An Empirical Study On The Evaluation And Management Of The Risk Of Pastoral Animal Husbandry In Mongolia

Animal husbandry is one of the most important economic sectors In Mongolia,which accounts for 9.3 percent of GDP and 30 percent of the total labor force.Mongolia has been engaging with pastoral animal husbandry throughout its long history,so pastoral animal husbandry in this area is often affected by natural disasters,epidemic diseases,market fluctuations,and policy failure.In particular,the frequency of natural disasters has accelerated,and the losses caused by natural disasters tend to be increasing since 2000.These risks have a huge negative impact on animal husbandry production and the livelihood of herders.Since Mongolian animal husbandry has always been maintained in a traditional nomadic way,it faces many risks.However,the risk management system of pastoral nomadic animal husbandry has not yet been established.Therefore,accurate identification and effective management of animal husbandry risks are of great significance to ensuring the livelihood of herders and even to the sustainable and high-quality development of grassland animal husbandry.The main innovations of this study are as follows:(1)Innovation in a research perspective.Taking the risk management of grassland animal husbandry in Mongolia as the starting point,it tries to identify and assess the risks of pastoral animal husbandry management and determines the problems existing in the risk management tools.(2)Innovation in research content.It effectively identified the characteristics of pastoral animal husbandry in Mongolia,the types of risks faced by pastoral animal husbandry,their characteristics,causes,impacts,and risk management tools.(3)Innovation in research methods.Using an econometric model,statistical grouping method and comprehensive index method,the natural and market risks to pastoral animal husbandry were assessed.The damage caused by falling prices was determined by estimating the probability of falling prices of livestock products.This research has certain theoretical and practical significance for analyzing and evaluating the risk of pastoral animal husbandry.First,based on the official statistics given by the National Statistical Office of Mongolia,this paper analyzes the characteristics and current situation of pastoral animal husbandry;secondly,based on types of the risks faced by pastoral animal husbandry,the basic characteristics and causes of these risks are described in detail.This paper further uses the mixed effect multi-level regression model,to evaluate the natural risk of grassland animal husbandry in Mongolia,at the same time,it also evaluates the market risk,policy risk,and disease risk in detail.To assess the volatility of prices of livestock products and live animals,i.e.,price volatility,coefficient of variation for price levels,adjusted coefficient of variation for the same price level,the standard deviation of log price differences,and computed tstatistics were used.The losses due to the falling prices of livestock products such as milk,meat,cashmere,hides,and skins are estimated at real prices,i.e.,constant prices.Finally,based on sorting out the current situation of the implementation of livestock index insurance,using the field survey data of herders,the logistic model is used to empirically analyze the herders’ willingness to purchase livestock index insurance and its factors.Moreover,the impact of the economic incentives,i.e.,subsidies,received by herders as well as the effects of the use of weather information through SMS by the herder households were studied based on survey interviews.The research of this paper mainly draws the following conclusions:The common risks faced by pastoral animal husbandry were natural risk,price risk,policy risk,and disease risk.In the aspect of natural risk,the degree of natural risks to animal husbandry is different in the different natural regions,i.e.,High Mountain,Forest Steppe,Steppe,Desert Steppe,and Desert.Among them,the highest risk area was the Grassland Steppe,and the area with the lowest risk was the Forest Steppe.In terms of price risk,as the source of market risk in nomadic animal husbandry,the prices and variances of all livestock products and live animals in Mongolia were highly volatile or high-risk within and between different periods,and the animal products with the highest risk in terms of the price were sheepskin and cashmere.In terms of policy risks,there are sufficient policies and plans to reduce and prevent risks in animal husbandry,but these policies and plans overlapped,and it was not clear whether they are implemented properly or not as plans and policies are always changed due to political instability,which usually results in the policy risks in the sector.Regarding disease risk,since livestock in Mongolia is private,i.e.,own property,comprehensive policies,and measures to be implemented in the livestock sector were left behind,and herders are almost solely responsible for the health of their livestock.But due to the lack of expertise and knowledge important for livestock health management,herders are not able to maintain the health of their livestock on their own.This paper uses the field survey data of 200 herders to identify the influencing factors of the purchasing behavior of livestock index insurance.The results suggest that the influencing factors on purchasing insurance were the education level of the head of household,number of livestock,cost of feeds,and location which have significant effects on the herder household’s risk management attitude.At the same time,100 herders were separately interviewed to investigate the use of weather information system through SMS and the effects of economic incentives and obtained reasonable results.Although the herders tried their best to obtain information about the weather and grassland conditions in advance,it was difficult to obtain information by SMS or communication networking due to the longdistance nomadism,especially in summer and autumn.Besides,the share of gross subsidies in total income increases as the increase in the number of livestock.Based on the above research conclusions and China’s animal husbandry risk management policies and experience,this paper puts forward the following policy suggestions: First,improve the livestock insurance awareness of herdsmen,mobilize the enthusiasm for insurance,and make more livestock join the insurance;Second,establish a system for the delivery of livestock raw materials and products to end users without the need for multiple intermediaries,and focus on increasing pastoralists’ share in the value chain;Third,since herders far from urban areas have limited access to weather information,it is necessary to expand the service scope of operators and increase access to bag-level weather information;Fourth,change the system of free pastures and introduce the pasture use fee,and use the collected pasture use fee for pasture improvement.