Herders’ preference for different grassland management policies in Mongolia

Enkh-Orchlon Lkhagvadorj1,3, Duinkherjav Bukhbat2, Lkhagvadorj Dorjburegdaa3, Jeff Bennett1

1. Australina National University,

2. University of Queensland3. Mongolian University of Life Sciences

Australian Rangelands Conference, Canberra, 2-5 September 2019

Introduction

Methodology

Results

Conclusion

Context

BackgroundContext

• 10.6% of GDP• 8.4% of income from exports• 30% of total labor force• 75% of rural population

employed in livestock sector• 90% of income from livestock

products (Dorjburegdaa 2013)• Types of animals: sheep, goat,

cattle and yak, horse and camel

Source: author

MotivationContext

• 66,4 million livestock as of 2018

• 70% of the grassland is degraded at certain levels

• No grassland management policy

92.90

25.85

25.53

44.02

66.22

20.00

25.00

30.00

35.00

40.00

45.00

50.00

55.00

60.00

65.00

70.00

20

30

40

50

60

70

80

90

100

Percentage of households with livestock Total number of livestock

Source: depicted using data from the National Statistics Office of Mongolia

QuestionsContext

What are herders’ preferences across different policy instruments?

Methodology

Choice modelling method was used to reveal the preferences of herders to different livestock reducing policies

The contingent behaviour method was used to estimate herders` stock equivalent responses under alternative policy settings

Choice modellingMethodology

7 aimags1,2 chosen with the most grassland degradation

Focus groups held in 6 soums3, survey in 10 soums

6 attributes identified for the Choice sets

1. Aimag is the first-level administrative geographic division. There are 21 aimags in Mongolia2. The study aimags are Arkhangai, Bulgan, Dundgovi, Khentii, Selenge, Sukhbaatar, Tuv3. Soum is the second-level administrative division after aimag

Sample statisticsMethodology

Sample herders

Average age 45

Higher education 3%

Average family size 4

Average number of livestock 640

Herders with a loan 75%

Sample statisticsMethodology

Attributes Current level Alternatives

Market expansion (%) 0 10, 20, 30

Infrastructure and communication (%)

0 5, 10, 15

Loan size (million MNT) 1

5 10, 15, 20

Monthly interest rate (%)

2.5 0.66, 1, 1.5

Livestock rights (% of the current herd)

100 60, 80, 90

Livestock tax (MNT) 1 0 1000, 3000, 5000

1. MNT1000 = AUD0.56

Herders` survey choice setMethodology

Attributes Policy outcomesLevels

Option 1 Option 2 Option 3

Demand stimulation Livestock products price increase 0 0% 30%

Infrastructure and communication

Production cost decrease 0 15% 0%

Loan size Loan amount increase 5,000,000 10,000,000 20,000,000

Loan interest rate Loan interest rate decrease 2.5% 0.66% 1%

Livestock rightsTotal livestock number

decrease up to the following quota

100% 60% 90%

Livestock tax Livestock tax per sheep head 0 5000 3000

I like this option the most

Residents` survey contingent behaviour analysisMethodology

For the option you chose would you:a. Decrease the number of animalsb. Increase the number of animalsc. Stay the same

If a or b:How much would you change the number of animals?

When the Government implements the policy you have chosen (Option 2 or 3) do you understand that you have to buy more rights to own more or same number of livestock you own now?

YesNo

Random parameter modelResults

Variables RPLFixed coefficients

education 1.849* (1.057)nchild 0.191 (0.118)employment 1.505 (0.916)asc 2.013*** (0.340)

Random coefficientsmarket 0.108*** (0.0113)infrastructure 0.0268* (0.0146)loansize -0.0246 (0.0184)interest -1.168*** (0.159)quota 0.0433*** (0.00656)tax -0.00194*** (0.00012)

Standard deviationsmarket -0.0393** (0.0179)infrastructure -0.0194 (0.0225)loansize -0.0568* (0.0298)Interest 0.886*** (0.176)Quota -0.0528*** (0.00925)tax -0.000743*** (0.0000937)Log likelihood -823.64941LR chi2 193.88AIC 1679.3BIC 1782.9N 4806

Standard errors in parenthesis. *, **, *** refers to statistically significant at 10%, 5%, 1% significance level respectively

WTP estimatesResults

Attributes RPL (MNT livestock tax per se)

Market 55

Infrastructure 13

Loansize Not significant

Interest 601

Quota 22

Contingent behaviour analysisResults

Variablesmarket -0.0657infrastructure -0.9loansize 1.102interest -25.79***quota 2.419***tax -0.0186***age -4.452***education 87.33***nchild 26.75***livestock 0.961***loan 90.11***resourceincome -68.02*adherding 46.58**_cons 45.48R2 0.868N 1602

Conclusion

In the choice modelling approach demand stipulation,infrastructure improvement, interest rate, livestockrights and livestock tax were found to have an impacton their decision to choose a policy alternative.

In the contingent behaviour analysis interest rate,livestock rights and livestock tax were found to beeffective tools in controlling the livestock numbers.

The policy that is most preferred by the herders doesnot necessarily reduce the number of animals.

Thank you for your attention