1

Green Gold Project

Annual Operations Report

(1October 2014 – 31 October 2015)

Ulaanbaatar, October 2015

2

Green Gold Project in brief

Name Green Gold Project Project Phase IV (2013-2016)

Reporting period 1 October 2014 – 31 October 2015

Budget for the period 4,798,204,000 MNT

Goal Livelihoods of herders are improved and poverty is reduced in rural

Mongolia

Phase IV Objective

Herders, organised through collective action, manage rangeland

sustainably and have better access to technological knowledge

management and markets

Outcomes

1

Collective action for sustainable rangeland management:

Pasture-User Groups (PUG‟s) promote, at the herders‟ level,

sustainable pasture management and economic development

(f/m)

2

Applied agricultural research that produces results for

practitioners: A science-based understanding of range-

management issues enhances the scope for sustainable range

management at all levels

3

An agricultural extension service to provide practical

knowledge to the herders: The agricultural extension service

delivers useful services (knowledge and services) to all herders

(f/m)

4

Facilitate market access by linking yak herders to

processing companies: The income of yak herders has

increased

Key outputs

1 PUGs have successfully negotiated land-use contracts

2

Institutional capacities for the interpretation and application of

ecological potential-based rangeland management are

developed

3 Herders are reached via the PUG system with relevant and

tested extension messages

4 Herders‟ income increased through the improved value chain of

yak wool and camel wool

Geographic outreach Seven western aimags: Bayan-Ulgii, KKhovd, Uvs, Gobi-Altai,

Zavkhan, Bayankhongor, Arkhangai

Main beneficiaries About 60,000 herder households (300,000 individuals, of whom 45-

55 percent are female)

Partners

MIA, NAEC, NAMEM, ALAGCG, MSUA, NUM, RIAH, aimag, soum

governments, Aimag Federations of Pasture-User Groups of

herders, PUGs

SDC Contribution 9.8 million CHF

Government contribution 2.0 million CHF

Herders‟ contribution 0.7 million CHF

3

Summary

Up to 60 percent of the country has been affected by drought this year. According to the National Institute of Metereology and feedback from herders, the 2015/2016 winter is likely to be tough. Winter preparation, therefore has been intense this year and is still on going. According to the Ministry of Food and Agriculture (MoFA), as of October 2015 60 of percent of hay and forage required for emergency is prepared. Of this, 70 percent was prepared by herders and 30 percent by state-managed aimag and soum government reserves. A subsidy programme for sheep and camel wool has been running for three years, and a hides and skins subsidy programme for two years. The subsidies have both positive and negative impacts. On the positive side, herders sell raw materials through cooperatives via a supply contract with processing companies, which has given cooperatives an opportunity to earn income and establish working relationships with processing companies. The government channelled the subsidy through the Association of Wool and Cashmere Processors and the Association of Skin and Hide processing companies. On the negative side, herders received a price topping from the government irrespective of the quality of the products supplied. This was contrary to the interests of processing companies in terms of the quality of the raw materials supplied. However, in 2015 the government issued a resolution to differentiate subsidy prices for camel wool based on quality. First grade wool earns MNT 2000 per kilogram subsidy, while second and third grade wool earns MNT 1000 per kilogram. The global economic crisis and the negative development of Chinese and Russian markets continues to threaten the future sales potential of animal fibres and hides/skins. As a result, processors are purchasing only limited quantities of raw materials. In addition, the markets for semi-processed hide/skin products are threatened by an increasing level of environmental awareness that is changing consumers‟ patterns of consumption. The project will continue to consult with textile producers in seeking alternative markets in Europe and North America. In the case of meat, the project will qualify processors in the production of meat products as an alternative to the sale of carcasses. 2015 marks the third year of implementation of the government‟s Local Development Fund (LDF) and Soum Development Fund aimed at boosting rural development. In 2014, MNT 82.8 billion in LDF was allocated to seven Green Gold aimags. However, due to the economic downturn, in 2015 that figure fell more than two fold to MNT 35.7 billion. Hence, there has been a significant drop in investment in rangeland and livestock management activities. In May 2015, a National Rangeland Health Assessment Report of Mongolia was completed and submitted to the government. The six-year research project examined the state of rangeland degradation in Mongolia as well as remedial technology for each stage of degradation. The report has been shared with interest groups, policymakers, researchers, civil society organisations (CSOs), international partners, rangeland management practitioners and herders. Cooperation with ALACAG, NAMEM, MoFA and the Ministry of Environment and Green Development has demonstrably improved, and ALACAG has adopted a new methodology for rangeland health photo-monitoring and Ecological Site Description (ESD) models to complement the existing five-year rangeland assessment methodology. The MoFA will submit a draft Rangeland Law to Parliament in October 2015. A Green Gold team is part of a working group established at the MoFA, sharing the results and experiences of PUG rangeland-use agreements, particularly in relation to the participation of herders in rangeland management planning and implementation, and the role of herders and their institutions at different levels (khot ails, PUGs, APUGs, Aimag Federations [AFs], cooperatives). The main goal of the draft law is to ensure long-term collective tenure/user rights for herder families to their traditional rangelands. However, the law is likely to create tension in Parliament as the Ministry of Mining recently issued

4

special exploration licences on an additional 30 million hectares of land, the majority of which is currently used as rangeland for livestock. As of June 2015, more than 600 PUGs of the total 1100 PUGs had negotiated rangeland-use agreements with soum governments. The organisation of herders into PUGs and the development of rangeland-use agreements has improved the participation of herder families in annual soum rangeland-management planning and budget allocations. From 2013-2014, there was on average a 1.5 times increase in LDF investments and local budget allocations for improved rangeland management. In the 2013/2014 fiscal year, when the LDF budget was highest (on average, each soum received MNT 200-300 million), investment proposals developed by herders, PUGs and APUGs based on rangeland-use plans (such as building wells and roads to expand rotational grazing areas, growing forage, and investing in high-productivity breeding animals) received substantial financial support from soum governments. Herders and PUGs were asked to contribute 10 percent of the total funding. This arrangement worked well. However, in the 2015 fiscal year, funding for the LDF fell from MNT 50-80 million per soum on average, as did investment contributions from local governments, hence many of the planned investments from herders and PUGs were put on hold. In order to further improve rangeland-use agreements, Green Gold in cooperation with the Centre for Policy Research is piloting two-tier agreements. In addition to the rangeland-use agreements negotiated between PUGs and soum governors, an agreement with more specific conditions that are inclusive of rangeland health indicators (ESD/State and Transition Model [STM]) and stocking rates will be established with smaller groups within PUGs and soum governments. In the initial stage, eight PUGs from eight aimags have been selected. At first, group members will agree on the rangelands to be covered by the second agreement (winter/spring or four seasons); they will then calculate potential carrying capacity and by how much that capacity is being exceeded, with consensus on a plan to reduce the stocking rate within the next five to 10 years. The agreement period will be negotiated with each of the groups and the stocking rate reduction plan will be monitored annually by soum governors. In return, soum governments will agree on a support scheme for those herder groups, which will differ according to the specific needs of each group. As well as improving the enforcement of rangeland-use agreements, this pilot project aims to demonstrate the feasibility of targeted subsidies with condtions stipulated for stocking rates and rangeland health. According to an initial assessment and based on expert calculation, herder families are willing to reduce their herds by 8 percent on average annually. This is in accordance with herders‟ need to maintain an appropriate level of livestock for reproduction. However, consideration needs to be given to rich and poor herder households when determining the level of livestock reduction. Ensuring the sustainability of the PUG system (PUGs, APUGs, AFs) is the centre of attention in Green Gold Phase IV. PUGs, APUGs, AFs and cooperatives are central components of Green Gold‟s legacy and sustainability. From 2014, the Green Gold PCU has increasingly been mandating to aimag AFs local-level coordination and liaison with Green Gold components and local stakeholders in order to develop their skills and capacity. There is an increasing tendency to use PUG networks and structures in acivities that require the participation of herder families, and to disseminate information. In this regard, soum APUGs and aimag AFs are pursuing two major directions; one is to set up business cooperatives and facilitate the collective marketing and sales of livestock products, and the second is to provide contracted services to herder households on behalf of public and private partners. All AFs have created second-level marketing cooperatives, and about 60 soum APUGs have created primary-level marketing cooperatives. Since 2013, cooperative membership has been continually increasing, as has shared capital and annual sales income. According to a Green Gold cooperative assessment conducted in May 2015, of the 63 cooperatives assessed,

5

30 had reached a level of regular and sustainable operations; the remaining 33 were still in the early stages of development. All 63 cooperatives had experience developing long and short-term supply contracts with processing companies and working as local agents to facilitate the supply of livestock raw materials and the distribution of government subsidies to herder families. As of 2015, soum APUG and aimag AF-based cooperatives were managing sales of MNT 4.3 billion. According to processing companies, the advantage of PUG-based cooperatives is trust and the relationships developed with members that enable them to trace back suppliers and improve quality control. In 2015, most of the processing companies that had received soft loans from the Chinggis Bond had completed work to enhance their technical capacity. Ensuring the reliable supply of good-quality raw materials is now one of the main considerations to guarantee success. The second direction is for soum APUGs and AFs to provide services on behalf of public and private stakeholders. One example that was greatly appreciated by local governments and the MoFA was testing the effectiveness of traditional methods of rodent eradication, namely early spring flooding combined with the creation of bird seats and nests. According to the MoFA, 40 percent of all rangelands are affected by rodents. In using this method, it is important to use a time frame of 10-15 days of early spring frost and to mobilise people so flooding can take place simultaneously to ensure rodents don‟t escape. The Arkhangai aimag AF was selected to mobilise herders and PUGs in two soums. According to summer monitoring compared with baseline data collected in early spring and feedback provided by herders, the rodent population fell by 30-40 percent. This traditional method is five times less costly than the government‟s allotted budget (MNT 300 per hectare versus MNT 1800 per hectare). A second flooding is planned for November 2015 after rodents have moved underground for winter hibernation. The pilot project will be finalised in March 2016 and the results will be shared with the MoFA and nationwide. Another example was the financial support the Bayankhongor aimag AF received from AVSF Mongolia (a French international NGO) to implement collective rangeland management as part of the Sustainable Cashmere Project funded by the EU. With this financial support, the PUG approach was up-scaled to four additional soums. Meat sales and exports: This year, 13 domestic meat processing companies received export licences to China by the Chinese inspections agency. Thus far, about 70,000 tonnes of carcasses and processed meat products, such as frozen horse meat dumplings and dried yak meat, were exported. However, animal health remains a major concern for meat exports. Through a pilot project Green Gold implemented in Zavkhan aimag, herders supplied more than 45,000 head of sheep, goats and cattle to the Zavkhan Khuns company with a value of MNT 3.4 billion. In 2015, Green Gold conducted the first extensive gender study at the level of herding households. Three-hundred men and women from eight soums across Mongolia took part in the survey. Different aspects of herding household life were studied: The division of labour, decision-making, access/control of resources/benefits, participation in community activities, and child-related issues. The main findings of the research were that workload sharing varied seasonally, and that women‟s workload was greater than men‟s. Although both men and women work hard to earn income for their families‟ livelihood, in relation to decision-making about how to spend family income, women are involved in the evaluation process but final decisions are made by men. In relation to household money management, men were slightly predominant, although women‟s involvement was quite high (63 percent of husbands decided and in 58.5 percent of wives were involved). Furthermore, most of the property of herding households (58.5 percent), including livestock, winter/spring camps, motorcycles and other vehicles, is registered in husbands‟ names. There is also a direct correlation between poor livelihood households and children's tendency to pursue higher education after secondary school.

6

Outcome 1: Pasture-User Groups (PUGs) promote at the herders‟ level sustainable pasture management and economic development (f/m)

Output 1.1 PUGs have successfully negotiated land-use agreements (LUAs)

Output 1.2 APUGs are successfully accessing public and private funding

Output 1.3 Change of marketed volume and turnover of livestock products in cooperatives

Output 1.4 Women’s increased participation in the PUG system

Output 1.1: PUGs have successfully negotiated rangeland land-use agreements (LUAs)

A two-tier rangeland-use agreement is piloted: The main challenges of formalising rangeland-use agreements (RUAs) and ensuring they are more effective and enforced remain due to an inadequate legal environment and the lack of capacity of local technical personnel to implement them. Following the Mid-Term Review, Green Gold organised technical assistance from the Centre for Policy Research (CPR) to aimag APUG Federations in order to develop two-tier RUAs; one level is a general RUA between PUGs, APUGs and soum governors; the second is an RUA that smaller groups within PUGs negotiate with soum governors and which have specific conditions on stocking rates and rangeland health. The CPR conducted a detailed assessment from April to June among herder families to identify the preconditions that members of the smaller groups would agree upon in relation to bearing responsibility for exceeding carrying capacity and rangeland health. The preconditions identified are that there is no trespassing by non-members, and that rangelands should be fully under the control of members. Once a boundary is defined and members are in agreement, the group‟s rangeland carrying capacity and rangeland health is estimated, as is the number of animals that would exceed the determined carrying capacity. The next step of the agreement is to calculate the number of animals to be reduced by each member of the group and to reach agreement on a plan to reduce the stocking rate to improve rangeland health. This RUA will be be in force for 15 years; herder groups develop a plan to reduce stocking rates and improve rangeland conditons within this time span which will be monitored annually by soum governors and soum land managers. In return, soum governors agree on a support package for these groups. That package varies depending on each context; in some soums, governors have agreed to subsidise rangeland infrastructure, the building of wells, the issuing of long-term land tenure for forage planting and facilitating livestock sales. This pilot aims also aims to demonstrate the feasibility of a targeted government subsidy policy. The CPR will pilot the two-tier agreement in one of the PUGs in one soum from each of the seven Green Gold aimags. The results of the pilot will be shared at two levels; the first, a demonstration event for policymakers, and the second capacity development training and demonstration events for those stakeholders who will be entrusted with the implementation of RUAs, PUG and APUG leaders, soum and aimag governors, soum land managers, bagh governors, AHBU staff, soum environmental inspectors and meteorological technicians. The Pasture Law will be submitted to Parliament in its autumn session: A working group at the MoFA is developing the draft Pasture Law at the request of the Minister for submission to Parliament in October 2015. Green Gold staff are part of the working group, and RUA conditions and the experiences of Green Gold are shared among group members. The main goal of the Pasture Law is to ensure long-term collective tenure/user rights for herder families to their traditional rangelands.

7

About 60 percent of all the PUGs have established RUAs with soum governments: Of the 1100 PUGs formed in Green Gold‟s seven target aimags, more than 600 had established RUAs with soum governors. According to internal monitoring and soum government land management reports, the organisation of herders into PUGs and the development of RUAs had demonstrably improved the participation of herders in rangeland management planning and implementation. Increasing awareness among herders of the consequences of rangeland degradation has resulted in effective rotational grazing, and resting is carried out in accordance with plans agreed upon between PUGs and local governments and included in soum annual rangeland management plans.

Table 1: RUAs made, rangelands rotated and rested in accordance with soum annual rangeland-use plans as of August 2015

Aimags Number of PUGs established

Of which PUGs established LUAs as of June 2015

Rangelands under regular rotational grazing in addition to those as of December 2014 (ha)

Rangelands under regular resting in addition to those as of December 2014 (ha)

Arkhangai 323 51 124,685 (578,647) 15,270 (25,923)

Bayankhongor 95 18 203,100 (182,720) 53,500 (27,800)

Gobi-Altai 78 61 254,100 (214,000) 166,100 (1,211,220)

Khovd 87 70 2,785,240 (2,348,802) 724,000 (654,854)

Uvs 118 18 1,159,321 (525,003) 180,861 (143,635)

Zavkhan 198 198 2,803,309 (2,698,786) 1,924,923 (1,811,840)

Bayan-Ulgii 201 190 1,412,000 (1,400,000) 1,682,600 (1,682,600)

Total 1100 606 8,741,755 (7,987,436) 4,747,254 (5,557,872)

*()-data as of December 31, 2014 However, due to drought and late rain this summer, rangeland rejuvenation has been slow and herders have had limited grazing areas. Rain began from mid-July, which assisted rangeland recovery and the availability of water. According to field reports from PUGs, APUGs and local governments, with late summer and rain, animals have been underfed for a protracted period and have hence grown progressively weaker. As a result, grazing intensity is likely to be high this summer and autumn in the rangelands in order to sufficiently fatten animals for winter. Increasing the investment of herders and local governments in rangeland management improvement: Green Gold financial support to PUGs and APUGs is complementing and promoting local investment. Compared with 2010 data, there has been increased investment in improving rangeland management by local governments and herders. This peaked in 2013/2014 when the LDF was created, and on average soums were given from MNT 150-450 million a year depending on population numbers. Planned LDF funding for 2013 was received in May-July 2014. The majority of the projects initiated by PUGs, herders, APUGs and cooperatives in Green Gold target soums and included in soum annual land management planning have received financial support from the LDF and local governments. According to LDF regulations, beneficiaries are required to develop a written proposal and contribute at least 10 percent of total funding. Green Gold provided training on proposal writing for PUG and APUG leaders, and also provided complementary funding of up to 10-30 percent of the total investment. If total project investment is between MNT 0.5-15 million, Green Gold contributes about 20-30 percent; if total investment is above MNT 15 million, Green Gold‟s contribution is about 10 percent. This is based on the experiences of previous years in which the average investment proposal per PUG and herder group (HG) ranges from MNT 0.5-15 million. This policy encourages PUGs and HGs to develop proposals and access local funding opportunities. Another criteria for Green Gold complementary funding is the urgency and priority of the project

8

for herders and PUGs, and its relevance to improved rangeland management, such as building roads, bridges or water points, access to unused pastures to reduce grazing pressure, fencing haymaking areas, growing forage for complementary feeding, and improving the per-head productivity of livestock.

As well as complementing LDF funding, Green Gold financial support is also used to encourage herder families to join PUGs and establish RUAs, and to support the implementation of RUA conditions. In new soums covered by Green Gold in 2013 and 2014 in Arkhangai, Bayankhongor, Uvs and Gobi-Altai aimags, this approach has been very effective. Herders were able to see the visible results of their collective efforts to improve grazing management, rotations and resting in a short period of time. For example, in Undur Ulaan and Chuluut soums, while clearing mountain roads to access unused pastures to expand their grazing area, herder families were able to rest winter and spring rangelands from March to November, and the recovery of rangelands was high after just nine months. In many soums, the same results have been achieved by herder families while rehabilitating handmade manual wells to access new rangelands and reduce grazing pressure. Compared with three to four years ago, the willingness of herders and local governments to invest in more productive animals has visibly improved. The networks created among PUGs, APUGs and leaders have often been used to identify local high-productivity animals such as white cashmere goats from Bayankhongor aimag (Bumbugur Tsagaan yamaa), meat-bearing sheep from Uvs aimag (Bayad sheep), high-quality yak wool from Arkhangai aimag (Terhiin Bor Sarlag), and long-wool sheep from Zavkhan aimag (Sartuul Honi, a good raw material for carpet-making). In 2011, of the investment proposals Green Gold received, breeding projects made up 1-3 percent; as of 2014, half of up to 90 investment project proposals submitted by PUGs, APUGs and cooperatives focused on improved breeding. Green Gold encourages herder families prior to buying high-productivity breeds from outside to improve their existing herds through the selective breeding of their best-quality animals to ensure that productivity is fully exploited.

In 2016, Green Gold will include in the training programme for herders, PUGs and APUGS skills development to simplify cost-benefit analyses for future investments. Table 2: Investment projects and Green Gold‟s contribution, and a comparision between 2014 and 2015 (thousand MNT) as of June 2015. Aimags Main investment projects GG contribution

Rangeland management

Hay/forage production

Water supply Herd productivity enhancement

2014 2015 2014 2015 2014 2015 2014 2015 2014 2015

Arkhangai 2500 60,000 11,910 25,100

300 13,200

22,000 50,000 36,710 61,900

Picture 1: Handmade bridges and

roads to access new rangeland in

Chuluut soum, Arkhangai aimag

9

Bayankhongor 2000 20,000 0 13,200

0 15,000

1200 5000 1200 23,200

Gobi-Altai 38,577 23,000 0 3000 28,939

50,000

67,516 31,000

KKhovd 830 4300 14,185 3500 5200 10,000

0 20,000 20,215 9800

Uvs 0 3500 21,100 35,000

414 1000 0 15,000 21,514 3500

Bayan-Ulgii 14,000 25,000 24,000 50,000

1000 1500 22,500 30,000 60,500 0

Zavkhan 20,000 56,000 3800 15,000

120 2400 12,812 30,000 36,732 0

However, local government investment fell significantly in 2015 due to the cut to LDF funding. On average, soums received from MNT 30-80 million compared with the 2013/2014 fiscal year, where the average funding per soum was in the range of MNT 150-450 million. According to Green Gold experience working with local organisations such as PUGs, APUGs, bagh citizens‟ meetings, cooperatives and herder families, being able to access LDF funding for one year saw significant improvements to such rangeland management challenges as the lack of grazing areas, lack of water access, hay-making and rodent control, and that this encouraged the participation of the herding community in local governance. In short, the impact of the LDF and SLF has been significant in its short existence. Increasing local ownership of PUG networks and structures: There is an increasing tendency to use PUG networks and structures in activities that require the participation of herder families, and to disseminate information. In 90 of Green Gold‟s 126 target soums, soum annual land-management planning is based on PUG structure. PUGs develop individual rangeland-use plans and submit them to bagh citizens‟ meetings for discussion. Bagh governors unify the PUGs‟ rangeland-use plans and submit them to soum citizens‟ meetings for approval and inclusion in soum annual land-management planning and budgeting. According to feedback received from local governments and soum rangeland management reports, in those soums where annual rangeland-management plans are based on the PUG structure, rangeland management practices and the seasonal rotational grazing schedule is easily enforced, and local investment is based on the needs and priorities of herders. Investment proposals and investments made in soums with advanced PUG structures was higher compared with those soums where PUG structures were new and weak. For example, in Tariat and Ikh Tamir soums in Arkhangai aimag, the percentage of investments targeting improved rangeland management represented 20-35 percent of the total local budget, whereas in neighbouring soums with no PUG structures or recently established PUGs, such as Batsengel and Tsengel, few activities were planned and related investments comprised just 5 percent ot the total soum budget and LDF. In addition, rangeland degradation in the latter two soums was more widespread than in the former two. Since 2015, with support from Green Gold and ALAGAC, the Arkhangai aimag government and the land agency is up-scaling the PUG approach and ESD/STM-based rangeland health monitoring to the 12 soums in the aimag and AVSF project in Bayankhongor aimag up-scaled in 3 soums where AVSF project is implemented.

10

Table 3. Number of soums adopting PUG-based soum annual rangeland-management planning Aimags Total soums Number of soums that have adopted PUG-based land-

management planning

2013 2014 2015

Arkhangai 20 4 5 17

Bayankhongor 17 4 4 7

Gobi-Altai 18 11 11 11

Khovd 17 2 10 12

Zavkhan 23 12 16 22

Uvs 18 9 13 9

Bayan-Ulgii 13 12 12 12

126 41 71 90

One example that was greatly appreciated by local governments and the MoFA was testing the effectiveness of traditional methods of rodent eradication, namely early spring flooding combined with the creation of bird seats and nests. According to the MoFA, 40 percent of all rangelands are affected by rodents. In using this method, it is important to adhere to a time frame of 10-15 days of early spring frost and to mobilise people so flooding can take place simultaneously to ensure rodents don‟t escape. The PUG network has been used to disseminate information and mobilise herder families to organise spring flooding. Initially two soums were selected; one is heavily infested with rodents (80 percent of rangelands) and the other is moderately infected (30 percent of rangelands). The pilot project has been co-financed by the aimag Department of Agriculture/MoFA (60 percent of costs), herder families (labour, transport, water) and the Aimag Federation of APUGs (poles and food costs). Based on summer monitoring compared with baseline data collected in early spring and on feedback provided by herders, the results indicate that the rodent population fell by 30-40 percent. In relation to cost per hectare, the traditional method of flooding is five times less costly than the government‟s allotted budget (MNT 300 per tonne, MNT 1800 per hectare). The second flooding is planned to take place in November 2015 after rodents move underground for winter hibernation. This pilot project will be finalised n March 2016 and the results will be shared nationwide.

In Ugiinuur soum, early spring flooding covered 80,000 ha of rangeland and 5030 main habitants (Picture 1); 262 bird seats and 45 nests were created involving 56 soum government employees, and 305 male and female herders and 86 vehicles were mobilised (Table 4).

Table 4: Results of Ugiinnuur soum rodent-control work Bags Toglokh Doit Zegestei Ugii Orkhon Total PUGs 1 2 1 2 1 1 2 1 2 3

11

Flooded main habitats 900 700 920 1244 150 200 234 320 242 120 5030

Bird seats 50 20 23 21 8 40 37 20 26 17 262

Bird nests 1 1 5 9 1 11 12 2 2 1 45

Rangeland area (ha) 13,000

12,000

10,000 8000 2000

10,000 8000 7000 6000 4000

80,000

In Erdenemandal soum, early spring flooding covered 53,000 ha of rangeland, and 855 main habitats were found; 175 bird seats and 24 nests were created involving 63 herder families and 38 soum government officials. Table 5: Results of Erdenemandal soum rodent-control work

Bags Erdene Uul Teel Ulziit Khan Undur Alag Uul Total

PUGs 1 2 1 1 1 1

Main habitats flooded 440 280 65 20 50 855

Bird seats 50 20 54 15 6 30 175

Bird nests 10 2 1 1 10 24

Project results were broadcast on Malchin TV nationwide twice this summer. Since then, five soums from Bayankhongor, Khuvsgul and Bulgan aimags have contacted Green Gold, and soum governments are planning to test late autumn flooding (once the rodents have moved to their winter habitat). When winter feed and bedding is destroyed, rodents die during the first winter frosts. According to the Plant Inspection Institute, about 70 percent of all rangeland is heavily infested with rodents. Increasing awareness of the stocking rate and investments for better herd-management practices: As well as improving grazing management practices, Green Gold has been promoting initiatives from herder families, PUGs, APUGs and cooperatives aimed at improving animal productivity and hence income per head. Initially, AFs are encouraged to organise skills and awareness-raising trainings for herder families (particularly younger herder families) on managing selective breeding within existing herds. The next step is facilitating the exchange of high-quality breeding animals between aimags using networks and contacts established through soum APUGs and aimag AFs. There are many local breeds of animals known for the high quality of their products and higher productivity, such as white cashmere goats from Bayankhongor aimag, red goats from Durvuljin soum in Zavkhan aimag, the Bayad breed of sheep from Uvs aimag (meat and wool), the Sartuul sheep from Zavkhan (wool), and the Terhiin Bor yak (high-quality yak wool). As of June 2015, 27 nuclear breeding herds of different livestock had been established by PUGs, APUGs, cooperatives and soum governments and were being used for breeding by herder families with support from Green Gold.

Table 6: Nuclear breeding herds of local high-productivity animals used for breeding purposes

Breeds Bayankhongor

Zavkhan Khovd Uvs Gobi-Altai

Arkhangai

Bayankhongor whilte goats 4

Bayad sheep 4 2 5 1

Dukhum Tungalag (camel) 2 1

Lamyn Gegeen Ulaan (camel)

2 1

Sartuul sheep (wool) 5

Selenge cattle (meat and 1

12

milk)

Total 8 9 3 5 2 1

Development of PUGs’ Herders’ Matching Funds: Since 2010, Green Gold has been supporting PUGs to establish Herders‟ Matching Funds. The main aim is to use economic incentives to promote collective action among herders for better rangeland management. Depending on budget availability, Green Gold contributes 10-15 CHF per PUG member and members contribute the same amount to the Matching Fund. With support from Green Gold, PUGs have developed simple rules to manage the funds. As of June 2015, the total sum of Herders‟ Matching Funds was MNT 2.1 billion, and about 34,000 herder families had joined. This means that each herder family has a share of MNT 90,000 in the Matching Fund. According to Green Gold experience, in the beginning (one to five years), the Herders‟ Matching Fund is used by members to bolster seasonal cash shortages while borrowing with interest rates below bank rates (up to 2.5 percent a month), with the amount ranging from MNT 100,000 to MNT 1 million for a period of three to six months. The loan repayment rate is high at 97 percent. As the Matching Fund increases and herders‟ trust grows, herders are willing to contribute more. For example, in Tsengel, Altai and Ulaankhus soums in Bayan-Ulgii aimag and Ikh Tamir and Tariat soums in Arkhangai aimag members agreed to increase their contribution from MNT 50,000 to MNT 200,000 and transform it into a business cooperative or savings and credit cooperative. However, as setting up savings and credit cooperatives requires special licences and regulations, such as having a full-time accountant and manager, the costs increase. Thus far, only two APUGs in Tsengel soum in Bayan-Ulgii aimag and Telmen soum in Zavkhan aimag have established savings and credit cooperatives. In the remaining soums, Herders‟ Matching Funds are operated and managed by the PUGs themselves as Community Development Funds at the APUGs. Starting in July 2015, Green Gold negotiated an agreement with Khaan Bank to make all transactions via bank transfer. This improves the transparency and monitoring of fund operations. In accordance with the new regulation, PUG leaders issue an assurance for the members to receive loans, and members enter into an agreement with APUG leaders to take out a loan from the Matching Fund. Green Gold is undertaking an assessment of Herders‟ Matching Funds to determine the main purposes of the loans. The results of the assessment will be available by mid-October. Table 7: Herders‟ Matching Funds (as of June 31, 2015) Aimags Total

herder households

Member HHs

Contribution „000 MNT

Interest rate income „000 MNT

Balance as of June 2015 („000 MNT)

Green Gold

Herders

Arkhangai 5080 3996 86,750 81,843 35,433 168,593

Bayankhongor 12,724 8520 190,050 203,044 310,033 393,094

Gobi-Altai 2151 2160 45,905 15,120 8288 69,313

Khovd 5134 4210 93,203 51,915 13,192 158,310

Uvs 7332 3197 163,700 78,349 59,200 301,250

Zavkhan 8435 5678 103,330 110,893 17,246 231,469

Bayan-Ulgii 10,112 7086 203,140 221,948 331,063 756,152

Total 51,148 34,817 886,078 763,113 774,459 2,078,184

Improving disaster risk preparedness: Green Gold support improves the disaster risk preparedeness of herder families in many ways. Herders are dependent on rangelands for their livestock feed, with the exception of a few days of additional feeding in winter and early spring. The most difficult period is the five months between December and April/May until rangelands

13

start to regenerate. When heavy snow falls or blizzards occur, it is impossible for animals to graze on open rangelands, and if hay or forage is not available for indoor feeding, the animals eventually starve to death. The situation worsens if animals are not sheltered from the cold and do not have warm, dry bedding. After being exposed to frost for a few days, animals freeze to death. In Mongolia, there are two kinds of dzud: Hoof dzud or black dzud, which results in animals dying of malnutrition because they lack the food to overcome the long, cold winter, and frost dzud, when temperatures drop dramatically, sometimes below -50C, causing animals to freeze to death. According to herders, winter preparation means:

- Making good “otor” (ensuring animals gain enough weight and fat during summer and autumn grazing to overcome winter)

- Preparing additional hay and forage - Resting winter and spring rangelands for regeneration - Preparing warm shelters and bedding for animals - Keeping money aside in case of emergency while selling animals in autumn

Green Gold contributes to the improved preparedness of herder families in natural disasters: 1. Herder families in soums with PUG structures and rangeland-use plans (34,000 herder families in about 60 soums of a total of 126 soums in seven Green Gold target aimags) are able to rest from grazing winter and spring rangelands until the following winter. As of June 2015, according to reports from PUGs and APUGs, about 3.9 million hectares of winter and spring rangelands are fully rested from March to November. For example, in Undurshireet soum, the lack of summer rangelands means winter and spring camping areas are used for summer grazing, which has led to an increase in conflicts among herders. When herders are organised into PUGs and have introduced rangeland-use planning, all available rangelands are divided into four seasonal grazing areas and herders start practicing rotational grazing between four seasons. 2. In relation to “otor”, the availability of plentiful summer and autumn rangelands is essential. Remote rangelands are usually used for otor, and in Green Gold target soums about 120,000 ha have been made assessible while clearing mountain roads and constructing new wells. 3. The creation of reserve rangelands for winter/spring: While herders are becoming organised into PUGs, one of the issues Green Gold encourages discussion on is the creation of reserve areas in case of emergencies. This, however, is dependent on the soum having sufficient seasonal grazing areas. If not, it is difficult to put aside reserve rangelands. PUGs and HGs generally keep aside reserves near winter and spring camps. Among the 126 target soums, about 24 soums had created reserve areas totalling 113,000 ha and had adopted special regulations on the use of reserve rangelands. After harvesting, fenced hay-making and forage-planting areas are used as autumn rangelands, and if the year turns out to be difficult, those areas are kept aside as reserve rangelands for winter. There are about 4100 ha of fenced hay-making areas and 210 ha of forage planting areas.

14

Table 7: Reserve rangelands reflected in soum annual rangeland-use plans as of June 2015 Aimags Soums Reserve areas created

(ha) Percentage of total rangelands

Arkhangai 4 12,000 0.6

Gobi-Altai 2 34,648 0.6

Bayankhongor 3 23,450 1.2

Bayan-Ulgii 2 8000 0.2

Zavkhan 2 6700 0.09

Uvs 6 15,000 0.3

Khovd 5 13,580 0.2

Total 24 113,378 3.5

4. Forage and fenced hay-making: Herders and PUGs are increasingly planting forage on a small scale. Green Gold has been providing support, complementing soum governments, to those herder families, PUGs, APUGs and cooperatives issued with long-term licences for forage and hay-making areas, and is contributing 10 percent of total funding. In 2014/2015 as a part of the LDF, 158 PUGs, APUGs and cooperatives were supported with complementary Green Gold funding. Table 8: Forage and hay-making as of June 2015

Aimags Number of PUGs/APUGs and cooperatives involved

Forage Fenced/improved hay-making areas (ha)

Investment (000‟ MNT)

Area planted (ha)

Harvest (tonnes)

Green Gold

Local budget

Herders

Arkhangai 40 90 360 700 5000 3000 17,700

Bayan-Ulgii 20 20 80 3000

Bayankhongor 15 8 32 90 1000 3700

Gobi-Altai 30 30 120 50 1200 1 000 3800

Khovd 10 10 40 120 5000 1000 1000

Uvs 30 50 200 100 8000 2000 1000

Zavkhan 13 5.5 22 100 300 395

Total 158 213.5 8540 4160 20,500 7000 27,595

5. In the aftermath of the 2009/2010 dzuds, Herders‟ Matching Funds played a crucial role in herder families being able to access to money to buy urgent medical supplies for family members, fuel to send small children and women to soum centres, and additional forage to ensure animals did not starve to death. The easy accessibility of the Matching Funds was very helpful, according to herders during the dzud. As of June 2015, there were MNT 2 billion in Herders‟ Matching Funds, from which about 34,000 herder families were benefiting. According

15

to PUG and APUG leaders, local banks feared this coming winter would be severe so they ceased issuing loans to herders with fewer than 200 animals. Herders Matching Funds have also been used by herder families to send children to school and to prepare for winter. Output 1.2 APUGs are successfully accessing public and private funding

Supporting the sustainability of the PUG system (PUGs, APUGs/cooperatives, AFs/cooperatives) is the central component of Green Gold Phase IV. In this regard, soum APUGs and aimag AFs are pursuing two major directions: Establishing business cooperatives and facilitating the collective marketing and sales of livestock products, and providing contracted servies to local public and private partners.

Creation of primary and second-level cooperatives among soum APUGs and Aimag Federations of APUGs: All AFs have created second level-marketing cooperatives and about 60 soum APUGs have created primary-level marketing cooperatives. Since 2013, cooperative membership has been continually increasing, and with it shared capital and annual sales income (Tables 9, 10). All 60 have established contractual relationships with processing companies and are working as local agents to organise the collective supply of all types of livestock raw materials. About 35 cooperatives have been contracted to channel government subsidies to herders on sheep wool, skin and hides. For yak wool supply, APUGs and AF- based cooperatives are supplying about 80 percent (60 tonnes) of yak wool to processing companies. According to the processing companies, the advantage of PUG-based cooperatives is trust and the relationships developed with members that enable them to trace back suppliers and improve quality control.

Based on Mid-Term Review recommendations, Green Gold conducted an assessment of each of the soum cooperatives between March and May 2015. The assessment was conducted in line with the seven principles of cooperative capacity development: Voluntary open membership; democratic governance and the monitoring of members; the economic participation of members; the independence of a cooperative; education, training and information; cooperation between cooperatives; and common interest. Basic training was also carried out during this period. The assessment, involving experts from major national cooperative associations, led to the development of detailed recommendations and a Plan of Activities for each of the 60 cooperatives. It was the most recent and most detailed field assessment undertaken of herders‟ cooperatives. The recommendations and Plan of Activities will be shared within and outside Green Gold and will be a major reference document for Green Gold cooperative-related capacity development activities in the remaining period. In relation to the Plan of Acitivities, the Green Gold PCU is starting training for cooperative leaders in September.

Picture 2: Herders during cooperative assessment and training

16

The main findings of the assessment were:

Positive:

- In accordance with the seven principles, of the 63 cooperatives assessed, 30 had reached a level of regular and sustainable operations, while the remaining 33 were still in the early stages of development and their operations were not regular.

- In the past two years, the total shared equity of APUGs and AF cooperatives has increased on average by a factor of 2.2. Up to 15 cooperatives received financial support from the LDF and other organisations and projects being implemented in the soum.

- The increase of cooperative memberships year by year demonstrates that herders are aware of the benefits of joining cooperatives. There are cooperatives implementing such innovative initiatives as the issuing of membership cards and shareholder books in which are recorded shared capital, dividends and participation in cooperative meetings and acitivities. These initiatives boost herders‟ trust and encourage them to take part in cooperative activities.

- Secondary-level cooperatives created by AFs are an appropriate institutional structure to coordinate and facilitate the improved access of smaller primary and soum-based cooperatives to market activities.

- Feedback from herders and other local stakeholders demonstrated that Green Gold took the right approach in supporting the establishment of cooperatives alongside PUGs and APUGs. Members express their appreciation for the support provided.

Problems:

- In general, herders have an inadequate level of understanding about cooperatives. This hinders them in enrolling in cooperatives and taking part in cooperative activities.

- Despite increasing contributions from members, the financial capacity of cooperatives is still weak. Although cooperatives enter into supply contracts with buyers in order to secure raw materials from herders, to compete with middle men they need better cash flow for deposits. For this reason, although they are members of cooperatives, some herders are tempted to sell raw materials to middle men for a lower price.

- The internal governance and operational management of cooperatives is still weak. For example, cooperatives‟ internal regulations do not comply with legal requirements and standards. On many occasions, they simply copy each other and don‟t reflect the specifics of the different cooperatives.

- With weak governance and operational regulations, cooperatives lack the capacity to determine their overall development policies and strategies. The heads of the majority of cooperatives have dual positions, also working for soum APUGs without salaries.

- Herders‟ cooperatives have to pay 10 percent VAT from total income derived from the sale of raw materials irrespective of the fact that they do not create any added value. This is a loophole in the current cooperative law. As a result, they must always seek ways to avoid paying VAT, which has a negative impact on their operations.

17

Table 9: APUGs and AF-based cooperatives‟ scale of collective assets and sales income

Aimags Coops

assessed

Shareholding capital („000 MNT)

Sales income (mln MNT)

2014 2015 2014 2015

Arkhangai 3 47,250.0 165,750.0 403.9 1,160.0

Bayankhongor

4 25,000.0 53,800.0 272.4 319.8

Gobi-Altai 6 19,000.0 24,600.0 50.3 78.8

Uvs 6 232,350.0 343,072.0 833.6 794.5

Tuv, Dundgovi

2 60,500.0 60,500.0 42.2 50.0

Bayan-Ulgii 11 513,727.3 636,619.0 748.1 617.9

Khovd 12 138,588.0 147,465.0 196.3 299.8

Zavkhan 19 108,411.0 114,111.0 1,074.0 984.4

TOTAL 63 1,144,826.3 1,485,417.0 3,620.0 4,305.0

Table 10: APUG and AF-based business cooperatives, membership

Name of aimags Cooperatives involved in the assessment

Number of members

Percentage of male members

2014 2015

2014 2015

Number percent in

total Number

percent in total

Arkhangai 3 1565 1692 1461 93.4 1692 94.5

Bayankhongor 4 510 564 461 90.4 564 91.0

Gobi-Altai 6 278 431 215 77.3 431 80.0

Uvs 6 768 768 610 79.4 768 79.4

Tuv, Dundgovi 2 472 472 438 92.8 472 92.8

Bayan-Ulgii 11 2999 2999 2466 82.2 2999 82.2

Khovd 12 967 1588 829 85.7 1588 87.0

Zavkhan 19 3053 3357 1559 51.1 3357 52.0

Total 63 10612 11871 8039 75.8 11871 82.3

According to the assessment, herder families are registered as members of cooperatives by the head of the family, hence the percentage of male members is very high. As the table above demonstrates, the percentage of male members is on average 80 percent and women 20 percent.

Contracted service provisions: Green Gold has been aiming to build the capacity of APUGs and AFs to provide services on behalf of public and private stakeholders. The initial results have been achieved in a short period of time.

The Bayankhongor aimag AF received financial support from AVSF Mongolia (a French international NGO) to implement collective rangeland management as part of the Sustainable Cashmere Project financed by the EU. The PUG financial approach was up-scaled to an additional four soums. In order to improve effectiveness, a working group led by soum governors, and comprised of local land managers, bagh governors, AHBUs, soum environmental inspectors and meteorological technicians, was established in each of the four soums. From 2014, the Green Gold PCU has increasingly been mandating local-level

18

coordination and liaison with Green Gold components and local stakeholders. Soum APUGs and AFs have been provided with training to write proposals for local tendering.

In Gobi-Altai aimag, six soum APUGs were mandated to implement local projects funded by the soum government and the LDF, as well as the Ministry of Environment and WWF, totalling MNT 29 million for rodent control, animal bathing, the rehabilitation of old wells, the fencing of natural water springs, and the creation of water reserves in remote rangelands.

Starting from 2014, the Green Gold PCU has mandated local coordination tasks to soum APUGs and aimag AFs so they can learn the skills needed to provide services and manage local activities related to marketing, extension and applied research. The workload of two to three people at AFs has increased, however they have demonstrated a high level of commitment and have managed to adequately facilitate local activities. Follow-up activities were carried out by AFs on behalf of Green Gold in the field.

According to AF semi-annual reports, AFs and soum APUGs organised and moderated 160 meetings for herders and PUGs involving 5700 participants (3260 men and 2440 women). During this period, about 50 events (workshops, trainings, trade fairs and conferences) were organised with support from Green Gold, with 5400 participants (3100 men and 2300 women).

Table 11: Training provided by soum APUGs and AFs with support from Green Gold

Training topics Partners Participant herder family members

Men Women

Rangeland management trainings C1, C2, C3 and soum AHBUs, land managers ALAGAC, MSUA

1220 800

Herd management trainings C1, C3, soum AHBUs, private companies

1000 700

Leadership training for PUG and APUG leaders

C1 550 120

Soum APUGs capacity development project

C1, MLSD 100 120

Cooperative assessment and training C1, cooperative associations

800 550

Two-tier RUAs C1, CPR 250 150

Matchmaking events between processors and cooperatives

C4 174 92

Extension master training C3 57 30

Training of soum extension facilitators

C3 50 50

Training of herders‟ advisors C3 500 120

Rodent control MoFA 350 200

RUA training CPR

Baby camel wool and yak wool combing training

C4 300 100

Hides and skin primary processing C1 110 50

Yarn-making training C4 45

Sewing training C4 40

Dairy processing training C1, soum AHBUs 50

Women herders‟ workshop C1 730

Soum herders‟ workshop C1 550 400

Herders Matching Fund improvement training

C1 350 400

Total 6360 4740

19

Establishment of a National Union of PUGs to improve lobbying and the representation of the interests of the herding community at the national level. The establishment of a National Union of PUGs as a part of a sustainability plan has long been discussed among herders and PUG and APUG leaders. This intensified with the adoption of fiscal decentralisation legislation and the creation of LDFs at the soum level. In the context of Mongolia, where herders on average comprise 80 percent of the soum population, the reflection of their interests in the allocation of LDFs became an issue in the first year. In 2013/2014, the majority of LDFs were spent on projects suggested by citizens living in the soum centre, such as the building of playgrounds for children, streetlights, public showers and gardens, and the construction of new offices for the soum government. According to Green Gold internal monitoring, the main reason for this was a lack of awareness among herders about the LDF and herders not being informed in advance about the LDF.

In February 2015, PUG, APUG and AF leaders and representatives from 69 soums gathered in Ulaanbaatar and established a National Union of PUGs. The main purpose of the National Union of PUGs is to have herders‟ interests reflected in national policy, as well as providing a vehicle with which to represent and lobby for those interests. Since its establishment, the National Union of PUGs has embarked on three projects: A pilot project in cooperation with the MoFA to test local indigenious technology aimed at eradicating rodents; facilitating meetings at the parliamentary level to improve the legal environment for herders‟ user rights on traditional rangelands; and promoting the formalisation of RUAs between PUGs and local governments.

Since its establishment, in addition to seven western aimags, herders from five soums in Uvurkhangai and Khentii aimags have joned the National Union.

Establishment of Herders’ Training and Information Centres: This year, Green Gold provided support to 12 Soum APUGs to establish Herders‟ Training and Information Centres. The centres are also used as APUG and cooperative offices. The arrangement was made in accordance with Green Gold‟s C3 component that C1 components support the construction of the centre and C3 supports the centre‟s operations and provides basic training equipment and tools. Each of the centres receives on average MNT 1.3 million from C3. PUG and APUG networks and leaders are increasingly acting as information agents for the herding community. However, there is still a need to make good use of Herders‟ Training and Information Centres.

Table 12: Newly established Herders‟ Training and Information Centres

Aimags Soums Total cost „000 MNT

Of which „000 MNT

GG Herders Local government/other sources

Arkhangai Chuluut (done) 23,000 18,000 5000 1000

Undur Ulaan (done) 24,000 18,000 5000 1000

Bayankhongor

Bogd (in progress) 25,000 20,000 5000 0

Gobi-Altai Taishir (in progress) 26,550 20,000 5000 1550

Darvi (in progress) 26,200 20,000 5000 1200

Tugrug (in progress) 20,000 20,000 5000 1200

Jargalan (in progress) 20,000 20,000 5000 1200

Uvs Umnugovi (in progress) 21,000 21,000 5000 1000

Turgen (in progress) 21,000 21,000 5000 1000

Undurkhangai (in progress)

21,000 21,000 5000 1000

20

Ulgi (in progress) 21,000 21,000 5000 1000

Khovd Bulgan (done) 20,000 20,000 5000 2000

Output 1.3 Changes in market volume and turnover of livestock products in cooperatives

With increasing membership and the market volume of products, cooperatives‟ turnover is also on the rise. There have been two big waves of cooperative development in the past three years: The introduction of a government subsidy scheme to channel sheep wool, skins/hides and camel wool through cooperatives to herders, and soft loans for livestock processing companies from the Chinggis Bond to support technical change and working capital. In order to create stable business operations and ensure the quality of raw materials from herders, a growing number of companies are interested in developing working relationships and entering into contracts with cooperatives.

Table 13: Contracts established by APUG-based cooperatives in 2015 (short and long term)

Aimags Long and short-term marketing contracts

Contracted sales volume (mln MNT)

Number of job places created full and part-time (M/F)

Arkhangai 6 1,210.0 35/45

Bayankhongor 7 319.8 6/2

Gobi-Altai 6 78.8 43/33

Khovd 4 794.5 11/2

Uvs 3 617.9 15/18

Zavkhan 29 299.8 107/14

Bayan-Ulgii 10 984.4 8/9

Total 65 4,305.0

225 Male 123 Female

A secondary marketing cooperative set up at the Aimag Federation of APUGs has entered into supply contracts with the following processing companies: Bayalag Ulzii (yak wool), Uguuj Shim (yak wool), Darhan Nekhii (skins and hides), Erdenet Khivs (sheep wool), Mogol (sheep wool) and Darkhan Foods (meat). Bayankhongor aimag cooperatives organised herders‟ participation in border trading in China and sold camel dairy products worth MNT 12.7 million. This year, the Arkhangai aimag AF entered into contracts with several wool-processing companies to supply wool from herders and the World Bank Marketing Project. The total sum of the contracted work was MNT 60 million.

21

During the recent Green Gold-mandated cooperative assessment, it was found that herders were also willing to increase their share in cooperatives. For example, in several soums in Gobi-Altai, Arkhangai and Zavkhan aimags, members agreed to increase their contributions up to MNT 100,000 per member in order to generate working capital. APUG and AF-based cooperatives developing new businesses: In addition to engaging in livestock raw material sales, Green Gold encourages APUG-based cooperatives to engage in local value-adding and primary processing businesses and in non-livestock product businesses such as growing fruit trees, planting potatoes and vegetables, and running shops and hotels. Based on a request from the AF in Arkhangai aimag, a Yak Festival was organised as an educational and tourist event. The main aim for Green Gold was to provide support for the AF and PUGs to gain experience and learn the skills needed to independently organise next year‟s festival as a tourism event and a possible source of income. According to a CBA analysis, in order to organise a Yak Festival for 1500-2000 visitors, there is a direct cost of about MNT 12.0 million As well as selling tickets to tourism companies, herders and soum APUGs can also earn income from the sale of dairy products to tourists and running a small eating establishment on site. This year, the total income generated for local herders and PUGs was MNT 15 million. Next year, the Arkhangai AF will participate in the Tourism Fair 2016 and will sell tickets to local tour operators to visit the Yak Festival. Table 14: New business initiatives supported by Green Gold for APUG-based cooperatives Non-livestock businesses

Aimags Cooperatives Number of employees (part and full-time)

Annual income („000 MNT)

Yak festival Arkhangai All cooperatives 10/10 5500

Fruit tree planting

Bayankhongor Bayangobi 2 F/T 6 P/T

3000

Construction concrete

Bayankhongor Gurvanbulag 5 P/T 3000

Potato and vegetable growing

Bayankhongor Bayanlig 5 P/T 3000

Felt-making Gobi-Altai Taishir 12 P/T 5000

Felt-making, sheep wool washing

Gob Altai Erdeme 8/1 5000

Forage and hay-making Potato and vegetable planting

Gobi-Altai Khaliun 12/12 4400

Bio char coal processing

Bayan-Ulgii Altai, Buga, Bayannuur, Buyan, Tolbo, Deluun, Ulaankhus, Tsengel

30/12 Not available

Livestock sales market

Uvs Second-level cooperative

In progress

Livestock sales market

Khovd Second-level cooperative

In progress

Yoghurt-making for school

Zavkhan Erdenekhairkhan 3 females 5000

22

lunches

Camel wool marketing: The market for camel wool has not improved, which has been reflected in sales prices. This year, Gobi-Altai and Bayankhongor AFs in cooperation with the marketing component of Green Gold organised the combing of baby camel wool (1250 tonnes raw). Sample raw materials were processed at several processing companies and the results were very good. According to the companies, baby camel wool micron and length is higher than the current best-quality cashmere. The average micron of combed baby camel wool is 15 mkm, with an average length of 41mm; the average cashmere micron is currently 16.5 mkm with a length of 38mm. Two local processing companies were involved in different stages of processing, from washing to final production. According to industry experts, camel wool is suitable for both knitted and woven products.

Output 1.4: Women’s increased participation in the PUG system The participation of women herders in bagh citizens’ meetings is increasing: According to soum government officials, women‟s participation in bagh citizens‟ meetings has increased in the past two years since women herders‟ annual meetings were made a regular event. In order to encourage women to participate in PUG activities, Green Gold has been supporting soum APUGs to organise annual meetings of women herders since 2013. In up to 30 soums of the 126 target soums, this has become a regular event. On average, 70-100 women per soum attend annual meetings. In the early years, these meetings were moderated by Green Gold staff or APUG leaders, with the main focus being rangeland management issues. The events have since expanded and become a platform for herder women to discuss a range of issues, and have become an important social gathering for women to meet and network. As Green Gold nears completion in 2016, we are working to make it sustainable in the future. About 30 soum governments have begun co-sponsoring the events. Gender analysis in herding households: Green Gold facilitated a gender analysis of herding households from November 2014 to June 2015. About 300 men and women from herding households and 70 herders‟ sons and daughters participated in the survey from eight soums across Mongolia: Taishir (Gobi-Altai), Most (Khovd), Umnugovi (Uvs), Bayannur (Bayan-Ulgii), Tsagaanchuluut (Zavkhan), Mandal (Selenge), Undurshireet (Tuv) and Ulziyt (Dundgovi). Different aspects of herding household life were examined: The division of labour, decision-making, access/control of resources/benefits, participation in community activities, and child-related issues.

23

The main findings of the research are summarised as follows:

Workload sharing varies seasonally throughout a year, however women‟s workload is greater than men‟s. The total working hours of women spent on productive, reproductive and main community activities is higher than men‟s for the majority of the year.

Women‟s working hours and their workload for reproductive activities was three to four times higher than that of men.

50.1 percent of respondents said most of the decisions about livestock production (such as otor movements, seasonal grazing movements, involvement in pastureland management plans and herd management) were made by men; only 23.2 percent said wives were involved in decision-making processes.

Although both men and women work hard to earn income for their families‟ livelihoods, there are imbalances in relation to the use of and the benefits derived from family income. In relation to decision-making on how to spend family income, women are involved in the evaluation process but final decisions are taken by men. In relation to household money

management, men are slightly predominant, although women‟s involvement is quite high (63 percent said the husband decides, and 58.5 percent said wives were involved).

Most herder household property (58.5 percent), including livestock, winter/spring camps, motorcycle and other vehicles, is registered in the name of husbands.

Survey respondents said women‟s limited involvement in community activities was the result of the difficulty they faced in delegating household tasks (33.2 percent) and delegating to others the care of children and the elderly.

In relation to the choice of a leader, the preference for men is quite pronounced (for PUGs, 38.7 percent). For cooperatives, 40.7 percent said they they had no gender preference as long as the person chosen was able to carry out their duties effectively. Only 12.6-16 percent of respondents said they would choose women as PUG/cooperative leaders.

Gender differences among sons and daughters in relation to education and their future were particularly evident in relation to school dropouts, with parents preferring to take their sons out of school rather than their daughters.

There is a direct correlation between poor livelihood households and children's tendency to pursue higher education after secondary school. School dropouts increase when households lack a workforce and the income needed to hire an assistant herder. Parents often need to keep one of their sons at home to work so their other children, mainly daughters, will have the opportunity to study.

Promotion of women in income-generation opportunities: One of the cross-cutting themes within all Green Gold components is the promotion of income-generation opportunities for women in herding households.

- Based on the successful experience of Herders‟ Matching Funds, Green Gold appropriated MNT 35 million to create a Community Fund for Women. The fund will operate under the same principles as the Herders‟ Matching Funds, in which member contributes MNT 15,000-20,000 with Green Gold contributing the same amount. The fund will primarily be used to support women in engaging in income-generation activities for the family, to sponsor women‟s events within PUGs and cooperatives, and to provide small loans to women in emergency situations.

- Through the extension component, herder women were contracted to sew 300 “information bags” for herders for MNT 6000 each.

- Up to five small income-generation projects were implemented by the extension and marketing components.

24

Lessons learned and implications:

Given the growing role of aimag AFs in the local coordination of four Green Gold components as well as coordination with local governments and herders, the workload of AF personnel (three people) has significantly increased this year. In addition, AF heads are also engaged in the collection of raw materials from herder familes and organising transfers and sales to processing companies in Ulaanbaatar, and the disribution of payments to herder families. PUGs and APUGs/cooperatives and AFs/cooperatives fill the gaps in the outreach system to nomadic herder households that existed under the Soviet system.

Ensuring the participation of herder families in collective rangeland management and increasing their responsibillity remains a challenge. The habit of grazing freely and the free use of rangeland resources for more than 20 years is a deep-seated mindset among herders.

Faciltating close cooperation between PUGs, APUGs and aimag land departments, soum land managers, AHBU staff and metererolgical technicians has improved the enforcement of RUAs and the planning and implementation of annual soum rangeland-use plans.

Following the release of the National Rangeland Health Report and the introduction of two-tier RUAs with more specific conditions on maintaining rangeland health (ESD/STM) and stocking rates, more time is required for training and facilitation from the PCU. The results may not be fully achieved during Green Gold‟s remaining time period.

Given the late issuing of the regulation for the LDF and that it was not well communicated, there are few soums in which 30 percent of the LDF (in accordance with the regulation) was spent on rangeland and environmental management projects. Most of the projects funded emanated from soum centre organisations and residents. This is because the majority of the members of Soum Citizens‟ Meetings reside in the soum centre. Therefore, voting tends to favour projects around the soum centre. Another reason is that after many of years budget deficit, the LDF was largely used to cover pending investments. However, there is still the issue of prioritisation. For example, in Ugiinuur soum in Arkhangai aimag, the governor said that although one of major problems in the soum was rodent control, he was unable to muster support from Soum Citizens‟ Meeting members to allocate funding to combat the problem; instead, members opted to build a children‟s playground in the soum centre.

Each year, Green Gold financial support is delayed and released in April. This means complementary funding from Green Gold for project proposals submitted by PUGs, HGs and cooperatives and those included in the Annual Plan of Operations are postponed. In the past two years, projects related to planting forage, expanding grazing areas and increasing access to water had to be delayed, necessitating the reworking of plans by PUG and APUG leaders.

The leadership of PUGs and APUGs is crucial for the successful implementation of collective rangeland management and cooperative development. Herders‟ trust in leaders can help to resolve many issues.

Organising training for PUG leaders in Zavkhan aimag by the aimag AF proved to be a good initiative. A total of 240 PUG leaders took part in the training, which resulted in the development of recommendations for the aimag governor on improved rangeland management policy, which was personally submitted to the governor.

In order to improve the monitoring and control of PUG Herders‟ Matching Funds (HMF), Green Gold is undertaking an assessment at each soum HMFs and made an arrangement with Khaan Bank to make all transcations via the Bank. The assessment results will be ready by March 2016.

Government policy on cooperative development is inconsistent, and the ad-hoc distribution of subsidies and unfulfilled promises is negatively shaping herders‟

25

perceptions. This year, many herder families did not receive price caps on sheep wool because of registration errors in the AHBUs. Many PUGs and APUGs delivered letters to the MoFA about this issue.

Pronounced political partisanship is reflected at the local level and is fueling tensions among herders from different parties.

According to feedback from herders on the issue of mining, they are not completely opposed to mining operations in their soums. The main issue for herders is being informed in advance and being able to take part in the processes. If there are negative consequences for the environment and rangelands, a joint solution needed to be sought.

Outcome 2: Applied agricultural research that produces results for practitioners: Science-based understanding of range-management issues enhances the scope for sustainable range management at all levels

Output 2.1 Human and institutional capacity is created within relevant ministries that enables: i) Improved data management; ii) The use of ecological site description-related concepts to interpret monitoring data; and iii) Serves by consistent products on regional and national dynamics.

Output 2.2 The ESD concepts, documents, map products and extension materials are jointly produced with the target soums to be used by PUGs/soums. They will serve as a foundation for the spatial expansion of ESD development.

Output 2.3 New technologies for forage production with annuals and perennials and for pasture rehabilitation are developed and demonstrated in experiments for the new ecological conditions of the target areas of Green Gold IV, are tested with PUGs and transferred to extension services for further up-scaling.

Output 2.4 The human and institutional capacities for the interpretation of existing data and the independent adaptation of rangeland management and forage production to present and future challenges are developed.

Output 2.1: Human and institutional capacity is created within relevant ministries that enables: i) Improved data management; ii) The use of ecological site description-related concepts to interpret monitoring data; and iii) Serves by consistent products on regional and national dynamics. The National Rangeland Health Report is presented to the Government of Mongolia. Based on successful collaboration with NAMEM in previous phases of Green Gold with such achievements as:

1. Resolution 114 of the Ministry of Environment and Green Development issued on 20 April, 2011, pertains to the adoption of one methodology nationwide for rangeland health monitoring.

2. Regional trainings were carried out for 450 soum technicians on the basic skills of data collection, as well as the provision of tools, in conjunction with SDC‟s Coping with Desertification Project and UNDP‟s Sustainable Land Management Project.

3. A national rangeland monitoring database has been set up at NAMEM on which is stored four years of data (2011-2014) from 1550 plots throughout Mongolia.

26

With support from the USDA team and rangeland inventory data collected from more than 600 plots, we developed concepts for ecological potential and the recovery of Mongolian rangelands with the aim of providing consistent information about potential recovery options, which is essential for translating assessment into management actions that improve land conditions and human livelihoods. These are as follows:

1. A five-level classification of recovery potential called “recovery classes” based on common patterns of rangeland dynamics observed worldwide.

While the logic underpinning the application of these classifications to particular land areas is science-based, it must be recognised that in Mongolia they represest testable hypotheses that can be either verified or disproved through management actions and monitoring.

2. Twenty-two ecological site groups based on the soil, climatic and landscape features of common rangeland types in Mongolia. These serve as a basic tool for the planning, enforcing and monitoring of rangeland management and restoration programme activities.

3. State and transition models are developed for the most common rangeland community shifts, state transitions and related triggers, and restoration pathways that enable NAMEM engineers to deliver annual rangeland health assessments to the public.

Based on these concepts and NAMEM monitoring data from the 1550 plots, the National Report on Rangeland Health was completed and presented to the government. Findings included:

- At present, 65 percent of Mongolia‟s rangelands have been altered to a certain extent. - Most rangeland areas can recover by changing the existing management approach. - The belief that irreversible degradation was spreading from southern Mongolia was not

supported by the analysis. However, as our data suggests, aimags in forest steppe and steppe regions in central Mongolia face serious degradation problems.

Output 2.2: ESD concepts, documents, map products and extension materials are produced jointly with the target soums to be used by PUGs/soums. They will serve as a foundation for the spatial expansion of ESD development.

The ALAGAC management board approved the resilience-based rangeland management approach for planning and management-impact monitoring, and decided to pilot the approach in 15 soums and one aimag. Rangeland management activities should be based on scientifically proven evidence and involve participation from land users. In order to provide land users and managers at all levels with the knowledge and tools needed to undertake rangeland management planning, the STMs for Mongolian rangeland communities have been simplified into user-friendly photo catalogues (Figure 1). The application of ESDs, including STMs as a roadmap for soum land-management planning, rangeland state mapping and management-impact monitoring, were tested in four soums in 2013/2014 (Undurshireet soum, Tuv aimag, Chandmani soum, Khovd aimag, Ikh Tamir soum, Arkhangai aimag, and Bulgan soum, Dornod aimag), representing the country‟s main ecological regions: Forest steppe, steppe and desert steppe. Based on the results of this testing, the ALAGAC management board decided to update soum land-management planning and management-impact monitoring manuals so that ESD information formed the basis for future planning and monitoring (Figure 1).

27

Figure 1: A photo catalogue for Mongolian rangeland communities in different ecological regions provides images of key indicator species and expected productivity, as well as information on carrying capacity and the appropriate utilisation of management recommendations

Figure 2: ESD-based soum land-management planning and photo-monitoring approaches were approved by ALAGAC

In relation to up-scaling the resilience-based rangeland management approach:

1. The resilience-based rangeland management (RBRM) approach is introduced in 15 pilot soums representing different ecological zones and throughout Arkhangai aimag. ALAGAC seeks to improve the Soum Annual Land Management Planning process by:

- Providing clear criteria for identifying healthy and degraded areas - Using ESDs and maps of rangeland conditions to specify where grazing can be usefully

deferred or pastures rested, and estimating the appropriate timing of grazing and recommended adjustments to stocking rates

- Adjusting management to specific areas based on differences among ecological site groups and rangeland health

- Focusing management on rangeland health as well as animal herds - Linking monitoring to expectations about pasture use and the maintenance or

improvement of rangeland health, based on specific indicators - Encouraging the participation of all stakeholders, including herders and local

government officials, in selecting preferred management options and updating plans 2. ALAGAC and MULS signed a Memorandum of Understanding to collaborate in the

capacity development of soum land managers; a land-management planning laboratory

28

was also set up (Figure 3). The laboratory is equipped with high-speed computers and GIS programs and has the potential to conduct training for 25 people

Figure 3: With Green Gold support, a laboratory for land-management planning is set up at MULS

3. The first training on the RBRM approach is conducted for 50 land managers from 30 soums

а) ALAGAC Director A. Khurelshagai opened the

training б) A total of 63 land managers took part in RBRM

training, of whom 41 percent were women

b) Land managers are given textbooks, manuals and

handouts on RBRM concepts and its application for

planning and monitoring

г) Land managers are given basic tools for photo-

monitoring

29

Output 2.4: The human and institutional capacities for the interpretation of existing data and the independent adaptation of rangeland management and forage production to present and future challenges are developed.

Improvement of rangeland and herd-management training programme at MSUA

As one of Mongolia‟s leading universities training rangeland and herd management specialists, MSUA has launched a rangeland and herd-management training programme, which includes:

1. Updating the curriculum and rangeland and herd-management course syllabuses. As a result of the collaboration between MULS professors, graduates and agencies involved in the agricultural and natural resource management sectors, the rangeland management and animal nutrition syllabuses were updated and approved in 2014.

2. Improvement of rangeland and herd management training materials: - The translation of such internationally recognised textbooks as Jerry Holechek‟s

“Rangeland Management Principles and Practices” was completed and published. Richard O. Kellems and David C. Church‟s “Livestock Feeds and Feeding” textbook is also being published.

Capacity building programme for young researchers Programmes oriented towards building the capacity of young researchers in the field of pasture ecology have been implemented through a “Young Researchers‟ Club” at NUM. The purpose of the club is to provide young researchers with opportunities (1) To exchange experiences, new ideas and innovations; (2) To coordinate studies among themselves; and (3) To improve their knowledge and capacity. Club activity is continuing independently since Green Gold ended its financial support and is focused on the following:

- Information sharing via social media (https://www.facebook.com/groups/160219437472585/)

- National and international scientists and specialists in the field Stuard Pimm, Li Alan Dugatkin and Chuluun published articles and were invited to give talks (Figure 8)

Figure 8: Lectures by internationally recognised scientists play a key role in providing young researchers with modern principles and best practices in rangeland ecology and natural resource management.

30

Students are conducting field research on the impact of climate change via simulation studies and rangeland productivity dynamics at experimental sites in Ikh Tamir soum in Arkhangai aimag, which is then passed on to NUM

Updating the rangeland management curriculum at MULS As a result of the collaboration between MULS, alumni students working in the rangeland management sector and the government agency responsible for land management and monitoring, the “rangeland management” and “animal nutrition” course syllabuses were updated and in use from this academic year. In addition, such internationally recognised textbooks as Jerry Holechek‟s “Principles and Practices in Rangeland Management” and Richard O. Kellems and David C. Church‟s “Animal Nutrition” were translated into Mongolian as student reference material.

Outcome 3: Demand-driven extension service system for herders (f/m) is set up.

Output 3.1 The capacity of the extension service system is strenghtened.

Output 3.2 Content: Herders are provided via the PUG system with relevant and tested extension messages (f/m).

Output 3.3 Dissemination: Application of sustainable livestock herding practices is increased.

Output 3.4 Entrepreneurship of herders is improved.

Outcome indicator 3.1: Perception of usefulness of extension services by herders

The SDC baseline monitoring report 2013 and annual monitoring report 2015 by IMRI confirmed that the share of herders in Green Gold areas that perceive extension services as useful increased from 11.2% in July 2013 to 51.6% in July 2015. This equals a 461% increase rate in positive perception of extension services within 21 months of implementation of the Extension component of the Green Gold project.

Outcome indicator 3.2: Public funds allocated for extension services in the project intervention areas

The pilot intervention and capacity building activities of C3 are resulting in increased awareness of the usefulness of extension services not only among herders but also among local decision makers. Funds allocated by aimag governments in the intervention areas for extension services reached 85 million MNT in 2015, compared to MNT 65 million in 2013.

Outcome indicator 3.3: Funds spent on delivery of extension services by APUG-based herder cooperatives

With initial support and stimulation by C3, APUG-based herder cooperatives have started providing extension services with substantial potential of sustaining without further support from the project. As an economic activity to boost profitability as well as a social activity to strengthen membership base, extension service delivery has been increasingly integrated into regular operation of the cooperatives. Internal funds spent by the cooperatives on delivery of extension services in 2015 were MNT 14 million, compared to MNT 8 million in 2013.

31

Output 3.1: The capacity of the extension service system is strenghtened.

Output indicator 3.1.1: Improved collaboration of MULS and NAEC

C3 is facilitating a new cooperation agreement between NAEC and MULS, which shall be followed by a collaborative project for establishment of a distance-learning system targeting an estimated 1500 agricultural specialists and extension staff at DFAs and AHBUs countrywide. Conclusion of the cooperation agreement and the start of the collaborative project are expected in September 2016.

Output indicator 3.1.2: Number of students learning extension methods at MULS

Stimulated through collaboration with C3, MULS replaced the undergraduate course “Extension service“, which was only elected by 42 students in 2013 and 36 students in 2014, with a new course titled “Communication and Innovation”. The course will be launched in the academic year 2015/2016 starting in September 2015.

C3 organised two workshops with representatives of the administration and schools of MULS on curriculum and syllabus development of the “Communication and Innovation” course. The first workshop in January 2015 with 15 participants (7F/8M) was a full-day event, and resulted in an initial curriculum and a work group to prepare the syllabus. At the second workshop with 7 participants (7f/10m) for 2 days in June 2015, the syllabus and curriculum of the course were finalised, core modules were prepared, and specific contents and delivery methods were planned for each school.

Output indicator 3.1.3: Number of aimags with qualified Master Trainers (f/m=30/70)

As of 31 July 2015, 17 Master Trainers (4f/13m) at AFPUGs and DFAs in 7 target aimags of C3 (Arkhangai, Bayankhongor, Bayan-Ulgii, Gobi-Altai, Khovd, Uws and Zavkhan) have been trained and are engaging in planning, coordination and monitoring of demand-driven extension services piloted for improving rangeland management, herd management, animal health and nutrition, and entrepreneurship of herders and herder cooperatives in the intervention areas.

The following three events were organised by C3 for training of master trainers:

Refresher training of master trainers in October 2014 (2 days)

Training of master trainers in March 2015 (4 days)

Refresher training of master trainers in June 2015 (3 days)

The refresher training in October 2014 was attended by 7 MTs (2f/5m) in Khovd, Uws and Bayan-Ulgii aimags, who had been initially trained in March 2014. The training strengthened the knowledge and skills of the MTs to design and coordinate demand-driven extension services for herders. Specific outputs included work plans for local-level training and exchange activities in the period October to December 2014, and for intensifying collaboration between AFPUGs and DIAs at the aimag level, and between APUGs and AHBUs at the soum level.

The ToMT in March 2015 was attended by 10 persons (2f/8m), including extension officers of AFPUGs and livestock/rangeland specialists of DFAs in Arkhangai, Bayankhongor, Gobi-Altai and Zavkhan aimags, which have been targeted by C3 since January 2015, in addition to extension officers of AFPUGs in Khovd and Uws, at which the Executive Directors have been trained as Master Trainers in 2014. Specific outputs of the training included a gender mainstreaming plan, design of a herder feedback mechanism and a participatory M&E framework.

The refresher training in June 2015 was attended by 11 MTs (3f/8m) from AFPUGs in 7 target aimags, and DFAs in 4 aimags (Arkhangai, Bayankhongor, Khovd and Uws). The training resulted in improved communication, facilitation and leadership skills of the MTs and increased their ability to communicate sustainable rangeland management and livestock herding practices to local stakeholders and herders. In addition, 7 MTs (3f/4m) were trained in facilitation of

32

community participation and leadership, and entrepreneurship of herder women. Specific outputs included work plans for local-level training and exchange activities in the period October to December 2014, including training herder women in 37 soums, and a plan for intensifying the operation of Herder Service Centres.

Output indicator 3.1.4: Percentage of GG soums with a team of trained Extension Facilitators (f/m=30/70)

As of 31 July 2015, 126 Extension Facilitators (36f/90m) at APUGs and AHBUs in 63 pilot soums in 7 target aimags of C3 have been trained and are engaging in coordination and delivery of demand-driven extension services piloted for improving rangeland management, herd management, animal health and nutrition, and entrepreneurship of herders and herder cooperatives in the intervention areas.

The following events were organised by C3 for training of facilitators:

Refresher training of facilitators in September 2014 (2 days)

Training of facilitators in April 2015 (3 days)

Workshop on preparation of business plans of herder cooperatives in November 2014 (3 days)

Training on participatory video in March 2015 (4 days)

Refresher training on participatory video in July 2015 (4 days)

The refresher training in September 2014 was organised in Ulaangom and Khovd, and attended by 52 facilitators (13f/39m) from 26 soums in Khovd, Uws and Bayan-Ulgii aimags, who had been initially trained in April 2014. The training strengthened the knowledge and skills of the participants to deliver demand-driven extension services to herders. Specific outputs of the training included assessment of local-level training and exchange activities in the period May to September 2014 and a detailed work plan for the period October to December 2014.

The ToF in April 2015 was attended by 74 persons (23f/51m), including heads of AFPUGs and livestock/rangeland specialists of AHBUs in 37 new pilot soums of C3 in 7 target aimags. Specific outputs of the training included a detailed plan for activities to facilitate herder learning and engagement at soum-, PUG- and khot ail-levels, and a plan of participatory monitoring of extension methods and contents in relation to herders‟ demands.

The workshop on preparation of business plans was organised in Ulgii in November 2015, and attended by 11 persons (3f/8m), including 10 APUG leaders in Bayan-Ulgii, Khovd and Uws aimags, who lead herder cooperatives at the same time, in addition to the extension officer of the AFPUG in Uws aimag. The participants drafted business plans for their cooperatives for the period 2015 to 2019, and the drafts were finalised by the C3 consultant who facilitated the workshop.

Ten facilitators (4f/6m) from 5 pilot soums (Tsetseg, Must and Darvi soums in Khovd aimag, and Tolbo and Buyant soums in Bayan-Ulgii aimag) were trained in preparation and use of participatory video to support herders‟ communication and exchange through training workshops in Khovd in March and July 2015. Each team was provided with cameras and tripods by C3.

Output indicator 3.1.5: Percentage of GG soums with APUG-based units for information dissemination and herder learning and exchange

Based on the establishment of Herder Training and Information Centres with APUG-offices by GG C1, C3 is introducing the concept of "Herder Service Centre (HSC)" in the intervention areas. As of 31 July 2015, HSCs in 55 pilot soums, out of 125 target soums of GG, are in operation. C3 supplied each HSC with information materials and media, and equipment for training and photo-point monitoring of rangelands. C3 also provides methodical guidance to APUGs for effective operation of HSCs.

33

The HSCs are based on herders' participation, operated by APUGs in collaboration with AHBUs, and serve to herders as: 1) a learning and exchange hub, 2) a social space to interact with different stakeholders and services and 3) a shop to provide products and/or services they need; whereas the level of intensity of each of these functions varies in different soums.

Output indicator 3.1.6: Percentage of APUGs with extension cooperation agreements with AHBUs

As of 31 July 2015, APUGs and AHBUs in all 63 pilot soums of C3 have extension cooperation agreements for the period May 2015 to December 2016.

Output 3.2: Content: Herders are provided via the PUG system with relevant and tested extension messages (f/m).

Output indicator 3.2.1: Percentage of PUG members (f/m=30/70) receiving extension messages via mass media

In the period of reporting, 10,000 PUG-member herder households in Khovd, Uws and Bayan-Ulgii aimags were reached with information and extension messages through two issues of the newsletter "Malch ukhaan" (“Herders‟ wisdom”). The outreach rate was 31% of all PUG-members.

The 2/2014 issue of the newsletter was published in October 2014 and the 1/2015 issue in January 2015. Both issues were distributed in 3000 copies in Mongolian and 2000 copies in Kazakh language per issue. On average, each copy is read by two herder households in the same khot-ail.

Output indicator 3.2.2: Percentage of PUG members (f/m=30/70) receiving extension messages via printed and audio-visual media

Through printed and audio-visual media, 8000 herder households in 7 target aimags, equalling 25% of PUG-members, received extension messages in the period of reporting.

The following media were used:

Manuals - reached 8000 herder households: o “Herder of the XXI century” manual, published by NAEC in original version in 2011 and

updated in May 2015 - 9 modules covering rangeland management, livestock management, animal breeding, animal health, herder entrepreneurship and herder cooperative development;

o Manual on “Diagnosis, prevention and treatment of the brucellosis”, published by AHP in

April 2014;

o Manual on “Animal health”, published by AHP in April 2015;

Wall calendar, published by C3 in June 2015, with extension messages contributed by Green Gold C1, C2 and C4, AHP, IBLIP, NAEC and MULS – published in 5000 copies, reaching 5000 herders;

Training videos, prepared by C3 between May 2014 and June 2015, on: haymaking, forage cropping, wool processing, and diagnosis, prevention and treatment of brucellosis, ganders and contagious agalactia – published in 150 copies per each and reached 1500 herders.

These media are distributed to herders through PUG-leaders trained as herder advisors. In June 2015, C3 introduced a system of distributing manuals and training videos to herders and receiving their feedback using “circulating information bags”. In May and June 2015, 400 information bags were distributed to 400 PUGs in 63 pilot soums of 7 target aimags. The information bags reached 8000 herder households by 31 July 2015, and the expected level of coverage by the end of 2015 is 40 herders per bag or 16,000 herder households.

34

Output indicator 3.2.3: Percentage of PUG members (f/m=30/70) engaging in field-based learning and herder-to-herder exchange

In the period of reporting, 5000 PUG-members participated in field-based training and exchange meetings at PUG and soum levels.

Field-based training of herders is linked to innovation pilots conducted by PUGs with partial support from the project for demonstrating sustainable rangeland and livestock management approaches and solutions to increase the herders‟ incomes. In 2014, innovation pilots on forage cropping, haymaking, lamb feeding, wool and milk processing, supplementary feeding were implemented in 17 soums of Khovd, Uws and Bayan-Ulgii aimags. Field days to disseminate the practices demonstrated were attended by 250 herders during the period September to December 2014. In 2015, innovation pilots are being implemented in 32 soums of 7 target aimags. Between January and July 2015, the pilots were visited by an estimated 3000 herders, either through field days or exchange visits of PUGs.

Herder exchange meetings at PUG and soum levels take place in spring and autumn. In October to November 2014, exchange meetings were facilitated at 265 PUGs in 26 pilot soums, and attended by 2500 herders. In the period June-July 2015, PUG-level exchange meetings were facilitated by herder advisors at 300 PUGs in 7 target aimags, and attended by an estimated 5000 herders.

Output 3.3: Dissemination: Application of sustainable livestock herding practices is increased.

Output indicator 3.3.1: Number of PUGs adopted practices for improving carrying capacity of rangelands

Number of PUGs that adopted technologies for improving carrying capacity of rangelands such as irrigation and bio-fertilisation increased from 8 in 2013 to 12 by 31 July 2015.

Output indicator 3.3.2: Percentage of GG soums with improved off-take intensity of non-productive animals

Balanced off-take of male animals older than 3 years and barren female animals is a priority of C3 pilot intervention as this has both short-term benefits to herders and long-term effects on the sustainability of rangeland management. In the period of reporting, off-take of such non-productive animals were increased in 11 GG soums, compared to the 2013 level.

Output indicator 3.3.3: Percentage of PUGs with improved animal breeds

For increasing animal productivity, especially in wool and meat, AFPUGs in 6 aimags, in collaboration with DFAs and AHBUs, facilitated breeding of 12,000 dams at 34 PUGs with sires of superior breeds such as Bayad, Sutai and Sartuul rams, and Altain Ulaan bucks in September to October 2014.

Output indicator 3.3.4: Percentage of PUGs with increased intensity of supplementary feeding in winter and spring

Hay and forage reserves for the winter 2014/2015 were increased at 36 PUGs by at least 15% compared to 2013, reaching up to 50 tons per PUG, thus enabling increased supplementary feeding in winter.

Output indicator 3.3.5: Percentage of PUG members contracted local vets

Twenty-one thousand herder households with PUG-membership have veterinary service contracts with local vets as of 31 July 2015. This presents a 117% increase compared to 2013.

Output 3.4: Entrepreneurship of herders is improved.

35

Output indicator 3.4.1: Percentage of PUG members (f/m=50/50) keeping household records

Household record keeping sheets as decision-making tools, especially for herd optimization, are being piloted by 500 herder households presenting 1.5% of all PUG-members. The number of herder households involved in this pilot is expected to reach 1600 by the end of 2015.

Output indicator 3.4.2: Percentage of APUG-based cooperatives generating supplementary income for herders (f/m=30/70)

Through C3 innovation pilots aiming to stimulate herders' business development, 10 APUG-based herder cooperatives out of 60 cooperatives in 7 target aimags are generating supplementary incomes for herders. The income-generating activities include: wool and milk processing, animal breeding, biochar production, fodder and vegetable cropping, sea buckthorn growing, meat storage and marketing, sewing and herders' shops.

Output indicator 3.4.3: Number of herder women engaging in collective processing of animal products

118 herder women in 5 aimags (Khovd, Uws, Bayan-Ulgii, Gobi-Altai and Arkhangai) are engaging in groups in milk and wool processing and sewing businesses of the APUG-based herder cooperatives.

2.3 Summary of achievement of monitoring indicators

Indicators Baseline

2013

Target

for 2015

Achievemen

t

by 31 July

2015

Rate of

execution

Outcome 3: Demand-driven extension service system for herders (f/m) is

set up.

3.1. Perception of usefulness of extension

services by herders (f/m=30/70)

11.2% 50% 51.6% 103%

3.2. MNT Public funds allocated for

extension services at aimag and soum

levels

MNT

65

million

MNT

58.25

million

MNT

70 million

120%

3.3. MNT Funds spent on extension

services by APUG-based herder

cooperatives

MNT

8 million

MNT

8.4

million

MNT

11 million

131%

Output 3.1. The capacity of the extension service system is strengthened.

3.1.1. Improved collaboration of MULS

and NAEC

0 2 2 100%

3.1.2. # of students (f/m=50/50) learning

extension methods at MULS

42 150 36 24%

36

3.1.3. # of aimags with qualified Master

Trainers (f/m=30/70)

0 7 7 100%

3.1.4. % of GG soums with a team of

trained Extension Facilitators (f/m=30/70)

0 50% 50.4% 101%

3.1.5. % of GG soums with APUG-based

units for information dissemination and

herder learning and exchange

0 40% 44% 110%

3.1.6. % of APUGs with extension

cooperation agreements with AHBUs

0% 60% 68% 113%

Output 3.2. Herders (f/m) are provided via the PUG system with relevant and

tested extension messages.

3.2.1. % of PUG members (f/m=30/70)

receiving extension messages via mass

media

12% 60% 31% 52%

3.2.2. % of PUG members (f/m=30/70)

receiving extension messages via printed

and audio-visual media

8% 40% 25% 63%

3.2.3. % of PUG members (f/m=30/70)

engaging in field-based learning and

herder-to-herder exchange

3% 25% 16% 64%

Output 3.3. Application of sustainable livestock herding practices is

increased.

3.3.1. # of PUGs adopted practices for

sustainable rangeland management

8 15 12 80%

3.3.2. % of GG soums with improved off-

take intensity of non-productive animals

0 10% 9% 90%

3.3.3. % of PUGs with improved animal

breeds

2% 5% 4.3% 86%

3.3.4. % of PUGs with increased intensity

of supplementary feeding in winter and

spring

0

5% 4.6% 91%

3.3.5. % of PUG members contracted

local vets

24% 30% 65% 217%

Output 3.4. Entrepreneurship of herders is improved.

3.3.1. % of PUG members (f/m=50/50) 0 5% 1.5% 31%

37

keeping household records

3.3.2. % of APUG-based cooperatives

generating supplementary income for

herders (f/m=30/70)

7% 10% 17% 167%

3.3.3. # of herder women engaging in

collective processing of animal products

32 100 118 118%

Overall Average 98%

2.4 Gender mainstreaming

In order to strengthen the overall significance of extension for community development as well as its specific role in ensuring gender equality in rural communities, specific gender-mainstreaming activities were introduced in the C3 pilot operation in the intervention areas in 2015, in addition to the strategy of maintaining a minimum of 30% female quota among the beneficiaries and innovation pilots supporting business development of herder women. The specific gender-mainstreaming activities included:

Training of Trainers for Herder Women: AFPUG- and Aimag government-based Master Trainers were trained by SCO and C3 staff and a local consultant in June 2015 in the following areas: Facilitating participation and leadership development of herder women, Facilitating herder women entrepreneurship and Finances and record keeping of herder households.

Training of Herder Women: Trained Master Trainers provided training to 512 herder women in 32 soums of 7 aimags in community participation and leadership, SME-development, marketing of animal products, and household finances and record keeping in July 2015.

Piloting of a soum-level Herder Women’s Board: A pilot "Herder Women‟s Board" of 15 members as a representative body to assist the soum government and the AFPUG in supporting herder women was established in Duut soum of Khovd aimag in July 2015. The Herder Service Centre in Duut soum is used for training and exchange activities of the Board.

2.5 Facilitation of stakeholder engagement

During the period of reporting, the Extension Component organised 15 events to facilitate stakeholder engagement at national and local levels, and participated with NAEC at one international event. The below table lists these events and is followed by brief profiles of the events.

No. Activity Period of

implementation

Location

1 Project planning workshop 16 October 2014 Ulaanbaatar

2 “Innovation for Sustainable

Livestock Production” fair

17 October 2015 Ulaanbaatar

3 Workshop for soum governors on 17-18 October 2015 Erdene soum, Tuv aimag

38

No. Activity Period of

implementation

Location

demand-driven extension services

4 Aimag-level stakeholder

consultation meetings (6 events)

December 2014 to

January 2015

Khovd, Ulgii, Ulaangom,

Uliastai, Tsetserleg, Altai

5 Workshop “Rethinking Extension”

for NAEC-staff

20 January 2015 Ulaanbaatar

6 Central-level stakeholder

consultation meeting

22 January 2015 Ulaanbaatar

7 Advisory Committee meeting 22 January 2015 Ulaanbaatar

8 Participation in the SDC Face-to-

Face workshop “Reaching the

Millions”

2-7 March 2015 Hanoi, Vietnam

9 Central-level consultation meeting 17 June 2015 Ulaanbaatar

10 Green Gold Field Day 19-20 June 2015 Chandmani and Buyant

soums, Khovd aimag

1. Project planning workshop

Date of implementation: 16 October 2014

Location: Ulaanbaatar

Participants: 51 persons (26f/25m) representing GG C1, C2, C3 and C4, AFPUGs in 7 target aimags, DIAs and soum governors in Khovd, Uws and Bayan-Ulgii aimags

Outcomes: Results of C3 activities and results in 2014 were evaluated and critically reflected on.

A first draft of C3 action plan 2015 was developed.

2. “Innovation for Sustainable Livestock Production” fair

Period of implementation: 17 October 2015

Location: Ulaanbaatar

Duration: 0.5 day

Participants: 54 persons (26f/38m) representing SDC, GG C1, C2 and C3, AFPUGs in 7 target aimags, DFAs and soum governors in Khovd, Uws and Bayan-Ulgii aimags, and herders in Must soum of Khovd aimag

(The above number only applies to invited participants).

Collaboration: MULS and NAEC organised the fair, and 14 inputs suppliers including research institutes and private firms presented their products.

39

Outcome: Representatives of AFPUGs and DFAs, and other local-level participants in C3 intervention areas were informed of new technologies, products and equipment for sustainable livestock and rangeland management, and connected to input suppliers for increasing their capacity to facilitate access of herders to innovation inputs and products for improving the productivity and sustainability of livestock herding.

3. Workshop for soum governors on demand-driven extension services

Period of implementation: 17 to 18 October 2014

Location: Tsonjin camp, Erdene soum of Tuv aimag

Duration: 1.5 days

Participants: 5 persons (1f/4m): Governors of Chandmani, Tsetseg and Zereg soums of Khovd aimag, and Baruunturuun and Tes soums of Uws aimag

Outcomes/Outputs: Governors of selected pilot soums improved their understanding of the concept and approaches of demand-based extension services.

Possibilities for improving extension collaboration of APUGs and AHBUs at the soum level, and for channelling soum-level public funds to extension services identified.

4. Aimag-level stakeholder consultation meetings (6 events, 1 day per event)

Period of implementation: December 2014 to January 2015

Locations: Khovd, Ulgii, Ulaangom, Uliastai, Tsetserleg, Altai

Participants: 132 persons (47f/75m) representing GG C1 and C3, AFPUGs, APUGs, DIAs, and aimag and soum governments in 7 target aimags

Outcomes: Local-level outcomes of the 2014 implementation of C3 were evaluated by aimag- and soum-level stakeholders.

Based on the draft 2015 action plan, local activities in each aimag for 2015 were designed together with the participants.

5. “Rethinking extension” workshop for NAEC-staff

Period of implementation: 20 January 2015

Location: Ulaanbaatar

Duration: 0.5 day

Participants: 11 NAEC-officers (9f/2m)

Outcome: NAEC-staff updated their knowledge on concept and methods of participatory rural extension and, based on the results of C3 pilot intervention in GG areas that is embedded in a framework for improving herder livelihoods, identified options for integrating the principles of participatory extension work in NAEC‟s activities targeting herders.

6. Central-level stakeholder consultation meeting

40

Date of implementation: 22 January 2015

Location: Ulaanbaatar

Participants: 27 persons (14f/13m): Green Gold C1, C2 and C3, MOFA, NAEC, MULS, CPR, NAMAC, Mercy Corps, AHP, IBLIP, FAO, Association of Land Managers

Outcomes: Project partners and national-level stakeholders in the agricultural extension system provided recommendations to the C3 action plan 2015.

7. Advisory Committee meeting

Date of implementation: 22 January 2015

Location: Ulaanbaatar

Participants: 20 persons (11f/9m), representing GG C1 and C3, SDC, MOFA, NAEC, MULS, NAMAC, CPR, Mercy Corps, Climate resilient rural livelihoods project, Market development and rangeland management project

Outcomes: Advisory Team members were informed of the progress of C3 implementation and provided recommendations to action plan 2015;

Field visits by Advisory Team members, and participation in a task force at MOFA for development of policy recommendations for strengthening extension was planned.

8. Participation in the SDC Face-to-Face workshop “Reaching the Millions” in Hanoi

Period of implementation: 2-7 March 2015

Location: Ulaanbaatar

Participants: 2 persons (1f/1m): Green Gold C3 coordinator, Extension specialist of NAEC, together with Head of Programme AFS of SDC-Mongolia

Outcomes/Outputs: The Mongolian delegation contributed to formulation of the “Hanoi statement” for strengthening rural advisory services in developing countries in a poverty-oriented, ecological and sustainable way;

The Mongolian delegation conducted an analysis of “Tops and Flops in the Rural Advisory Services in Mongolia”, and developed an action plan for “Awareness-raising at decision-making level to develop a pluralistic Rural Advisory System in Mongolia”, which was integrated into the C3 action plan 2015.

9. Central-level stakeholder consultation meeting

Period of implementation: 17 June 2015

Location: Ulaanbaatar

Participants: 14 persons (6f/8m), representing Green Gold C1 and C3 , MOFA, NAEC, MULS, NAMAC, AHP, FAO, Climate resilient rural livelihoods project

Outcomes/Outputs: Project partners and national-level stakeholders in the agricultural extension system were informed of the progress of C3 implementation in the first half of 2015 and provided recommendations for the implementation period July-December 2015.

41

10. Green Gold Field Day

Period of implementation: 19 t 20 June 2015

Location: Chandmani and Buyant soums of Khovd aimag

Duration: 2 days

Participants: 50 (18f/32m) participants, including:

24 (10f/14m) local government officials (DFA, Land management agency of aimags and land manager of soums) in 4 Khovd, Uws, Bayan-Ulgii and Gobi-Altai aimags

17 (3f/14m) representatives of AFPUGs and APUGs in 4 aimags

2 (1f/1m) representatives of the Ministry of Food and Agriculture, and

7 representatives (4f/3m) of the SCO, Green Gold C2 and C3.

Collaboration: Preparation in close collaboration with Green Gold PCU and C2. Information sessions were organised and held by D.Bulgamaa from C2.

Outcomes/Outputs: The experiences and outcomes of the research and extension work of Green Gold for improving rangeland management and livestock productivity as well as models of effective collaboration between the local government, especially land management division, AHBU and AFPUG and APUG to provide extension service to the herders in Khovd aimag, were shared with stakeholders in other aimags in the Western region;

The participants identified possibilities for a) introducing good practices of rangeland use and protection, and regulation and monitoring of rangelands at soum and PUG levels; b) improving herd management and productivity, and c) embedding extension services in professional services such as animal breeding, and introducing such models in the Government extension system, i.e. by DFAs at the aimag level and Animal Health and Breeding Units at the soum level;

The participants shared experiences with approaches for facilitating herder learning and exchange, and supporting herder cooperatives in generating incomes for herders.

2.6 Provision of reference materials to master trainers, facilitators and herder advisors

During the period of reporting, the Extension Component provided AFPUGs, DFAs, APUGs, AHBUs and PUG-leaders in the intervention areas with a comprehensive set of reference materials in printed and online formats, as listed and briefly described below.

No

.

Output Period of development Outreach in the period of

reporting

1 Catalogue of input and

equipment suppliers

September-October

2014

AFPUGs, DFAs, APUGs, AHBUs

and PUG-leaders in Khovd,

Bayan-Ulgii and Uws aimags with

47 soums targeted by GG

42

No

.

Output Period of development Outreach in the period of

reporting

2 Reference materials

online

September-October

2014

AFPUGs and DFAs in 7 aimags

and APUGs and AHBUs in 125

soums targeted by GG 3 Reference manuals January-April 2015

1. Catalogue of input and equipment suppliers for livestock sector

Period of development: September to October 2014

Target groups: AFPUGs and DFAs in Khovd, Uws and Bayan-Ulgii aimags, and

APUGs and AHBUs and AHBU-based cooperatives, and PUGs in

all 47 target soums of Green Gold in these three aimags.

Collaboration: The catalogue was prepared by NAEC under coordination of C3.

Outcomes/Outputs: 300 copies of the catalogue were distributed to the target groups in October 2014;

Aimag- and soum-level implementing partners of C3 were informed of domestically available inputs and equipment for livestock production, and connected to input suppliers for increasing their capacity to facilitate access of herders to inputs and equipment for improving the productivity and sustainability of livestock herding.

2. Reference materials online

Period of development: September to October 2014

Target groups: AFPUGs and DFAs in 7 aimags and APUGs and AHBUs in 125

soums targeted by GG

Collaboration: GG C1 and C2, AHP and IBLIP provided reference materials for

publishing on the website.

Outcomes/Outputs: The website www.nogoon-alt.mn containing reference and training materials on rangeland management, herd management, fodder and feeding, animal health and herder entrepreneurship was launched in October 2014.

Master trainers extension facilitators have permanent access to reference materials for self-learning and use in facilitation of herder learning and exchange activities at soum and PUG levels.

3. Reference manuals

Period of development: January to April 2015

Target groups: AFPUGs and DFAs in 7 aimags and APUGs and AHBUs in 125

soums targeted by GG

Collaboration: GG C1 and C2, AHP, NAEC and MULS contributed to preparation

of reference manuals.

Outcomes/Outputs: Reference manuals on photo-point monitoring of rangelands and

animal health were published in 300 hard copies per each in

March 2015 and distributed to the target groups in April 2015.

43

Reference manuals on herd management and animal breeding

were distributed in electronic format to the target groups in April

2015.

Master trainers, extension facilitators and PUG-based herder

advisors have access to reference manuals for self-learning and

use in facilitation of herder learning and exchange activities.

Lesson learnt and Implications.

The following difficulties have been encountered during the reporting period:

• The National Agricultural Extension Centre reduced its staff positions from 26 to 7 and no longer receives salaries from MOFA, and its director was replaced twice during the period of reporting. These changes question NAEC‟s capacity and significance as a national-level partner of the component. In contrast to NAEC, MULS continues to deliver extension services in addition to research and higher education. For ensuring effectiveness and sustainability of partnerships at the national level, therefore, the roles of NAEC and MULS need to be redefined. The initial classification of MULS as a research organisation and NAEC as a head organisation of the government extension system is no longer valid.

• The common understanding of extension as transfer of new technologies, which is anchored in the Mongolian name of NAEC, conflicts with our understanding of extension as facilitation of participatory processes that connect herders/farmers to information, education, services, technologies and markets. While our concept is successfully adopted and positively perceived at the local level, policy-level stakeholders such as MOFA officers still maintain their own definition. The conflict of different definitions was, among others, observed at the Steering Committee meeting in February 2015, where some SC members demanded the Extension Component to present a list of new technologies transferred.

• An essential task for the Extension Component is to ensure sustainability of the extension approaches and structures piloted. Due to persisting economic recession resulting in budget cuts at the local level e.g. at Local Development Funds, substantial increase in public funds for extension cannot be expected in the next years. Hence, most sustainable models are those functioning with or without limited public funds, such as cooperative-based extension services involving partnerships with local governments. Several cooperative-based extension models have been piloted in the intervention areas. However, the herder cooperatives need on-going learning and exchange in order to effectively sustain the extension services piloted. Meanwhile, the policy responsibility for cooperatives has been shifted from MFA to the Ministry of Industry. Therefore, the Extension Component needs to collaborate with the MOI as well as to identify an umbrella NGO to facilitate learning and exchange among herder cooperatives in the long term. Possible candidates include the National Association of Mongolian Agricultural Cooperatives (NAMAC) and the recently established United Association of Mongolian Herders‟ Cooperatives.

• A persisting challenge faced by AFPUGs as aimag-level coordinators of the pilot intervention of C3 is limited agricultural education of their staff. The AFPUGs need to employ agricultural specialists in order to design extension services that match the demands of herders for not only information and simple practices but also for innovative methods and products.

44

Outcome 4: Facilitate Market Access by linking yak herders to processing companies: Income of yak herders has increased.

Output 1.1 Herders and PUG’ are organized to market yak-down

Output 1.2 APUG’s and Cooperatives have market-links

Output 1.3 Organized PUG’s apply semi-processing of yak down for increased income

Output 1.4 Domestic processing companies exporting value added products

Main results:

The recent research and practice conducted to increase camel wool value have proved that herder‟s income will be improved and processors‟ cost will be decreased if baby camel wool is combed during preparation. Last year the GG C4 project conducted pilot trainings for baby camel combing in 2 soums of Bayankhongor and Gobi-Altai aimags. Based on this result and experiences the project developed the respective handout and a training program for herders. In order to follow this up GG C4 organized trainings for herders together with herder cooperatives in May 2015. They aimed at introducing the new method of combing baby camel as well as sorting and packaging of the combed wool in accordance with the requirements of the processors.

A total of 13 trainings were organized in those targeted project soums in Bayankhongor and Gobi Altai Aimags which have a large resource of camel wool. The trainings were organized for 1 day, which comprised half day classroom training and half day practical training for combing of baby camel. The trainings were conducted with intensive participation and involvement of the participants.

In total 350 herders were qualified and learned the new combing method for baby camels. During the trainings a video was produced and GG C4 is now finalizing the training video. Before the next harvesting season 2016 the video will be disseminated to herders.

Photo 1: Baby camel wool combing

45

Due to the weak economic outlook of the processing companies and the lack of experience with

this new way of raw material preparation the processors were not prepared to pay a sufficiently

high price for the combed baby camel wool. Therefore, after discussion with AFPUGs of

Bayankhongor and Gobi-Altai aimags, the National Union of Pasture User Groups NGO has

decided to buy 1.2 tons of combed baby camel wool and to conduct processing tests, which are

being implemented now. It is expected that the test results will convince the processors of the

quality benefits of this new raw material and the need to pay a price premium for it.

Additional yak down combing trainings held- Huvsgul aimag is added to the GG C4

progect aimags:

Additional yak down combing trainings were organized together with AFPUGs in 11 soums of Bayan-Ulgii, Bayankhongor, Zavkhan and Khovd aimags. They aimed to increase the preparation of yak down in soums, where there is less experience of yak down combing. 4 soums out of those soums received the combing training for the the first time. As a result the total of 310 herders were trained in yak down combing bringing the total number of trained persons in 2014 and 2015 to about 1,000. A training video on yak down combing was produced and was distributed to APUGs in soums with yak down resources.

The Khuvsgul aimag is one of the aimags with the largest resource of yak down; in 2015 the aimag has 85,000 heads of yak and has a resource potential of 25 tons of yak down annually. In order to expand the project outreach and to incorporate this important source area of yak down preparation into the value chain upgrading, it was agreed with SDC to add Khuvsgul aimag into project area in 2015. Likewise the Uvurkhangai aimag will be added in 2016, which is equally important as source for yak down.

In recognition of the regional expansion of the mandate from SDC, GG C4 has organized yak down combing trainings in Galt, ShineIder and Jargalant soums of Khuvsgul aimag together with AFPUG of Arkhangai aimag. In these trainings totally 92 persons participated, including soum administration, breeding and veterinarian specialists and herders. During the one day trainings participants saw the combing demonstration and took part in practical training by which they were qualified with improved yak down combing skills and also with the use of the more productive comb from Tibet. As a result of the trainings the 3 soums of Khuvsgul aimag prepared 380 kgs of yak down and supplied that to Khorgiin misheel cooperative in Tariat soum of Arkhangai aimag.

More productive inputs for the preparation of raw materials are introduced:

One problem the project identified was that during raw material preparation, cooperatives use different packing materials to supply yak down and camel wool to the processors. When processors open the bags in order to sort yak down and camel wool, fibres from the bags can be mixed with the wool which may cause damages to the processing equipment. The bags which are normally used are also of different sizes, which makes the calculation of the volume and the transport more difficult.

In order to solve these issues GG C4 has found a source for high quality bags, which are accepted by the processors. The project distributed 700 high quality bags with tags to the cooperatives. These bags can be used several times as processors were asked to return them to the cooperative upon delivery. This initiative not only enabled cooperatives to use proper bags for wool supply to the processors but also introduced more informative labels into the value chain. They show clearly the volume and quality of the contents and ensure the traceability of the raw materials (see photo with example of the new labels).

Photo 1: New bag with newly designed label

46

Before the combing season the GG C4 has received orders from cooperatives for the more productive comb from Tibet. The project purchased 450 combs from Tibet and distributed them to cooperatives at the original price. The transport expenses are covered by GG C4.

In 2014 GG C4 has introduced a registration book to document the purchases of yak down and camel wool by the cooperatives. The project has received comments and suggestions from 3 cooperatives, which used the book for testing last year. In 2015 the registration book was updated and the updated version was distributed to all cooperatives who are involved in yak down and camel wool preparation process. This has become a good step to improve the registration of sales of raw materials from herders to cooperatives and also to ensure the traceability of the raw material.

The innovative fence for more productive yak combing was tested:

For combing yaks they need to be captured individually, tied, brought down to the ground and held tight by one or two persons. This work is hard for the herders, potentially harmful for the yaks, and demands much manpower. GG C4 has commissioned the design of a new fence which is transportable and has two corridors. The design and construction of fence was coached by one lecturer of the Science Technical University of Mongolia as national short-term expert. The advantages of fence are:

two yaks can be combed simultaneously;

yaks do not need to be tied and held;

combing is less hard for herders and harmful for animals;

the fence is transportable on a small lorry (2 tons);

the fence can also be used for veterinary purposes.

The installation is tested in a pilot project in Tariat Soum, Arkhangai Aimag. During the construction GG C4 prepared a TV program which was broadcasted on the “Mongol herder” TV channel. This program might provide good guidedance for herder groups to build such fences in their own regions during the next year. These installations can be organized by the cooperatives (possibly with co-funding from processors). This is a further innovation introduced by GG C4 for more productive yak combing.

47

Photo 2: More productive fence for yak combing

Analysis of the wool characteristics of the Terkh brown yak breed:

GG C4 has started the establishment of the nucleus herd Terkh brown yak in 2014. Since then the project had started initiatives to study the brown yak down characteristics and compare them with other yak colours. This information was to presented to the National center for animal breeding fund of nucleus herds of Mongolia.

For the implementation of this initiative, the project is collaborating with the National Center for Animal Breeding Fund of the Ministry of Food and Agriculture and with the “Renewable Resource Innovation Center” NGO of the Mongolian Textile Institute. Their task is to get samples from all yaks of the nucleus herd and start comparative research work to study the particular quality of Terkh brown yak down. The research will look into structure, diameter and length of brown yak down and compare these with reference indicators.

As a result of this research, quality indicators of Terkh brown nucleus herd yak down will be integrated into National Center for Animal Breeding Fund. This is a precondition to pursue the registration of Terkh brown yak under the geographical indication product quality logo.

Photo 3: Samples of yak down from the Terkh brown yak nucleus herd in Tariat soum

48

Second match making between cooperatives and processors to organize the direct sale

of yakdown and camel wool:

The second match making event between herder cooperatives from “Green Gold” project and processors was organized on 19 March 2015 at Sky center. In the event 11 cooperatives from 7 aimags and 10 processors presented their raw material offers and requirements to each other. During the event about 52.5 tons of yak down and 96 tons of camel wool were offered to processors. Negotiations were intensively conducted during about 3 hours between the two groups of stakeholders. During the months April and May the negotiations were followed up and as at July 2015 the following volumes were transacted: 43.3 tons yak down at an average price of about 8.600 MNT/kg and 56.2 tons of camel wool at an average price of 3.700 MNT/kg.

The volume of sold yak down is 10% less than in 2014 while the volume of camel is 4% more than last year. However, the agreed prices are much lower than in the previous match-making. Due to the economic recession in Russia, one of the main markets for cashmere products from Mongolia the prices for raw cashmere woll were reduced by about 40% from last year. Since cashmere is the reference price this has also affected the price for yak down and camel wool. The price of yak down represents only 57% of the price of last year and the price of camel wool is about 67% of the price in 2014. Some processors do not make any purchases (like Sor Cashmere for yak down and Bayalag Ulzii for camel wool) and use still existing stocks. This has shown that the sales markets of the herder cooperatives are volatile and depend on international market trends.

It is positive to note that the match making mechanism also works in the current negative environment. Herders prepare and cooperatives deliver the fibres even at lower than expected prices. The fact that in this way the value chain can be maintained is one of the results of GG C4 leading towards sustainability.

During the match making event in march 2015 the GG C4 consulted herder cooperatives that there is need to prepare higher quality of raw material, while processors should be ready to pay higher prices for higher quality raw material. Based on that need GG C4 has developed a new price system for yak down and camel wool, which is based on the quality of the raw material. It was in principle agreed by both sides.

VALUE BASED PRICE SYSTEM FOR YAK DOWN

(3 BAGS SYSTEM)

VALUE BASED PRICE SYSTEM FOR CAMEL WOOL

(4 BAGS SYSTEM)

Color: white

Age: all ages Price: basic price plus 10%

Color: White

Age: all Basic price plus 10

Color: brown and black

Age: Young (1-2 years) Basic price plus 20%

Color: Original

Age: Baby camel (1-2 years)

Separate price

Color: brown and black

Age: Adult (up 3 years) Basic price

Color: Original

Age: Young (3 years) Basic price plus 20%

Color: Original

Age: Adult camel (4 years and more)

Basic price

49

The table above displays different qualities of yak down and camel wool which are to be sorted

including the price premium which can be paid for them.

However, in some aimags the herder did not sort the raw materials according to this schedule and many cooperatives did not insist that herders implement it properly. Therefore most of the raw material which arrived at the processors gate was unsorted and was paid at the basic prices. It is unfortunate that the herders did not make use of the chance to increase the low prices which were paid this year by 10% or 20%. On the other side it can be argued that the basic price was so low that herders were not interested to make the effort of sorting anyway. The GG C4 will evaluate this result in more detail and draw the necessary conclusions for the consultations during 2016.

Hand knitting trainings were organized for female herders:

The project has already organized trainings on hand spinning in 2014 to improve the income generation for female herders by producing value added products locally. Based on the positive result of the spinning training the GG C4 organized hand knitting training for female herders. Three groups of female herders (21 women) were supported by obtaining yarn, receiving knitting training and provision of knitting machine. The knitting trainings were conducted in Bayanlig soum of Bayankhongor aimag, Durgun soum of Khovd aimag and Ulaangom soum of Uvs aimags.

As a result of the knitting trainings, small hand knitting workshops were established in the three aimags and started their production. In order to achieve sustainable operations of these small workshops, refresher trainings for the female herders, on the job practice in larger factories and improvement in product design and quality are still needed.

Photo 4: Knitting workshop and first product example

50

Approved quality standard MNS 0036:2015 and updating of other quality standards started:

The standard for camel wool preparation MNS 0036:2015 was developed by GG C4 in close cooperation with the MWCA. It was discussed and supported by the technical committees and finally was approved by the National Council of Standardization in March 2015 (see annex 1).

Based on experiment and studies conducted by C4 GG, the new standard MNS 0036:2015 was updated with regard to terminology, identification, technical requirements, classification of camel wool, preparation method. The dissemination and introduction of the new standard is done by GG C4 through the AFPUGs and APUGs in the aimags. On initiative of GG C4 the standard was also published in the daily newspaper “Zuunii medee”.

The working group for updating of two other standards, namely for processed camel wool (MNS.4950-2000) and for processed yak down (MNS.5248-2003) is still working. It is ensured that the processors are actively involved and it is planned to submit the updated standard to MASM in the 4th quarter 2015.

Web page for members of “United Yak Brands of Mongolia” was created - Official logo of UYBM registered:

A web page for members of United Yak Brands of Mongolia was created in February 2015 to advertise products of yak down producers in the international market. The web page enables users to gain knowledge and information on pasture friendly yak, characteristics of yak down, its main benefits and to see products made by the member companies. Visitors also can get information аbout United Yak Brands of Mongolia, Code of ethics of members and Member companies of UYBM. In the future we are planning to update the page with new designs of yak down products and more information related to the member companies.

In order to safeguard the property rights of UYBM, we submitted a request to the Authority of Intellectual Property of Mongolia to register the brand name and logo of UYBM. In June 2015, the permission to use the brand logo in all yak down textile and knitwear products was officially granted. This information was already disseminated to all member companies. The logo has yak picture in brown colour and Yak Mongolia is written as caption. The brand logo will be attached to the products of the producers which are UYBM members when they are sold at international markets.

UYBM participated at Las Vegas MAGIC fashion exhibition:

The member companies of UYBM participated in international exhibition “Sourcing at Magic”, which was held in Las Vegas from 16 to 19 February 2015. It is one of the largest shows worldwide for the fashion global supply chain. In the exhibition 35 countries and about 15,000 visitors (wholesalers and retailers, not consumers) participated mainly from USA and Canada. The GG C4 in cooperation with the MWCA supported the costs of the stand in the exhibition. Three UYBM members participated with their representatives and financed all their travel expenses by themselves. The yak down products found large interest among the visitors. As a result of the exhibition member companies got direct orders, made many contacts (business cards with requests) and created new business ideas (handbags, shoes, functional clothing). Before the exhibition GG C4 has developed a new brochure of UYBM in English and distributed it during the exhibition. The new website (see above) was also helpful to inform the visitors about the UYBM and the products of its members.

51

VC study of meat and skin hides conducted:

In January 2015 SDC has expanded the mandate of the consortium GFA-GEFAK for implementation of GG C4. Based on the positive results of the match-making for yak down and camel wool the consortium was tasked to consult the upgrading of the two value chains live animals/meat and hides/skins. This amendment of the contract is valid until December 2016 and refers to the raw material base in Zavkhan Aimag and Arkhangai Aimag.

This pilot project aims firstly at analyzing the live animals/meat and hides/skins value chains (VC), and to elaborate a VC upgrading strategy which is agreed with the stakeholders. Secondly the VC upgrading strategy is to be translated into a detailed support program and operation plan which is then executed in pilot implementations in close collaboration with the stakeholders.

The supply study was conducted in selected soums of the two pilot aimags in order to collect data from herders, PUGs, herder cooperatives as well as representatives from Agriculture Department and Department for SMEs as well as secondary cooperatives. It covered the following issues: resource potential (volume and quality) of raw material, sales of live animal, meat and hides/skins, main sales channels, ways to establishing direct links between herder cooperatives and processors, role of cooperatives in the value chain of meat and skin/hides, training needs on strengthening the capacity of cooperatives, PUGs and APUGs; and issues of improving the value chain and the quality of products.

The demand study was conducted in selected processing companies in Ulaanbaatar and Darkhan with interest to buy live animals and hides/skins from herder cooperatives in the pilot aimags. It covered the following issues: volume, quality, prices and seasonality of demand of animals for slaughtering, processing and production capacity, technology and actual capacity, main markets (including export) of processed and semi processed products and demand of products. The main goal of the study was to analyze preparation and supply as well as demand of live animals/meat, hides/skins. It also aimed to produce a value chain map of the current situation of the value chain connecting the project target regions to the processors and markets and to identify ways to develop it further.

Both studies were then incorporated into one value chain analysis report. The studies were implemented by teams, which comprised experts from the National Agricultural University and the Leather Industry Association and Meat Association. The studies resulted in detailed analysis of the value chains, elaboration of value chain maps and the recommendation of upgrading strategies and the respective activities.

The study results as well as upgrading strategies and proposed activities were presented on 14 May 2015 at a workshop and were supported by the stakeholders (cooperatives, processors, associations). The draft final report has been presented to SDC and comments of SDC are currently being incorporated.

The objectives of the upgrading strategy for live animals/meat are: (i) to improve and increase the sales of live animals; (ii) to increase livestock prices for herders and improve their income.; (iii) to help processors obtain steady supply of live animals.; (iv) to provide access of consumers to quality meat at reasonable prices throughout the year and (v) to utilize the market potentials for export especially of meat products.

The objective for upgrading of the hides/skins value chain are: (i) to increase skins/hides prices for herders and improve their income; (ii) to help processors obtain steady and sufficient supply of skins/hides and (iII) to utilize the market potentials for export of skins/hides and leather products.

Incorporated into the workshop a match making event for the two value chains was organized. It was hampered by the absence of some buyers. At the match making during the VC workshop

52

and during consultations by GG C4 the following negotiations between cooperatives and processors were supported.. The following status of information was achieved as at July 2015:

Zavkhan Cooperatives and Zavkhan Khuns sofar cannot agree on sales agree-ments for livestock to be delivered to Zavkhan meat factory. The reasons are low offered prices and the linkages of the meat business with political campaigning in the Aimag. At events in most Soums by the company only few animals were sold.

Arkhangai secondary cooperative is in negotiations with Darkhan meat factory on delivery of up to 6,000 yaks. The bottleneck is the low offered price. Nevertheless the cooperative collects sales agreements with herders and will eventually buy and sell the livestock. Two options are Darkhan Meat factory (if the price can be agreed) or Zavkhan Khuns.

The secondary cooperatives of both Aimags have concluded a new agreement with Darkhan Nekhii on sales of skins/hides (unlimited volume).

It appears that the value chain for hides/skins can benefit from the direct contacts between cooperatives and processors. They have a large demand for raw materials and the only limiting factors are the price and the communication between the partners.

The situation in the value chain for live animals/meat is much more complex. This is due to the pressure under which the processors are operating (insecure export markets, low domestic demand for industrially prepared meat, lack of liquidity to purchase animals etc). GG C4 continues to consult both market sides closely in order to support the achievement of concrete sales deals.

Monitoring of progress with regard to operation plan and key indicators

Monitoring of progress with regard to the operation plan:

In the following table the activities which were contained in the operation plan for execution between January and July 2015 are checked with regard to the actual achievements (results and timing).

NO. PLANNED ACTIVITY ACHIEVEMENT

1 To carry out quality-oriented technical training for secondary cooperatives and their members (e.g. sorting, grading of yak down)

The sorting training was held in the secondary cooperative in Arkhangai aimag in June 2015.

2 To carry out awareness raising for the importance of combing yak among herders

Video training distributed to APUGs, distribution of 450 more yam combs, test for combing fence in Tariat soum. Video training and construction of combing fence broadcasted in “Mongol malchin” channel in May 2015.

3

To carry out quality-oriented technical training for PUGs and cooperatives and their members (e.g. combing baby camel and grading of camel wool)

13 baby camel combing trainings were held for about 350 herdes in 4 aimags in May-June 2015.

4 To carry out awareness raising for the importance of combing baby camel among herders

GG C4 developed, printed and distributed the handbook“How to increase income from properly prepared camel wool” and prepared the demonstration video ” Combing baby camel” in June 2015.

5 Matchmaking between cooperatives and processors

The matchmaking workshop was held on 19 March 2015 and was participated by representatives of 11 local cooperatives and 10 processing companies.

53

NO. PLANNED ACTIVITY ACHIEVEMENT

6 Support to build raw material storage of cooperatives

The construction of storage in Ikh Tamir soum of Arkhangai aimag started in June 2015. The construction of storage in Khovd aimag is postponed due to the need to obtain the land use permission of the Aimag administration.

7 To conduct quality control (registration of yield) to Nucleus herd “Terkh” brown yak

Samples of yak down from all yaks of the Terkh Brown yak nucleus herd were taken in May 2015 and the wool test has started in Textile institute in UB.

8 Support to initiation of establishment for Geographically identified products

The presentation videos for two camel breeds (“Tukhum tungalagiin khuren” and “Lamiin gegeenii ulaan”) were produced. An NSTE was contracted to prepare the registration of the GI for these two camel breeds.

10 To conduct training Geographical indications product features and differences /for herders/

Trainings is postponed until September 2015.

11 Support of value added production in local level Yak down and camel wool production units were established in 3 aimags and woman herders were supported through relevant trainings in June-July 2015.

12 To develop quality standards incl. tracing documentation, testing, verification.

The quality standards for raw camel hair according to MNS 0036:2015 was approved by MASM in March 2015. The updating of standards MNS 5248:2007 and MNS4950:2007 continues.

13 To provide technical consultation/coaching for processors

One NSTE was contracted for technical coaching and consultation of firms. One company is already completed and consultations for 2 companies are going on.

14 To promote united yak brands in international market

The web page www.yakmongolia.com was created in February 2015. The brochure of UYBM was developed. Member companies of UYBM participated in the international exhibition Sourcing at Magic in las Vegas in February 2015.

15 Conceptualization and implementation of product presentation in international market

Brief report for consultation of processors and manufacturers on international marketing of yak down products with regard to marketing channels, presentation at exhibitions, implementation of sales, and institutional organization prepared by ISTE Carl Krug was submitted to SDC in March 2015

16 Assessment of the supply and demand side of live animals/meat and skins/hides value chains as well as stakeholder analysis

The value chain study of live animals/meat and skins/hides was conducted in 2 pilot aimags with cooperation of AFPUGs. It will be submitted to SDC. Preliminary results of study and upgrading strategy were introduced and discussed with stakeholders during the value chain upgrading workshop on 14 May 2015.

17 Development of upgrading strategy and support program live animals/meat and skins/hides value chains

18 Implementing pilot activities with value chain upgrading instruments in collaboration with stakeholders

Implementations of pilot activities are planned and will start in August/September 2015.

19 Improving business linkages between the value chain actors

GG C4 organized the matchmaking workshop on 14 May 2015 and 2 secondary cooperatives and 4 meat and skin/hides processors participated and were consulted.

54

Monitoring of progress with regard to the project indicators:

In the following table the current status of progress made with regard to the indicators of the GG C4 as contained in the Log frame is being analyzed.

INDICATORS STATUS AND ACHIEVEMENTS

ANALYSIS /COMMENTS

Outcome 4: Increased income of yak herders

Indicator 4.1. Change in turnover of value added domestic products made from yak down and camel wool (%).

Baseline: 100 Target 2014: 120 Target 2015: 130

Result of 2015: 83

The sales of finished products from raw materials which were collected in the framework of GG C4 decreased from 2014 to 2015 and was also below the level of 2013. This is caused by the low demand on the domestic and international markets due to negative economic outlook. It has been decreased by 17% compared to 2013 baseline and by 28% from last year.

Indicator 4.2: Change of herder gate fiber price as percentage of Mongolian consumer price of finished products (%).

Baseline: 10% Target 2014: 15% Target 2015: 20%

Result of 2015: 6%

In 2015 the herder gate price for yak down decreased to 8000 MNT/kg (2014 15.000 MNT/kg) and the camel wool to 3.500 MNT/kg (2014 5. 600 MNT/kg). From 1 kg of raw material one typical garment can be produced at average value of 95.500 MNT (average for yak down and camel wool garment). Processors report that their domestic sales prices in 2015 are the same as 2014. Still the share of the herder gate price in the consumer price was reduced due to the decreased price of the raw material (see above).

Output 4.1 Improved quality and volume of yak and camel wool supplied by herders

Indicator 4.1.1. Herder households marketed combed yak-down and camel wool (%).

Baseline: 100 Target 2014: 140 Target 2015: 160

Result of 2015: 600

The number of herders covered in the value chains increased from 1000 in 2013 and 3000 in 2014 to 6000 in 2015. The number of participating herder households is based on preliminary results of the sales registration journals of cooperatives. It may be adjusted after final evaluation. The impact of the project could be expanded to many more herder households also due to effectivenes of cooperatives.

Indicator 4.1.2. Change in herder gate price of yak down and camel wool (%)

Baseline: 100 Target 2014: 130 Target 2015: 150

Result of 2015: 82

The herder gate price of yak down decreased from 15.000 MNT in 2014 to 8.000 MNT in 2015. The camel wool price decreased from 5.600 MNT in 2014 to 3.500 in 2015. Due to reduced sales expectations of processors and the drop in the reference price of cashmere wool the herder gate prices were reduced (yak down by 46% and camel wool by 35%). The latter is also due to the lower share of highly priced baby camel wool in total sales in 2015.

Indicator 4.1.3. Raw cashmere output per kg of combed yak down (%).

Baseline: 20 Target 2014: 25

Result of 2015: N/A

Raw cashmere output is expected after processing November 2015. Therefore no relevant data are available now.

55

INDICATORS STATUS AND ACHIEVEMENTS

ANALYSIS /COMMENTS

Target 2015: 30

Output 4.2 APUG’s and Cooperatives have market-links

Indicator 4.2.1. APUG’s and cooperatives with new supply chain (%).

Baseline: 5 Target: 20

Result 2015: 85

The value has increased from 18 cooperatives in 2014 to 30 cooperatives in 2015 out of 35 cooperatives. The indicator has been fulfilled. In the 2015 collection season 4 secondary coops (with 19 members) and 8 primary cooperatives sold yak down or camel wool to processors. In addition 3 soums of Khuvsgul aimag supplied yak down to Arkhangai secondary cooperative. It was possible to expand the impact of the project to more cooperatives.

Indicator 4.2.2. Annual turnover of APUGs and cooperatives from sales of yak down and camel wool (%).

Baseline: 100 Target 2014: 115 Target 2015: 120

Result 2015: 113

The turnover of cooperatives from sales of yak down and camel wool decreased from 1.022 mio MNT in 2014 to 583 mio MNT in 2015 due to falling prices even though the total volume increased (for details see above). However the turnover was 13% higher compared to the baseline.

Indicator 4.2.3. APUGs and cooperatives selling semi processed yak down and camel wool (%).

Baseline: 2 Target 2014: 10 Target 2015: 10

Result 2015: 20

In 2015, 7 cooperatives were equipped with spinning and knitting tools and 21 female members have been trained in knitting. First sample garments were manufactured and sold.

Output 4.3 Domestic processing companies exporting value added products

Indicator 4.3.1. Increase in volume of yak down products exported (%).

Baseline: 100 Target 2014: 105 Target 2015: 115

Result 2015: 101

Processors reported that the sales of the exported products is reduced especially due to the negative market situation in Russia and China. The sales could not reach this year 2015 target and is 24% lower than the last year. Only 1% increase this year compared to the baseline. (MNT 2694.5 Mio in 2013 and MNT 2718.1 Mio in 2015). This could not yet be compensated by increased sales to Europe and America.

Implementation issues and solutions

Comments on any difficulties encountered and corresponding solutions proposed:

The strategy for value chain development of meat and skin as well as the operation plan based on it had been elaborated on the basis of information which were obtained from all relevant stakeholders. But there are some difficulties in VC development depending on the product type and political agenda of processing companies. Therefore the expectations of the pilot project are lower than compared to yak down and camel wool value chain.

In agreement with GG PCU it may be useful to select 1-2 soums from each aimag and focus to link herders and cooperatives of these soums to local meat processors. The GG C2 applied research component can cooperate with C4 with regard to reducing the number of livestock based on rangeland carrying capacity of these soums.

56

Details of any organizational changes made:

During the reporting period there has been no requirement to change the organizational structure of the project. The structure which has been established during the inception is working effectively. In particular the working relationship to all participating cooperatives and processors as well as with the MWCA has been established at an optimal level. This greatly supports the achievement of the expected results.

As a consequence of the new mandate to upgrade the live animals/meat and hides/skins value chains an effective working relationship has been started with Mongolian meat association and Mongolian leather producers association, leading NGOs in these sectors.

Planning of activities for the next reporting period 1 July to 31 December 2015:

During the next reporting period from July to December 2015 the following activities are planned by the GG C4 PIU.

Support to organize camel festival and yak festival in selected aimags

To provide capacity development for institutional strengthening and business development of secondary cooperatives

To organize primary cooperative training based on need from cooperative assessment done by GG

Comparative analyze of yak down from “Terkh” brown yak with other yak down

To conduct training for Geographical indications product features and differences for herders and cooperatives

To establish and sekk protection for GI on “Tukhum tungalag iinkhuren” and “Lamiin gegeenii ulaan” camel‟s woolen product

To develop quality standards for dehaired yak down and camel wool with processors according to MNS 5248:2007 and MNS4950:2007

To promote United Yak Brands of Mongolia in the international market

Conceptualition and implementation of product presentation in international market for home textile products of Mongol Textile and for garments of other manufacturers

Implementing pilot activities with value chain upgrading instruments in collaboration with stakeholders for live animals/meat and hides/skins value chains

Introducing innovations and providing infrastructures to the value chain, such as intestines processing facility in Tariat soum