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Research

Strengthening incentives for improved grassland management in China and Mongolia

Abstract

The overall aim of the project is to improve grassland management practices and pastoral livestock systems in China and Mongolia through research into the incentives driving these systems and the design of incentive based policies. In China, the focus of the research will be on the grasslands of Inner Mongolia. Within this overall aim, there are three main objectives: (a) to design more efficient incentive schemes for improved grassland and livestock management in China; (b) to design more efficient incentives for improved livelihoods and grassland condition in Mongolia; and (c) to facilitate linkages between China and Mongolia for improving grassland management.

Description

Background

China and Mongolia have vast (over 520 million hectares) inter-connected grasslands that provide the resource base to support the livelihoods of over 20 million low income pastoral households and an array of ecosystem services from improving air and water quality to acting as a carbon sink. However, concerns over the condition of these grasslands and livelihoods of herders have increased through time and are now a major issue. In China, the concerns have led the government to invest CNY13.6 billion (>2b$US) per annum on grassland management programs and grassland incentive payment schemes. The fundamental and topical policy issue in China among policy makers, research scientists and society at large is whether the existing programs and payments are: (a) efficient in meeting the environmental and livelihood objectives; and (b) can account for the heterogeneity in grassland systems and changes in socio-economic, market and climatic conditions. In Mongolia, policy makers are concerned about the resilience of herders and grasslands to adverse climatic events and seeking information on the management systems and impact of alternative policy and institutional settings needed to sustain grasslands and herder livelihoods. The similarities and contrasts between the two countries provide a larger context to test ideas and principles for managing grasslands and improving herder livelihoods that have wide application throughout east and central Asia.

Aims and objectives

The overall aim of the project is to improve grassland management practices and pastoral livestock systems in China and Mongolia through research into the incentives driving these systems and the design of incentive based policies. In China, the focus of the research will be on the grasslands of Inner Mongolia. Within this overall aim, there are three main objectives: (a) to design more efficient incentive schemes for improved grassland and livestock management in China; (b) to design more efficient incentives for improved livelihoods and grassland condition in Mongolia; and (c) to facilitate linkages between China and Mongolia for improving grassland management.

Research questions

The issue raises a series of specific research questions to be investigated in the project including:

For China:

  1. What incentives are needed to encourage herders to pursue grassland and livestock systems consistent with government objectives and that improve social welfare?
  2. How is the size of the incentives needed influenced by household characteristics and by biophysical, market and weather conditions?
  3. How does the size of these incentives compare with the private and social net benefits arising from the practice changes?
  4. What are the more efficient ways to provide these incentives?
  5. What are the transaction costs associated with alternative incentive schemes?

For Mongolia:

  1. What are the primary grassland ecosystem services, including cultural ecosystem services, that stakeholders value in Mongolia?
  2. What market and non-market based options are available for reducing grazing pressure in vulnerable pastures and at vulnerable times, and what is their relative efficiency?
  3. Would grazing user fees improve the incentives to use grasslands in a way that improves social welfare and, if so, what form should they take?
  4. Do livestock and livestock product subsidies incentivise or distort efficient grassland use?

Methods

The study uses an interdisciplinary approach involving integrated institutional/market, economic/modelling, biophysical and social/socio-ecological components to assess the net social benefits of particular livestock and grazing practice changes and policy incentives. An embedded case study approach, covering different grassland types, economic circumstances and household characteristics, will enable a level of focus and depth to the analysis but within the context of the broader regional systems and research questions under investigation. In China and Mongolia, grassland incentive schemes operate in the context of institutional settings where uncertainty, distributional issues and social embeddedness are important and these factors will be considered in the analysis.

In China, farm and household surveys, biophysical and farming systems modelling, stakeholder interviews, economic valuation, econometric analysis and choice modelling will be used to: identify scenarios of practice changes consistent with sustainable grassland and livestock management; establish the environmental benefits and opportunity costs of the practice changes; establish the opportunity costs of the practice changes and relate them to household characteristics and biophysical, market and seasonal conditions; and design an incentive scheme and payment metrics based on these environmental benefits and opportunity costs. In Mongolia, grassland condition assessments, and household & stakeholder interviews will be used to construct household and biophysical models for analyses of policy measures and incentives. Stakeholder interviews and a choice modelling approach will be used to elicit behavioural responses, while a state contingent approach will be used to identify strategic and tactical management and policy responses under different seasonal conditions.

Funding Body

Australian Centre for International Agricultural Research

Lead Organisation

University of Queensland

Partners

Australian National University, Charles Sturt University, James Cook University, Inner Mongolia Agricultural University, Chinese Academy of Agricultural Sciences, Mongolia University of Life Sciences, Ministry of Food & Agriculture (Mongolia)

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