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“No silver bullet”Complementary approaches to supporting
pastoral risk management in Mongolia
Presentation to the China Grassland Conservation Network
Beijing, January 15, 2007
Dr. Robin Mearns, World Bank (Vietnam Office)
Key trends in post-socialist Mongolia
• Decollectivization post-1991 led to hybridization of formal rural institutions and decline in herder mobility
• Burden of risk shifted dramatically from state/collective institutions to herders
• Pastoral livestock sector performed crucial role as an economy-wide safety net
• Net urban-to-rural migration in early-mid 1990s led to doubling of herder numbers
• Consecutive dzud episodes over 1999-2002• Subsequent reversal in net migration patterns
increased concentration in central region
Emergent action-research community of practice
• PALD: a collaborative research and training project between IDS Sussex (UK) and Mongolian research institutions (1991-94)
• Same individuals continued to work together in action-research and consulting activities for ADB, Danida, FAO, World Bank, etc.
• Key Mongolian researchers trained overseas and/or collaborated with foreign researchers
• Founding of Centre for Policy Research (CPR)• Global Livestock Collaborative Research Support
Program (GL-CRSP) & Gobi Forage• With long gestation, community of practice has evolved
into a driving force for progressive policy development
Theoretical underpinnings
• Non-equilibrium perspectives in range ecology
• ‘Fuzzy’ boundaries, both of resources and groups of resource users
• Common-pool resource management where exclusion is difficult
• Beyond the ‘tragedy of the commons’• Sustainable livelihoods approaches• Economies of scope in collective action
Kinship and community
• Example of Oroin-Tovgor bag, Tsetsen-Uul sum, Zavkhan
• constructed genealogy of bag using card-sorting technique
• almost all 100+ households inter-related by blood or marriage
• these people know each other!
The result...
Those not related to others tended to be among both richest and poorest
Government policy and operational responses
• 1994 and 2002 Land Laws– A broadly permissive framework for pastoral land
tenure?– Persistent ambiguities regarding possibility of
controlling access/ excluding some users
• National Poverty Alleviation Programme (1995-2000): ‘welfarist’
• Household Livelihoods Capacity Support Programme (2000-date): emphasis on ‘self-help’
World Bank-supported interventions
• Poverty Alleviation for Vulnerable Groups Project (1996-2000)– Local development funds for basic infrastructure provision,
revolving loan funds for income-generating activities, restocking (post-1999)
• Participatory Living Standards Assessment 2000– Focused attention on risk and vulnerability
• Sustainable Livelihoods Program (Phase 1 2002-07; Phase 2 2007-11)– Pastoral risk management (new), local initiative funds, micro-
finance outreach– Japan Social Development Fund supporting ‘Community
Mobilization for Sustainable Livelihoods’• Index-Based Livestock Insurance Project (2004-date)
Conceptual framework for PRMStrategies ►
Levels of intervention ▼
Disaster management
General risk management
(land, NRM etc.)
Diversification & market access
National
Sub-national (‘meso’)
Community
The Mongolia case: 1Strategies ►
Levels of intervention ▼
Disaster management
General risk management
(land, NRM etc.)
Diversification & market access
National
Sub-national (‘meso’)
Community
Index-based livestockinsurance
Grazing reserves
dzud preparedness/ contingency
planning
Mobility
Restocking
Why Insurance?
Livestock losses in Mongolia
0%2%4%6%8%
10%12%14%16%18%20%
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
year% 2002 GDP % livestock value
Dundgov’ aimag in April 2000, following the worst dzud in living memory
Expecting a harsh winter again, following severe drought duringthe summer, Tsevel of Saintsagaan sum, Dundgov’, shows the only winter feed she was able to prepare this summer:
highly inferior Caragana sp. (August 5, 2000)
Spatial data product example:Spatial data product example: DEPARTURE FROM AVERAGE VEGETATION DEPARTURE FROM AVERAGE VEGETATION
INDEXINDEX
Animals Losses – Bad Years Value Animals
2001 25% 17%
2000 15% 12%
2002 11% 13%
1977 8% 9%
2003 7% 5%
1993 7% 6%
1983 7% 7%
1980 7% 6%
Differences in Relative Risk Will Result in Different Premium Rates
Pilot Scheme Layers the Risk
100% Mortality
30% Mortality
10% Mortality
Disaster Relief Program
Base Insurance Product
Retained by Herders and Banks
Index-based livestock insurance pilot• 2006 first sales season• 10% of herders bought insurance; twice the target• lenders already offering lower interest rates to herderswith coverage
The Mongolia case: 1Strategies ►
Levels of intervention ▼
Disaster management
General risk management
(land, NRM etc.)
Diversification & market access
National
Sub-national (‘meso’)
Community
Index-based livestockinsurance
Grazing reserves
dzud preparedness/ contingency
planning
Mobility
Restocking
On the move: ◄ otor
Bag meeting ►
Restocking beneficiariesBayarsaikhan and his son, Gurvanbulag sum, Bayankhongor;
Naranchimeg and Sarav of Zag sum, BayankhongorAugust 9, 2000
The Mongolia case: 2Strategies ►
Levels of intervention ▼
Disaster management
General risk management
(land, NRM etc.)
Diversification & market access
National
Meso
Community
Index-based livestockInsurance
Grazing reserves
dzud preparedness/ contingency
planning
Public awarenessHerder groups
Mobility
Water pointrehab
National Councilon PRM
Restocking
Pastoral Risk Management Component
Key Achievements Development of pasture mapping and preliminary risk
contingency planning in all 142 sums Rehabilitation of 314 engineered wells providing
additional water resources and improving access to underused pasture
Rehabilitation and construction of 2 inter-aimag otor storage facilities, plus rehabilitation of 8 engineered wells
313 herder NGOs formed with the support of the project, of which 123 received loans
14 hay and fodder emergency storage facilities have been rehabilitated which has doubled the amount of hay and tripled the amount of fodder stored
Pastoral Risk Management Component
Key Challenges• Establishing an institutional framework for
pastoral risk management at national level and in the project aimags remains a challenge (and a requirement to move to Phase 2)
• For long-term sustainability, the activities supported by the project need to be institutionalized at all levels within government
The Mongolia case: 3Strategies ►
Levels of intervention ▼
Disaster management
General risk management
(land, NRM etc.)
Diversification & market access
National
Meso
Community
Index-based livestockInsurance
Grazing reserves
dzud preparedness/ contingency
planningPublic awareness
Herder groups
Mobility
Water pointrehab
National Councilon PRM
Microfinanceoutreach
Value-chainactivities?
(SLP2)
‘CDD’/basic infrastructureRestocking
Local Initiatives Fund
A demand-led window for financing public goods provision
Key Achievements Implementation of almost 1,983 sub-projects for a total
value of US$7.2 million
61% of sub-projects in education sector
30% for improvement of hospital facilities
7% for drinking water, bath houses, and other
Microfinance OutreachKey Achievements Wholesale loans to 15 PFIs (commercial banks and non-bank FIs)
totalling US$7 million Has resulted in US$12 million in on-lending to rural people (including
re-disbursements) Over 22,000 sub-loans disbursed, benefiting an estimated 111,000
people (14% of target population, exceeding target of 10%) Repayment rate of sub-loans is 98.2% and 100% from PFIs to the MDF Over 60% of on-lending to sub-borrowers at the sum and bag level Around 40% of sub-loans to poor households Over 40% of sub-loans to first-time borrowers 92% of loans used for income-generating activities