SD:TCP/MON/4553 TECHNICAL COOPERATION PROGRAMME RURAL DEVELOPMENT IN PASTORAL AREAS, ARHANGAY PROVINCE MONGOLIA Terminal Statement the Food and Agriculture Organization of the United Nations Rome, 1998 |
SD:TCP/MON/4553 TECHNICAL COOPERATION PROGRAMME RURAL DEVELOPMENT IN PASTORAL AREAS, ARHANGAY PROVINCE MONGOLIA Terminal Statement the Food and Agriculture Organization of the United Nations Rome, 1998 |
Appendix DOCUMENTS PREPARED DURING THE PROJECT
The movement towards democracy in Mongolia has been accompanied by the liberalization of the country's centrally-planned economy, a process that has accelerated since 1990 with the privatization of important areas of the national economy. Chief among these is pastoral livestock production and marketing, the mainstay of the rural economy and, through downstream processing industries, of much of the urban economy as well. However, the rapid emergence of new types of urban and rural poverty has been an unwelcome consequence of these developments. By the mid-1990s, more than a quarter of the national population was estimated to be in a state of poverty.
Rural poverty is particularly difficult to deal with in a lightly-settled country, where more than a third of the population of 2.2 million is nomadic and directly dependent on natural pastures and mobile livestock rearing. In rural areas, between a quarter and half of all households are now poor and a significant proportion of these are female-headed. Although poverty is officially defined in terms of income, herders themselves, when interviewed using participatory rural appraisal (PRA) techniques, define poverty as having a herd too small to provide the household with a minimum standard of living, through both direct consumption and the sale of animal products. People survive in these circumstances with the help of the existing social security safety net, especially pensions, and support from other rural households.
Rural poverty has grown rapidly since 1990 for four main reasons. When the assets of the former livestock cooperatives (negdels) were divided the livestock was distributed unequally; many households moved to the countryside after economic liberalization in the unsuccessful search for a livelihood; many households, especially those of young or new herders, lack basic herding skills, as a result of which their herds have diminished to below the poverty level; and the reduction of state support in emergencies, especially the reduction of the state fodder fund, has left households more exposed to natural disasters, especially to dzuud or freezing snow cover. These factors have quickly led to substantial variations in livestock holdings among households.
Following discussions with donors, Mongolia launched a national Poverty Alleviation Programme in 1993. This programme set up local development funds in support of local income-generating activities, but the impact of these on the herding economy (as opposed to the urban poor in aimag or sum centres) has been limited. The work of the Ministry of Food and Agriculture has not so far been specifically targeted at problems of rural poverty.
FAO participated in the drafting of the national poverty alleviation programme and, in particular, collaborated with the International Fund for Agricultural Development (IFAD) in preparing an experimental programme, funded through the Technical Cooperation Programme, to fight rural poverty in one province (Arhangay). FAO's role in this process was to test on a pilot basis some development options that were urgently needed to tackle the emerging poverty in rural areas and to prepare the implementation of the IFAD "Arhangay Livestock Development Programme (ALDP)".
The Project Agreement was signed by FAO on 7 March 1995 and by the Government of Mongolia on 1 May 1995. The FAO contribution was $US 301 000, subsequently revised to $US 314 000. The project was executed through the Ministry of Food and Agriculture (MOFA), which, along with the Provincial Government of Arhangay, contributed staff time, office space and logistic support (including transport) at national and sub-national levels. It also covered the costs of normal operating expenses related to the participation of its staff in the project activities. The implementation of field activities started in July 1995 and was scheduled to last 14 months, although this was later extended to 20 months, until December 1996.
The main project objectives were to provide the Arhangay Livestock Development Project with comprehensive socio-economic baseline data, to identify suitable strategies for poverty alleviation and to strengthen local institutions.
With the dissolution of the negdels, there were fears of an institutional vacuum in the countryside. Project research showed that these were partly unfounded, mainly because of the flexibility of formal government structures and of customary herder institutions, which moved to fill the gap. Nevertheless, the institutional situation in the countryside is not satisfactory, with new tasks (such as livestock marketing) emerging without appropriate institutional backing, and old tasks (such as service delivery) persisting without adequate institutional support.
Three types of institution operate at local level: state organizations such as sum and bag administrations and government technical departments; economic organizations such as livestock companies, cooperatives and small private enterprises; and informal customary organizations such as camps (khot ail) and neighbourhood groupings (neg nutginkhan).
Large companies had been seen as potential successors to the negdels in rural economic management, but it was concluded that their potential had not been realized. Most companies retained a style of management that was more suitable to central planning and showed little sign of innovation. Few of the many smaller enterprises formed after liberalization were economically viable, and few were directly involved with rural production.
Customary informal organizations survived better. The project surveyed and described a large number of camps and neighbourhood groups. During the collective period, traditional kin-based camps were replaced by specialized production units of one or two households. Since liberalization, larger traditional camps have formed once more. In the project area, camps are generally composed of two to seven households (occasionally of more than ten), with accepted leaders and some shared livestock production (and, in some cases, marketing) activities. Some camps are composed of closely related kin groups, while others have a more open composition. Camp composition can be flexible, with households arriving, leaving and choosing to move at different times. As the first level of economic cooperation above that of the household, and with considerable potential for providing economies of scale and mutual support, camps have an important potential as an institutional support to rural economic development and poverty alleviation activities.
Several camps together make up a neighbourhood group. Neighbourhood groups used to be quite formal, with shared activities including decisions about pasture use and joint trading. These activities ceased with collectivization but are now being reestablished, especially in the mountain areas. At its simplest, and most common, a neighbourhood group is an unstructured collection of camps in a single valley, or along the same stretch of river, which make decisions about pasture use in the light of the expected decisions of other camps in the same area. Neighbourhood groups are not formal enough in most cases to provide institutional mediation in poverty alleviation, although it is likely that they are evolving rapidly in ways which are not entirely predictable. They may have a role to play in future natural resource management and use.
The bag, or sub-district, has emerged since liberalization as a key level of local administration, with an important role in economic and other activities. Bags in Arhangay contain 150-250 households, and are of widely varying size. Each bag has a leader elected for four years, as well as a doctor and a veterinarian. Bag leaders are responsible for general administrative affairs and tax collection, as well as overseeing pastoral activities which require coordination, such as seasonal changes in pasture use and hay cutting, and settling conflicts about natural resource use. The bag administration was an effective institutional support for the restocking exercise described below and is likely to play a central role in land tenure reforms as pasture leasing becomes more widespread.
The project clarified the present constitutional position regarding pasture and hay field tenure and, after detailed discussions with herders and officials and within existing legal provisions, prepared a draft pro forma lease for hay fields for sum governors to use. These materials were made available to aimag and sum administration.
The project was asked to carry out a small-scale restocking experiment in order to provide guidance for the larger-scale restocking envisaged by IFAD. As a result, a three-stage approach was adopted. First, a rapid appraisal was undertaken of herders' views of poverty and its solution, as well as of the official poverty statistics. This established that herders considered poverty to be the result of inadequate household herds; that the threshold of poverty was situated around 20 bod units (1 bod = 1 horse or bovine, or 0.8 camels, or 8 sheep/goats), for an average household of 4.3 people; that restocking was an appropriate solution, but that stringent criteria were necessary in the selection of beneficiaries. It was also established that official, income-based, poverty lists were a reasonably accurate reflection of herders' perceptions as long as the official list had been publicly discussed at the bag assembly, as is often, but not always, the case.
The project then designed an experimental restocking programme in one sum, Tuvshruuleh. Based on herders' advice, the following criteria were adopted in the selection of beneficiary households: they would live away from the sum centre, and be committed to herding as their main activity; they would belong to a viable camp, whose other members would undertake to provide help and whose leader would guarantee the character, skills and abilities of the candidate; they would have enough labour to care adequately for their new herd; they would fall within a range of livestock holdings fixed initially at 10-25 bod; finally, they would have proven herding skills and experience and a sustained commitment to herding.
Twenty five households meeting these criteria in Tuvshruuleh sum were chosen through a participatory process in which the bag assembly and bag leader played important roles. Animals were bought locally by the TCP team, and individual household packages were worked out with each household. Ownership of the animals was given to the household head, whether male or female, with clear rules about succession in case of divorce or death. Restocked animals were insured against accidental loss, with the premium forming part of the capital to be repaid. Households were given a year of grace, with repayment at a modest interest rate, based on that already decided by the IFAD project, over a period of three years.
The restocking exercise took place from April to June 1996, and was followed in August 1996 by a preliminary evaluation, together with a training session in monitoring and evaluation so that the local TCP team would be able to continue to monitor the progress of the restocked households. Although it was too early to make a final judgement, the preliminary evaluation showed that the process of restocking had generally gone according to plan, that restocked households were happy with the process and that poor households which were not restocked accepted that their turn would come. Several important issues for future restocking were raised and settled with the aimag authorities.
The phenomenon of risk as perceived by the herders' community and potential risk management strategies were investigated and documented. The Mongolian herding economy is exposed to a range of hazards which can rapidly destroy the livelihoods of many herders. Natural hazards include: snow storms, either short intense storms with high winds which drive animals long distances from their herders, or deep frozen snow which prevents animals from reaching the grass beneath; drought, either in late spring and early summer, coinciding with the period of new pasture growth, or in mid-summer; animal disease, a renewed risk following the reduction in veterinary services as a result of liberalization; predation, a renewed risk because of a reduction in predator, especially wolf, control as a result of the dissolution of the livestock collectives; and woodland and open field fire.
In addition to natural hazards, herders face new types of economic hazard following liberalization, above all in market changes and failures and in socially determined entitlements, especially pensions.
The project investigated the impact of these changing risks, and particularly the herders' perceptions of such risks, focusing on the situation in Arhangay province. The existing provincial mechanism for responding to such risks was also described and assessed, and recommendations for improved future management of natural risks were discussed with the provincial administration. These recommendations included: the creation of adequate hay reserves at camp and bag level and a functioning emergency fodder reserve at aimag level; an increase in the area devoted to hay fields by creating tenure security through an improved leasehold system; expanded livestock insurance; camp and bag level grazing reserves; inter-sum emergency grazing reserves; and the creation of aimag herd recovery funds to hasten herd reconstitution after natural disaster in less affected areas.
Rural poverty alleviation requires a broadening of employment opportunities to provide alternatives to herding. This is especially important for people who lack the essential skills and social networks to make a success of herding, for example the substantial number of recent urban-rural migrants who now live at aimag, sum and bag centres.
The project commissioned Mongolian Consulting Services Ltd to conduct a survey of small enterprises in Arhangay, and to make recommendations for their expansion.
Arkhangay has abundant raw materials for the development of small enterprises for primary processing, storage and distribution. These include livestock products (milk, meat, wool, yak down and cashmere, hides and skins), agricultural products (especially vegetables), wood, wild berries and medicinal plants. In addition, there is potential for the development of bakeries, small flour mills and other simple consumer goods production and handicraft manufacture. Arhangay dairy products have a national reputation, which is a valuable comparative advantage, especially in combination with relatively easy access (by Mongolian standards) to Ulaanbaatar.
However, there remain many constraints to the development of small private enterprises. There is limited access to government or private investment and credit, and a lack of money circulating in the countryside; barter transactions have been the norm for several years. There is still a suspicious attitude on the part of many administrators to private enterprise and trading, although such attitudes have started to change since the change of government in mid-1996. Policies to encourage private enterprise are still in their infancy. There is limited knowledge about business methods and opportunities, and market information is lacking. There is no well-trained workforce for modern light industry. Infrastructures within the aimag, and between Tsetserleg and the rest of the country, remain poor. Consumers in the aimag are spread thinly over a large area and have little purchasing power.
The report on small enterprises identified detailed business plans for small enterprises in six sample sums which could, with appropriate investment, generate new employment. These enterprises were selected on the basis of employment generation opportunities, potential markets, economic viability, the availability of inputs and raw materials and the quality of management available. The enterprises, which would be eligible for assistance with capital and working finance through the Local Development Fund of the national Poverty Alleviation Programme, include the processing of livestock products and natural resources, wood processing, boot and felt making, garment making, livestock equipment and accessories, vegetable production, bakeries, the collection of berries and pine nuts, jam making and services.
Discussions were held with the aimag administration about the requirements of small enterprises and how their needs might be met.
A central place in a poverty alleviation strategy for an extensive pastoral area like Arhangay must be reserved for measures to raise the productivity of the pastoral economy. The project reviewed the extensive Mongolian literature on this subject and undertook some experimental work including, at the request of the Mongolian authorities, work on vegetable production. The following conclusions were reached.
There is a need to protect pasture land from alienation and its misuse for other, frequently less productive, tasks. Cropping land is often carelessly used, leading to permanent loss of productivity. Livestock market trekking routes pose particular problems of sustainable management. The sum and aimag authorities have special responsibilities in this respect.
There is little indisputable evidence of general pasture degradation in Arhangay. However, there are signs of overgrazing around settled areas such as sum centres and along main roads and livestock trekking routes, while vehicle tracks have created some gully erosion in all sums. The answer to these problems lies in better management of the natural pastures, including seasonal and longer-term resting from grazing, and encouragement to herders to maintain season rotational grazing patterns. The potential means to do this include: the allocation of pasture leases under existing legislation, specifying certain seasonal patterns of use; the fixing of variable grazing fees depending on pasture quality and location; and the distribution of services such as markets, schools, clinics and livestock services, which have an important impact on herders' movement patterns.
There is a substantial amount of underused high mountain pasture in Arhangay. Herders need incentives to use these pastures, because of their remote location. Such incentives could include advantageous fees and leases and better distribution of services.
Since liberalization, the grazing areas formerly reserved for emergencies have been progressively abandoned. However, they are still urgently needed during severe winters and spring droughts, and should be reinstated and managed as part of an aimag risk management strategy.
The degree of coverage of animal fodder requirements has decreased substantially since 1988, although there has been a small recovery in hay making; hay now accounts for over 90 percent of total fodder. Increased private-sector hay making will require herders to: cut all potential hay areas, especially woodlands, flood meadows and mountain meadows; create additional hay fields by removing rocks, tree stumps and other obstacles to cutting; create protected (fenced) hay fields near winter shelters; improve the yield of existing hay fields by the use of natural manure and reseeding; irrigate hay fields, where possible, by diverting streams or manipulating ice cover; make greater use of animal-drawn hay mowers and rakes.
Although yak are important animals in mountain environments such as Arhangay, yak husbandry is less well known than that of other animals. Yak in Arhangay have high calf mortality, which seems to be caused, at least in part, by heavy milking of their mothers for butter making. Proposals were made for improved management of yak reproduction to reduce this problem.
Herders have responded to changes in relative prices by increasing cashmere production, in part by increased cross-breeding. This has reduced cashmere quality. Proposals were made for a strategy to be led by the specialist research stations to counter this trend.
Several other activities were undertaken through research contracts with the High Mountain Research Station in Arhangay. These included work on a strategy for livestock genetic improvement, work on the simple mechanical processing of milk at camp level and work on the use of animal-drawn hay mowers.
The experimental work on vegetable production involved training in vegetable production and experimentation with new techniques. Members of 26 poor households were trained in vegetable growing techniques and equipped with tools and seeds; leaflets on vegetable growing and storage were produced and distributed; three tons of selected potato seed for multiplication, as well as varieties of Chinese cabbage, radish, open field cucumber, tomatoes, Chinese onion and bean seeds were distributed for local trials; and experiments were made with the use of clear polythene for protection from late frost.
Despite severe spring drought, these experiments achieved some of their objectives. Potato multiplication was partially successful, and Chinese onion very successful. All participants expressed the wish to continue growing vegetables, and several households who had heard of the trials asked to be included the following year.
The format adopted by the project of commissioning work principally from Mongolian scientists and consulting companies served the objective of strengthening some of the institutions directly involved in development in Arhangay. In particular, the main rural development research station for the ecological zone, the High Mountain Research Station, was commissioned to undertake several of the research tasks mentioned above. It was also equipped with two computers and printers, and computer training of its staff was undertaken in word processing and the use of spreadsheets.
The entire restocking test phase was implemented as a closely supervised learning-by-doing exercise. It was conducted by the local restocking team, established for the purpose of guiding the IFAD project activities on restocking at a later stage. This on-the-job training enabled the team to design and experience all phases of an in-kind restocking approach, thus preparing its members for their future tasks in the context of the ALDP.
Several other training courses were held in PRA techniques for research, planning, monitoring and evaluation. These included the training of sum officials in the use of PRA for poverty assessment (September 1995); the training of sum officials in poverty alleviation activities (August 1995); the training of TCP/ALDP project officials and aimag/sum officials in participatory monitoring and evaluation (May 1996); and the training of sum officials and project team members in participatory evaluation (August 1996). Training courses were also provided for local entrepreneurs in the management of small and medium-sized enterprises (July 1996); for poor households in vegetable production (May 1996); for sum livestock inspectors in livestock genetic improvement (May 1996); for research scientists at High Mountain Research Station in the use of computers (August 1996); and for aimag and sum officials in the management of restocking programmes (October 1996).
A study tour for four project staff members was implemented in spring 1997 to visit other projects and research institutions in China in order to exchange views and experiences on approaches to poverty alleviation and pastoral development issues.
The programme provided useful new information, identified a coherent rural poverty alleviation strategy and strengthened local institutions in Arhangay. The reports listed in the Appendix, most of which were in both English and Mongolian, were made available and discussed with Mongolian officials and researchers, and the ALDP design team. A policy workshop was held early in the TCP process (in August 1995), with the provincial deputy governor, leading officials, and a majority of sum governors, to discuss key issues in poverty alleviation.
TCP project recommendations have been incorporated into the design of the ALDP, and provincial policies on poverty alleviation. However, discussions regarding the results of the project, with the director of the National Poverty Alleviation Programme and key members of parliament after the June 1996 elections, suggest that the conclusions have a wider relevance.
The research and pilot activities of the TCP project focused on poverty alleviation in Arhangay. However, there are great similarities between Arhangay and the rest of rural Mongolia. The project conclusions thus provide important elements for a national rural poverty alleviation programme.
The main recommendation, discussed with the national officials responsible for poverty alleviation, is that the strategy proposed for Arhangay be scaled up, with appropriate adaptation, to form the core of a national rural poverty alleviation strategy.
Animals are the essential capital of a herding economy. Households without them, or with too few for viability, cannot be independent herders, and have to adopt other livelihood strategies. The first priority of an anti-poverty strategy is to help capable poor households acquire enough animals to make them viable and efficient producers. This can best be achieved by restocking poor households to a level that is above the viability threshold.
To reduce rural poverty, the herding economy needs to increase its productivity, so that livestock, animal feed and human labour are combined more efficiently in the production process.
An essential part of improving livestock productivity over the longer term depends on clarifying and strengthening the tenure rights of herders over the pasture and other land they use. This would reduce conflicts, increase security of tenure and provide herders with an incentive to manage the land sustainably.
The herding economy is vulnerable to a range of natural and other risks, including dzuud, drought, animal disease and predation. Such calamities reduce viable households to poverty. Without a strategy to manage and control such risk, the efforts of a poverty alleviation strategy will be periodically undermined and widespread rural poverty will reappear.
Not all poor rural households are suitable for herding. Many, including a large number of those who have only recently returned to the countryside and now live at aimag, sum or bag centres, do not have the experience, commitment or skills to be efficient herders. For these people, alternative economic activities, such as vegetable production or small enterprise development, must be found.
Several other important components of a rural poverty alleviation strategy were identified by the project, but were not researched or experimented in depth and thus need further work in the development of a national strategy. These include: small enterprises and the local processing of rural products; the development of markets; forms of credit other than restocking; the role of local formal and informal organizations of herders and farmers; national social security and safety net provisions; the provision of services such as human and animal health, and education; and macro-economic policies concerning poverty reduction.
Local government and NGOs. Batbuyan, 1995.
Territorial organization of Mongolian pastoral livestock husbandry in the transition to a market economy. Batbuyan, 1996.
Legal principles for herders to possess pastures and hay fields. Dugerjav, 1996.
Outline contract for hay-field leasing. Dugerjav, 1996.
A rural poverty strategy for Arhangay: Report on fieldwork, summer 1995. J.J. Swift, 1995.
Poverty perceptions among rural herders and sum inhabitants, Chuluut sum. R. Ebdon and S. Baas, 1995.
Poverty calculation and measurement by aimag and sum administration (in Mongolian only). Namsrai, 1995.
Participatory monitoring and evaluation workshop, Tuvshruuleh sum, Arhangay aimag, 10-18 April 1996. R. Ebdon, 1996.
A rural poverty strategy for Arhangay: Report on fieldwork. J.J. Swift, 1995.
Restocking poor households: an experiment in Arhangay province. J.J. Swift, 1996.
Report on restocking. Tsedendamba et al, 1996.
Three-way contract for restocked households (in Mongolian only). Tsedendamba, 1996.
FAO pilot restocking project evaluation report. Centre for Social Development, Institute for Administration Management and Development, Ulaanbaatar, with S. Baas, 1996.
Risk management. M. Fernandez-Gimenez, 1995.
Risk management strategy in the pastoral economy: Issues and options for Arhangay aimag. B. Erdenebaatar, 1996.
Small enterprise development, economic diversification and markets. Mongolian Consulting Services Ltd, 1995.
Report of training "Management of small and medium enterprises". A. Bakey and R. Orsoo, 1996.
Management of small and medium sized enterprises: Course curriculum. A. Bakey and R. Orsoo, 1996.
Pastoral development in Arhangay province: Report of a technical support mission. J.M. Suttie, 1995.
Report on technical support mission, livestock development. J. Maki-Hokkonen, 1995.
Report on vegetable production, Arhangay province. N. Guyer and Purevsuren, 1995.
Grazing management. M. Fernandez-Gimenez, 1995.
The management of grazing and livestock in the mountain and steppe zones of Arhangay province. B. Erdenebaatar, 1996.
Report of the research on grazing land improvement in Chuluut sum, Arhangay aimag. S. Tserendash, 1996.
Training in implementing a strategy for livestock genetic improvement. Daghbiikhorol, 1996.
Final report on khot-ail level milk processing. Daghbiikhorol, 1996.
Report on an experiment in improved hay cutting. Daghbiikhorol, 1996.
Report on vegetable production development in Arhangay aimag. S. Purevsuren, 1996.
Report of PRA workshop on poverty alleviation, Chuluut sum, Arhangay aimag. R. Ebdon, S. Baas and Centre for Social Development staff, 1995.
Report on workshop on livestock production and poverty alleviation, Tsetserleg, Arhangay, 24 August 1995.
Draft curriculum: Sum monitoring and evaluation training workshop. Centre for Social Development, Institute for Administration Management and Development, Ulaanbaatar, 1996.
Report on the study tour by Mongolian agricultural specialists to the People's Republic of China, 31 March to 19 April 1997. N. Maam, T. Tsedendamba, V. Davgiihorol and A. Shiilegdamba, 1997.