bne IntelliNews – Livestock Economics in Mongolia
Pastoralism, also known as nomadic herding, was once practiced by the majority of Mongols. However, more young people are leaving the steppes in search of education and a modern life as the city’s economic opportunities increase. Animal husbandry remains an important activity, however, as there will always be a demand for meat, leather, wool, cashmere and milk. Consequently, over the past two decades, the trend has been towards fewer pastoralist households with larger herds. Currently, Mongolia has more than three times as many animals as in the year 2000, while herder households represent only 20.5% of all households.
There are more than three times as many animals in Mongolian herds today as there were in 2000 (Credit: Antonio Graceffo).
The life of a shepherd is physically demanding in the harsh climate of Mongolia where winter is long and temperatures can drop to -50°C. Caring for animals is constant work. The herders are also not connected to the electricity grid or the city’s sewage networks. The Gerstraditional tent houses, have no indoor showers or plumbing.
The average annual income of a herder household, which is estimated at 15.6 million Mongolian tughrik (MNT) (about $5,000), is comparable to the national average. However, income from animal husbandry varies depending on the number and types of animals a family keeps. Proximity to a town or population center also plays a role in a family’s income. There are agents who travel to the countryside to buy animals and animal products directly from breeders. Obviously, these intermediaries must be compensated, so that a breeder who has direct access to markets could sell his animals at a higher price. In addition, milk is difficult to transport over long distances and spoils quickly. Farmers who live far from a population center can consume all their milk themselves while those who live closer to town can sell it to earn extra income.
Herders who live far from major population centers lose some of their profits to middlemen who travel to vast rural swaths to buy their animals (Credit: Antonio Graceffo).
Mongolia has five main animals in its herding economy: horses, goats, camels, cows and sheep. Yaks are also often available. While everyone’s milk, meat, and hair can be used, some are more popular than others. For example, you cannot buy camel meat in a grocery store in Ulaanbaatar, but in the countryside people can eat a camel. The same is true for milk. All the milk from the campaign will be used. But generally, only cow’s milk is sold in supermarkets, while mare’s milk is used to make traditional Mongolian alcohol. airag
Otgonbayar S., 63, an Arkhangai aimag herder who has herded cattle all his life, said he currently has 600 animals but hopes to expand his herd to 1,000. He said: “Well sure, most people now raise sheep, but people prefer big animals. They require a lot of care, but they are very profitable.
Otgonbayar explained that sheep were profitable because of cashmere, but cows were always the most profitable because of the amount of meat they produced. Another advantage of cows is that the family can support themselves with milk and meat.
Sheep are profitable because of the cashmere, but cows remain the most profitable animals for the herder because of the amount of meat they produce (Credit: Antonio Graceffo).
Some ranchers will earn extra money working for other ranchers brushing sheep (removing wool) or slaughtering them. In addition, they can practice crafts and sell products made of skin, bone or wool. Another source of income for some herding families is old-age pensions, which average 548,400 MNT (175 USD) per month.
A small amount of extra money can be earned by picking berries, onions, black currants and other forest products. However, families tend to save and consume these products rather than sell them.
The timing of income depends on weather conditions, seasons and biological cycles of animals. Otgonbayar says: “In the spring, you hardly sell your cattle. You love your animals and don’t want to sell the ones that just survived this bad cold winter. Well, in the spring I earn 80,000 tughrik with goats.
Goat cashmere is sold from March (in the east) to May (in the west) depending on how hot the weather is because once the cashmere is removed the goats can get cold.
Sheep’s wool is sold towards the end of June when the wool becomes loose. The first camel wool is sold around spring and the second in the fall. Dairy products are marketed from June to October or November depending on the year. The meat is sold from the end of June until December, with the skin and hide being sold at the same time as the meat. Some male animals are sold in the spring while female animals are kept to care for calves according to an interview with Professor D. Lkhagvadorj.
In the past, breeders were exempt from taxes. Since January 1, 2021, they are subject to the payment of a tax of 0-2000T per animal.
This is problematic as debt is a major problem for Mongols in general and herders in particular. Forty percent of herders had a loan in 2019. Farmer Nyamdorj confirmed that many herders are in debt. “Everyone owes money on cattle. Herders have little cash, so they pawn their cattle and take out a separate loan as a shepherd’s loan. On average, herders have a loan of about five million MNT.
In general, herders devote a large part of their income to the education of their children, sending them to schools in towns and villages. Those who go on to college usually don’t come back. As a result, the number of herding households is expected to continue to decline while the size of commercial herds will continue to grow.
The author, Dr. Antonio Graceffo PhD China-MBA, worked as an economics researcher and university professor in China, but now lives in Ulaanbaatar, writing about the Mongolian and Chinese economies. He holds a Ph.D. from the Wushu Department of Shanghai Sports University where he wrote his thesis “A Cross-Cultural Comparison of Chinese and Western Wrestling” in Chinese. He is the author of 11 books, including A Deeper Look at the Chinese Economy, The Wrestler’s Dissertation and Warrior Odyssey. He completed postdoctoral studies in economics at Shanghai University, specializing in US-China trade, China’s Belt and Road Initiative, and Trump-China economics. His economic reports on China are regularly published in The Foreign Policy Journal and published in Chinese at the Shanghai Institute of American Studies, a Chinese government think tank.
This article was written with research assistance from Munkh-Orchlon Lkhagvadorj and Udval Battulga.
Lkhagvadorj, D., Hauck, M., Dulamsuren, C., & Tsogtbaatar, J. (2012, October 15). Pastoral nomadism in the forest-steppe of the Mongolian Altai under a changing economy and a warming climate. Journal of Arid Environments. Retrieved June 14, 2022, from https://www.sciencedirect.com/science/article/pii/S0140196312002224
Lkhagvadorj, D., Hauck, M., Dulamsuren, C., & Tsogtbaatar, J. (2013, June 22). Twenty years after decollectivization: mobile herding and its ecological impact in the Mongolian forest steppe – human ecology. Springer link. Retrieved June 14, 2022, from https://link.springer.com/article/10.1007/s10745-013-9599-3