Over the past few decades a series of major economic, demographic and environmental developments have transformed Mongolia’s food security situation. Under communism, the country was more than 80% self-sufficient in terms of overall agricultural production. In the decade after the collapse of the Soviet Union in 1991, this number dropped precipitously as a result of declining subsidies, lax regulatory oversight, and, more generally, the rapid and poorly managed transition to a market economy. Additionally, beginning in the late 1990s, a multi-year period of drought and harsh winters decimated much of the country’s livestock population. Since the mid-2000s the government has been working to simultaneously boost local agricultural production and, more recently, ensure that herders and farmers operate on a sustainable, long-term basis, primarily with an eye towards feeding the local population. “I always found it strange that a country like ours, a country with vast land, more than 50m livestock and with a population of only around 3m isn’t able to supply sufficient food material for its own people,” Kh. Battulga, Mongolia’s minister of industry and agriculture, said at a public meeting in October 2012. “This is disgraceful.”
A number of issues stand in the way of Mongolia’s current drive to boost self-sufficiency. In addition to the country’s short growing season and dry climate, the sector must also contend with a handful of challenges that are relatively unique to Mongolia. In 2009, for example, around 25% of the country’s total livestock population was wiped out by a dzud, a spell of particularly cold, snowy weather that comes on with little warning. The government is currently working with herders to protect against similar losses in the future. According to a recent study carried out by the Asian Development Bank (ADB), Mongolia is particularly susceptible to climate-change-related severe weather conditions in the coming years, which represents a major challenge for the agriculture sector. Since 2011 the industry has also faced steadily increasing competition for land from the mining sector. With new discoveries of coal and metals expected to proliferate in the coming years, agriculture players have also raised concerns about Dutch disease, the economic situation in which the rapid expansion of a nascent natural resources sector leads to a decline in agricultural and industrial production.
Both the government and a wide variety of private sector players are working to overcome such issues.
Indeed, since the mid-2000s the state has invested heavily in boosting agricultural production in Mongolia with the goal of ensuring the country’s long-term food security. These efforts have had a positive impact throughout the country, resulting in a major jump in consumption of domestic meat, wheat, flour and a variety of types of vegetables over the past five years.
While Mongolia will likely continue to import many agricultural products for the foreseeable future, rising levels of self-sufficiency in at least some areas bode well for the future of the agriculture sector in particular and the country as a whole.
A Far- Reaching Impact
Imported consumer goods of all kinds – including agricultural products – are generally quite expensive in Mongolia, particularly compared to domestic production. This can be attributed primarily to Mongolia’s remote location and low-quality transport infrastructure, the latter of which has contributed to high international shipping and logistics costs. While poverty rates have dropped significantly even in the past three to four years, as of the end of 2012 more than one-quarter of the population was technically living below the poverty line, according to a late 2013 report from the World Bank. Food generally accounts for a large percentage of this low-income population’s total expenses. Additionally, nearly 30% of the population is employed in the agriculture sector in some capacity or another, primarily as herders. With these issues in mind, boosting the country’s self-sufficiency in terms of agricultural production is widely considered to be a major long-term goal, both within the government and among private sector players.
Over the past five years successive governments have had a considerable amount of success in achieving this objective. Largely as a result of three years of favourable agricultural conditions since 2010, in 2012 production had increased to the point that Mongolia was able to meet between 90% and 100% of domestic demand for meat, potatoes and wheat, and between 50% and 70% of domestic demand for vegetables and flour. In some cases – wheat production, for example – domestic production of these staples has more than doubled since the mid-2000s. As of the end of 2012 the country was around 60% self-sufficient in food in total. Pending another dzud or some other kind of adverse weather condition, this figure is expected to rise for the foreseeable future.
In the decade following the beginning of economic liberalisation in the early 1990s, the government pursued a hands-off approach to agriculture. While Ulaanbaatar introduced a variety of new agriculture-related policies and regulations over this period, implementation was left almost entirely to regional authorities in each of the country’s 21 provinces. In retrospect, this lack of centralised authority is widely considered to be one of the major causes of the decline in domestic agricultural production during this period. In an effort to militate against rising uncertainty in the market, many herders sought to maximise their livestock holdings, which eventually gave rise to many of the challenges that are currently facing the industry today, including declining quality, overgrazing, overproduction and lack of livestock management (see overview).
Since the mid-2000s the federal government has gotten more involved in regional planning and implementation. Beginning in 2009 successive governments launched several agriculture-related initiatives and policy platforms, including the State Policy on Food and Agriculture, which runs through 2020; the State Policy Towards Herders (SPTH), the first phase of which is expected to wrap up in 2015; and the Mongolian National Livestock Programme, which was launched in 2010 and is set to run through 2021.
The SPTH aims to boost this group’s income by 50% by 2015 – primarily by improving livestock quality and marketing – in addition to providing herders with better insurance and social security benefits. Similarly, the livestock programme, which was developed by the government in conjunction with the ADB, aims to introduce new technologies and methods to the sector, in line with international standards. Additionally, it includes a variety of components aimed at protecting and preserving Mongolia’s pastureland, which is increasingly threatened by mining interests. “In general the project aims to formalise Mongolia’s livestock industry,” J. Tuvshinsanaa, director of a major domestic agriculture development project sponsored by the ADB, told OBG. “This includes improving sustainability, boosting the quality of livestock-derived products and adding value all along the production chain.”
A variety of additional self-sufficiency-related programmes are currently under way in Mongolia. The government is working to expand the country’s storage capacity for agricultural products, for example. According to the Ministry of Industry and Agriculture (MIA), as of September 2013 the nation had the capacity to store around 110,000 tonnes of agricultural products, equal to only around one-quarter of the expected harvest for the year. With this in mind, new storage facilities are currently under construction throughout the country.
In November 2012 the MIA signed a deal with the government of Laos, under which Mongolia will carry out agricultural activities on 10,000 ha of rented land in the South-east Asian country. The deal, which has been in development since at least 2010, is the latest in a long line of projects carried out on a joint basis by the two countries. Mongolia will likely use the majority of the land to produce rice, which accounts for a large percentage of food imports into the nation on an annual basis. Some percentage of the land might also be used to grow redwood trees for wood production. In addition to the agriculture deal, in late 2012 Mongolia and Laos agreed to cooperate on a number of other projects, primarily in the areas of industrial production and trade.
Several international groups are involved in boosting food self-sufficiency in Mongolia. The Global Agriculture and Food Security Programme, established by the G-20 group of countries in 2009, is currently in the midst of implementing a programme in Mongolia that aims to improve the links between farmers and the market, boost the quality of Mongolian livestock and provide general technical assistance to the domestic industry. In mid-July 2013 the EU’s commissioner for agriculture and rural development visited the country to discuss potential future EU-Mongolia cooperation in these areas. “A wide variety of international organisations are involved in the agriculture sector here,” Tuvshinsanaa told OBG.
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