3 research outputs found
Examining the feasibility of livestock insurance in Mongolia
Herders in Mongolia have suffered tremendous losses in recent dzud (winter disasters), with livestock mortality rates of over 50 percent in some locales. This study examines the feasibility of offering insurance to compensate for animal deaths. Such an undertaking is challenging in any country. Mongolia offers even more challenges given the vast territory in which herders tend over 30 million animals. Traditional approaches that insure individual animals are simply not workable. The opportunities for fraud and abuse are significant. Monitoring costs required to mitigate this behavior would be very high. This study focuses on the potential for using the livestock mortality rate at a local level (for example, the sum or rural district) as the basis for indemnifying herders. Applications of index insurance are growing around the world, although no country has so far implemented such insurance for livestock deaths. But few countries have such frequent and high rates of localized animal deaths as does Mongolia, and it is one of the few countries that perform an animal census every year. This concept may therefore be precisely what is needed to start a social livestock insurance program. Just as important, the insurance that is used in Mongolia should not interfere with the exceptional efforts that experienced herders take to save animals during severe weather. Using an individual insurance may, in fact, diminish these efforts. Herders may ask,"Why should I work so hard to save my animals if I will simply be compensated for those that are lost?"Since the index insurance would pay all herders in the same region the same rate, the incentives for management to mitigate livestock losses remain strong. No one would reduce their effort to collect on insurance. Those who increase their efforts during a major event (dzud) would likely be compensated for this effort even though they do not lose livestock. In some cases, they could reasonably expect to receive payments that would compensate for the added effort or the added cost of trying to save their livestock.Payment Systems&Infrastructure,Insurance&Risk Mitigation,Livestock&Animal Husbandry,Health Economics&Finance,Labor Policies,Livestock&Animal Husbandry,Insurance&Risk Mitigation,Health Economics&Finance,Environmental Economics&Policies,Banks&Banking Reform
Production function analysis of the extensive livestock industry in Mongolia
As Mongolia began the transition to a market oriented economy in 1990-1991, traditional livestock production faced serious changes. There is evidence that productivity of the sector might be falling through a less utilisation of some important technological inputs such as supplementary fodder and veterinary services. In this respect, the question of whether the intensification process undertaken from the 1960's to 1980s led to productivity gains in livestock production is quite interesting and entails serious policy implications. This study is aimed at specifying livestock production functions adequate to describe specific conditions in Mongolia and analysing productivity changes in the Mongolian extensive livestock sector in the socialist period, 1969 to 1990. The weather-dependent and low productive nature of production dictated the use of some individual approach to specifying production functions. First, the natural growth rate (NGR) of animals was used as a measure of output and basic indicator of performance of extensive livestock production. Second, a two-stage estimation procedure was used to analyse first the impact of weather on production and then the impact of economic inputs on weather-adjusted output. The findings of the study suggested that (i) in addition to weather, the main factors determining output were capital, supplementary fodder and the share of private animals for cattle, and capital and supplementary fodder for small stock. The problem of pasture shortage was more serious for cattle than for small stock; (ii) technical change was significant at an increasing rate in the cattle industry, however, it was not significant in the small stock industry; (iii) intensification of production, or increased application of technological inputs per animal, led to an increase in the natural growth rate (NGR) of animals; (iv) the contribution of technical change and the intensification of production to the total growth in the NGR of animals varied across agro-ecological regions and over time. These results led to important policy discussions concerning ways to improve productivity of the cattle and sheep-goat industry