Social capital Institutions

Posted June 1999

Pastoral institutions and approaches to risk management and poverty alleviation in Central Asian countries in transition

by Jeremy Swift
Institute of Development Studies, University of Sussex
in collaboration with Stephan Baas
FAO Rural Development Division

1. Introduction

Extensive pastoral production and marketing plays a key role in the rural economies of all Central Asian countries, especially in the poorest and most marginal areas. The development of these pastoral economies is the key to poverty alleviation and improved food security, as well as to the wider goal of creation of sustainable livelihoods. However, pastoral systems are subject to high levels of variability and risk from environmental, economic and social causes. The most obvious risks come from periodic snow disasters, which cause heavy animal and human mortality. In Mongolia, snow storms killed an estimated 100,000 animals in May 1993, and in June 1995 heavy rain killed 60,000 recently-shorn sheep in a single night, immediately impoverishing large numbers of herding households.

In addition to their direct impact on animal and human mortality, snow and other disasters undermine rural development strategies, and are a major cause of rural and urban poverty. Rural development will have to start afresh each few years if such disasters are not better managed. Likewise poverty alleviation can only deal with symptoms until key risks are brought under control. None of the countries of Central Asia yet have the right strategies and institutions to deal with such risks.

This report synthesises the results of work by three national teams - in Mongolia, China and Kyrgyzstan - working with FAO support on institutional approaches to pastoral risk management in Central Asia, within the wider context of poverty alleviation and food insecurity.

2. Background

Decollectivisation in China and the Central Asian countries of the former USSR has created new forms of rural poverty and vulnerability, especially in the extensive pastoral economies of the dry and mountain hinterlands which make up a substantial proportion of these countries. Changing forms of ownership of land and livestock, a shift from state to market provision of most services as well as an increase in the role of markets in economic life generally, and a redefinition of the degree to which the state will, or is able, to provide a social security safety net, have altered the experience of poverty, its incidence and its consequences.

Urban poverty and agricultural poverty are important, but are visible to policy makers and there are lessons from other parts of the world to illuminate the choices available to those wishing to fight poverty. In the pastoral areas, poverty is less visible to policy makers; there are fewer analytic tools for understanding and measuring pastoral poverty, and few lessons from other countries to suggest options to policy-makers.

Extensive pastoralism is a key economic adaptation in the grasslands, mountains and desert steppes on central and inner Asia, involving large numbers of people, occupying very extensive land areas, and making a significant contribution to national economic activity. In some countries - notably Mongolia, where pastoralism directly employs between a third and a half of the national population - livestock are the backbone of the national economy. In Kyrgyzstan, pastoralism employs a quarter of the agricultural population. Pastoralism does not play a large part in the Chinese economy as a whole, but in several provinces and autonomous regions - especially Inner Mongolia, Xinjiang, Tibet and Qinghai - extensive pastoralism is the main economic activity of millions of people and a substantial proportion of China's livestock (in 1990, 22 percent of all large livestock, and 37 percent of all sheep and goats) are raised under pastoral conditions [1]. And, contrary to the trend in other parts of the world, there has been an increase in the number of people engaged in extensive pastoralism since decollectivisation in several countries in Central Asia, as economic adjustment takes place, subsidised industrial and agricultural enterprises fail, and the artificial urban economies promoted by central planning falter.

A key part of the economic transition underway in Central Asian countries is the creation of appropriate institutions for a modern market economy and democratic state. Institutions to manage rural poverty are an essential part of this, but there is little recent experience of these either in the region or in other countries outside the region. This is particularly true in the case of the pastoral population, where such strategies and programmes as exist are generally partial, fragmented between sectoral Ministries, and poorly coordinated. There is no pastoral risk management policy and strategy enacted by government, and risk, with its potentially severe consequences in terms of poverty and food insecurity, is only addressed incidentally, partially and in an ad hoc manner.

Thus, in Mongolia the Ministry of Agriculture and Industry's programmes on development of emergency grazing areas and fodder supplies are not coordinated with the national weather forecasting system administered by the Ministry of Nature and Environment, and the national Poverty Alleviation Programme (NPAP) does not deal with poverty among herders, the majority inhabitants of the countryside. Some donor programmes focus on herder poverty in particular provinces, and on the need to diversify the rural economy, but do not directly address risk, and are at risk of being undermined by a single serious risk episode.

In all the countries concerned, herders themselves are the main actors in day-to-day pastoral risk management, but this is rarely recognised and scarcely ever acted upon. Customary herder institutions - such as mechanisms for immediate help in assuring food security from fellow camp members or neighbours - are the front line protection for herders who suffer individual loss of livelihood, but such institutions are easily overwhelmed in a major disaster covering a large area and many households.

This project tries to improve our understanding of the institutional dimensions to one key aspect of poverty alleviation and improved food security among pastoral populations of three Central Asian countries in transition: China, Mongolia and Kyrgyzstan. It build on previous work by the Rural Institutions and Participation Service (SDAR) of FAO in Central Asia, including especially the TCP project on 'Rural development in Pastoral Areas in Arkhangay Province, Mongolia' [2], and a comparative study on 'Trends in Pastoral Development in Central Asia' [3].

3. Objectives and focus

The objectives of the work were to analyse the linkage between national and local approaches and strategies of poverty alleviation among three selected Central Asian countries in transition - Mongolia, Kyrgyzstan and China - with a particular focus on participatory institutional mechanisms related to poverty alleviation in rural pastoral areas, and to identify strategies and policies [4].

The issue of pastoral poverty and its remedies is vast, and to study it comparatively between three countries with widely different histories, cultural traditions and present policies adds to the size of the canvas. Initial discussion with research partners revealed a common concern that the work should be focused on a clearly defined problem, of limited scope, with a strong link to poverty alleviation policy. Initial discussions identified risk in the pastoral economy as a key force generating poverty and inequality, and focused on institutions for the management of this risk. The risks of destitution facing pastoral households, and responses to those risks, provide a powerful theme which cross-cuts national and local particularities.

It was agreed that each national team would focus on the relationship between risk and poverty in the pastoral economy, the experience and perception of pastoral risk by different actors, the institutional management of risk through customary and formal institutions, and the policy conclusions that flow from this analysis. In Mongolia a part of the research focused on restocking poor pastoralists as a specific institutional response to risk, and a study site was chosen where a restocking schemes had been implemented (with FAO TCP support) two years earlier to allow a detailed evaluation of their effect [5].

4. Analytical framework

4.1 Perceptions of risk

Risk is the subject of a large and rapidly growing literature [6]. The classic conception distinguishes between risk - defined as the probability that a particular adverse event occurs during a stated period of time, or results from a particular challenge - and detriment - defined as a numerical measure of the expected harm or loss associated with an adverse event; it further distinguishes between objective risk and detriment - the past and likely future occurrence of risk and detriment measured by experts - and perceived risk and detriment - the way lay people anticipate future events or view past ones. We may express this as the 2 x 2 matrix shown in table 1:

Table 1. Risk matrix
riskdetriment
objective (measured as)statistical probability economic cost
perceived (measured as)perceptions of likelihood of different events by different actors
  • economic cost
  • non-economic cost (including eg self-esteem, community solidarity, future livelihood vulnerability)
  • There are several difficulties in this type of approach to risk analysis.

    Measurement difficulties

    Even the 'objective' measures in the matrix above are increasingly recognised to be difficult. A meaningful statistical probability of drought or extreme snow conditions is hard to calculate given the weak statistical base for Central Asian weather systems. Perhaps the best that can be done is a very approximate classification of frequency zones for different events (eg for major snow disasters in different provinces in Mongolia [7]), based on records of their occurrence in previous decades. But this is a rough calculation, and made less amenable to forecasting by the changes in weather systems resulting, or not, from global warming. Nevertheless, an understanding of the past frequency of events such as drought or severe snow is one essential part of a risk analysis.

    Measurement difficulties become greater when we attempt to investigate perceptions of risk or to assign an economic or other value to the detriments caused by various risks, and indeed in defining what those detriments are: do detriments include non-material harms, such as family separation, loss of self-esteem or a reduction in community solidarity, and if so how do we measure them?

    Ecological system dynamics

    The difficulty in measuring pastoral risk is compounded by the nature of the underlying ecology of pastoral areas. Recent research suggests there may be important differences between ecological processes in wetter and dryer areas, with a systems' break which may occur in Central Asia at around 250 mm annual rainfall [8]. If Central Asia does indeed follow African environments on this, which is not yet established and needs more research, then the drier areas will be characterised by non-equilibrial dynamics in which random climatic events are key exogenous drivers in the evolution of the vegetation and of herding strategies. In wetter environments, random events and risk are reduced, leading to more predictable ecological dynamics and herd management responses.

    If this ecological categorisation holds for Central and Inner Asia, the incidence of risks of various sorts, herders' expectations and perceptions of risk, and herders' strategies to contain and manage risk, will differ not just from site to site, but in a more global way between equilibrial and non-equilibrial environments.

    Cultural, economic and political construction of risk

    Risk is not just a series of random events striking unwary populations. Risk is culturally constructed [9]. People in risky zones experience risk and anticipate for it in ways which depend on their prior experience, their expectations of others' behaviour (including especially their own kinship or residential community and the public authorities), their resources and their objectives.

    Different categories of people construe risks differently. Their perceptions are determined by a range of variables, including:

    Previous experience of risk

    Herders' attitudes to risk, and their perception of the probability and magnitude of future adverse events, are shaped in part by their own previous experience of risk and its outcomes, for example their expectations of the respective roles of government versus their local community in helping risk victims. These attitudes are continuously modified throughout their life in the light of experience.

    Rewards to risk-taking

    The habitual analysis of risk, typified by the matrix in table 1, assumes that all risk is negative, and that risk produces only losers. However risks offer opportunities as well as threats and there are substantial rewards to some forms of risk-taking. Thus the Kyrgyz herder who herds cattle instead of yaks or yak-cattle crosses is likely to do much better in production for market than the herder who keeps only yaks, but at the cost of substantially increased risk of loss of animals in exceptionally heavy or severe snowfall. Herders, like other people, are continually trading off risk and potential loss against potential gain. They base their calculations on their perceptions of risk, on the economic and social framework which surround risk-taking, the potential rewards and harm from risk taking, and the safety nets available in case the worst happens. These calculations change as key elements in the calculation alter the potential rewards or the potential harm.

    Thus the existence of a state emergency fodder fund (SEFF) in Mongolia during the period of central planning is widely believed to have influenced herders to reduce their own production of winter fodder, and to abandon some previous risk-avoiding livestock management practices, since there was an assurance that the state would make fodder available in most circumstances and that even if they didn't and animals were lost, the collectives would restock the unlucky herder. When the SEFF was wound up at the start of liberalisation, there was an immediate modification in livestock management by herders towards more risk-averse practices, such as mixed-species herding, and herders started to cut hay for themselves again.

    Winner and losers

    Because risk offers both opportunity and hazard, there are clear winners and losers from some types of risk. Even a sudden severe snowfall which kills thousands of animals may provide a windfall for transporters hired by the government to bring in emergency supplies. Droughts may bring substantial profits to private sector traders in staple foodstuffs, and often also allow non-herders, or rich herders, to buy animals from impoverished herders at low price. Mass mortality of animals in one area will benefit herders in neighbouring, unaffected areas, by increasing demand and prices for livestock. It is important to identify winners and losers in case some potential anti-risk policies reduce the benefits of winners; if the winners are powerful, as they are likely to be, they may be expected to resist such policies.

    4.2 Risk and poverty

    Pastoral risk is important because of the effect it has on pastoral strategies and tactics, but also because it is a major direct determinant of pastoral vulnerability and poverty.

    Risk is a major cause of poverty in the countryside, both in the herding economy itself, and in the small towns which serve as local centres. When household herds fall to below the minimum viable level, as a result of one or other type of risk, the household has to rely on support from relatives and neighbours; where this is not available, for example because others are poor also, or because all have lost animals in the same risk episode, households rarely have any other option but to move to small urban centres where they remain destitute.

    Risk is not the only determinant of poverty:

    However risk is the main proximate cause of pastoral poverty, especially when taken in conjunction with the factors listed in the previous paragraph. Perhaps the commonest route into extreme poverty in central Asian pastoral economies is the case of labour-deficient households, not very skilled in herd management, owning herds close to the margin of viability, hit by a major climatic disaster.

    Risk also jeopardises major investments by government and donors. For example, IFAD and the Mongolian government are investing $5 million in Arkhangay and Huvsgul provinces on poverty alleviation, especially by restocking poor herders; other donors have similar restocking programmes in other provinces. A single major snow disaster could not only threaten the success of these initiatives, but could wipe out the investments already made.

    4.3 Actors and institutions

    Several distinct groups of actors are concerned in risk management, and a pastoral risk management strategy should clearly identify which actors are involved with individual activities. The main actors are: (i) the herders themselves, individually, and in some cases organised into camps and wider informal groupings such as geographic neighbourhoods; (ii) formal groupings of herders created for specific purposes such as livestock marketing; (iii) the administration at different levels; (iv) government technicians at different levels of the administration; (v) private sector operators, such as livestock traders.

    These actors have played different roles, in a shifting relationship to each other, during this century in relation to risk management.

    In the pre-socialist period, the pastoral societies of the region had a range of mechanisms, based in both customary and state institutions, to limit the detriment suffered by individual households, and to reinsert the impoverished household into a viable production process. Little is known about intracommunity mechanisms, although they certainly existed. Feudal and monastic relationships provided an alternative mechanism through which destitute herders could, at a considerable cost to personal freedom, ensure some level of subsistence. Kyrgyz family relations are said to have been particularly strong and mutually supportive.

    Socialism, through collectivisation of the herding economies of the region from the 1920s and 1930s in the republics of the Former Soviet Union, and from the 1950s in Mongolia and China, institutionalised a more substantial safety net through membership of a herding collective which provided:

    Local community responses to risk became less important during the socialist period, because of the substantial government safety net and other policies, and also hostility on the part of the state towards pre-existing social relationships. But local responses, based on individual and informal group relationships, did not entirely disappear. Herders' own strategies continued to play an important part, both in terms of livestock management such as extended movement away from a threat or towards assistance, labour and food sharing within small social groups, and extended forms of urban-rural exchange of foodstuffs and other commodities [10].

    Decollectivisation removed the benefits and safeguards provided by the centrally planned economy to varying degrees in different countries. In Mongolia and Kyrgyzstan, liberalisation of the economy, starting in the early 1990s, removed the employment guarantee, removed many price controls on basic foodstuffs, ended the automatic resupply of collectively owned animals to households which had an insufficient herd, privatised livestock insurance, reduced or ended subsidised emergency fodder supplies, introduced cost-recovery for most services, and started in varying degrees to reduce social security guarantees. Changes in China - signposted by the introduction of livestock management contracts in 1983 and pasture management contracts in 1994 - were less drastic, but had much the same effect.

    Since liberalisation, herders' and local community responses to risk and detriment have become more important again as state responses are reduced. In Mongolia, the recreation immediately after liberalisation of the old khot ail camps of kin and friends, in place of the one or two household suur production units of the collective period, was in part motivated by a desire to capture economies of scale in herding labour, but also to provide greater mutual support in a risky environment. Urban-rural solidarity has also grown. Similar changes have taken place in Kyrgyzstan and China.

    5. Importance of pastoral risk

    5.1 Types of risk

    The main risks faced by herders are similar throughout Central Asia:

    Snow disaster

    Snow disaster (zud in Mongolian and related languages, kengschi in Tibetan) is ranked as the most important risk they face by most herders in Central Asia. An idea of the impact of snow disaster on pastoral economies of the region is given by some Mongolian statistics:

    In Qinghai, unusually heavy snow cover during the 1997-1998 winter, with an especially cold period (temperatures of down to -35C) lasting almost one month, led to severe dislocations and heavy losses: 1,400 people, and 330,000 animals, had to make emergency moves away from the worst affected areas; over 9,000 animals froze to death, and nearly 12,000 died of starvation; the direct economic cost of the snow disaster was estimated at about US$ 445,000 in one of the poorest counties in China.

    Definitions of zud vary. In Mongolia, the meteorological service defines zud as a snow cover of more than 25 cms, a sudden prolonged snow storm, 2-3 cm of frozen snow cover, or prolonged extreme cold. As would be expected, herders have a rich vocabulary to describe and analyse zud. The main criteria are not so much snow cover itself, as the consequences, especially in terms of animal mortality. A serious zud is one where there is very heavy snow which freezes to a permanent ice cover which prevents the animals from grazing. Zuds are also defined by their geographic coverage (a single valley or a whole ecological or administrative zone), and by their duration (heavy zuds exceed 20 days). Mongolian herders also classify several types of zud: black zud, which doesn't involve snow at all, but is a freezing of surface water, making it inaccessible to the animals; white zud, the classic snow disaster; storm zud, when a severe snow storm lasts several days, forming deep drifts and stampeding animals down wind so they are lost; and freezing zud, when temperatures descend so low that people and animals cannot maintain their body temperature, and die of cold.

    In Mongolia, dangerous zuds of this sort occur mainly during late autumn, winter or early spring. In Kyrgyzstan, by contrast, since herders are in well-equipped villages with fodder supplies during the winter, the most serious snow disasters are those which occur in later spring or early summer, when the flocks are out on the pastures.

    Drought

    Droughts may occur in drier areas of Central Asia at any time outside the winter months, those in late spring and early summer being the most feared since they coincide with the period of new pasture growth, when a moisture deficit has serious consequences for plant growth. In addition to direct stress on the animals, drought at this time can cause significant mortality among new-born animals, and a significant diminution in milk production. Drought impact on pasture can result in less summer weight gain by animals, and hence in reduced preparedness of animals for the following winter-spring critical period and higher mortality.

    Predation

    Predation has always been a major threat to pastoral economies in Central Asia, but until recently was kept within manageable limits through predator control organised by the collectives. Liberalisation has resulted in a significant increase in predator damage to flocks.

    Wolves are the main threat, but damage is also done by snow leopards (not uncommon in parts of Mongolia and China despite their global rarity), foxes, bears (in parts of China), eagles, vultures and other large birds. In general, good herders are expected to be able to protect their animals against most predation, although wolf populations in some areas have reached a level where this is increasingly difficult, and in Kyrgyzstan have taken to attacking animals in their winter shelters in villages. In Mongolia, a market is developing for wolf meat which is used for medicinal purposes, and this may encourage hunting.

    In Qinghai however, the Tibetan religion discourages herders from killing wolves; they scare them away instead.

    Animal disease

    Animal disease poses an obvious risk to herding livelihoods, which has increased in most areas following partial privatisation of animal health services. However, herders questioned in Qinghai stated that animal disease was now under better control than ever before.

    Animal theft

    Animal theft is a recent risk in Central Asia, resulting from progressive social breakdown after economic liberalisation. In Qinghai, small number of animals are stolen by local impoverished herders and larger numbers by professional thieves from neighbouring provinces. Theft is ranked as a growing risk in all the study areas.

    Conflict

    Social breakdown is also leading to increased conflict over pasture, access to other natural resources, and over theft of things other than animals. Herders who leave their winter animal sheds for the summer migration risk finding the buildings vandalised and building materials stolen on their return. Fights over pasture are increasing in Mongolia and China, as the best pastures are more heavily used. In Kyrgyzstan, because of the significant reduction in the number of livestock since liberalisation, there are fewer resource conflicts.

    Market failure

    All herders depend on the market to a varying degree for their basic subsistence, and shortcomings in the market create a serious threat to livelihoods. Market risks are of two main sorts:

    1. declining terms of trade, where the price relationship between commodities sold by herders (essentially animals and animal products) and commodities bought by herders (mainly staple foods, clothing, and household goods) deteriorates to the disadvantage of herders. Herders in the region rarely have much cash, and so are not in a position to negotiate over price to get a better deal. In Qinghai, herders in 1998 faced a 50 percent drop in the price they were offered for sheep wool compared to 1997, and were left with large amounts unsold. Terms of trade can be very changeable. In Mongolia, rising cashmere prices after liberalisation triggered a large expansion in cashmere goats; a recent slump in prices has left many households much poorer.

    2. collapse of market channels, where the institutions of trading are deficient or absent. The remote areas inhabited by most Central Asian herders have always made the development of dense networks of markets and traders difficult. Following the retreat from a centrally-planned economy, the lack of roads, transport, petrol, and banks in the countryside meant that there were, and still are, few traders or market places. In many country areas cash has become a scarce commodity, further hampering the development of economic exchanges. In Mongolia following liberalisation few traders were able to get access to petrol, cash and manufactured goods became rare in the countryside, and herders partially withdrew from the market.

    Illness

    Illness is a particularly dangerous risk in a pastoral economy because the animals have to be tended every day, and herders cannot, as farmers can, abandon their activities for even a short time. Pastoral camps are in part an adaptation to this need, enabling households to group their animals so that one herder can tend the animals from several households.

    Heavy spring rain, floods

    In some areas of Central Asia, heavy rain and floods are a risk to herders, especially when animals are weakened by a long and difficult winter. Heavy rain shortly after sheep have been sheared is particularly dangerous.

    Fire

    Wild fire is a significant risk to herders in mountain and forest areas. Fires damage not only pasture and browse, and may kill animals, but also threatens camps, and can do considerable damage to herders' possessions, barns, stored hay and food. Fighting fires may divert large amounts of labour from herding tasks at critical times. For example, during spring and early summer (the lambing season) in 1996, forest and pasture fires in Arkhangay province in Mongolia damaged 217,000 ha of forest and 213,000 ha of pasture; 5,000 people were employed in fighting the fires; more than 200 families and 150,000 animals had to be moved to safe areas.

    5.2 Categorising risk

    We may categorise risk in various ways. A functional typology gives three main categories: environmental, economic and social, as shown in table 2:

    Table 2. Main risk categories
    CategoryExamples
    1. Environmental snow disaster , drought, fire, predation, animal disease, heavy spring rain
    2. Economicanimal theft, market failure, terms of trade, market channels
    3. Socialillness conflict

    A different, outcome-oriented, way of classifying pastoral risks is to look at who is affected: risks that affect individual households only (individual risks), or risks that affect all households in a given area (covariate risks) are fundamentally different in impact and call for different responses. Snow disaster or market collapse are covariate risks, affecting everyone in the area. Animal theft, predation or illness are generally individual risks. The ability of herding households to help neighbours or kin to recover from risk depends in part on the type of risk: in the case of individual risk, other households may be able to help, but in the case of covariate risk, everyone is in the same situation, and cannot.

    Different types of risk are inter-related: for example, snow disaster may weaken surviving animals, making them particularly susceptible to heavy spring rain. Different ecological or geographic zones may have characteristic combinations of risk: for example, areas close to markets are much less likely to suffer from market risk than remote hinterlands, but may be more susceptible to animal theft.

    5.3 Perceptions of risk

    As discussed above, different actors may have different perceptions about the nature and importance of risk

    In Qinghai, herders and officials had significantly different perceptions of the importance of different types of risk, as shown by table 3. Everyone ranked snow disaster as the most important risk, but herders ranked animal theft next, followed by wolf predation; animal disease was ranked least important, being considered to be under control. County and township officials who had no animals of their own ranked animal disease as the second most important risk, and animal theft least important. However, officials who had animals of their own ranked the risks in the same way as the herders. These different perceptions have important implications for policy making.

    Table 3. Risk perception by herders and officials who own or do not own animals
    risk herders*county/township officials
    with own herdwithout own herd
    snow disaster111
    animal theft224
    wolf predation333
    animal disease442
    Note: * averaged from six surveys

    5.4 Risk frequency

    The frequency with which some risks have occurred in the past can be measured as a way of predicting their future likelihood, although this is a very inexact method.

    In Mongolia, it has been shown that the country can be divided into three categories: those provinces (eight of them) where a major snow disaster occurs at least once every seven years, those provinces (five) where a major snow disaster occurs once in seven to fourteen years, and those (five) where major snow disasters occur less often than once in fourteen years [11].

    In Qinghai, the animal husbandry authorities estimate that there is a small snow disaster every three years, a medium sized one every five years, and a large disaster every ten years. They estimate that the impact of snow disasters has increased since 1980, because grassland degradation has resulted in less animal feed availability as a safety net.

    In Kyrgyzstan, it is suggested that since most herders now spend winter in villages in the valley, where enough fodder is available and the animals are in shelters, snow is now only a serious danger in the warmer spring and early summer months. Snow storms are estimated to occur during these months every eight to ten years.

    5.5 Changing levels of risk

    The frequency and severity of risks and potential detriments are not fixed.

    The main environmental risks, especially snow disaster and drought, may be subject to change from global warming. Mongolian climate scientists estimate that average temperatures in Mongolia will rise significantly in the next decade, with unpredictable impacts on weather and the incidence of weather-related risks.

    But the main changing risk factors are economic and social. Since the start of economic liberalisation, market, social and some environmental risks to herders have substantially increased in China, Mongolia and Kyrgyzstan due to reduced support from central government to the countryside, and an explicit shifting of many risks from the public sector to herders. In China, after the rural reform programme started in pastoral areas in early the 1980s, responsibility for risk was shifted from government agencies to herders themselves, with assistance and coordination by government organisations and village leaders.

    Snow disasters during the collective period in all three countries were met with a massive state response: helicopters delivering fodder to remote herder households. After liberalisation, this became economically impossible. In Mongolia, the State Emergency Fodder Fund (SEFF) had before liberalisation been operational in all 22 provinces, with a total of 69 emergency fodder stores. By the late 1990s, responsibility, but no funds, had been shifted from central government to the provincial authorities; now there are only 14 stores in 9 provinces, and most of these are non-operational. As a result, there are no emergency fodder provisions, making snow disasters much more dangerous.

    The Ulaanbaatar workshop made some estimates of the way risk responsibilities have shifted from government to individuals following economic liberalisation. The cases of Kyrgyzstan and China are shown in tables 4 and 5.

    Table 4. Changing risk responsibility in Kyrgyzstan following liberalisation
    RiskDegree of responsibility for risk
    Collective periodCurrently
    governmentindividualsgovernmentindividuals
    Environmental
    snow disaster**--**
    animal disease**-**
    predation**-**
    Economic
    animal theft**-**
    market theft**--**
    Social
    illness**--**
    accident**--**

    The Kyrgyzstan situation (where items are scored out of two) shows a substantial shift of risk responsibility from the government to herders following economic liberalisation. This is especially true for snow disasters, market risk, illness and accident. In China (where the scores are out of five), the changes are less dramatic, but still substantial. There have been major shifts from government to individuals in the case of economic risks (animal theft and market risk), illness and accident, but the shifts in the case of most environmental risks (snow disaster and animal disease), although they have taken place, are less dramatic; the Chinese state has retained substantial responsibilities in these areas.

    Table 5. Changing risk responsibility in China following liberalisation
    RiskDegree of responsibility for risk
    Collective periodCurrently
    governmentindividualsgovernmentindividuals
    Environmental
    snow disaster++++++++++
    animal disease+++++-++
    predation+++++-+++++
    Economic
    animal theft--+++++
    market theft--+++++
    Social
    illness++++++++++
    accident++++++++++

    Changing macro-economic conditions also alter the risk calculus. In Mongolia and Kyrgyzstan, the events of 1989 led to the loss of markets for livestock products in the Soviet Union, and as a result to important changes in the economic structure of the pastoral economy. Kyrgyzstan has had to shift from meat to wool sheep production to meet new markets. In Mongolia, a combination of high prices for cashmere and mild winters has since the early 1990s encouraged herders to increase their holdings of cashmere goats in their flocks relative to sheep. Both these changes have led to different patterns of herding risk

    The pattern of risks is also affected by environmental changes. In the Chinese study area (Dari county, Qinghai province), large areas of pasture land are affected by environmental degradation, and in places further undermined by rodent damage, increasing the pressure on the remaining pasture. As a result, herders perceive that since the 1950s snow disasters have become commoner.

    6. Managing pastoral risk

    Pastoral risk management involves a four-stage planning process, each with different actors and characteristic activities:

    Stage 1. Risk reduction and risk avoidance

    This is the stage of long-term strategies, by herders and by government, to reduce vulnerability to risk. Key activities include:

    (a) Institutional development and herder organisations

    The degree to which formal and informal herder organisations operate in the three countries varies. Following the disbandment of formal collectives and cooperatives, there is an organisational vacuum in the countryside in Mongolia and Kyrgyzstan, hampering coordinated risk management by herders. In Mongolia, herders cooperate in daily activities, including risk management, through informal camp and neighbourhood groupings; but these are not recognised as economic entities under the law, and as a result have none of the legal protection or tax advantages more formal groups enjoy. The experience so far of formal groups (horshoo and campagn) has not been very encouraging.

    In Kyrgyzstan, where extended family links were an important basis for economic activities before collectivisation, there are now efforts to re-establish into individual family farms. But the formal organisational matrix in the countryside remains uncertain and changing.

    In China, following the implementation of the contract system, formal organisations have a much less important role than formerly in production and disaster response, but the role of informal institutions is less clear. In Qinghai, households still depend in the first place on other households in case of disaster. Community self-help is a tradition within the Tibetan herder community. Destitute herders can borrow or rent pasture or animals from neighbouring households. Such measures are sometimes coordinated or assisted by village or township leaders.

    In all three countries, there is a need to encourage further evolution of herder organisational structures (for example through grass-roots herder associations) which facilitate local-level collective action in pastoral economic development including risk management. Livestock marketing is one area where collective action may provide a partial solution to market failure risks.

    Formal institutions such as herder associations are, however, only one aspect of institution-building. Informal or customary institutions are as important in providing a framework for economic life in herding economies, and in the case of risk may be more important. Such informal institutions are often now analysed as social capital, defined as authority relations, relations of trust, and the consensual allocation of rights leading to the establishment of norms. Social capital is increasingly recognised as a key component of the ability of any group to pursue effective economic development. Social capital is a key determinant of the ability of a pastoral group to survive extreme risk, by facilitating collective local action.

    In all three countries, an effort was made during the socialist period to strengthen authority relations in a different form from those obtaining under the pre-existing feudal regimes, at the expense of relations of trust and freely-established norms. A deliberate attempt was made to reduce or destroy kinship relations and other types of customary social relationships as the basis of economic activity.

    An important part of the reconstruction of liberalised herding economies in the three areas will be the way new types of authority relations, trust and socially accepted norms are recreated. It is possible that this will happen partly through the creation of hybrid institutions - part customary, part formal - such as extended camps operating as micro-enterprises for hay production or milk processing for the market. It is likely that the success or failure of this reconstruction of social capital will largely determine the success of poverty-alleviation strategies and perhaps of the pastoral economy itself.

    (b) Appropriate financial institutions

    There is an urgent need for savings, credit and insurance institutions appropriate for the pastoral areas of Central Asia as a key component of risk management strategies.

    Mongolia used to have an economically successful system of insurance against animal loss as a result of risk, although in recent years only around 10 percent of animals have been insured. Animal insurance needs to be revived in a form suitable for present market conditions, and livestock insurance developed in those areas where it has not previously existed. Innovative thinking is needed to make livestock insurance attractive to herders: an example would be the payment of insurance premiums in animals. To avoid fraud in insurance claims, a system of district or township level loss certification commissions, including local officials, technicians and herder representatives, will need to be put in place.

    An alternative to insurance of individual livestock may be area-based snow or drought insurance, now receiving more attention [12].

    Essential tasks also include the development of operational rural banks, and appropriate savings mechanisms for herders, especially in the context of the need to market more livestock each autumn so that fewer need to be carried through the winter-spring pasture shortage period, and appropriate credit mechanisms which provide working capital to herders (for example, for marketing) and facilitate restocking of herders who have fallen below a viable herd size, or herders who wish to undertake livestock fattening or other livelihood diversification strategies.

    (c) Risk-avoiding herd management techniques

    Central Asian herders make strategic responses to perceived risks and detriments through their herding management practices and technology. These include:

    Choice of species herded and breed selection for survivability. Some species and varieties are more resistant than others to extreme climatic conditions (drought or snow), diseases or food shortage than others. Yaks are well adapted to high mountain conditions: they can graze short grasses; their respiratory system is adapted to high altitudes; they can walk on icy surfaces, and are less vulnerable to wolves. Yak-cattle crosses have some of the advantages of both parent. But there are trade-offs with productivity, since generally hardier animals produce less. Experiments in China and Mongolia to cross wild with domestic yaks may give interesting results in terms of risk reduction. Yaks are increasing as a proportion of the herds in some areas, such as Qinghai, as a deliberate risk reduction strategies by herders.

    Multi-species herding. Herding more than one species reduces the risks associated with any one species, but raises the costs of herding by reducing economies of scale. Multi-species herding is therefore a risk-reduction mechanism, but may achieve this at the cost of reduced productivity of the household herding enterprise. Mongolian herders argue that at least three species must be herded for effective risk reduction.

    Selection of pastures. Pasture areas have varying degrees of hazard associated with them: for example, extreme snow occurs in some types of mountain area, above a certain altitude, although in others high mountain winds clear deep snow from pastures and leave them accessible to yaks. Herders can minimise exposure to certain risks by their choice of seasonal pasture. Again, there are trade-offs with productivity, since more hazardous environments are normally less intensively used, and therefore have higher quality pasture available.

    Herd management. A wide variety of choices in styles of herd management is open to herders: at one extreme, herders can leave animals without supervision for a large part of the day, but this exposes them to predator attack or theft; close herding is labour-demanding, but allows the herder to manage the animals' intake of different types of desirable forage with good production responses; during seasonal pasture flushes, carefully managed long-distance migrations to unused pastures (the Mongolian otor) enables animals to put on weight rapidly after fodder shortage, but there is an important trade-off in labour use since it takes at least one herder away from the camp at a time when there are many other tasks to be performed.

    (d) Seasonal pasture allocation and emergency grazing reserves

    Mobility is a key risk reduction mechanism for herders, and depends on consensual allocation of seasonal pastures. Herders make their own decisions about pasture use, but there is an important role for local authorities in pasture allocation, settling disputes over pasture use, and in creating grazing reserves for exceptional situations. Such reserves may be situated on the border between different administrative areas, and can thus be used by different groups. Some such reserves already exist, or have survived since the collective period in Mongolia. A comprehensive national plan needs to be elaborated, in collaboration with local authorities and user groups.

    (e) Market development

    Herders may vary their market involvement in function of perceived risk. Herders specialising in production for market tend to have different species or races of animals than those with less market involvement, and their movements are determined in part by market access; these two factors make such herders more vulnerable. However, greater involvement in the cash economy may enable market oriented herders to save cash, which puts them in a better position to buy essential supplies in a crisis.

    The development of more efficient marketing of livestock and livestock products, for example through assistance to marketing cooperatives, or the organisation of livestock auctions at province or district/county level, would reduce market risks to herders, and would assist responses to other types of risk. There is a role for improved market information.

    (f) Long-term weather forecasting

    Long-term weather forecasting is already undertaken in each of the three countries with around seven days warning of serious snow disasters, and a more detailed and accurate warning with a lead time of two to three days. But transmission delays to provincial and district/county level reduces the usefulness of this. A key task is to improve the transmission times of such forecasts, and the mechanism upon which they are acted at local level.

    (g) Training

    Economic liberalisation in Mongolia and Kyrgyzstan has created a situation where there are many inexperienced herders, ignorant of basic herd management skills, and there is no framework of the sort provided by the former collectives through which such herders can learn and be supervised. In Mongolia, the situation is made worse by the substantial urban-rural migration which took place after 1990, when the urban economy contracted and inexperienced people sought a new livelihood in herding. In China, because of greater continuity, the problem is not so great.

    In all three countries, experienced herders and livestock technicians (many now in the private sector) provide a resource which can be used to train younger and less experienced herders, especially in aspects of risk avoidance and risk management. Training should include: traditional and modern weather forecasting, risk avoiding strategies and choices, preparation of animals for winter, the choice of emergency pastures, emergency livestock management, predator control, and other tasks related to risk management.

    Stage 2. Risk planning

    Risk planning includes activities which prepare the herding economy for stress periods such as winter, and for unexpected shocks. Key risk planning activities include:

    (a) Winter preparation by herders

    Winter preparation is an important activity already undertaken by herders, and includes proper animal fattening during the short summer season, accustoming animals progressively to winter cold, decisions about how many animals can be carried through winter and early spring, and which animals should be sold or slaughtered in autumn, preparation and stocking of hay and other animal feed, and reinforcement of winter shelters and other enclosures. Herders need assistance with this, and many new or young herders need training by more experienced herders.

    Direct preparation of animals for winter includes fattening them during the summer pasture flush and grazing management to maintain their fatness in the cold season; getting livestock used to the cold by a regime of reduced feeding and watering, together with mineral supplements, and exercise for the animals. This is a question of technical expertise within the community: specialist herders know the right mineral supplements and how to prepare animals for winter.

    Physical preparation of the herding system for winter has been a specific policy in China. From the 1980s onwards, the Chinese authorities started to replace the former programmes of snow disaster relief with an investment programme to prepare herders better for winter. A four point programme ('the four countermeasures') was implemented from the early 1990s which provided households with:

    The financing of this programme, which costs 20,000 yuan per family, is mixed: central and local government provide a grant of half the cost, and herders have to pay the rest. Although low-interest, long-term credit is available to poor herders for this, in fact only richer herders can afford the package, and the susceptibility of poor herders to snow risk, compared to richer ones, is increased.

    Fodder preparation by households is an important component of winter preparation. In Mongolia, haymaking by households was reduced during the collective period since the functions were taken over by specialist mechanised haymaking operations. Since liberalisation, households have started to make their own hay supplies again. Key issues are, first, the allocation of hayfields to households, and second to identify appropriate technology - especially animal powered hay mowers and rakes. Interesting experiments are being undertaken to raise the productivity of hay meadows through ice field irrigation and manuring.

    At local level, collective haymaking can benefit from the economies of scale possible during the late summer months when households are still grouped together in large camps, and a large labour force is available, before the dispersal which takes place in autumn as households move towards winter quarters.

    (b) Fodder markets and strategic fodder reserve

    The development of fodder markets will contribute to greater fodder security for herders, but fodder reserves under public control as an emergency reserve are an essential part of risk planning, although difficult to manage efficiently. The former emergency reserve in Mongolia became a general source of subsidised fodder for those who could get access. A multi-tier emergency fodder reserve system, which remains genuinely a reserve for exceptional situations and does not become a source of subsidised fodder every year, is urgently needed. This could incorporate both standing hay in emergency grazing reserves, household hay and fodder reserves, small local reserves produced through a joint activity organised by camps, cooperative groups of the lowest administrative level, and wider district/county and provincial reserves bought in by the authorities.

    (c) Better co-ordination of key risk actors at provincial and lower administrative levels

    Key risk actors include herders themselves, local officials in provincial and lower administrative levels, the technical services and civil defence. These actors need to be linked by a specific plan for large scale emergencies, with an appropriate institutional backing and enough resources for an initial rapid reaction, that can be implemented at short notice.

    In China, disaster coordination at province and county level is in the hands of a Risk Management Lead Group, headed by the deputy governor, bringing together all key players in government agencies, including the Animal Husbandry Bureaux responsible for livestock, the Poverty Alleviation Bureau responsible for poverty, and the Civil Affairs Bureau responsible for emergency relief.

    In Mongolia, action at provincial level is coordinated by the governor's office. There is a need for an operational definition of natural disasters, agreed by herders and officials, to trigger action, and a standing committee with specialist working groups on different risks, with herder representation.

    (d) Early warning

    In all three countries, there needs to be a better institutional base at province level to monitor potential emergencies, and provide early warning to herders and to provincial authorities. More accessible weather forecasting in the five to seven day range is one part of this, but the early warning system should also incorporate other sources of information, including especially information from experienced herders. The experience of drought contingency planning in some other countries may provide a useful model. Getting warnings to herders in time for reaction is a key task.

    Experienced herders have their own system of weather prediction, based on the behaviour of livestock and wild animals, and other signs. Key winter preparation decisions may be based on these predictions. This is an area where better understanding by scientists of traditional weather prediction, combined with modern weather forecasting, could perhaps produce a hybrid early warning system of greater power and discrimination than either system alone.

    Stage 3. Reacting to risk

    Key tasks once an emergency occurs include:

    (a) Co-ordinated emergency management

    The central point of administrative management of the emergency response in all three countries is the provincial government, in contact with authorities at lower levels. In major emergencies such as a serious snow disaster, a designated organisation coordinates responses by all government actors. But in the administrative structures emerging from liberalisation, there needs to be better articulation of state and private actors (including non-government organisations and formal and informal herder groupings), especially to share information, decide priorities and make decisions about specific responses. These institutional arrangements must be created and tested in advance of a crisis.

    As an example of what can be achieved, in Dari county, Qinghai, during the 1997-8 snow disaster, a county Disaster Relief Leading Group was formed early in the crisis with representatives from the county, townships and villages. Eleven disaster relief working groups were formed, including around 100 people, to coordinate and implement emergency relief.

    (b) Facilitate herder mobility and access to emergency fodder reserves/grazing

    In snow disasters and major droughts, the ability of herders to move their animals away from the crisis is even more important than at other times, but is constrained. In snow disasters, heavy machinery may be needed (usually from the army) to clear tracks. New more accessible pasture areas must be selected on a coordinated basis, transport may have to be arranged, and water and fodder provided at way points on the route. Special emergency services (veterinary, human health) may be needed in places they are not normally situated. The emergency fodder reserve needs to be opened, and delivery of emergency fodder organised. A detailed contingency plan needs to be prepared in advance to include all these activities.

    (c) Emergency services

    Disasters create special requirements for emergency health services for both people and animals, which need advance planning and training.

    (d) Emergency food distribution

    The pastoral areas of Central Asia have little experience of emergency food distribution in crises, but the situation could arise in the future in Mongolia and Kyrgyzstan, with a large number of newly poor people after economic liberalisation, and a withdrawal of the state from some of its previous social safety net commitments. The extensive experience of other countries in such programmes provides some lessons on how this could be implemented. Specific advance planning is needed.

    Stage 4. Recovering from risk

    Recovery from risk is a key process, since until the household economy has recovered it remains especially vulnerable to new risks. Important activities include:

    (a) Micro-credit for restocking

    The immediate requirement after a disaster in which large numbers of animals have been lost is for as many households as possible to restock themselves or to be restocked so they can resume a productive livelihood and not remain reliant on emergency relief. Pastoral societies in Central Asia and elsewhere have mechanisms of animal gifts, loans and other reallocations to enable destitute households to restart independent production. In pre-socialist Mongolia and parts of China, such mechanisms were supplemented and modified by the feudal and herding monastic systems which were responsible for a large proportion of the total livestock herd, and which could absorb destitute herders.

    Such customary restocking mechanisms did not survive the collectivisation of herding, and the introduction of measures through the collectives to ensure that all herding households had enough animals for efficient production. When the collectives were disbanded in Mongolia and Kyrgyzstan, and the contract system introduced in China, households were allocated animals, so most households started off under liberalisation with an independent herd, although in some cases this was too small to be fully viable. The operation of normal risk, most notably severe snowfalls, reduced some household herds to well below viability, but in the new economic system there was no provision for restocking through social security, and no appropriate credit system through the private sector.

    Restocking through micro-credit has been a successful response to this situation in other countries, and may have considerable potential. It should be considered a possible major response to pastoral poverty in central Asia, although the modalities need to be explored in detail and may differ according to local situations.

    Some interesting experience is being acquired in Mongolia of restocking poor households, through targeted and locally adapted credit in kind, in the Arkhangay project designed on the basis of an FAO TCP project, and funded by IFAD, where 400 households have so far been restocked. This experience provides a basis for developing appropriate schemes targeted to the particular conditions of other countries. This pilot project demonstrates some of the conditions for success likely to be true of other such schemes:

    (b) Alternative livelihood strategies for impoverished herders

    Not all poor herders will be able to return to full-time pastoralism immediately after a crisis. In the Arkhangay project, interesting work is being done to develop vegetable production for the local urban market by ex-herders. This and other possible ways of diversifying rural livelihoods need to be explored.

    (c) Assistance where necessary with short-term consumption needs

    Restocking and the development of alternative livelihood strategies do not solve the immediate problem of households impoverished by a crisis, which is to feed its members from day to day. Such a situation may last for months after a crisis. There may be a role for specific food-for-work or food-for-cash public works programmes as part of a wider risk management strategy.


    Notes

    1. Longworth, J. W., G. J. Williamson, 1993, China's Pastoral region: Sheep and Wool, Minority Nationalities, Rangeland Degradation and Sustainable Development. CAB International.

    2. FAO, 1997, Rural development in Pastoral Areas, Arkhangay Province, Mongolia. TCP/MON/4553. Terminal Statement Prepared for the Government of Mongolia. Rome: FAO.

    3. FAO, 1996, Trends in Pastoral Development in Central Asia (Buryat, Inner Mongolia, Kalmyk, Kazakstan, Kyrgyzstan, Mongolia). Rome: FAO.

    4. Letter of Agreement between FAO and IDS, 28 November 1996.

    5. Full details of the research and conclusions are contained in the three national reports.

    6. This literature is summarised in two recent and influential publications, on which much of the following discussion is based: Beck, Ulrich, 1992, Risk Society. London: Sage (first published in 1986 as Risikogesellschaft; and Adams, John, 1995, Risk. London: University College London Press.

    7. Templer, G., J. Swift, P. Payne, 1993, "The changing significance of risk in the Mongolian pastoral economy." Nomadic Peoples 33: 105-122.

    8. Behnke, R.H., I. Scoones, C. Kerven, eds, 1993, Range Ecology at Disequilibrium: New Models of Natural Variability and Pastoral Adaptation in African Savannas. London: ODI, IIED, Commonwealth Secretariat; I. Scoones, ed, 1996, Living with Uncertainty: New Directions in Pastoral Development in Africa. London: Intermediate Technology Publications; Ellis, J., Chuluun, T., 1993, Cross-country survey of climate, ecology and land use among Mongolian pastoralists. unpublished note, IDS: PALD project.

    9. Adams, 1995, op. cit.

    10. Potkanski, T., S. Szynkiewicz, 1993, The Social Context of Liberalisation in the Mongolian Pastoral Economy. Brighton, Institute of development Studies, Policy Alternatives for Livestock Development Research Report 4. and Cooper, L., 1995, Wealth and Poverty in the Mongolian Pastoral Economy. Brighton, Institute of Development Studies. Policy Alternatives for Livestock Development, Research Report 11.

    11. Templer, G., J. Swift, P. Payne, 1993, "The changing significance of risk in the Mongolian pastoral economy." Nomadic Peoples 33: 105-122.

    12. Peter Hazell, 1998, "Public policy and drought management in agro-pastoral systems", paper presented a the international symposium on Property Rights, Risk and Livestock Development, Feldafing, Germany, September 1998.



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