviation y + tα = 3550014+834668= 4384682 y - tα =3550014- 834668= 2715346 Calculation shows that the livestock number of Mongolia will reach from 271534 to 438468 thousand heads animals in 2009 Below three steps shows the steps of calculation 3 Step A To calculate δy (standard deviation) can be solved by using following equation 45 (45) Table 42 shows the result of this estimation by using Equation 45

Where n - total number of sample

Step B To find the dispersion of Student (Student is the name of person) (tα)

18

tα (q k) = tα (005 18)= 212 (Appendix I) Where k - degree of freedom k= n-1=18

q - significance level (Appendix I) Step C tα δy = 21 397461 = 834668

Table 42 Estimation by using Equation 45

y yt y-yt (y-yt)2

1990 258549 246426 12123 146967129 1991 255279 25214 3139 9853321 1992 254941 257855 -2914 8491396 1993 251747 263569 -11822 139759684 1994 268081 269284 -1203 1447209 1995 285723 274998 10725 115025625 1996 293001 280713 12288 150994944 1997 312923 286427 26496 702038016 1998 328975 292142 36833 1356669889 1999 33596 297856 38104 1451914816 2000 303274 303571 -297 88209 2001 260752 309285 -48533 2355452089 2002 238976 31500 -76024 5779648576 2003 254277 320714 -66437 4413874969 2004 280199 326429 -4623 21372129 2005 303988 332143 -28155 792704025 2006 34803 337858 10172 103469584 2007 402638 343572 59066 3488792356 2008 421959 349287 72672 5281219584

2843562432

44 Land Utilization

Mongolian total territory is 1564116 thousand hectares Of which in total 742 of total area is used for the agriculture 157 used for state special land 91 of total area is comprised forest land 03 land used for cities rural town and other settlements 04 land possesses water resources and 02 of total land is covered by transportation and networks in 2006 (NSO 2006) Currently Mongolian pastureland faced many significant problems such as grassland degradation soil erosion and desertification Main sources of them are overgrazing water

19

source and the population According to some survey approximately 120 million hectare land (70 percent) of total Mongolian territory is degraded

Figure 44 The comparison of utilized lands between 2000 and 2006 (by type)

Figure 44 shows utilization land between 2000 and 2006 For example the agriculture land and forestland decreased by 9 and 4 in 2006 compared to 2000 Generally the development of crop production and destruction the populationrsquos migration to urban areas and the nomadic livestock husbandry are leading to the overgrazing and degradation of the land Moreover livestock number in Mongolia is increasing during the last few years Especially in 2008 it reached the highest number of livestock for the first time in history Even though the herders are facing the shortage of fodder In addition the land for the natural pasture has slightly increased since 1989

441 The Impacts for the Land Degradation

There are many environmental factors affect on the agricultural sector in complex ways Most scientists and experts agreed that factors of land degradation in Mongolia could be divided into following two main categories including human and natural factors Today many factors affect the land degradation caused by the human activities such as excessive grazing deforestation poor irrigation and inappropriate land tenure in all sector The first significant factor is overgrazing Crop cultivation is one of the most important reasons of soil erosion and overgrazing Spring tilling coincides caused the seasonal higher speed wind and most planted areas are lack of windbreaks like trees For example the average wind speed of Gobi region is 3hellip4 meters per second it is one of the significant cause of soil moisture loss and erosion According to some survey an average of 35ndash50 tons of soils has been lost from each

20

hectare of cultivated land due to erosion during the past 30 years Half of all cultivated land degraded to some degree of erosion Another factor of overgrazing is the vehicle-induced degradation The second significant factor is the deforestation due to clear-cutting the trees fire and insect infestations The third important factor is inappropriate land tenure like mining and inadequate waste management Shagdar (2001) estimated approximately 100000 hectare of land have been degraded by mining and quarrying Moreover another significant factor of land degradation is bad or poor irrigation practices Salinization of irrigated land in arid climates as a result of poor drainage and evaporation and using highly toxic pesticide for vegetation protection from insects causes depletion of soil productivity The final factor of land degradation is the legal provision of ldquoopenness of pastureland which is public propertyrdquo Because of this legal provision the utilizing of pastureland is free for everyone (UNDP amp SIDA 2003) On the other hand the land degradation of Mongolia depends directly on nature and weather conditions Most important impact is the location It is located high above sea level and far away from the ocean Mongolia lies between 420 520N and almost 1200 E Another principal factor is the global warming and climatic change of the world Climate change can affect weeds insects plant diseases and pathogens in the environment especially in agricultural activities Another consequence on the pasture is the lack of rainfall Mongolia has low precipitation and short growing seasons especially long and cold winter and short and hot summer Therefore other significant causes are drought and Dzud in Mongolia They are the keys determinants of vulnerability of livestock to climate change They affect the livelihood of herdersrsquo household which is reduced livestock productivity especially milk and destroy pasture (AIACC 2006) The natural disasters like dzud and drought have occurred around 30 times in Mongolia with different level of harm (UNDPampSIDA 2003) (Figure 45)

Figure 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006)

During the disaster of harsh winter (dzud) in 1999- 2000 almost one third of the total livestock died in 1999 Figure 46 shows that the losses adult animals between 2000 and 2006 in Mongolia

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

11

Figure 32 Location of Tuv aimag

34 Data Collection

Data were collected from two sources (i) Secondary data was from the Mongolian National Statistical Office Mongolian State

University of Agriculture and the Ministry of Food and Agriculture Data used in this study included Urban and rural population Number of herder households (selected area) Total number of livestock and livestock distribution Land utilization Main agricultural production

12

(ii) Primary data was collected through questionnaires distributed to the randomly selected dairy farms and herder households in Tuv province and to determine the production processing and marketing (Appendix-A and B) Data collected in this part included

Present situation and the growth prospect of Livestock husbandry The suggestions and comments of herders and farmers who responded in this

research The comments The current problems faced by the herders and farmers

The survey aimed to question 80 herding households from the Tuv province and 8 intensive farmers of Tuv province were involved but in practice only 69 herders and 32 small and medium scale intensive dairy farms were surveyed Therefore around 10 relevant people including an official such as governor of soum and bag coordinator of household livelihood improvement related project and livestock expert were given an additional questionnaire

35 Data processing and analysis

351 Data processing The data of this study collected from the herder households and farmers of Tuv province The draft were analyzed to know the development future growth the influencing factors and special characteristics of the livestock sector SWOT analysis Around 80 questionnaires processed in the SPSS package and Microsoft Excel by using descriptive statistics Moreover in the survey investigated the herders and farmersrsquo opinions about the Mongolian livestock sub sector 352 Data analysis Data collections were analyzed quantitative and qualitative ways according to the field data The basis statistics data and the survey questionnaire results investigated the past and current performance of Mongolian livestock husbandry and calculated the future growth of livestock animals in Mongolia by showing the form of table figure flowchart mean and percentile 353 SWOT analysis The statistical data and the results of questionnaire determine the external factors such as Opportunity and Threat and internal factors such as Strength and Weakness of intensive and extensive livestock husbandry of Mongolia Moreover SWOT analyses provided the opportunity weakness and other factors of Tuv province for the livestock sector

13

CHAPTER IV

RESULT AND DISCUSSION

41 The current situation of Mongolian Animal Husbandry

Generally Mongolian animal husbandry divided two main sectors extensive animal husbandry and intensive animal husbandry Barker (1997) said lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo The extensive livestock management system of Mongolia includes main five species of livestock for most of the year The some herders and some relevant people believe that the extensive animal husbandry is most suitable sector in Mongolia The first reason is that approximately 80 of total territories are grassy area in Mongolia This is one of the biggest scales of the world Second Mongolian livestock systems is continuing with a long traditional nomadic livestock herding Hence the herders obtained the great knowledge and experiments during the several centuries Third Mongolian herder households are settled in the traditional pastoral system such as ldquokhot ailrdquo and ldquoneg goliinhonrdquo Two and more herder households including relatives and acquaintances called ldquokhot ailrdquo and ldquoneg goliinhonrdquo live together This system is most indigenous form This form of living served a variety of functions such as using pasture and seasonal movement of households Lastly the demand of livestock production is increasing during the last few years because of incomes of family are increasing and the increased demand from the neighbor countries Furthermore it has become the foundation of Mongolian livestock revolution Moreover Mongolian climate is suitable for the extensive animal husbandry On the other side the government of Mongolia begun to support intensive livestock farms to develop dairy and meat bread cattle pork and poultry Some people said the intensive livestock husbandry is better than the extensive livestock husbandry There are several reasons for this statement The first significant reason is that the increasing livestock number of Mongolia According to some researches it is possible to support around 38 million heads of livestock on the Mongolian whole grasslands However the number of livestock already reached 42 million heads in 2008 Therefore the growth of livestock is creating the degradation of pastureland by overgrazing in Mongolia Secondly since 1940 the average air temperature has been increasing in Mongolia caused by the climate change of the world Moreover the arid land is increasing due to decreasing of precipitation Therefore since last few years the yield of pasture is depleting gradually Thus grazing time of livestock is decreasing in Mongolia Finally the development of extensive farms directly depends on the supply and safety of the food Presently Mongolia is importing most of food products except the meat and meat products That is why the intensive animal husbandry is developing in some provinces especially the nearest provinces with the bigger cities such as Tuv Selenge and Bulgan According to research by the Ministry of Food and Agriculture (2007) Mongolia has 750 intensive animal husbandries Of which 494 farms for dairy 10 of them for meat cow 15 sheep farms for meat and wool 79 farms with pigs 111 farms with poultry and 40 farms with bees in Mongolia (AppendixC)

14

42 The Present Status of Mongolian Livestock

Mongolian livestock reached 421958 thousand heads in 2008 and it increased by 48 percent compared with 2007 Figure 41 shows the livestock numbers of Mongolia during last 18 years Sheep goat and cattle population has increased while those of camel and horse are decreasing in Mongolia during the last few years (Appendix D and F)

Figure 41 The state of livestock number of Mongolia from 1990 to 2008

According to Figure 41 the total number of livestock dramatically increased between 1990 and 1999 However it decreased by 287 due to drought and Dzud during 2000 to 2002 During that period 35 million and 47 million heads of animals died in 2000 and 2001 respectively During the last 7 years the number of livestock increased by 31 By the way the number of livestock in 2008 reached highest number ever

Figure 42 The comparison of the livestock structure in 2008 with 1990

15

Figure 42 shows the comparison of livestock structure (by type) during 2008 and 1990 According to Figure 41 sheep were dominating in the livestock structure until 2003 However cattle and goats dominated the structure of livestock during the recent years This is because of cashmere become herderrsquos main income from livestock due to free market economy It explained that after privatization the herders prefer to herd productive kinds of livestock Although the livestock resist Mongolian weather especially adopted for the cold season the productivity of livestock is low Therefore the some preparations such as to build warm shelters and to prepare and store hay and fodder are most significant principal elements during the wintertime Moreover pastures are subjected to increased vulnerability to parasites and other diseases These issues affect the animal productivity

43 Comparison of Actual and Estimated Livestock Number

Three different estimation including the average of number of livestock comparison of actual and estimated livestock number of Mongolia between 1990 and 2008 and livestock number in 2009 by using the Microsoft Excel (AppendixG) are given below (Avdai et al 1999) Calculation 1 The average number livestock in Mongolia from 1990 to 2008

The average number of livestock estimated was 295501 thousand heads between 1990 and 2008 Calculation 2 The goal of this part is that to estimate the equalized livestock number (amount) on the actual livestock amount by using the straight-line equation

yt = a + bt - (42)

Where t - period and a b - the parametric constraints

To estimate the parametric constraints can be solving by using the following method The value obtained by using equation (43) Table 41 shows the results of estimation To solve this system of equation substitute sumt = 0 Moreover the estimated values such as Σ y Σt2 and Σyt are shown from the Table 41

16

yt = 2978564+57145t y ndashactual livestock amount yt - estimated livestock amount

The estimated livestock amount and actual livestock number of Mongolia between 1990 and 2008 are shown in Figure 43

Table 41 The calculation by using Equation 43

(thousand heads)

y t t2 yt yt=a+bt

1990 258549 -9 81 -2326941 2464259 1991 255279 -8 64 -2042232 2521404 1992 254941 -7 49 -1784587 2578549 1993 251747 -6 36 -1510482 2635694 1994 268081 -5 25 -1340405 2692839 1995 285723 -4 16 -1142892 2749984 1996 293001 -3 9 -879003 2807129 1997 312923 -2 4 -625846 2864274 1998 328975 -1 1 -328975 2921419 1999 33596 0 0 0 2978564 2000 303274 1 1 303274 3035709 2001 260752 2 4 521504 3092854 2002 238976 3 9 716928 3149999 2003 254277 4 16 1017108 3207144 2004 280199 5 25 1400995 3264289 2005 303988 6 36 1823928 3321434 2006 34803 7 49 243621 3378579 2007 402638 8 64 3221104 3435724 2008 421959 9 81 3797631 3492869 2009 10 3550014 2010 11 3607159 2011 12 3664304 2012 13 3721449 2013 14 3778594 2014 15 3835739 2015 16 3892884

TOTAL 5659272 91 570 3257319 82642859

17

Figure 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads)

bull Calculation 3 The last estimation is that how many heads of Mongolian livestock will be reach in 2009 by using the following Equation 44

yt plusmn tα δy -(44)

Where yt - estimated amount of livestock on 2009 (see from previous Table 41) tα ndash dispersion of Student

δy ndash standard deviation y + tα = 3550014+834668= 4384682 y - tα =3550014- 834668= 2715346 Calculation shows that the livestock number of Mongolia will reach from 271534 to 438468 thousand heads animals in 2009 Below three steps shows the steps of calculation 3 Step A To calculate δy (standard deviation) can be solved by using following equation 45 (45) Table 42 shows the result of this estimation by using Equation 45

Where n - total number of sample

Step B To find the dispersion of Student (Student is the name of person) (tα)

18

tα (q k) = tα (005 18)= 212 (Appendix I) Where k - degree of freedom k= n-1=18

q - significance level (Appendix I) Step C tα δy = 21 397461 = 834668

Table 42 Estimation by using Equation 45

y yt y-yt (y-yt)2

1990 258549 246426 12123 146967129 1991 255279 25214 3139 9853321 1992 254941 257855 -2914 8491396 1993 251747 263569 -11822 139759684 1994 268081 269284 -1203 1447209 1995 285723 274998 10725 115025625 1996 293001 280713 12288 150994944 1997 312923 286427 26496 702038016 1998 328975 292142 36833 1356669889 1999 33596 297856 38104 1451914816 2000 303274 303571 -297 88209 2001 260752 309285 -48533 2355452089 2002 238976 31500 -76024 5779648576 2003 254277 320714 -66437 4413874969 2004 280199 326429 -4623 21372129 2005 303988 332143 -28155 792704025 2006 34803 337858 10172 103469584 2007 402638 343572 59066 3488792356 2008 421959 349287 72672 5281219584

2843562432

44 Land Utilization

Mongolian total territory is 1564116 thousand hectares Of which in total 742 of total area is used for the agriculture 157 used for state special land 91 of total area is comprised forest land 03 land used for cities rural town and other settlements 04 land possesses water resources and 02 of total land is covered by transportation and networks in 2006 (NSO 2006) Currently Mongolian pastureland faced many significant problems such as grassland degradation soil erosion and desertification Main sources of them are overgrazing water

19

source and the population According to some survey approximately 120 million hectare land (70 percent) of total Mongolian territory is degraded

Figure 44 The comparison of utilized lands between 2000 and 2006 (by type)

Figure 44 shows utilization land between 2000 and 2006 For example the agriculture land and forestland decreased by 9 and 4 in 2006 compared to 2000 Generally the development of crop production and destruction the populationrsquos migration to urban areas and the nomadic livestock husbandry are leading to the overgrazing and degradation of the land Moreover livestock number in Mongolia is increasing during the last few years Especially in 2008 it reached the highest number of livestock for the first time in history Even though the herders are facing the shortage of fodder In addition the land for the natural pasture has slightly increased since 1989

441 The Impacts for the Land Degradation

There are many environmental factors affect on the agricultural sector in complex ways Most scientists and experts agreed that factors of land degradation in Mongolia could be divided into following two main categories including human and natural factors Today many factors affect the land degradation caused by the human activities such as excessive grazing deforestation poor irrigation and inappropriate land tenure in all sector The first significant factor is overgrazing Crop cultivation is one of the most important reasons of soil erosion and overgrazing Spring tilling coincides caused the seasonal higher speed wind and most planted areas are lack of windbreaks like trees For example the average wind speed of Gobi region is 3hellip4 meters per second it is one of the significant cause of soil moisture loss and erosion According to some survey an average of 35ndash50 tons of soils has been lost from each

20

hectare of cultivated land due to erosion during the past 30 years Half of all cultivated land degraded to some degree of erosion Another factor of overgrazing is the vehicle-induced degradation The second significant factor is the deforestation due to clear-cutting the trees fire and insect infestations The third important factor is inappropriate land tenure like mining and inadequate waste management Shagdar (2001) estimated approximately 100000 hectare of land have been degraded by mining and quarrying Moreover another significant factor of land degradation is bad or poor irrigation practices Salinization of irrigated land in arid climates as a result of poor drainage and evaporation and using highly toxic pesticide for vegetation protection from insects causes depletion of soil productivity The final factor of land degradation is the legal provision of ldquoopenness of pastureland which is public propertyrdquo Because of this legal provision the utilizing of pastureland is free for everyone (UNDP amp SIDA 2003) On the other hand the land degradation of Mongolia depends directly on nature and weather conditions Most important impact is the location It is located high above sea level and far away from the ocean Mongolia lies between 420 520N and almost 1200 E Another principal factor is the global warming and climatic change of the world Climate change can affect weeds insects plant diseases and pathogens in the environment especially in agricultural activities Another consequence on the pasture is the lack of rainfall Mongolia has low precipitation and short growing seasons especially long and cold winter and short and hot summer Therefore other significant causes are drought and Dzud in Mongolia They are the keys determinants of vulnerability of livestock to climate change They affect the livelihood of herdersrsquo household which is reduced livestock productivity especially milk and destroy pasture (AIACC 2006) The natural disasters like dzud and drought have occurred around 30 times in Mongolia with different level of harm (UNDPampSIDA 2003) (Figure 45)

Figure 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006)

During the disaster of harsh winter (dzud) in 1999- 2000 almost one third of the total livestock died in 1999 Figure 46 shows that the losses adult animals between 2000 and 2006 in Mongolia

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

12

(ii) Primary data was collected through questionnaires distributed to the randomly selected dairy farms and herder households in Tuv province and to determine the production processing and marketing (Appendix-A and B) Data collected in this part included

Present situation and the growth prospect of Livestock husbandry The suggestions and comments of herders and farmers who responded in this

research The comments The current problems faced by the herders and farmers

The survey aimed to question 80 herding households from the Tuv province and 8 intensive farmers of Tuv province were involved but in practice only 69 herders and 32 small and medium scale intensive dairy farms were surveyed Therefore around 10 relevant people including an official such as governor of soum and bag coordinator of household livelihood improvement related project and livestock expert were given an additional questionnaire

35 Data processing and analysis

351 Data processing The data of this study collected from the herder households and farmers of Tuv province The draft were analyzed to know the development future growth the influencing factors and special characteristics of the livestock sector SWOT analysis Around 80 questionnaires processed in the SPSS package and Microsoft Excel by using descriptive statistics Moreover in the survey investigated the herders and farmersrsquo opinions about the Mongolian livestock sub sector 352 Data analysis Data collections were analyzed quantitative and qualitative ways according to the field data The basis statistics data and the survey questionnaire results investigated the past and current performance of Mongolian livestock husbandry and calculated the future growth of livestock animals in Mongolia by showing the form of table figure flowchart mean and percentile 353 SWOT analysis The statistical data and the results of questionnaire determine the external factors such as Opportunity and Threat and internal factors such as Strength and Weakness of intensive and extensive livestock husbandry of Mongolia Moreover SWOT analyses provided the opportunity weakness and other factors of Tuv province for the livestock sector

13

CHAPTER IV

RESULT AND DISCUSSION

41 The current situation of Mongolian Animal Husbandry

Generally Mongolian animal husbandry divided two main sectors extensive animal husbandry and intensive animal husbandry Barker (1997) said lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo The extensive livestock management system of Mongolia includes main five species of livestock for most of the year The some herders and some relevant people believe that the extensive animal husbandry is most suitable sector in Mongolia The first reason is that approximately 80 of total territories are grassy area in Mongolia This is one of the biggest scales of the world Second Mongolian livestock systems is continuing with a long traditional nomadic livestock herding Hence the herders obtained the great knowledge and experiments during the several centuries Third Mongolian herder households are settled in the traditional pastoral system such as ldquokhot ailrdquo and ldquoneg goliinhonrdquo Two and more herder households including relatives and acquaintances called ldquokhot ailrdquo and ldquoneg goliinhonrdquo live together This system is most indigenous form This form of living served a variety of functions such as using pasture and seasonal movement of households Lastly the demand of livestock production is increasing during the last few years because of incomes of family are increasing and the increased demand from the neighbor countries Furthermore it has become the foundation of Mongolian livestock revolution Moreover Mongolian climate is suitable for the extensive animal husbandry On the other side the government of Mongolia begun to support intensive livestock farms to develop dairy and meat bread cattle pork and poultry Some people said the intensive livestock husbandry is better than the extensive livestock husbandry There are several reasons for this statement The first significant reason is that the increasing livestock number of Mongolia According to some researches it is possible to support around 38 million heads of livestock on the Mongolian whole grasslands However the number of livestock already reached 42 million heads in 2008 Therefore the growth of livestock is creating the degradation of pastureland by overgrazing in Mongolia Secondly since 1940 the average air temperature has been increasing in Mongolia caused by the climate change of the world Moreover the arid land is increasing due to decreasing of precipitation Therefore since last few years the yield of pasture is depleting gradually Thus grazing time of livestock is decreasing in Mongolia Finally the development of extensive farms directly depends on the supply and safety of the food Presently Mongolia is importing most of food products except the meat and meat products That is why the intensive animal husbandry is developing in some provinces especially the nearest provinces with the bigger cities such as Tuv Selenge and Bulgan According to research by the Ministry of Food and Agriculture (2007) Mongolia has 750 intensive animal husbandries Of which 494 farms for dairy 10 of them for meat cow 15 sheep farms for meat and wool 79 farms with pigs 111 farms with poultry and 40 farms with bees in Mongolia (AppendixC)

14

42 The Present Status of Mongolian Livestock

Mongolian livestock reached 421958 thousand heads in 2008 and it increased by 48 percent compared with 2007 Figure 41 shows the livestock numbers of Mongolia during last 18 years Sheep goat and cattle population has increased while those of camel and horse are decreasing in Mongolia during the last few years (Appendix D and F)

Figure 41 The state of livestock number of Mongolia from 1990 to 2008

According to Figure 41 the total number of livestock dramatically increased between 1990 and 1999 However it decreased by 287 due to drought and Dzud during 2000 to 2002 During that period 35 million and 47 million heads of animals died in 2000 and 2001 respectively During the last 7 years the number of livestock increased by 31 By the way the number of livestock in 2008 reached highest number ever

Figure 42 The comparison of the livestock structure in 2008 with 1990

15

Figure 42 shows the comparison of livestock structure (by type) during 2008 and 1990 According to Figure 41 sheep were dominating in the livestock structure until 2003 However cattle and goats dominated the structure of livestock during the recent years This is because of cashmere become herderrsquos main income from livestock due to free market economy It explained that after privatization the herders prefer to herd productive kinds of livestock Although the livestock resist Mongolian weather especially adopted for the cold season the productivity of livestock is low Therefore the some preparations such as to build warm shelters and to prepare and store hay and fodder are most significant principal elements during the wintertime Moreover pastures are subjected to increased vulnerability to parasites and other diseases These issues affect the animal productivity

43 Comparison of Actual and Estimated Livestock Number

Three different estimation including the average of number of livestock comparison of actual and estimated livestock number of Mongolia between 1990 and 2008 and livestock number in 2009 by using the Microsoft Excel (AppendixG) are given below (Avdai et al 1999) Calculation 1 The average number livestock in Mongolia from 1990 to 2008

The average number of livestock estimated was 295501 thousand heads between 1990 and 2008 Calculation 2 The goal of this part is that to estimate the equalized livestock number (amount) on the actual livestock amount by using the straight-line equation

yt = a + bt - (42)

Where t - period and a b - the parametric constraints

To estimate the parametric constraints can be solving by using the following method The value obtained by using equation (43) Table 41 shows the results of estimation To solve this system of equation substitute sumt = 0 Moreover the estimated values such as Σ y Σt2 and Σyt are shown from the Table 41

16

yt = 2978564+57145t y ndashactual livestock amount yt - estimated livestock amount

The estimated livestock amount and actual livestock number of Mongolia between 1990 and 2008 are shown in Figure 43

Table 41 The calculation by using Equation 43

(thousand heads)

y t t2 yt yt=a+bt

1990 258549 -9 81 -2326941 2464259 1991 255279 -8 64 -2042232 2521404 1992 254941 -7 49 -1784587 2578549 1993 251747 -6 36 -1510482 2635694 1994 268081 -5 25 -1340405 2692839 1995 285723 -4 16 -1142892 2749984 1996 293001 -3 9 -879003 2807129 1997 312923 -2 4 -625846 2864274 1998 328975 -1 1 -328975 2921419 1999 33596 0 0 0 2978564 2000 303274 1 1 303274 3035709 2001 260752 2 4 521504 3092854 2002 238976 3 9 716928 3149999 2003 254277 4 16 1017108 3207144 2004 280199 5 25 1400995 3264289 2005 303988 6 36 1823928 3321434 2006 34803 7 49 243621 3378579 2007 402638 8 64 3221104 3435724 2008 421959 9 81 3797631 3492869 2009 10 3550014 2010 11 3607159 2011 12 3664304 2012 13 3721449 2013 14 3778594 2014 15 3835739 2015 16 3892884

TOTAL 5659272 91 570 3257319 82642859

17

Figure 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads)

bull Calculation 3 The last estimation is that how many heads of Mongolian livestock will be reach in 2009 by using the following Equation 44

yt plusmn tα δy -(44)

Where yt - estimated amount of livestock on 2009 (see from previous Table 41) tα ndash dispersion of Student

δy ndash standard deviation y + tα = 3550014+834668= 4384682 y - tα =3550014- 834668= 2715346 Calculation shows that the livestock number of Mongolia will reach from 271534 to 438468 thousand heads animals in 2009 Below three steps shows the steps of calculation 3 Step A To calculate δy (standard deviation) can be solved by using following equation 45 (45) Table 42 shows the result of this estimation by using Equation 45

Where n - total number of sample

Step B To find the dispersion of Student (Student is the name of person) (tα)

18

tα (q k) = tα (005 18)= 212 (Appendix I) Where k - degree of freedom k= n-1=18

q - significance level (Appendix I) Step C tα δy = 21 397461 = 834668

Table 42 Estimation by using Equation 45

y yt y-yt (y-yt)2

1990 258549 246426 12123 146967129 1991 255279 25214 3139 9853321 1992 254941 257855 -2914 8491396 1993 251747 263569 -11822 139759684 1994 268081 269284 -1203 1447209 1995 285723 274998 10725 115025625 1996 293001 280713 12288 150994944 1997 312923 286427 26496 702038016 1998 328975 292142 36833 1356669889 1999 33596 297856 38104 1451914816 2000 303274 303571 -297 88209 2001 260752 309285 -48533 2355452089 2002 238976 31500 -76024 5779648576 2003 254277 320714 -66437 4413874969 2004 280199 326429 -4623 21372129 2005 303988 332143 -28155 792704025 2006 34803 337858 10172 103469584 2007 402638 343572 59066 3488792356 2008 421959 349287 72672 5281219584

2843562432

44 Land Utilization

Mongolian total territory is 1564116 thousand hectares Of which in total 742 of total area is used for the agriculture 157 used for state special land 91 of total area is comprised forest land 03 land used for cities rural town and other settlements 04 land possesses water resources and 02 of total land is covered by transportation and networks in 2006 (NSO 2006) Currently Mongolian pastureland faced many significant problems such as grassland degradation soil erosion and desertification Main sources of them are overgrazing water

19

source and the population According to some survey approximately 120 million hectare land (70 percent) of total Mongolian territory is degraded

Figure 44 The comparison of utilized lands between 2000 and 2006 (by type)

Figure 44 shows utilization land between 2000 and 2006 For example the agriculture land and forestland decreased by 9 and 4 in 2006 compared to 2000 Generally the development of crop production and destruction the populationrsquos migration to urban areas and the nomadic livestock husbandry are leading to the overgrazing and degradation of the land Moreover livestock number in Mongolia is increasing during the last few years Especially in 2008 it reached the highest number of livestock for the first time in history Even though the herders are facing the shortage of fodder In addition the land for the natural pasture has slightly increased since 1989

441 The Impacts for the Land Degradation

There are many environmental factors affect on the agricultural sector in complex ways Most scientists and experts agreed that factors of land degradation in Mongolia could be divided into following two main categories including human and natural factors Today many factors affect the land degradation caused by the human activities such as excessive grazing deforestation poor irrigation and inappropriate land tenure in all sector The first significant factor is overgrazing Crop cultivation is one of the most important reasons of soil erosion and overgrazing Spring tilling coincides caused the seasonal higher speed wind and most planted areas are lack of windbreaks like trees For example the average wind speed of Gobi region is 3hellip4 meters per second it is one of the significant cause of soil moisture loss and erosion According to some survey an average of 35ndash50 tons of soils has been lost from each

20

hectare of cultivated land due to erosion during the past 30 years Half of all cultivated land degraded to some degree of erosion Another factor of overgrazing is the vehicle-induced degradation The second significant factor is the deforestation due to clear-cutting the trees fire and insect infestations The third important factor is inappropriate land tenure like mining and inadequate waste management Shagdar (2001) estimated approximately 100000 hectare of land have been degraded by mining and quarrying Moreover another significant factor of land degradation is bad or poor irrigation practices Salinization of irrigated land in arid climates as a result of poor drainage and evaporation and using highly toxic pesticide for vegetation protection from insects causes depletion of soil productivity The final factor of land degradation is the legal provision of ldquoopenness of pastureland which is public propertyrdquo Because of this legal provision the utilizing of pastureland is free for everyone (UNDP amp SIDA 2003) On the other hand the land degradation of Mongolia depends directly on nature and weather conditions Most important impact is the location It is located high above sea level and far away from the ocean Mongolia lies between 420 520N and almost 1200 E Another principal factor is the global warming and climatic change of the world Climate change can affect weeds insects plant diseases and pathogens in the environment especially in agricultural activities Another consequence on the pasture is the lack of rainfall Mongolia has low precipitation and short growing seasons especially long and cold winter and short and hot summer Therefore other significant causes are drought and Dzud in Mongolia They are the keys determinants of vulnerability of livestock to climate change They affect the livelihood of herdersrsquo household which is reduced livestock productivity especially milk and destroy pasture (AIACC 2006) The natural disasters like dzud and drought have occurred around 30 times in Mongolia with different level of harm (UNDPampSIDA 2003) (Figure 45)

Figure 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006)

During the disaster of harsh winter (dzud) in 1999- 2000 almost one third of the total livestock died in 1999 Figure 46 shows that the losses adult animals between 2000 and 2006 in Mongolia

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

13

CHAPTER IV

RESULT AND DISCUSSION

41 The current situation of Mongolian Animal Husbandry

Generally Mongolian animal husbandry divided two main sectors extensive animal husbandry and intensive animal husbandry Barker (1997) said lsquoMongolia is one of the few countries in Central Asia where people still live a nomadic lifestyle despite the extreme climatersquo The extensive livestock management system of Mongolia includes main five species of livestock for most of the year The some herders and some relevant people believe that the extensive animal husbandry is most suitable sector in Mongolia The first reason is that approximately 80 of total territories are grassy area in Mongolia This is one of the biggest scales of the world Second Mongolian livestock systems is continuing with a long traditional nomadic livestock herding Hence the herders obtained the great knowledge and experiments during the several centuries Third Mongolian herder households are settled in the traditional pastoral system such as ldquokhot ailrdquo and ldquoneg goliinhonrdquo Two and more herder households including relatives and acquaintances called ldquokhot ailrdquo and ldquoneg goliinhonrdquo live together This system is most indigenous form This form of living served a variety of functions such as using pasture and seasonal movement of households Lastly the demand of livestock production is increasing during the last few years because of incomes of family are increasing and the increased demand from the neighbor countries Furthermore it has become the foundation of Mongolian livestock revolution Moreover Mongolian climate is suitable for the extensive animal husbandry On the other side the government of Mongolia begun to support intensive livestock farms to develop dairy and meat bread cattle pork and poultry Some people said the intensive livestock husbandry is better than the extensive livestock husbandry There are several reasons for this statement The first significant reason is that the increasing livestock number of Mongolia According to some researches it is possible to support around 38 million heads of livestock on the Mongolian whole grasslands However the number of livestock already reached 42 million heads in 2008 Therefore the growth of livestock is creating the degradation of pastureland by overgrazing in Mongolia Secondly since 1940 the average air temperature has been increasing in Mongolia caused by the climate change of the world Moreover the arid land is increasing due to decreasing of precipitation Therefore since last few years the yield of pasture is depleting gradually Thus grazing time of livestock is decreasing in Mongolia Finally the development of extensive farms directly depends on the supply and safety of the food Presently Mongolia is importing most of food products except the meat and meat products That is why the intensive animal husbandry is developing in some provinces especially the nearest provinces with the bigger cities such as Tuv Selenge and Bulgan According to research by the Ministry of Food and Agriculture (2007) Mongolia has 750 intensive animal husbandries Of which 494 farms for dairy 10 of them for meat cow 15 sheep farms for meat and wool 79 farms with pigs 111 farms with poultry and 40 farms with bees in Mongolia (AppendixC)

14

42 The Present Status of Mongolian Livestock

Mongolian livestock reached 421958 thousand heads in 2008 and it increased by 48 percent compared with 2007 Figure 41 shows the livestock numbers of Mongolia during last 18 years Sheep goat and cattle population has increased while those of camel and horse are decreasing in Mongolia during the last few years (Appendix D and F)

Figure 41 The state of livestock number of Mongolia from 1990 to 2008

According to Figure 41 the total number of livestock dramatically increased between 1990 and 1999 However it decreased by 287 due to drought and Dzud during 2000 to 2002 During that period 35 million and 47 million heads of animals died in 2000 and 2001 respectively During the last 7 years the number of livestock increased by 31 By the way the number of livestock in 2008 reached highest number ever

Figure 42 The comparison of the livestock structure in 2008 with 1990

15

Figure 42 shows the comparison of livestock structure (by type) during 2008 and 1990 According to Figure 41 sheep were dominating in the livestock structure until 2003 However cattle and goats dominated the structure of livestock during the recent years This is because of cashmere become herderrsquos main income from livestock due to free market economy It explained that after privatization the herders prefer to herd productive kinds of livestock Although the livestock resist Mongolian weather especially adopted for the cold season the productivity of livestock is low Therefore the some preparations such as to build warm shelters and to prepare and store hay and fodder are most significant principal elements during the wintertime Moreover pastures are subjected to increased vulnerability to parasites and other diseases These issues affect the animal productivity

43 Comparison of Actual and Estimated Livestock Number

Three different estimation including the average of number of livestock comparison of actual and estimated livestock number of Mongolia between 1990 and 2008 and livestock number in 2009 by using the Microsoft Excel (AppendixG) are given below (Avdai et al 1999) Calculation 1 The average number livestock in Mongolia from 1990 to 2008

The average number of livestock estimated was 295501 thousand heads between 1990 and 2008 Calculation 2 The goal of this part is that to estimate the equalized livestock number (amount) on the actual livestock amount by using the straight-line equation

yt = a + bt - (42)

Where t - period and a b - the parametric constraints

To estimate the parametric constraints can be solving by using the following method The value obtained by using equation (43) Table 41 shows the results of estimation To solve this system of equation substitute sumt = 0 Moreover the estimated values such as Σ y Σt2 and Σyt are shown from the Table 41

16

yt = 2978564+57145t y ndashactual livestock amount yt - estimated livestock amount

The estimated livestock amount and actual livestock number of Mongolia between 1990 and 2008 are shown in Figure 43

Table 41 The calculation by using Equation 43

(thousand heads)

y t t2 yt yt=a+bt

1990 258549 -9 81 -2326941 2464259 1991 255279 -8 64 -2042232 2521404 1992 254941 -7 49 -1784587 2578549 1993 251747 -6 36 -1510482 2635694 1994 268081 -5 25 -1340405 2692839 1995 285723 -4 16 -1142892 2749984 1996 293001 -3 9 -879003 2807129 1997 312923 -2 4 -625846 2864274 1998 328975 -1 1 -328975 2921419 1999 33596 0 0 0 2978564 2000 303274 1 1 303274 3035709 2001 260752 2 4 521504 3092854 2002 238976 3 9 716928 3149999 2003 254277 4 16 1017108 3207144 2004 280199 5 25 1400995 3264289 2005 303988 6 36 1823928 3321434 2006 34803 7 49 243621 3378579 2007 402638 8 64 3221104 3435724 2008 421959 9 81 3797631 3492869 2009 10 3550014 2010 11 3607159 2011 12 3664304 2012 13 3721449 2013 14 3778594 2014 15 3835739 2015 16 3892884

TOTAL 5659272 91 570 3257319 82642859

17

Figure 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads)

bull Calculation 3 The last estimation is that how many heads of Mongolian livestock will be reach in 2009 by using the following Equation 44

yt plusmn tα δy -(44)

Where yt - estimated amount of livestock on 2009 (see from previous Table 41) tα ndash dispersion of Student

δy ndash standard deviation y + tα = 3550014+834668= 4384682 y - tα =3550014- 834668= 2715346 Calculation shows that the livestock number of Mongolia will reach from 271534 to 438468 thousand heads animals in 2009 Below three steps shows the steps of calculation 3 Step A To calculate δy (standard deviation) can be solved by using following equation 45 (45) Table 42 shows the result of this estimation by using Equation 45

Where n - total number of sample

Step B To find the dispersion of Student (Student is the name of person) (tα)

18

tα (q k) = tα (005 18)= 212 (Appendix I) Where k - degree of freedom k= n-1=18

q - significance level (Appendix I) Step C tα δy = 21 397461 = 834668

Table 42 Estimation by using Equation 45

y yt y-yt (y-yt)2

1990 258549 246426 12123 146967129 1991 255279 25214 3139 9853321 1992 254941 257855 -2914 8491396 1993 251747 263569 -11822 139759684 1994 268081 269284 -1203 1447209 1995 285723 274998 10725 115025625 1996 293001 280713 12288 150994944 1997 312923 286427 26496 702038016 1998 328975 292142 36833 1356669889 1999 33596 297856 38104 1451914816 2000 303274 303571 -297 88209 2001 260752 309285 -48533 2355452089 2002 238976 31500 -76024 5779648576 2003 254277 320714 -66437 4413874969 2004 280199 326429 -4623 21372129 2005 303988 332143 -28155 792704025 2006 34803 337858 10172 103469584 2007 402638 343572 59066 3488792356 2008 421959 349287 72672 5281219584

2843562432

44 Land Utilization

Mongolian total territory is 1564116 thousand hectares Of which in total 742 of total area is used for the agriculture 157 used for state special land 91 of total area is comprised forest land 03 land used for cities rural town and other settlements 04 land possesses water resources and 02 of total land is covered by transportation and networks in 2006 (NSO 2006) Currently Mongolian pastureland faced many significant problems such as grassland degradation soil erosion and desertification Main sources of them are overgrazing water

19

source and the population According to some survey approximately 120 million hectare land (70 percent) of total Mongolian territory is degraded

Figure 44 The comparison of utilized lands between 2000 and 2006 (by type)

Figure 44 shows utilization land between 2000 and 2006 For example the agriculture land and forestland decreased by 9 and 4 in 2006 compared to 2000 Generally the development of crop production and destruction the populationrsquos migration to urban areas and the nomadic livestock husbandry are leading to the overgrazing and degradation of the land Moreover livestock number in Mongolia is increasing during the last few years Especially in 2008 it reached the highest number of livestock for the first time in history Even though the herders are facing the shortage of fodder In addition the land for the natural pasture has slightly increased since 1989

441 The Impacts for the Land Degradation

There are many environmental factors affect on the agricultural sector in complex ways Most scientists and experts agreed that factors of land degradation in Mongolia could be divided into following two main categories including human and natural factors Today many factors affect the land degradation caused by the human activities such as excessive grazing deforestation poor irrigation and inappropriate land tenure in all sector The first significant factor is overgrazing Crop cultivation is one of the most important reasons of soil erosion and overgrazing Spring tilling coincides caused the seasonal higher speed wind and most planted areas are lack of windbreaks like trees For example the average wind speed of Gobi region is 3hellip4 meters per second it is one of the significant cause of soil moisture loss and erosion According to some survey an average of 35ndash50 tons of soils has been lost from each

20

hectare of cultivated land due to erosion during the past 30 years Half of all cultivated land degraded to some degree of erosion Another factor of overgrazing is the vehicle-induced degradation The second significant factor is the deforestation due to clear-cutting the trees fire and insect infestations The third important factor is inappropriate land tenure like mining and inadequate waste management Shagdar (2001) estimated approximately 100000 hectare of land have been degraded by mining and quarrying Moreover another significant factor of land degradation is bad or poor irrigation practices Salinization of irrigated land in arid climates as a result of poor drainage and evaporation and using highly toxic pesticide for vegetation protection from insects causes depletion of soil productivity The final factor of land degradation is the legal provision of ldquoopenness of pastureland which is public propertyrdquo Because of this legal provision the utilizing of pastureland is free for everyone (UNDP amp SIDA 2003) On the other hand the land degradation of Mongolia depends directly on nature and weather conditions Most important impact is the location It is located high above sea level and far away from the ocean Mongolia lies between 420 520N and almost 1200 E Another principal factor is the global warming and climatic change of the world Climate change can affect weeds insects plant diseases and pathogens in the environment especially in agricultural activities Another consequence on the pasture is the lack of rainfall Mongolia has low precipitation and short growing seasons especially long and cold winter and short and hot summer Therefore other significant causes are drought and Dzud in Mongolia They are the keys determinants of vulnerability of livestock to climate change They affect the livelihood of herdersrsquo household which is reduced livestock productivity especially milk and destroy pasture (AIACC 2006) The natural disasters like dzud and drought have occurred around 30 times in Mongolia with different level of harm (UNDPampSIDA 2003) (Figure 45)

Figure 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006)

During the disaster of harsh winter (dzud) in 1999- 2000 almost one third of the total livestock died in 1999 Figure 46 shows that the losses adult animals between 2000 and 2006 in Mongolia

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

14

42 The Present Status of Mongolian Livestock

Mongolian livestock reached 421958 thousand heads in 2008 and it increased by 48 percent compared with 2007 Figure 41 shows the livestock numbers of Mongolia during last 18 years Sheep goat and cattle population has increased while those of camel and horse are decreasing in Mongolia during the last few years (Appendix D and F)

Figure 41 The state of livestock number of Mongolia from 1990 to 2008

According to Figure 41 the total number of livestock dramatically increased between 1990 and 1999 However it decreased by 287 due to drought and Dzud during 2000 to 2002 During that period 35 million and 47 million heads of animals died in 2000 and 2001 respectively During the last 7 years the number of livestock increased by 31 By the way the number of livestock in 2008 reached highest number ever

Figure 42 The comparison of the livestock structure in 2008 with 1990

15

Figure 42 shows the comparison of livestock structure (by type) during 2008 and 1990 According to Figure 41 sheep were dominating in the livestock structure until 2003 However cattle and goats dominated the structure of livestock during the recent years This is because of cashmere become herderrsquos main income from livestock due to free market economy It explained that after privatization the herders prefer to herd productive kinds of livestock Although the livestock resist Mongolian weather especially adopted for the cold season the productivity of livestock is low Therefore the some preparations such as to build warm shelters and to prepare and store hay and fodder are most significant principal elements during the wintertime Moreover pastures are subjected to increased vulnerability to parasites and other diseases These issues affect the animal productivity

43 Comparison of Actual and Estimated Livestock Number

Three different estimation including the average of number of livestock comparison of actual and estimated livestock number of Mongolia between 1990 and 2008 and livestock number in 2009 by using the Microsoft Excel (AppendixG) are given below (Avdai et al 1999) Calculation 1 The average number livestock in Mongolia from 1990 to 2008

The average number of livestock estimated was 295501 thousand heads between 1990 and 2008 Calculation 2 The goal of this part is that to estimate the equalized livestock number (amount) on the actual livestock amount by using the straight-line equation

yt = a + bt - (42)

Where t - period and a b - the parametric constraints

To estimate the parametric constraints can be solving by using the following method The value obtained by using equation (43) Table 41 shows the results of estimation To solve this system of equation substitute sumt = 0 Moreover the estimated values such as Σ y Σt2 and Σyt are shown from the Table 41

16

yt = 2978564+57145t y ndashactual livestock amount yt - estimated livestock amount

The estimated livestock amount and actual livestock number of Mongolia between 1990 and 2008 are shown in Figure 43

Table 41 The calculation by using Equation 43

(thousand heads)

y t t2 yt yt=a+bt

1990 258549 -9 81 -2326941 2464259 1991 255279 -8 64 -2042232 2521404 1992 254941 -7 49 -1784587 2578549 1993 251747 -6 36 -1510482 2635694 1994 268081 -5 25 -1340405 2692839 1995 285723 -4 16 -1142892 2749984 1996 293001 -3 9 -879003 2807129 1997 312923 -2 4 -625846 2864274 1998 328975 -1 1 -328975 2921419 1999 33596 0 0 0 2978564 2000 303274 1 1 303274 3035709 2001 260752 2 4 521504 3092854 2002 238976 3 9 716928 3149999 2003 254277 4 16 1017108 3207144 2004 280199 5 25 1400995 3264289 2005 303988 6 36 1823928 3321434 2006 34803 7 49 243621 3378579 2007 402638 8 64 3221104 3435724 2008 421959 9 81 3797631 3492869 2009 10 3550014 2010 11 3607159 2011 12 3664304 2012 13 3721449 2013 14 3778594 2014 15 3835739 2015 16 3892884

TOTAL 5659272 91 570 3257319 82642859

17

Figure 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads)

bull Calculation 3 The last estimation is that how many heads of Mongolian livestock will be reach in 2009 by using the following Equation 44

yt plusmn tα δy -(44)

Where yt - estimated amount of livestock on 2009 (see from previous Table 41) tα ndash dispersion of Student

δy ndash standard deviation y + tα = 3550014+834668= 4384682 y - tα =3550014- 834668= 2715346 Calculation shows that the livestock number of Mongolia will reach from 271534 to 438468 thousand heads animals in 2009 Below three steps shows the steps of calculation 3 Step A To calculate δy (standard deviation) can be solved by using following equation 45 (45) Table 42 shows the result of this estimation by using Equation 45

Where n - total number of sample

Step B To find the dispersion of Student (Student is the name of person) (tα)

18

tα (q k) = tα (005 18)= 212 (Appendix I) Where k - degree of freedom k= n-1=18

q - significance level (Appendix I) Step C tα δy = 21 397461 = 834668

Table 42 Estimation by using Equation 45

y yt y-yt (y-yt)2

1990 258549 246426 12123 146967129 1991 255279 25214 3139 9853321 1992 254941 257855 -2914 8491396 1993 251747 263569 -11822 139759684 1994 268081 269284 -1203 1447209 1995 285723 274998 10725 115025625 1996 293001 280713 12288 150994944 1997 312923 286427 26496 702038016 1998 328975 292142 36833 1356669889 1999 33596 297856 38104 1451914816 2000 303274 303571 -297 88209 2001 260752 309285 -48533 2355452089 2002 238976 31500 -76024 5779648576 2003 254277 320714 -66437 4413874969 2004 280199 326429 -4623 21372129 2005 303988 332143 -28155 792704025 2006 34803 337858 10172 103469584 2007 402638 343572 59066 3488792356 2008 421959 349287 72672 5281219584

2843562432

44 Land Utilization

Mongolian total territory is 1564116 thousand hectares Of which in total 742 of total area is used for the agriculture 157 used for state special land 91 of total area is comprised forest land 03 land used for cities rural town and other settlements 04 land possesses water resources and 02 of total land is covered by transportation and networks in 2006 (NSO 2006) Currently Mongolian pastureland faced many significant problems such as grassland degradation soil erosion and desertification Main sources of them are overgrazing water

19

source and the population According to some survey approximately 120 million hectare land (70 percent) of total Mongolian territory is degraded

Figure 44 The comparison of utilized lands between 2000 and 2006 (by type)

Figure 44 shows utilization land between 2000 and 2006 For example the agriculture land and forestland decreased by 9 and 4 in 2006 compared to 2000 Generally the development of crop production and destruction the populationrsquos migration to urban areas and the nomadic livestock husbandry are leading to the overgrazing and degradation of the land Moreover livestock number in Mongolia is increasing during the last few years Especially in 2008 it reached the highest number of livestock for the first time in history Even though the herders are facing the shortage of fodder In addition the land for the natural pasture has slightly increased since 1989

441 The Impacts for the Land Degradation

There are many environmental factors affect on the agricultural sector in complex ways Most scientists and experts agreed that factors of land degradation in Mongolia could be divided into following two main categories including human and natural factors Today many factors affect the land degradation caused by the human activities such as excessive grazing deforestation poor irrigation and inappropriate land tenure in all sector The first significant factor is overgrazing Crop cultivation is one of the most important reasons of soil erosion and overgrazing Spring tilling coincides caused the seasonal higher speed wind and most planted areas are lack of windbreaks like trees For example the average wind speed of Gobi region is 3hellip4 meters per second it is one of the significant cause of soil moisture loss and erosion According to some survey an average of 35ndash50 tons of soils has been lost from each

20

hectare of cultivated land due to erosion during the past 30 years Half of all cultivated land degraded to some degree of erosion Another factor of overgrazing is the vehicle-induced degradation The second significant factor is the deforestation due to clear-cutting the trees fire and insect infestations The third important factor is inappropriate land tenure like mining and inadequate waste management Shagdar (2001) estimated approximately 100000 hectare of land have been degraded by mining and quarrying Moreover another significant factor of land degradation is bad or poor irrigation practices Salinization of irrigated land in arid climates as a result of poor drainage and evaporation and using highly toxic pesticide for vegetation protection from insects causes depletion of soil productivity The final factor of land degradation is the legal provision of ldquoopenness of pastureland which is public propertyrdquo Because of this legal provision the utilizing of pastureland is free for everyone (UNDP amp SIDA 2003) On the other hand the land degradation of Mongolia depends directly on nature and weather conditions Most important impact is the location It is located high above sea level and far away from the ocean Mongolia lies between 420 520N and almost 1200 E Another principal factor is the global warming and climatic change of the world Climate change can affect weeds insects plant diseases and pathogens in the environment especially in agricultural activities Another consequence on the pasture is the lack of rainfall Mongolia has low precipitation and short growing seasons especially long and cold winter and short and hot summer Therefore other significant causes are drought and Dzud in Mongolia They are the keys determinants of vulnerability of livestock to climate change They affect the livelihood of herdersrsquo household which is reduced livestock productivity especially milk and destroy pasture (AIACC 2006) The natural disasters like dzud and drought have occurred around 30 times in Mongolia with different level of harm (UNDPampSIDA 2003) (Figure 45)

Figure 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006)

During the disaster of harsh winter (dzud) in 1999- 2000 almost one third of the total livestock died in 1999 Figure 46 shows that the losses adult animals between 2000 and 2006 in Mongolia

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

15

Figure 42 shows the comparison of livestock structure (by type) during 2008 and 1990 According to Figure 41 sheep were dominating in the livestock structure until 2003 However cattle and goats dominated the structure of livestock during the recent years This is because of cashmere become herderrsquos main income from livestock due to free market economy It explained that after privatization the herders prefer to herd productive kinds of livestock Although the livestock resist Mongolian weather especially adopted for the cold season the productivity of livestock is low Therefore the some preparations such as to build warm shelters and to prepare and store hay and fodder are most significant principal elements during the wintertime Moreover pastures are subjected to increased vulnerability to parasites and other diseases These issues affect the animal productivity

43 Comparison of Actual and Estimated Livestock Number

Three different estimation including the average of number of livestock comparison of actual and estimated livestock number of Mongolia between 1990 and 2008 and livestock number in 2009 by using the Microsoft Excel (AppendixG) are given below (Avdai et al 1999) Calculation 1 The average number livestock in Mongolia from 1990 to 2008

The average number of livestock estimated was 295501 thousand heads between 1990 and 2008 Calculation 2 The goal of this part is that to estimate the equalized livestock number (amount) on the actual livestock amount by using the straight-line equation

yt = a + bt - (42)

Where t - period and a b - the parametric constraints

To estimate the parametric constraints can be solving by using the following method The value obtained by using equation (43) Table 41 shows the results of estimation To solve this system of equation substitute sumt = 0 Moreover the estimated values such as Σ y Σt2 and Σyt are shown from the Table 41

16

yt = 2978564+57145t y ndashactual livestock amount yt - estimated livestock amount

The estimated livestock amount and actual livestock number of Mongolia between 1990 and 2008 are shown in Figure 43

Table 41 The calculation by using Equation 43

(thousand heads)

y t t2 yt yt=a+bt

1990 258549 -9 81 -2326941 2464259 1991 255279 -8 64 -2042232 2521404 1992 254941 -7 49 -1784587 2578549 1993 251747 -6 36 -1510482 2635694 1994 268081 -5 25 -1340405 2692839 1995 285723 -4 16 -1142892 2749984 1996 293001 -3 9 -879003 2807129 1997 312923 -2 4 -625846 2864274 1998 328975 -1 1 -328975 2921419 1999 33596 0 0 0 2978564 2000 303274 1 1 303274 3035709 2001 260752 2 4 521504 3092854 2002 238976 3 9 716928 3149999 2003 254277 4 16 1017108 3207144 2004 280199 5 25 1400995 3264289 2005 303988 6 36 1823928 3321434 2006 34803 7 49 243621 3378579 2007 402638 8 64 3221104 3435724 2008 421959 9 81 3797631 3492869 2009 10 3550014 2010 11 3607159 2011 12 3664304 2012 13 3721449 2013 14 3778594 2014 15 3835739 2015 16 3892884

TOTAL 5659272 91 570 3257319 82642859

17

Figure 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads)

bull Calculation 3 The last estimation is that how many heads of Mongolian livestock will be reach in 2009 by using the following Equation 44

yt plusmn tα δy -(44)

Where yt - estimated amount of livestock on 2009 (see from previous Table 41) tα ndash dispersion of Student

δy ndash standard deviation y + tα = 3550014+834668= 4384682 y - tα =3550014- 834668= 2715346 Calculation shows that the livestock number of Mongolia will reach from 271534 to 438468 thousand heads animals in 2009 Below three steps shows the steps of calculation 3 Step A To calculate δy (standard deviation) can be solved by using following equation 45 (45) Table 42 shows the result of this estimation by using Equation 45

Where n - total number of sample

Step B To find the dispersion of Student (Student is the name of person) (tα)

18

tα (q k) = tα (005 18)= 212 (Appendix I) Where k - degree of freedom k= n-1=18

q - significance level (Appendix I) Step C tα δy = 21 397461 = 834668

Table 42 Estimation by using Equation 45

y yt y-yt (y-yt)2

1990 258549 246426 12123 146967129 1991 255279 25214 3139 9853321 1992 254941 257855 -2914 8491396 1993 251747 263569 -11822 139759684 1994 268081 269284 -1203 1447209 1995 285723 274998 10725 115025625 1996 293001 280713 12288 150994944 1997 312923 286427 26496 702038016 1998 328975 292142 36833 1356669889 1999 33596 297856 38104 1451914816 2000 303274 303571 -297 88209 2001 260752 309285 -48533 2355452089 2002 238976 31500 -76024 5779648576 2003 254277 320714 -66437 4413874969 2004 280199 326429 -4623 21372129 2005 303988 332143 -28155 792704025 2006 34803 337858 10172 103469584 2007 402638 343572 59066 3488792356 2008 421959 349287 72672 5281219584

2843562432

44 Land Utilization

Mongolian total territory is 1564116 thousand hectares Of which in total 742 of total area is used for the agriculture 157 used for state special land 91 of total area is comprised forest land 03 land used for cities rural town and other settlements 04 land possesses water resources and 02 of total land is covered by transportation and networks in 2006 (NSO 2006) Currently Mongolian pastureland faced many significant problems such as grassland degradation soil erosion and desertification Main sources of them are overgrazing water

19

source and the population According to some survey approximately 120 million hectare land (70 percent) of total Mongolian territory is degraded

Figure 44 The comparison of utilized lands between 2000 and 2006 (by type)

Figure 44 shows utilization land between 2000 and 2006 For example the agriculture land and forestland decreased by 9 and 4 in 2006 compared to 2000 Generally the development of crop production and destruction the populationrsquos migration to urban areas and the nomadic livestock husbandry are leading to the overgrazing and degradation of the land Moreover livestock number in Mongolia is increasing during the last few years Especially in 2008 it reached the highest number of livestock for the first time in history Even though the herders are facing the shortage of fodder In addition the land for the natural pasture has slightly increased since 1989

441 The Impacts for the Land Degradation

There are many environmental factors affect on the agricultural sector in complex ways Most scientists and experts agreed that factors of land degradation in Mongolia could be divided into following two main categories including human and natural factors Today many factors affect the land degradation caused by the human activities such as excessive grazing deforestation poor irrigation and inappropriate land tenure in all sector The first significant factor is overgrazing Crop cultivation is one of the most important reasons of soil erosion and overgrazing Spring tilling coincides caused the seasonal higher speed wind and most planted areas are lack of windbreaks like trees For example the average wind speed of Gobi region is 3hellip4 meters per second it is one of the significant cause of soil moisture loss and erosion According to some survey an average of 35ndash50 tons of soils has been lost from each

20

hectare of cultivated land due to erosion during the past 30 years Half of all cultivated land degraded to some degree of erosion Another factor of overgrazing is the vehicle-induced degradation The second significant factor is the deforestation due to clear-cutting the trees fire and insect infestations The third important factor is inappropriate land tenure like mining and inadequate waste management Shagdar (2001) estimated approximately 100000 hectare of land have been degraded by mining and quarrying Moreover another significant factor of land degradation is bad or poor irrigation practices Salinization of irrigated land in arid climates as a result of poor drainage and evaporation and using highly toxic pesticide for vegetation protection from insects causes depletion of soil productivity The final factor of land degradation is the legal provision of ldquoopenness of pastureland which is public propertyrdquo Because of this legal provision the utilizing of pastureland is free for everyone (UNDP amp SIDA 2003) On the other hand the land degradation of Mongolia depends directly on nature and weather conditions Most important impact is the location It is located high above sea level and far away from the ocean Mongolia lies between 420 520N and almost 1200 E Another principal factor is the global warming and climatic change of the world Climate change can affect weeds insects plant diseases and pathogens in the environment especially in agricultural activities Another consequence on the pasture is the lack of rainfall Mongolia has low precipitation and short growing seasons especially long and cold winter and short and hot summer Therefore other significant causes are drought and Dzud in Mongolia They are the keys determinants of vulnerability of livestock to climate change They affect the livelihood of herdersrsquo household which is reduced livestock productivity especially milk and destroy pasture (AIACC 2006) The natural disasters like dzud and drought have occurred around 30 times in Mongolia with different level of harm (UNDPampSIDA 2003) (Figure 45)

Figure 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006)

During the disaster of harsh winter (dzud) in 1999- 2000 almost one third of the total livestock died in 1999 Figure 46 shows that the losses adult animals between 2000 and 2006 in Mongolia

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

16

yt = 2978564+57145t y ndashactual livestock amount yt - estimated livestock amount

The estimated livestock amount and actual livestock number of Mongolia between 1990 and 2008 are shown in Figure 43

Table 41 The calculation by using Equation 43

(thousand heads)

y t t2 yt yt=a+bt

1990 258549 -9 81 -2326941 2464259 1991 255279 -8 64 -2042232 2521404 1992 254941 -7 49 -1784587 2578549 1993 251747 -6 36 -1510482 2635694 1994 268081 -5 25 -1340405 2692839 1995 285723 -4 16 -1142892 2749984 1996 293001 -3 9 -879003 2807129 1997 312923 -2 4 -625846 2864274 1998 328975 -1 1 -328975 2921419 1999 33596 0 0 0 2978564 2000 303274 1 1 303274 3035709 2001 260752 2 4 521504 3092854 2002 238976 3 9 716928 3149999 2003 254277 4 16 1017108 3207144 2004 280199 5 25 1400995 3264289 2005 303988 6 36 1823928 3321434 2006 34803 7 49 243621 3378579 2007 402638 8 64 3221104 3435724 2008 421959 9 81 3797631 3492869 2009 10 3550014 2010 11 3607159 2011 12 3664304 2012 13 3721449 2013 14 3778594 2014 15 3835739 2015 16 3892884

TOTAL 5659272 91 570 3257319 82642859

17

Figure 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads)

bull Calculation 3 The last estimation is that how many heads of Mongolian livestock will be reach in 2009 by using the following Equation 44

yt plusmn tα δy -(44)

Where yt - estimated amount of livestock on 2009 (see from previous Table 41) tα ndash dispersion of Student

δy ndash standard deviation y + tα = 3550014+834668= 4384682 y - tα =3550014- 834668= 2715346 Calculation shows that the livestock number of Mongolia will reach from 271534 to 438468 thousand heads animals in 2009 Below three steps shows the steps of calculation 3 Step A To calculate δy (standard deviation) can be solved by using following equation 45 (45) Table 42 shows the result of this estimation by using Equation 45

Where n - total number of sample

Step B To find the dispersion of Student (Student is the name of person) (tα)

18

tα (q k) = tα (005 18)= 212 (Appendix I) Where k - degree of freedom k= n-1=18

q - significance level (Appendix I) Step C tα δy = 21 397461 = 834668

Table 42 Estimation by using Equation 45

y yt y-yt (y-yt)2

1990 258549 246426 12123 146967129 1991 255279 25214 3139 9853321 1992 254941 257855 -2914 8491396 1993 251747 263569 -11822 139759684 1994 268081 269284 -1203 1447209 1995 285723 274998 10725 115025625 1996 293001 280713 12288 150994944 1997 312923 286427 26496 702038016 1998 328975 292142 36833 1356669889 1999 33596 297856 38104 1451914816 2000 303274 303571 -297 88209 2001 260752 309285 -48533 2355452089 2002 238976 31500 -76024 5779648576 2003 254277 320714 -66437 4413874969 2004 280199 326429 -4623 21372129 2005 303988 332143 -28155 792704025 2006 34803 337858 10172 103469584 2007 402638 343572 59066 3488792356 2008 421959 349287 72672 5281219584

2843562432

44 Land Utilization

Mongolian total territory is 1564116 thousand hectares Of which in total 742 of total area is used for the agriculture 157 used for state special land 91 of total area is comprised forest land 03 land used for cities rural town and other settlements 04 land possesses water resources and 02 of total land is covered by transportation and networks in 2006 (NSO 2006) Currently Mongolian pastureland faced many significant problems such as grassland degradation soil erosion and desertification Main sources of them are overgrazing water

19

source and the population According to some survey approximately 120 million hectare land (70 percent) of total Mongolian territory is degraded

Figure 44 The comparison of utilized lands between 2000 and 2006 (by type)

Figure 44 shows utilization land between 2000 and 2006 For example the agriculture land and forestland decreased by 9 and 4 in 2006 compared to 2000 Generally the development of crop production and destruction the populationrsquos migration to urban areas and the nomadic livestock husbandry are leading to the overgrazing and degradation of the land Moreover livestock number in Mongolia is increasing during the last few years Especially in 2008 it reached the highest number of livestock for the first time in history Even though the herders are facing the shortage of fodder In addition the land for the natural pasture has slightly increased since 1989

441 The Impacts for the Land Degradation

There are many environmental factors affect on the agricultural sector in complex ways Most scientists and experts agreed that factors of land degradation in Mongolia could be divided into following two main categories including human and natural factors Today many factors affect the land degradation caused by the human activities such as excessive grazing deforestation poor irrigation and inappropriate land tenure in all sector The first significant factor is overgrazing Crop cultivation is one of the most important reasons of soil erosion and overgrazing Spring tilling coincides caused the seasonal higher speed wind and most planted areas are lack of windbreaks like trees For example the average wind speed of Gobi region is 3hellip4 meters per second it is one of the significant cause of soil moisture loss and erosion According to some survey an average of 35ndash50 tons of soils has been lost from each

20

hectare of cultivated land due to erosion during the past 30 years Half of all cultivated land degraded to some degree of erosion Another factor of overgrazing is the vehicle-induced degradation The second significant factor is the deforestation due to clear-cutting the trees fire and insect infestations The third important factor is inappropriate land tenure like mining and inadequate waste management Shagdar (2001) estimated approximately 100000 hectare of land have been degraded by mining and quarrying Moreover another significant factor of land degradation is bad or poor irrigation practices Salinization of irrigated land in arid climates as a result of poor drainage and evaporation and using highly toxic pesticide for vegetation protection from insects causes depletion of soil productivity The final factor of land degradation is the legal provision of ldquoopenness of pastureland which is public propertyrdquo Because of this legal provision the utilizing of pastureland is free for everyone (UNDP amp SIDA 2003) On the other hand the land degradation of Mongolia depends directly on nature and weather conditions Most important impact is the location It is located high above sea level and far away from the ocean Mongolia lies between 420 520N and almost 1200 E Another principal factor is the global warming and climatic change of the world Climate change can affect weeds insects plant diseases and pathogens in the environment especially in agricultural activities Another consequence on the pasture is the lack of rainfall Mongolia has low precipitation and short growing seasons especially long and cold winter and short and hot summer Therefore other significant causes are drought and Dzud in Mongolia They are the keys determinants of vulnerability of livestock to climate change They affect the livelihood of herdersrsquo household which is reduced livestock productivity especially milk and destroy pasture (AIACC 2006) The natural disasters like dzud and drought have occurred around 30 times in Mongolia with different level of harm (UNDPampSIDA 2003) (Figure 45)

Figure 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006)

During the disaster of harsh winter (dzud) in 1999- 2000 almost one third of the total livestock died in 1999 Figure 46 shows that the losses adult animals between 2000 and 2006 in Mongolia

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

17

Figure 43 The actual number of livestock compared with the estimated number of livestock in Mongolia from 1990 to 2008 (thousand heads)

bull Calculation 3 The last estimation is that how many heads of Mongolian livestock will be reach in 2009 by using the following Equation 44

yt plusmn tα δy -(44)

Where yt - estimated amount of livestock on 2009 (see from previous Table 41) tα ndash dispersion of Student

δy ndash standard deviation y + tα = 3550014+834668= 4384682 y - tα =3550014- 834668= 2715346 Calculation shows that the livestock number of Mongolia will reach from 271534 to 438468 thousand heads animals in 2009 Below three steps shows the steps of calculation 3 Step A To calculate δy (standard deviation) can be solved by using following equation 45 (45) Table 42 shows the result of this estimation by using Equation 45

Where n - total number of sample

Step B To find the dispersion of Student (Student is the name of person) (tα)

18

tα (q k) = tα (005 18)= 212 (Appendix I) Where k - degree of freedom k= n-1=18

q - significance level (Appendix I) Step C tα δy = 21 397461 = 834668

Table 42 Estimation by using Equation 45

y yt y-yt (y-yt)2

1990 258549 246426 12123 146967129 1991 255279 25214 3139 9853321 1992 254941 257855 -2914 8491396 1993 251747 263569 -11822 139759684 1994 268081 269284 -1203 1447209 1995 285723 274998 10725 115025625 1996 293001 280713 12288 150994944 1997 312923 286427 26496 702038016 1998 328975 292142 36833 1356669889 1999 33596 297856 38104 1451914816 2000 303274 303571 -297 88209 2001 260752 309285 -48533 2355452089 2002 238976 31500 -76024 5779648576 2003 254277 320714 -66437 4413874969 2004 280199 326429 -4623 21372129 2005 303988 332143 -28155 792704025 2006 34803 337858 10172 103469584 2007 402638 343572 59066 3488792356 2008 421959 349287 72672 5281219584

2843562432

44 Land Utilization

Mongolian total territory is 1564116 thousand hectares Of which in total 742 of total area is used for the agriculture 157 used for state special land 91 of total area is comprised forest land 03 land used for cities rural town and other settlements 04 land possesses water resources and 02 of total land is covered by transportation and networks in 2006 (NSO 2006) Currently Mongolian pastureland faced many significant problems such as grassland degradation soil erosion and desertification Main sources of them are overgrazing water

19

source and the population According to some survey approximately 120 million hectare land (70 percent) of total Mongolian territory is degraded

Figure 44 The comparison of utilized lands between 2000 and 2006 (by type)

Figure 44 shows utilization land between 2000 and 2006 For example the agriculture land and forestland decreased by 9 and 4 in 2006 compared to 2000 Generally the development of crop production and destruction the populationrsquos migration to urban areas and the nomadic livestock husbandry are leading to the overgrazing and degradation of the land Moreover livestock number in Mongolia is increasing during the last few years Especially in 2008 it reached the highest number of livestock for the first time in history Even though the herders are facing the shortage of fodder In addition the land for the natural pasture has slightly increased since 1989

441 The Impacts for the Land Degradation

There are many environmental factors affect on the agricultural sector in complex ways Most scientists and experts agreed that factors of land degradation in Mongolia could be divided into following two main categories including human and natural factors Today many factors affect the land degradation caused by the human activities such as excessive grazing deforestation poor irrigation and inappropriate land tenure in all sector The first significant factor is overgrazing Crop cultivation is one of the most important reasons of soil erosion and overgrazing Spring tilling coincides caused the seasonal higher speed wind and most planted areas are lack of windbreaks like trees For example the average wind speed of Gobi region is 3hellip4 meters per second it is one of the significant cause of soil moisture loss and erosion According to some survey an average of 35ndash50 tons of soils has been lost from each

20

hectare of cultivated land due to erosion during the past 30 years Half of all cultivated land degraded to some degree of erosion Another factor of overgrazing is the vehicle-induced degradation The second significant factor is the deforestation due to clear-cutting the trees fire and insect infestations The third important factor is inappropriate land tenure like mining and inadequate waste management Shagdar (2001) estimated approximately 100000 hectare of land have been degraded by mining and quarrying Moreover another significant factor of land degradation is bad or poor irrigation practices Salinization of irrigated land in arid climates as a result of poor drainage and evaporation and using highly toxic pesticide for vegetation protection from insects causes depletion of soil productivity The final factor of land degradation is the legal provision of ldquoopenness of pastureland which is public propertyrdquo Because of this legal provision the utilizing of pastureland is free for everyone (UNDP amp SIDA 2003) On the other hand the land degradation of Mongolia depends directly on nature and weather conditions Most important impact is the location It is located high above sea level and far away from the ocean Mongolia lies between 420 520N and almost 1200 E Another principal factor is the global warming and climatic change of the world Climate change can affect weeds insects plant diseases and pathogens in the environment especially in agricultural activities Another consequence on the pasture is the lack of rainfall Mongolia has low precipitation and short growing seasons especially long and cold winter and short and hot summer Therefore other significant causes are drought and Dzud in Mongolia They are the keys determinants of vulnerability of livestock to climate change They affect the livelihood of herdersrsquo household which is reduced livestock productivity especially milk and destroy pasture (AIACC 2006) The natural disasters like dzud and drought have occurred around 30 times in Mongolia with different level of harm (UNDPampSIDA 2003) (Figure 45)

Figure 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006)

During the disaster of harsh winter (dzud) in 1999- 2000 almost one third of the total livestock died in 1999 Figure 46 shows that the losses adult animals between 2000 and 2006 in Mongolia

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

18

tα (q k) = tα (005 18)= 212 (Appendix I) Where k - degree of freedom k= n-1=18

q - significance level (Appendix I) Step C tα δy = 21 397461 = 834668

Table 42 Estimation by using Equation 45

y yt y-yt (y-yt)2

1990 258549 246426 12123 146967129 1991 255279 25214 3139 9853321 1992 254941 257855 -2914 8491396 1993 251747 263569 -11822 139759684 1994 268081 269284 -1203 1447209 1995 285723 274998 10725 115025625 1996 293001 280713 12288 150994944 1997 312923 286427 26496 702038016 1998 328975 292142 36833 1356669889 1999 33596 297856 38104 1451914816 2000 303274 303571 -297 88209 2001 260752 309285 -48533 2355452089 2002 238976 31500 -76024 5779648576 2003 254277 320714 -66437 4413874969 2004 280199 326429 -4623 21372129 2005 303988 332143 -28155 792704025 2006 34803 337858 10172 103469584 2007 402638 343572 59066 3488792356 2008 421959 349287 72672 5281219584

2843562432

44 Land Utilization

Mongolian total territory is 1564116 thousand hectares Of which in total 742 of total area is used for the agriculture 157 used for state special land 91 of total area is comprised forest land 03 land used for cities rural town and other settlements 04 land possesses water resources and 02 of total land is covered by transportation and networks in 2006 (NSO 2006) Currently Mongolian pastureland faced many significant problems such as grassland degradation soil erosion and desertification Main sources of them are overgrazing water

19

source and the population According to some survey approximately 120 million hectare land (70 percent) of total Mongolian territory is degraded

Figure 44 The comparison of utilized lands between 2000 and 2006 (by type)

Figure 44 shows utilization land between 2000 and 2006 For example the agriculture land and forestland decreased by 9 and 4 in 2006 compared to 2000 Generally the development of crop production and destruction the populationrsquos migration to urban areas and the nomadic livestock husbandry are leading to the overgrazing and degradation of the land Moreover livestock number in Mongolia is increasing during the last few years Especially in 2008 it reached the highest number of livestock for the first time in history Even though the herders are facing the shortage of fodder In addition the land for the natural pasture has slightly increased since 1989

441 The Impacts for the Land Degradation

There are many environmental factors affect on the agricultural sector in complex ways Most scientists and experts agreed that factors of land degradation in Mongolia could be divided into following two main categories including human and natural factors Today many factors affect the land degradation caused by the human activities such as excessive grazing deforestation poor irrigation and inappropriate land tenure in all sector The first significant factor is overgrazing Crop cultivation is one of the most important reasons of soil erosion and overgrazing Spring tilling coincides caused the seasonal higher speed wind and most planted areas are lack of windbreaks like trees For example the average wind speed of Gobi region is 3hellip4 meters per second it is one of the significant cause of soil moisture loss and erosion According to some survey an average of 35ndash50 tons of soils has been lost from each

20

hectare of cultivated land due to erosion during the past 30 years Half of all cultivated land degraded to some degree of erosion Another factor of overgrazing is the vehicle-induced degradation The second significant factor is the deforestation due to clear-cutting the trees fire and insect infestations The third important factor is inappropriate land tenure like mining and inadequate waste management Shagdar (2001) estimated approximately 100000 hectare of land have been degraded by mining and quarrying Moreover another significant factor of land degradation is bad or poor irrigation practices Salinization of irrigated land in arid climates as a result of poor drainage and evaporation and using highly toxic pesticide for vegetation protection from insects causes depletion of soil productivity The final factor of land degradation is the legal provision of ldquoopenness of pastureland which is public propertyrdquo Because of this legal provision the utilizing of pastureland is free for everyone (UNDP amp SIDA 2003) On the other hand the land degradation of Mongolia depends directly on nature and weather conditions Most important impact is the location It is located high above sea level and far away from the ocean Mongolia lies between 420 520N and almost 1200 E Another principal factor is the global warming and climatic change of the world Climate change can affect weeds insects plant diseases and pathogens in the environment especially in agricultural activities Another consequence on the pasture is the lack of rainfall Mongolia has low precipitation and short growing seasons especially long and cold winter and short and hot summer Therefore other significant causes are drought and Dzud in Mongolia They are the keys determinants of vulnerability of livestock to climate change They affect the livelihood of herdersrsquo household which is reduced livestock productivity especially milk and destroy pasture (AIACC 2006) The natural disasters like dzud and drought have occurred around 30 times in Mongolia with different level of harm (UNDPampSIDA 2003) (Figure 45)

Figure 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006)

During the disaster of harsh winter (dzud) in 1999- 2000 almost one third of the total livestock died in 1999 Figure 46 shows that the losses adult animals between 2000 and 2006 in Mongolia

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

19

source and the population According to some survey approximately 120 million hectare land (70 percent) of total Mongolian territory is degraded

Figure 44 The comparison of utilized lands between 2000 and 2006 (by type)

Figure 44 shows utilization land between 2000 and 2006 For example the agriculture land and forestland decreased by 9 and 4 in 2006 compared to 2000 Generally the development of crop production and destruction the populationrsquos migration to urban areas and the nomadic livestock husbandry are leading to the overgrazing and degradation of the land Moreover livestock number in Mongolia is increasing during the last few years Especially in 2008 it reached the highest number of livestock for the first time in history Even though the herders are facing the shortage of fodder In addition the land for the natural pasture has slightly increased since 1989

441 The Impacts for the Land Degradation

There are many environmental factors affect on the agricultural sector in complex ways Most scientists and experts agreed that factors of land degradation in Mongolia could be divided into following two main categories including human and natural factors Today many factors affect the land degradation caused by the human activities such as excessive grazing deforestation poor irrigation and inappropriate land tenure in all sector The first significant factor is overgrazing Crop cultivation is one of the most important reasons of soil erosion and overgrazing Spring tilling coincides caused the seasonal higher speed wind and most planted areas are lack of windbreaks like trees For example the average wind speed of Gobi region is 3hellip4 meters per second it is one of the significant cause of soil moisture loss and erosion According to some survey an average of 35ndash50 tons of soils has been lost from each

20

hectare of cultivated land due to erosion during the past 30 years Half of all cultivated land degraded to some degree of erosion Another factor of overgrazing is the vehicle-induced degradation The second significant factor is the deforestation due to clear-cutting the trees fire and insect infestations The third important factor is inappropriate land tenure like mining and inadequate waste management Shagdar (2001) estimated approximately 100000 hectare of land have been degraded by mining and quarrying Moreover another significant factor of land degradation is bad or poor irrigation practices Salinization of irrigated land in arid climates as a result of poor drainage and evaporation and using highly toxic pesticide for vegetation protection from insects causes depletion of soil productivity The final factor of land degradation is the legal provision of ldquoopenness of pastureland which is public propertyrdquo Because of this legal provision the utilizing of pastureland is free for everyone (UNDP amp SIDA 2003) On the other hand the land degradation of Mongolia depends directly on nature and weather conditions Most important impact is the location It is located high above sea level and far away from the ocean Mongolia lies between 420 520N and almost 1200 E Another principal factor is the global warming and climatic change of the world Climate change can affect weeds insects plant diseases and pathogens in the environment especially in agricultural activities Another consequence on the pasture is the lack of rainfall Mongolia has low precipitation and short growing seasons especially long and cold winter and short and hot summer Therefore other significant causes are drought and Dzud in Mongolia They are the keys determinants of vulnerability of livestock to climate change They affect the livelihood of herdersrsquo household which is reduced livestock productivity especially milk and destroy pasture (AIACC 2006) The natural disasters like dzud and drought have occurred around 30 times in Mongolia with different level of harm (UNDPampSIDA 2003) (Figure 45)

Figure 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006)

During the disaster of harsh winter (dzud) in 1999- 2000 almost one third of the total livestock died in 1999 Figure 46 shows that the losses adult animals between 2000 and 2006 in Mongolia

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

20

hectare of cultivated land due to erosion during the past 30 years Half of all cultivated land degraded to some degree of erosion Another factor of overgrazing is the vehicle-induced degradation The second significant factor is the deforestation due to clear-cutting the trees fire and insect infestations The third important factor is inappropriate land tenure like mining and inadequate waste management Shagdar (2001) estimated approximately 100000 hectare of land have been degraded by mining and quarrying Moreover another significant factor of land degradation is bad or poor irrigation practices Salinization of irrigated land in arid climates as a result of poor drainage and evaporation and using highly toxic pesticide for vegetation protection from insects causes depletion of soil productivity The final factor of land degradation is the legal provision of ldquoopenness of pastureland which is public propertyrdquo Because of this legal provision the utilizing of pastureland is free for everyone (UNDP amp SIDA 2003) On the other hand the land degradation of Mongolia depends directly on nature and weather conditions Most important impact is the location It is located high above sea level and far away from the ocean Mongolia lies between 420 520N and almost 1200 E Another principal factor is the global warming and climatic change of the world Climate change can affect weeds insects plant diseases and pathogens in the environment especially in agricultural activities Another consequence on the pasture is the lack of rainfall Mongolia has low precipitation and short growing seasons especially long and cold winter and short and hot summer Therefore other significant causes are drought and Dzud in Mongolia They are the keys determinants of vulnerability of livestock to climate change They affect the livelihood of herdersrsquo household which is reduced livestock productivity especially milk and destroy pasture (AIACC 2006) The natural disasters like dzud and drought have occurred around 30 times in Mongolia with different level of harm (UNDPampSIDA 2003) (Figure 45)

Figure 45 Different level of harm due to drought and dzud disasters in all provinces in Mongolia (AIACC2006)

During the disaster of harsh winter (dzud) in 1999- 2000 almost one third of the total livestock died in 1999 Figure 46 shows that the losses adult animals between 2000 and 2006 in Mongolia

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

21

Figure 46 Losses adult animals of Mongolia (2000-2006)

thoushead Moreover there are many negative consequence such as mental stress (66) destroyed health (26) be disabled (13) running up a huge debt (18) school children dropouts (17) shortage of food (10) became family break up involving in robbery and crime faced in Mongolia even suicide have been followed by the Dzud of 1999-2000 (AIACC 2006)

45 Mongolian Livestock Production

Agricultural products especially livestock products is one of the main source of economy Almost 90 of the total agricultural production of Mongolia produced from livestock sector and yielded approximately 9803 million dollar in 2007 Today all meat and meat products and milk and dairy products of food industry consume on the domestic market However Mongolia exports high quality meat and meat products other animal originated raw products such as hides skins and wool The population is increasing every year and 50 of total population is working in the agricultural sector in Mongolia Agricultural production also should increase according to the population growth rate Figure 46 provides the details the percentage of livestock products in total gross agricultural production output between 1990 and 2007 The largest contribution is provided by the livestock sector overall years in Mongolia The production of livestock has increased by 11 from 1990 to 1995 last five years production of livestock sector dramatically increased Generally gross agricultural output has decreased slightly from 2000 to 2004 caused by drought and harsh winter (dzud)

Figure 47 The percentage of livestock products in agriculture (1990-2007)

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

22

In addition difference in culture and geographical segmentation of Mongolian each provinces reflect the ethnic and regional taste of livestock food products Moreover the statistical data shows that every livestock types give to the economy different benefits (Figure 47)

Figure 48 The percentage of benefits from livestock types in economy (NSO 2006)

Generally milk and meat products are the most essential products for the food industry in Mongolia Productions differed by geographical location and it demonstrate different supply different demand condition and different market conditions Figure 48 shows the output of livestock products during the last 16 years in Mongolia

Figure 49 Main livestock production of Mongolia (1990- 2006) Agricultural food products deliver to Ulaanbaatar city from three main sources including products from local producers the private sellers and the imported products

451 Milk and dairy products Milk and diary products are the traditional food of Mongolian people Mongolia consumes a high per capita of milk about 3 times the average for Asia as whole Even though the supply of milk is enough the supply of the milk products is not enough due to excessive privatization For example dairy products with huge demand include cheese and ice cream but it still has been

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

23

importing from other countries While 138 kg of dairy products per capita is required the urban people consume only 50 kg of dairy products per year in Mongolia (Table 43)

Table 43 Milk availability (FAOUN 2006)

Moreover fresh milk and other traditional dairy products are also seasonal and we produce the milk products for a short period of a year Many of these products have a long life and are stored for consumption in the winter and spring During the winter and springtime the intensive housing farms produce milk and dairy products However those products are insufficient Moreover the sterilized and unsterilized milk is selling in the city markets and especially in the street It creates some threat and hazard like unhygienic conditions and it depends on the price of milk Consumer perceived that low price of products is indicating bad quality of those products Nevertheless imports of milk with carton are increasing during the last years Figure 49 shows the milk flow chart that link herders and dairy farmers with consumer in large urban cities such as Ulaanbaatar Erdenet Darkhan and Selenge

Figure 410 Milk flow chart Mongolian dairy products made by using the traditional methods of processing and produced by three main procedures named boiling with foam curdling and souring (fermentation)

Milk producer

Milk cooling center 20

Milk processing plant 30

Others 10

Food retail market 40

Bakery amp restaurants

10

Schools 40

Retail stores amp shops 50

Consumer

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

24

Figure 411 The type of livestock which provide the milk products

At present around 80 factories are working with producing milk and other milk products Last few years many companies have launched new factories which can process and package in high temperature and vacuum environment and produce high quality long-term preserve able and pasteurized products Such as New Zealand ndashMongolian joint venture company ldquoNZM Foodrdquo ldquoMon Fresh Juicerdquo ldquoGUMrdquo LLC ldquoVitafitrdquo Coltd and ldquoMon Taragrdquo Coltd They produce around 40 kinds of traditional dairy products

452 Meat and meat products The meat processing industries work seasonally and the main working period is from October to December in that time the abattoirs operate at maximum capacity There is potential to improve the meat export and to compete with other neighbor For example meat exported was 38468 tons of cattlersquos frozen meat and 70728 tons of horse meat to the some foreign countries such as Russia China Japan and some Arab countries such as Turkey and Jordan Highest meat export reached around 40000 tonnes per annum in 1977 and 1978 (Batjavkhlan 2008) The collectivized state farms influenced the growth of meat export at that time Moreover in 2007 Mongolia produced 18 million dollar from the cattle meat 13 million dollar from sheep meat 25 million dollar from the horse meat and 116239 dollar from pork meat respectively The annual meat consumption is 65 thousand tons and according to agricultural products and consumption standard per capita by Mongolian Ministry of Health and Welfare meat standard consumption is 230 g per day yearly 120 kg per person for the Mongolian climate

Table 44 Meat consumption in Asian first five countries (FAO Rome 2004) (kg per person)

Mongolia 1088 Singapore 711

Brunei Darussalam 564 China 524

Russian Federation 51 However during the recent 9 years livestock slaughtered for consumption has been gradually decreasing after 2000 yearrsquos harsh winter (dzud) Today domestic demand of meat is increasing

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

25

due to urbanization and growth of population During 2008 almost 50 percent of total livestock slaughtered for consumption include sheep meat 39 percent is include goat meat (Figure 411)

Figure 412 The percentage of total slaughtered livestock by types (thousand tons)

In socialism time the market distribution was regulated by the government managed commercial system After privatization it changed to the free market There are two main distribution roots in meat distribution such as distribution by meat wholesaler market and meat production plants The government and Ministry of Health deal with the hygiene of meat produced and search for a greater proportion of the slaughtering through abattoirs with set up hygiene standards Mongolia has around 30 medium and large sized slaughter houses The capacity of them is about 85000 tons of carcass meat per year (AIP 2006-2007) However the slaughterhouses use just 29 of the total capacity Largest meat slaughtering companies Makh Impex Bagakhangai Darkhan makh and Meat market are equipped with advanced and sophisticated facilities of modern meat processing industry that meets international standards

453 Animals raw materials Animal originated raw materials are the base of the light industry of Mongolia Mongolia produced 17000 metric tones sheep wool around 9 millions skins and hides and 3000 tones cashmere per year Figure 412 shows the output of animal originated raw materials during the last 8 years The cashmere of goats is a most important part of the herderrsquos income After privatization the goat population increased dramatically much faster than other animals

Figure 413 The output of animal raw materials (1999-2006)

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

26

Mongolian cashmere has main five stages and every stage has substantial excess capacity still remains scouring (40 capacity utilization in 2004) dehairing (52) spinning (42) knitting (77) and weaving (52) (Table 45) More than 50 of Mongoliarsquos production of raw cashmere is smuggled to China without any processing Table 45 shows cashmere Mongolian production export and imports of cashmere by stage of processing in 2004 (EPRC 2005)

Table 45 The output of animalrsquos raw material in 2004 by stage (metric tons) (The project by the Textiles Institute)

Stage Production Exports Imports Input to next

stage of production

Rawgreasy cashmere 3200 1600 0 1600 Scouring dehairing 800 616 0 184 Dieing spinning 147 6 180 341 Knitting 312 303 0 0 Weaving 30 21 0 0

Table 46 shows the main products of livestock commodities The largest producers are Gobi Corporation and Buyan Company Furthermore there are many processing factors of agricultural raw materials such as cashmere and other non-food materials in Ulaanbaatar Darkhan Erdenet and Hovd cities

Table 46 Production of main livestock commodities (Shagdar 2001)

2000 2001 2002 2003 2004 2005 2006

Spun threat tons 408 456 559 551 574 697 385

Camel wool blanket thous m 285 431 383 274 368 335 344

Scoured wool thous tons 14 21 12 05 18 09 11

Carpet thous sqm 7048 6148 5339 6631 6904 5869 6063

Knitted goods thous pcs 12335 23157 55636 51481 79899 34485 45293

Felt thousm 1139 1105 1129 303 678 691 688

Felt boots thous pairs 34 334 161 9 49 105 78

Woolen fabrics thous running m 21 38 32 546 587 648 695 Mongolia exports the animal originated raw products with high quality such as hides skins and wool (MIF 2006)

46 Past Policies and Strategies

Agricultural development especially livestock sector directly influences on Mongolian economy Mongolian Government approved the policy named ldquoGuidance and the State Policy on Rural Developmentrdquo in 1996 (Bataa 2002) The purpose tended the improving the living condition of herders and people of rural area Moreover the government extends many subsides to the herding sector For example herders pay no taxes rather they pay a very tax based on the

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

27

number of goats They do not pay their dormitory and food expenses when they board at sum and aimag schools and pay no social security or health fees water is provided free from wells drilled and maintained by local government units and fodder has been subsidized The agricultural sector of Mongolia cooperate varied international organizations like FAO of the UN ADB IFAD UNDP WFP WB European Union Program also Russia Japan USA China and Germany Total 15 projects being implemented in the Mongolian agricultural sector Approximately 7 projects of them tended to the livestock sector (Table 47)

Table 47 The implemented projects in livestock sector of Mongolia (Bataa 2002)

47 The General View of Study Area

In this part briefly outline of livestock situation of Tuv province and to investigate the results of questionnaire which is collected from the herder householdsrsquo and the owners of intensive diary farms of Tuv province (Appendix Hand I) are included

471 The situation of Tuv province Tuv province includes 27 soums According to the result of census by 2007 the livestock number of Tuv province reached 26265 thousand heads It has increased by 21 than 2006 Three sub-provinces named Bayanchandmani Jargalant and Sumber of Tuv aimag were

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

28

selected in this research There is difference between the livestock numbers in those sub-provinces Bayanchandmani soum (sub-province) counted 44745 heads of livestock animals Jargalant and Sumber counted 90652 and 29046 heads of livestock animals respectively in 2007 (Figure 413)

Figure 414 The livestock number of Tuv province by soum

Moreover in Tuv province live 13475 herder households with 25 million livestock Figure 414 shows that 11 of total households have less than 10 animals 9 of them have 11 to 30 animals 16 have 51-100 animals 21 have 101-200 21 have 201-500 7 have 501-900 and 2 have 1000-1499 animals Moreover around 45 households herd more than 1500 livestock animals each in Tuv province (Appendix-J)

Figure 415 The classification of herders household of Tuv aimag (by livestock number and percent of total)

According to some survey the herder households with 200-300 livestock animals can provide their own existence It means they can supply only their own needs oriented living Therefore Tuv province has almost 50 of herding households with less than 100 animals They are poor and unable to provide their own subsistence because of countrywide drought and dzud Since 1996 the government implements the restocking program in order to define the suitable

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

29

incomes and to improve livelihood of herders Total 29538 animals were providing support to 1899 herder households from 27 soums of Tuv province for the period of the last three years (Table 48)

Table 48 The result of restocking program in Tuv aimag in 2005 to 2007

of which Involved in the

restocking program

Total budget (thoustug)

For

eign

cou

ntrie

ss

proj

ect

a

nd

prog

ram

s b

udge

t

Loca

l gov

ernm

ents

an

d

a

imag

s

budg

et

Oth

ers

The

num

ber

of a

nim

als

whi

ch

prov

ided

i

n th

e re

stoc

king

pr

ogra

m

Num

ber

of h

ouse

hold

s

Num

ber

of m

embe

rs

2005 4266921 35300 291627 3622294 9167 574 2158 2006 4619235 538955 1025 407011 12016 992 4286 2007 261710 38282 3600 219828 8355 333 1312

1$= 1170 tugrug (The livestock census of Tuv aimag 2007)

472 Herder Householdrsquos Characteristics

4721 Herderrsquos age and education level In total three soums selected from Tuv aimag and 69 herders participated in the survey five of them were family headed families Their age education production environment social and living condition were investigated Almost half of the all herders are young people aged between 36-55 years old herding experience was around more than 20 years (Figure 415)

Figure 416 Herdersrsquo age group and education level

Generally the level of education in rural area is lowers than urban area in Mongolia According to Table 49 the education level of herders is lower especially people who aged between 36 and 55 and more than 55 The result shows 92 percent of herders aged between 36 and 55 had finished the secondary school other 8 percent of middle age group have no education

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

30

Table 49 The comparison the education level with herderrsquos age

Education

High school

No education

Secondary school

Technical school

University Total

16-35 19 0 4 7 5 35 36-55 1 1 23 0 0 25 55+ 1 1 7 0 0 9

Total 21 2 34 7 5 69

4722 The herder householdsrsquo population and their livelihood situation

As a result 26 of respondent households had a family size of 1-5 members 67 had a 5-10 members and 7 had a more than 10 members The survey revealed that 13 herders were poor (with up to 100 head of livestock) 768 medium (between 100-499 head of livestock) and 10 high level (more than 500 head of livestock) of their livelihood situation (Table 410) The livestock animals are a main source of their livelihood for the all herder households

Table 410 Households population and livelihood situation

Livelihood situation

High Medium Poor Total 1 5 3 13 2 18 5 10 4 38 4 46

Households population

10+ 0 2 3 5 Total 7 53 9 69

Table 411 shows the livestock number of respondent households and livestock composition by animal type Amongst the 69-herder households the average number of dairy animal was 216 animals and minimum and maximum numbers were 21 and 1652 animals respectively

Table 411 The livestock composition of herder households (by animal type)

No of respondents

Min number of animals

Max number of animals

Mean

Total 69 21 1652 21688 Sheep 69 5 690 10336 Goat 68 4 520 6185

Cattle 69 7 54 1941 Horse 69 3 379 3241 Camel 11 2 10 473

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

31

In addition 116 of herders had crossbred type of livestock 319 are herd fresh bred livestock and 565 of them had improved bred type of livestock (Figure 416)

Figure 417 The kind of livestock of herder households

4723 The marketing

Main products of the herder households are surely meat and milk products and animalsrsquo raw materials More than half percent of respondents said their income from the livestock is enough and around 49 percent of them said the income is not enough for their daily life The respondents who said income is not enough they cannot sell their meat and dairy products in the market Some herders who have enough livestock animals sell their products to the market Generally main market for the products is Ulaanbaatar city and Tuv province Main customer is retailer 377 of the herders sell their products in the own province 348 of them sell in Ulaanbaatar city and 159 of them sell their products in the nearest province (Table 412)

Table 412 Main customer and customer area of herders

Whos your customer

Factory Person Total Percent City market 3 21 24 348

Nearest province 0 11 11 159 Other 0 8 8 116

Where do u sell

your products Own province 0 26 26 377

Total 3 66 69 100 Percent 43 957 100

Furthermore most herders reported that they feel some problems in marketing (Figure 417) Almost half of respondents reported the main problem of marketing is the competition between herders They sell their products direct to the market Moreover quality of products is another major problem in the marketing for the herdersrsquo households The second main negative problem faced by herders is that the price of dairy products According to my survey 16 of farmers and herders responded that the price of dairy products is low In addition the prices of products depend on the market size and un-pasteurized form of milk Therefore the third main problem of herders is the lack of transportation equipment It is restricted herder households in expanding their market Moreover 43 of herders have motorcycle 21 of them have own car or tractor

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

32

other 36 of herders do not have any technical equipment Besides those problems herders responded that other problems in the marketing are quality of products small market and storage

Figure 418 The problems of herders in marketing

On the other hand 65 of total herdersrsquo income level who sells their products in the market was average 20 of them said the income level is high and other around 15 of respondents said the income is not enough for their life and just can provide their own subsistence (Figure 418) Additionally some herders want to start new business but their income from the livestock production is not enough for their daily life

Figure 419 The income level of herders households Furthermore there are several problems faced by the herders Figure 419 shows those problems Most significant problems of herders are the availability and quality of products finance marketing of products and availability of fodder Furthermore the lack of transportation means restricted to expand their business There are some other problems such as the lack of winter and spring shelter the lack of water supply (not enough well) and decreasing arable land Generally most processing activities were done manually and they use the public wells and operate them manually too Therefore the insufficient equipment level for primary processing of raw materials affects their income

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

33

Figure 420 Major problems of herder households

4724 The government support

Several activities like the restocking program and improvement of wells and shelters were implemented by the government However 41 percent of herders responded that the result is not satisfied for them 39 percent of them said that they are satisfied from those activities and other herders said had no comment Thus most herders are not satisfied with the government policies 927 of all herder households loan the money from the bank 203 of them would spend their loans for preserving hay well and shelters Some herders interested in pursuing business besides their livestock Figure 420 shows use of the loan for different purpose 21 of all respondentsrsquo loan their animal husbandry production such as preserving hay building wells and shelters 19 of them spent on food and households goods and 17 of them used for other purposes

Figure 421 Loan uses by herder households

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

34

473 Dairy Farmsrsquo Characteristics

4731 General information As a result from Ministry of Food and Agriculture (2007) Mongolia has around 750 intensive farms including dairy farms pig poultry bees and rabbit farm (Figure 421) Tuv aimag is one of the biggest productive provinces in Mongolia (Figure 422)

Figure 422 Number of intensive farms of Mongolia

Figure 423 Number of intensive farms in Tuv province

Total 32 small and medium scale intensive dairy farms of Tuv aimag involved in this study

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

35

4732 The reason of establishment

Figure 423 (a) shows that most important factor which encourages the establishment of the farms is the market demand Profitability and family business came next with the percentage response of 31 and 13 respectively Moreover 72 of total farms were established between 1990 and 1999 and 25 percent of them were established after 2000 (Figure 422 b) (Appendix H) After livestock privatization in 1991 there was a rapid increase in the number of farms It affected the increasing number of livestock animals and the output of livestock products

Figure 424 Reason of establishment (a) and established year of dairy farms (b)

4733 The technology of dairy farms

The technology used by small scale and medium scale dairy farms is mostly simple and traditional techniques According to survey 719 of farms used half stationary and 281 of them used stationary Most processing activities are done manually

Most of government supported programs tended to the farmers training The farmers said that the skilled workers are not so important to them but they want to use the modern technology However the resources and income are limited for the farmers

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

36

Figure 425 The reason which to initiate the dairy farm

As a result (Figure 424) three major reasons given to initiate dairy farm are potential profit market demand and government supported programs

4734 The number of animals and the income of farms

Amongst the 32 dairy farms the average number of dairy animal was 29 cows The minimum and maximum number was 13 and 62 cows respectively Average annual milk production is 1826 litres per cow Minimum and maximum numbers of annual milk production are 400 and 3100 litres per cow respectively (Appendix H) Furthermore Table 413 shows that 812 of 32 dairy farms are recorded have non-dairy activities 188 of them have some additional activities for example vegetable mare milk and crop

Table 413 The income level of farms who include dairy activities and non-dairy activities

The farms who

include non dairy activities

No Yes

Total

Enough (1076-1589$) 8 6 14 Middle (512-974$) 12 0 12

The income

Not enough (300-461$) 6 0 6 Total 26 6 32

Around 532 of the owners of dairy farms answered that their income from the dairy (gross income is between 1076 and 1589$) is enough for their familyrsquos livelihood 375 of them have average (income is between 512 and 974$) and 188 of them have not enough income (between 300 and 461$) for sustaining familyrsquos livelihood (Appendix-H)

4735 Supplementary feeds

Availability of supplementary feeds is an essential problem for the herders and dairy farms

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

37

Normal dairy supplementary feeds of the dairy farms are natural hay and bran but they are not adequate in the farms Around 70 of expenditures of dairy farms are the fodder related It was revealed that 469 of 32 farms are buying the feeds and 531 of them prepare by own The cost of preparing 1 ton of hay by own is 23 $ buying 1 ton of hay cost is 39 $ (WB 2003) (1$=1160 tugrug) Therefore it is very important to prepare the hay by own However there are many problems in preparing the hay such as the lack of hayfields and the lack of equipment Moreover 594 of total respondents who prepare own hay do not have the haymaking equipment and 406 of them have the haymaking equipment 438 of total respondents buy bran from the market and 562 from the processor

4736 Marketing

Tuv province is the biggest milk-producing province Market structure of Tuv province includes the public or private enterprises and companies All dairy farms targeted their products for the domestic consumption Supply of dairy products depends on the Mongolian seasons Farmers informed that main consumer area is Ulaanbaatar According to survey 69 of respondent farms sell their products to the processor 25 and 6 of farms sell their dairy products to the trader and direct to the market respectively (Figure 425 )

Figure 426 Main customers of dairy farms

Generally there are many factors affect in demand The first significant factor is the quality Of course consumer needs pure milk According to survey most farmers are satisfied their dairy products because they have the high producing dairy cows However they want to increase the milk production per cow Besides the quality of milk consumers expect low price products with high quality products from the farms Most of farmers said the price is negotiable to sell However 26 of farmers and herders responded that the price of dairy products is low That is why it needs to increase the price due to develop their dairy business Another significant factor is distribution Dairy products are widely available summer and autumn time in Mongolia Furthermore the lack of transportation and packing system restricted farms in expanding their market

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

38

Moreover as a result all dairy farms are facing several problems in the market Most important problem is the competition between dairy farms because most farms centralized in Tuv province (Figure 426) However farms success depends upon their ability to compete Moreover 16 of them answered that the lack of modern technologies and equipments among dairy producers collectors and processors Most dairy farms used a combination of few types of machineries because the cost of new and imported equipments is higher Moreover 13 of them reported finance and 6 and 3 of them reported small market and lack of feed respectively

Figure 427 The problems which to faced by the farmers in marketing

Lastly the government will have to continue to provide the infrastructure of Tuv province such as communication public utility supply like water and electricity information and extension services and public storage

48 Veterinary Service

Today all veterinary services privatized since 1997 Mongolian veterinary services organized throughout Mongolia with 18 provinces 4 towns and 350 sums (MPVA site) Total Mongolia has around 380 veterinary service organizations The service is fully dependent on their private income and currently there is no access to investment capital Therefore the current situation of veterinary service faced several significant problems in Mongolia According to the research from Mongolian Private Veterinary Association identified following problems in Mongolian veterinary sector The first problem is the communication and location of the herdersrsquo households It means Mongolian territory is huge and the distance between herders household is far from the center of aimag and soum The second problem is that a gap between veterinarians and herders because of lack of communication and relationship based on veterinary services

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

39

However herders take care for their animals 3 times per year regularly According to my research 84 farmers and 64 herders responded that they can satisfied the veterinary service and the quality of service and other 16 farmers and 36 herders said that the veterinary service is poor and they advised that the government provide to reform the veterinary sector from old practices Summary the veterinary service is good in Mongolia and quality of service is high The government supports to herders with provision of aid funds of free gift drugs and medicines In addition many policies for the veterinary service tend to protect livestock animals by the western union and other charity organizations

49 Problems and Scope for Livestock Husbandry

Around 80 percent of total agricultural products related to the livestock sector in Mongolia However there are many problems faced in this sector (Table 414)

Table 414 Problems and possibility of livestock sectorrsquos for the future

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

40

410 Suggested Strategies for Future Expansion

The Mongolian government has been launching programs to encourage intensive and extensive livestock sectors Although countryrsquos resource assistances provide sufficient opportunities to develop further in livestock sectors according to this study almost half of herders responded that they do not feel any support from the government Moreover they said that the favorable policies of government should support farmers such as to improve productivity to improve the packaging transportation facilities and the loan facility Therefore the government keeps the communication between the government herders and intensive animal farms and continue improve infrastructures roads water supply and electricity in rural areas As a result herders and farmers had been expecting the policies about to control the products price and reduce the fodder cost Most farmers planned to expand their farms in the near future More than half percent of farmers responded that they want to increase their cow number upgrade cow quality and improve feeding

411 SWOT Analysis

The SWOT analysis deals with two main factors (internal factors and external factors) and then by their dual positive and negative aspects (strengths and opportunities as the internal factors with weaknesses and threats representing the external factors)

SWOT analysis on Extensive animal husbandry

Strengths bull Abundant grazing land bull Expenditure is low bull Pure natural products and products are manufactured at the lower cost bull Availability of experienced herders bull Uses low cost pastoral hay bull Availability of various raw material

Opportunities

bull Less negative impact to environment bull Less input bull Availability to enhance the export bull Availability to supply for domestic resource and goods

Weaknesses

bull Some small scale supplying products bull Seasonality of supply bull Lack of infrastructure bull Low income of farmers

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

41

bull The veterinary service is far from the households bull Destroy to grassy land bull The shortage of information of herders bull Poor support of the government

Threats

bull Climatic risky conditions like Dzud and drought bull Disasters which are caused by hail heavy storm bull Overgrazing due to the increasing number of livestock bull Importing substitute products

SWOT Analysis on Intensive animal husbandry Strengths

bull Increasing of the quality and quantity of products bull Milk consumption and availability is higher bull Labor force is abundant

Opportunities

bull Effect from climatic condition is less bull Dairy cows with high quality bull Rapidly growing in urban market bull Potential to export milk and dairy products

Weaknesses

bull Milk production is seasonal bull Obsolete equipment and technologies bull Poor support from the government bull Low level of education and technical skills bull Less opportunity at the international sales market bull The lack of information of herders

Threats

bull Non natural products bull The competition from the imported milk and milk products bull Lack of capital to develop the dairy farms

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

42

SWOT analysis of Study area (Tuv province) Strengths

bull Lower risk about natural and climatic condition bull Nearest province with Ulaanbaatar city bull Transportation and information is higher bull Resources of agricultural machinery and equipment bull Marketing and sales management more developed bull Veterinary service is good

Opportunities

bull Availability to perform any project and research bull Availability of experienced workers

Weaknesses

bull Increasing thefts number of animal bull Quality of products is low

Threats

bull Overgrazing bull Water resources bull Increased market competition

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

43

CHAPTER V

CONCLUSIONS AND RECOMMENDATION

51 Conclusions

Mongolia is a predominantly agriculture country and livestock sector is the most significant sector Agriculture contributes around 19 of GDP and contributes 30 percent of the total exported of Mongolia The livestock products constitute 876 of total output of agriculture Moreover 40 the workforce of the countryrsquos population is directly employed in the agricultural sector Mongolian livestock animal is adapted for the extensive livestock management system Moreover after privatization in 1991 the intensive dairy farms became a significant issue In addition the tendency of land usage leads modern farmers towards private and small to medium scale farming over the last few years According to my survey the growth prospects of livestock sector look more favorable in Mongolia The potentiality for the development of livestock sector both of intensive and extensive livestock husbandry is great in view of the availability of raw materials human resources and the endowments However this potential is limited due to unexpected natural disaster and degradation of pastureland caused by overgrazing deforestation and climate change Moreover the availability of critical support like wells and infrastructure price fluctuation of livestock products out of date equipment and technology of processing and producing factories the capital of intensive farms and a lack of information Those consequences affect the livelihood of herdersrsquo household livestock productivity

Tuv province is one of the big potentialized provinces Because of the climatic hazard in this province is lower than some other provinces The infrastructure such as power transportation and communication system in Tuv province has been improving compared to other provinces However even though there are many advantages of livestock sector in Tuv province also there are several problems faced by herders and intensive dairy farms such as land degradation quality of products market competition information and extension service and the imported goods

Based on present conditions it is necessary to provide the government endowments and proper situation to expand the livestock sector Although Mongolian government is keeping to continue its efforts in terms of improving productivity of livestock both extensive and intensive animal husbandry but in the future the role of government should be to give more attention to the intensive and extensive animal husbandry

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

44

52 Recommendations

The following research should be carried out to promote the development of livestock husbandry in Mongolia

bull Further investigation should perform in other provinces of the country and in country as a whole

bull More detailed research on potential of livestock products and to investigate the ways to improve quality of meat and milk products varieties for raw materials and producing more value added products

bull To investigate the ways to combat with the land degradation and how to mitigate the effects of natural disasters such as drought and harsh winter (dzud)

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

45

REFERENCES

AIACC Final Report BatimaP ldquoClimate Change Vulnerability and Adaptation in the Livestock Sector of Mongoliardquo 2006 Institute of methodology and Hydrology Ulaanbaatar Mongolia

Asia Invest Programme (AIP) 2006-2007 ldquoFood technology packaging and safety in Mongoliardquo Ulaanbaatar Mongolia

Avdai Ch Ayursed J Tseren O Tsendsuren T ldquoThe general principle of researchrdquo 1999 Ulaanbaatar Mongolia

Baasanjav Z BatbayarD BoldbaatarJ and others (1999) ldquoHistory of Mongoliardquo Ulaanbaatar Admon

Bataagiin Bynie ldquoThe Country report on Animal Genetic Resources of Mongoliardquo 2002 Ulaanbaatar Mongolia

BatjargalZ ldquoDesertification in Mongoliardquo National Agency for Meteorology Hydrology and Environment Monitoringrdquo Ulaanbaatar Mongolia

Batjavkhlan Dashdondog ldquoStatus and Potential of Improving Agro-Production in Mongoliardquo 2008 Masterrsquos Thesis AIT Bangkok Thailand

Delgado1999 Scott Waldron Colin Brown et al ldquoChinardquos Livestock Revolution Agribusiness and Policy Developments in the Sheep Meat Industryrdquo p1 2006

Enkhjargal Th ldquoInstitutional building for dairy-based farming and veterinary system in Mongoliardquo 1999 Thesis No AC99-38 AIT Bangkok Thailand

Enkhjargal T ldquoWTO membership agriculture in transition economies Country Overview ndash Mongoliardquo 2005 Ulaanbaatar Mongolia

FAOUN Dairy Food Project TsetsgeeS ldquoMongolia Milk production processing consumption amp outlook 2010rdquo 2006 Ministry of Food amp Agriculture Ulaanbaatar Mongolia

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

46

GOM and UNDP (2000) Lesson Learned in the 1999-2000 Dzud Research report complied under the MON00302 Project funded by the Government of Mongolia and the UNDP Ulaanbaatar Mongolia

Keating BA and McCown RL ldquoAdvances in farming systems analysis and interventionrdquo 2001 Agricultural System 70 (2001) 555-579

Lor Lytour ldquoStatus of Small and Medium Scale Agro-Industries in Phnom Penh Cambodiardquo

Thesis No AE-03-3 AIT Bangkok Thailand

Ministry of Food and Agriculture (MFA) 2001 ldquoLivestock in the winter of 2000-2001rdquo Ulaanbaatar Mongolia

Mongolian Economic Policy Reform and Competitiveness Project (EPRC) ldquoA value Chain

Analysis of the Mongolian Cashmere Industryrdquo 2005 Ulaanbaatar Mongolia

Mongolian Investors Forum (MIF) 2006 Food and Agriculture Sector Ulaanbaatar Mongolia

Mongolian Travel Guide 2007 Ulaanbaatar Mongolia

National Statistics Office (NSO) 1998-2007 Mongolian Statistics Yearbook 1998-2007 Ulaanbaatar Mongolia

Poverty Reduction Strategy Paper (PRSP) ldquoEconomy growth support and poverty reduction strategyrdquo 2004 Ulaanbaatar Mongolia

Salokhe VM and Alastair Hicks ldquoAgribusiness Development through Agricultural Engineering Apllications to Agricultural Productsrdquo 2001 AIT Bangkok Thailand

Shagdar E ldquoThe Mongolian livestock sector Vital for the economy and people but vulnerable to natural Phenomenardquo 2001 Research division ERINA

Tsetsgee Ser-Od ldquoSmall milk producers the key to dairy industry revivalrdquo 2007 Ministry of Food and Agriculture Ulaanbaatar Mongolia

UNDP SIDA and Ministry of Finance and Economy Poverty Research group ldquoAn Examination of the Effectiveness of Herd Restocking Strategies in Building and Securing the Incomes and the Livelihood of Herder householdsrdquo 2003 Ulaanbaatar Mongolia

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

47

World Bank (WB) ldquoSemi- Intensive Dairy Sector in Mongoliardquo 2003 East Asia and Pacific Region 1818H Street NW Washington DC 20433

World Bankrsquos Rural Strategy for Mongolia (WB)ldquoRural sector strategy and business planrdquo 2006

World Bank (WB) ldquoMongolia quarterlyrdquo 2008 Page 8

Mongolian Developmant Gateway Available online at httpwwwgatewaymnmodulesphpname=Newsampfile=articleampsid=85

Mongolian Private Veterinary Service Available online at httpwwwowcorgmnmpva

FAO Rome 2004 Available online at httpwwwasiafinestcomforumindexphps=2d17e9f31d422ea47d5030c4249db497ampshowtopic=180359ampst=0ampp=4010343ampentry4010343

APPENDIX A

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

48

Questionnaire from the Livestock Herder Households for Livestock Industry

(English translation of Mongolian)

Name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Location helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 1 Personal data

1 Sex a Male b Female 2 Present age

a 16-35 b 36-55 c 55+

3 Marital status a Married b Unmarried c Widowed Divorcedseparated 4 Education

a No education b Secondary school c High school d Technical College e University f Others (specify)

Section 2 Information of Household

1 Family situation

Education No Name Sex Age

University Technical college

High school

Secondary school

Work experience

1 2 3 4 5 TOTAL

2 The livelihood situation

a Poor b Medium c High

3 Livelihood source

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

49

a Animal husbandry b Pension subsides c Salaries d Production service other than animal husbandry e Others

4 How many years have you been herding a 1-5 years b 5-10 years c 10-15 years d More that 15

5 Does any household member belong to a farmer or other community organizations a Yes b No If yes please give details

Member No Organization Since what year Position held presently

6 Did you attend any project and training (ur dung) a Yes b No If yes what name of project or training did you attend helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Project or training output helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Section 3 Information of Livestock 1 Total livestock number

Of which a Sheep b Goat c Cattle d Horse e Camel

2 What type of livestock breeds do you raise a Fresh bred livestock b Crossbred livestock c Improved bred animals

3 Reason of low production of your household a Hay fodder b Pasture management

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

50

c Water d Bandit e Degenerate

4 During last 4 years does any disease problem happen to your particular livestock a Yes b No 5 Compared the situation of last four years with to last year (presently) how you would

express amount of economic lost due to disease a Worst b No change c reduced a little bit d reduced substantially 6 Do you do prevention measure regularly or only irregular a Regular b Irregular

Section 4 Marketing

1 What are your main products a Meat b Milk and dairy production c Raw materials

2 How profitable your products for your herder household a Profitable b Non- profitable 3 Where do you sell your products

A City market B Own province C Outside province D Others

4 What do think about the production price a Low helliphelliphelliphelliphelliphellip b Reasonablehelliphelliphelliphelliphelliphellip

5 Do you feel any difficulties in marketing your products a Yes b No If yes what are they

- Small market - Competition from counterparts - Quality of product - Storage - Transportation - Others (specify)

6 Who is your customer a Factory b Person

7 Do you sell your products through middle men a Yes b No If yes what are the roles of middle men

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

51

helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 How is your income

a Enough b Average c Not enough

9 In addition do you have any possibilities for creating additional value a Yes b No

10 Did you loan the money from the bank If yes what was the interesthelliphelliphelliphellipper month Durationhelliphelliphelliphellipmonth What is your loan purpose

a Expenses associated with the sale of raw materials b Buying any fixed asset (vehicle car and TV etc) c Working capital for trading activities d Animal husbandry production(hay making veterinary shelters and wells) e School tuition f Buying food and household goods g Others

11 Do you have a debt a Yes b No 12 Are there any major problems for your business Please rank

Availability and quality of pastures Animal quality Availability and quality of fodder Animal shelters Haymaking equipment Veterinary service Marketing of products Finances Availability of information

14 Where do you obtain the knowledge about the market economy new information of new technology on livestock development and disease control helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

APPENDIX B

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

52

Questionnaire from the Intensive Dairy Farms for Livestock Industry (English translation of Mongolian)

Country helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Industry namehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Interviewerrsquos name helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Date of interview helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Name of respondent helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

a) Entrepreneur b) Manager c) Partner d) Other (specify)

Section A Information about the dairy farms

1 Establishment of your farms Year helliphelliphelliphellip

2 Location of your farm a Town b Village c Other (specify) 3 How many dairy animals do you have 4 Reason to initiate dairy farm a Market demand b Profit potential c Availability of raw material d Techniques availability e Other (specify)

5 What is the technology you use

a Half stationary b Stationary

6 Which problems you encounter in application a Taking too much time (please specify the time) b Complicated procedure (please tell the procedure) c Seeking help from friends and acquaintances d Cost too much (specify) e Other (specify)

7 Does your farming include non-dairy activities Please specify helliphelliphelliphelliphelliphelliphelliphelliphelliphellip

8 Is income from the dairy enough for sustaining familyrsquos livelihood a Enough b Middle c Not enough

9 Is there negative attitude from the people when you intend to set up the enterprise

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

53

a Yes b No 10 What were the negative attitudes a Not understandable b Persuaded not do so c Gossip from the people d Others (specify) 11 Are these negative attitudes still exist a Yes b No

12 Among the total workers can you tell in detail how many are skilled workers and how many are unskillful workers

a Skilled workers (persons) helliphelliphelliphelliphellip b Unskilled workers (persons) helliphelliphelliphelliphellip 13 What was the cost of production of your enterprise last year a Total helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip b Raw materialhelliphelliphelliphelliphelliphelliphelliphelliphellip c Labor helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip d Transportationhelliphelliphelliphelliphelliphelliphelliphelliphellip e WaterPower helliphelliphelliphelliphelliphelliphelliphelliphellip f Interest payment on loanshelliphelliphelliphelliphellip g Other (specify) helliphelliphelliphelliphelliphelliphelliphelliphellip 14 What was the output value of the enterprise last year Section B Marketing

1 Please tell the channel from which you acquire the supply of production material a State b Market c Acquaintance and friends d Other (specify)

2 Estimated annual milk production per cow (litres) helliphelliphelliphelliphellip 3 Do you have any difficulty to get your production material a Yes (cont Q4)

b No If yes what are the problems a No adequate resource b No stable raw material source c Fluctuation of price d Others (specify) 4 Where do you sell your product a City b Outside province c Own province d Others (specify)

5 To whom do you sell

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

54

a trader b processor c direct to market

6 Is your milk tested your quality a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

7 Are you satisfied with the testing system a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

8 If your farm produced more milk could you sell it a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip

9 Do you feel any difficulties in marketing your products a Yes b No If yes what are they a Small market b Market channel problems c Competition from counterparts d Quality of product e Transportation f Others (specify)

9 Do you think the current policy is good for the growth of agro industrial enterprise a Yeshelliphelliphelliphelliphellip b Nohelliphelliphelliphelliphellip (cont Q2)

11 What is your normal daily supplementary feed d Hay e Bran f Other

12 How do you obtain hay a By own b Buying

13 Do you have haymaking equipment 14 Do you cultivate any fodder crops 15 What veterinary service do you use 16 How difficult is it to obtain all desired veterinary services 17 Did you have experience to get artificial insemination for dairy cattle 18 Where do you get information in need

19 How would you like to develop your dairy business in the future a Increase your cow numbers b Upgrade cow quality c Improve feeding d Mechanize milking

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

55

APPENDIX C The number of intensive animal husbandry of Mongolia (by provinces)

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

56

APPENDIX D The livestock number of Mongolia (by provinces)

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

57

APPENDIX F Number of livestock and household animals

Years Sheep Goat Cattle Horse Camel Total 1990 15083 51257 28467 2262 5375 258549 1991 14721 52496 2822 22593 476 255279 1992 14657 56025 26192 22002 4152 254941 1993 137792 6107 27305 21903 3677 251747 1994 137866 72413 30052 24089 3661 268081 1995 137186 85207 33171 26484 3675 285723 1996 135606 91348 34763 27705 3579 293001 1997 141656 102653 36128 28932 3554 312923 1998 146942 110619 37258 30591 3565 328975 1999 151913 110339 38247 31635 3556 33569 2000 138764 103698 30976 26607 3229 303274 2001 119373 95913 20696 21918 2852 260752 2002 106366 91348 18843 19889 253 238976 2003 107564 106529 17928 19689 2567 254277 2004 116864 12230 18416 20053 2566 280199 2005 128845 132674 19636 20291 2542 303988 2006 148151 154517 21679 21148 2535 34803 2007 169901 183478 24258 22395 2606 402638 2008 17898 194654 24483 21224 2618 421959

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

58

APPENDIX G

Table of the Mathematic Statistic

q q q k

005 001 k

005 001 k

005 001

1 1271 6366 14 314 298 27 205 277 2 43 992 15 213 295 28 205 276 3 318 584 16 212 292 29 205 276 4 278 461 17 211 29 30 204 275 5 257 403 18 21 288 40 202 27 6 245 371 19 209 286 50 201 268 7 236 35 20 209 285 60 2 266 8 231 336 21 208 283 70 199 264 9 226 325 22 07 282 80 198 263 10 223 317 23 207 281 100 198 262 11 22 311 24 206 28 120 197 26 12 218 305 25 206 279 200 196 259 13 216 301 26 206 278 500 196 258

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

59

APPENDIX H The brief information of respondent dairy farms (1$=1170 tugrug)

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

60

APPENDIX I The brief information of herder households

Livetsock number No Herders name Name of soum Family

size Total Sheep Goat Cattle Horse Camel

1 Bayartsogt K Sumber soum 5 323 180 70 23 50

2 TumurbaatarD Sumber soum 6 758 360 295 40 60 3

3 DavaadorjB Sumber soum 5 425 160 200 18 45 2

4 Boldhuyag D Sumber soum 8 105 37 44 13 11

5 AmgalanT Sumber soum 3 77 30 23 9 15

6 Bat-ErdeneS Sumber soum 6 374 230 90 17 37

7 GendenD Sumber soum 5 509 300 125 23 56 5

8 DamrinS Sumber soum 5 489 200 200 26 60 3

9 Chuluun-ErdeneA Sumber soum 7 190 86 65 11 28

10 BolorgerelG Sumber soum 4 72 25 29 9 9

11 UhnaaB Sumber soum 9 128 50 45 14 19

12 BoldkhuuY Sumber soum 11 41 9 14 15 3

13 YadmaaJ Sumber soum 3 813 320 390 24 77 2

14 JargalsaihanL Sumber soum 6 65 16 29 12 8

15 LhagvadorjB Sumber soum 7 90 43 29 9 9

16 TumenH Sumber soum 3 150 65 53 11 21

17 EnkhtuvshinR Sumber soum 3 386 150 160 24 52

18 RadnaabazarJ Sumber soum 5 175 65 69 12 29

19 NyambayarO Sumber soum 10 31 8 6 9 8

20 Sumyabazar A Sumber soum 5 60 19 25 9 7

21 OtgonbaatarN Sumber soum 6 430 180 200 15 35

22 NaranbaatarN Sumber soum 5 72 25 23 9 15

23 TerbishH Sumber soum 7 155 58 66 14 17

24 Myanganbaatar E Sumber soum 4 170 51 64 21 34

25 HuushaanM Sumber soum 8 66 18 24 13 11

26 Ochirzaan L Sumber soum 5 84 25 28 14 17

27 ErdenekhuuE Sumber soum 8 167 55 65 16 31

28 Batbaatar B Sumber soum 3 53 14 22 12 5

29 Ayurzana G Sumber soum 6 92 45 27 12 8

30 GongorT Sumber soum 3 726 270 350 25 75 6

31 Vaahchig Z Jargalant soum 5 67 17 24 19 7

32 JantsanU Jargalant soum 5 151 53 45 21 32

33 Zolbayar S Jargalant soum 12 72 25 30 17 8

34 MyagmardorjM Jargalant soum 7 63 19 23 16 5

35 Surenhorol A Jargalant soum 8 41 8 13 11 9

36 Amgalanbaatar C Jargalant soum 5 290 65 160 34 29 2

37 SergeiD Jargalant soum 5 123 49 36 18 20

38 Doljinsuren D Jargalant soum 11 85 25 36 15 9

39 BatbaatarS Jargalant soum 6 130 40 51 15 24

40 BoldhetL Jargalant soum 2 510 200 260 34 12 4

41 LhamsurenY Jargalant soum 6 161 47 65 19 30

42 Radnaaragchaa E Jargalant soum 5 1325 610 550 45 120

43 Khishigt Jargalant soum 3 84 18 29 12 25

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

61

44 NorvilonA Jargalant soum 7 41 15 8 12 6

45 Zorigoo Jargalant soum 7 170 54 66 18 32

46 SainbayartD Jargalant soum 3 80 32 23 13 12

47 DalhjavN Jargalant soum 9 180 64 58 21 37

48 NaidanN Jargalant soum 10 27 5 6 13 3

49 Dorjsuren D Jargalant soum 5 125 35 51 23 16

50 TserenpilTs Jargalant soum 5 180 57 65 21 37

51 UuganbaatarO Jargalant soum 7 1639 740 670 54 170 5

52 Tsogtgerel D Jargalant soum 4 66 16 25 12 13

53 Lkhasuren U Jargalant soum 8 75 24 35 8 8

54 OtgonboldG Jargalant soum 6 128 40 56 12 20

55 GanbatG Jargalant soum 9 176 78 57 22 19

56 TserendorjJ Bayanchandmani soum 4 90 25 39 15 11

57 JargalN Bayanchandmani soum 5 69 18 26 14 11

58 NasanbayarM Bayanchandmani soum 6 413 160 180 28 45

59 DorligjavO Bayanchandmani soum 5 44 9 16 11 8

60 BoldbayarD Bayanchandmani soum 3 78 30 20 18 10

61 Boldhuyag G Bayanchandmani soum 8 45 9 18 12 6

62 NasanjargalN Bayanchandmani soum 6 73 25 20 15 13

63 EnkhjavA Bayanchandmani soum 5 58 16 25 8 9

64 AltangadasU Bayanchandmani soum 2 75 21 28 15 11

65 Uragshlalt Bayanchandmani soum 9 165 48 60 18 39

66 Purevdorj P Bayanchandmani soum 5 168 55 65 15 33

67 SosorbaramN Bayanchandmani soum 4 31 4 9 13 5

68 Batdorj N Bayanchandmani soum 5 80 22 30 12 16

69 Munkhbaatar D Bayanchandmani soum 6 95 40 37 18 9

62

APPENDIX J Selected social indicators of herdsmen households

1

62

APPENDIX J Selected social indicators of herdsmen households

1

1