Interview: Sh. Gungaadorj
What can Mongolia do to make more effective use of its sizeable livestock population?
SH. GUNGAADORJ: Owing to the long tradition of nomadic lifestyles in Mongolia, livestock has been and continues to be a fundamental source of income for the population. Despite growing challenges such as mass migration to urban areas, Mongolia still maintains an abundant supply of cattle, goats, sheep and horses: more than 60m in 2014 compared to around 25m in 1990. That said, we need to concentrate on developing the sector more sustainably to promote value-added production rather than simply the sheer quantity of livestock. For example, we ought to improve the quality of our animals. For instance, goats damage roots when grazing, making it difficult to sustain a very large population of them over an extended period of time. While more goats and cashmere would in theory create more wealth, a huge increase of goats would not be sustainable in the long term. Instead, we should focus on breeding the best goats and surrounding them with favourable conditions so that each one will produce more cashmere – rather than 1.5 kg of wool each, they would produce up to 25 kg. This would be attainable if the government and herders were to sit together to come up with a well designed plan for implementation; but to do so herders must have effective outlets for expressing their views, such as unions and associations.
How can the agricultural sector leverage its strengths to export more to the wider region?
GUNGAADORJ: To boost the sector’s competitiveness, we need to introduce world-class standards across the sector, from cashmere production and meat packaging to dairy processing. Indeed, meat exports could be a major opportunity for the economy: If factories were to develop products specifically designed for other countries, we could begin exporting increased quantities of our meat. Already we are seeing more demand from Russia following the visit by President Vladimir Putin and agreements signed to expand commodity trade. Further development could allow the sector to export more to Europe, which would in turn create more jobs for Mongolians in the agricultural sector.
What are the most pressing challenges facing the sector in the coming years, and to what extent can the government do more to provide support?
GUNGAADORJ: The agricultural sector has made great progress since the early 1990s, especially in terms of wheat and flour production. Since the introduction of the Atar-3 project in 2008, wheat production in particular has grown significantly. At 500,000 tonnes, of which 460,000 tonnes were wheat, the overall agricultural harvest in 2014 was the largest since 1990. That said, a number of challenges are hindering further development of the sector. For example, more severe weather patterns could pose a significant threat to future gains. The sector is also dominated by outdated Russian-made machines, which account for roughly 70-80% of all equipment used, while a growing number of people are leaving farming jobs in the countryside, for what they perceive as better lives in urban areas.
Individual farmers have employed a number of different methods to overcome these issues. For instance, they are planning wheat closer to rivers to help mitigate the negative effects on the climate associated with decreased amounts of available water. They are also taking out loans to import cutting-edge machines from places like Canada, the US and Europe.
At the same time, the government could do more to support the sector. For example, it could defray the costs of buying new technologies by extending long-term loans at subsidised rates for equipment purchases, or provide tax incentives for such purchases. The government should also do more to develop export markets by negotiating agreements with foreign governments that allow for increased trade in agricultural products. For instance, there are considerable opportunities with respect to the export of oil plants, dark wheat plants and even potatoes to places like Japan and Korea.
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