Mongolia - Agricultural Sector Mongolia - Agricultural Sector
Overview
Long a mainstay of the economy, agriculture generates much of Mongolia’s national revenue and employment. In 2016, the National Statistics Office of Mongolia (NSO) reported that the sector generated about 13 percent of Mongolia's GDP and directly or indirectly employed more than half of Mongolia’s three million people.
The livestock sector, comprised mostly of small-scale herders, raises cattle, goats, sheep, horses, and camels, and accounts for nearly 83 percent of agricultural products. The goats and sheep contribute to the domestic hair and hides processing sectors. Altogether, according to the National Statistics Office, Mongolians possess more than 60 million herding animals. Mongolian farmers grow wheat, potatoes, and rapeseed and are experimenting with many other crops, seeking those that can be profitably grown during Mongolia’s short and relatively dry summers.
While agriculture is central to Mongolia’s economy, it is only recently that investors have moved to improve the efficiency and profitability of the sector with a goal of exporting to neighboring countries. Despite some improvements, however, several impediments to exporting remain. First, animal diseases are prevalent and persistent, and the Mongolian veterinary system has been unable to promptly and effectively contain and manage outbreaks. These animal disease outbreaks lead Mongolia’s neighbors to periodically ban Mongolian exports. Second, some Mongolian meat, especially beef, is unable to compete in export markets on quality due to livestock producers’ limited use of feed and breeding practices. Third, the ever-increasing number of animals exceeds the carrying capacity of the pastureland — and the impact of climate change further exacerbates the deterioration of the pastureland. Fourth, Mongolia’s sanitary and phytosanitary standards fall short of international standards. Mongolia’s regulatory and testing systems need investment and improvement.
While obstacles exist, the Ministry of Food, Agriculture, and Light Industry (MOFALI) and the private sector are working to reduce these barriers, uncovering commercial opportunities in the process. The government’s National Action Plan identifies development of the agricultural sector as its top priority and seeks to develop an agricultural export sector.
|
|
2013 |
2014 |
2015 |
|
|
Total Local Production |
4,388 |
6,127 |
5,092 |
4,678 |
|
Total Exports |
4,269 |
5,774.3 |
4,669.5 |
4,046 |
|
Total Imports |
6,358 |
5,236.7 |
3,797.2 |
3,466 |
|
Imports from the U.S. |
512.7 |
229.5 |
116.5 |
55.6 |
|
Total Market Size |
6,477 |
5,590 |
4,220 |
4,098 |
|
Exchange Rate: 1 USD |
1,524 |
1,818 |
1,970 |
2,130 |
Data Sources:
Total Local Production: National Statistics Office of Mongolia
Total Exports: Bank of Mongolia
Total Imports: Bank of Mongolia
Imports from U.S.: U.S. Census Bureau
Leading Sub-Sectors and Opportunities
Mongolia is poised to increase meat exports to its neighboring markets, especially China, which already imports over three billion dollars of beef and mutton each year. Despite a slowing economy, the Chinese demand for imported meat has grown steadily. Provided health and safety measures are met, Mongolian sheep, goat, and horse meat is already of sufficient quality to meet Chinese demand. In addition, several large farms are employing modern techniques, including feeding imported beef cattle breeds from thousands of hectares of irrigated cultivated grasses. Meat processing facilities are also upgrading equipment and operating procedures, and a few have obtained certification to export to China, Russia, and other countries. As the Mongolian livestock sector moves closer to developing a viable export sector, opportunities exist to provide agricultural technologies, know-how, and modern equipment.
Although most of Mongolia’s provinces have established private food plants and shops, the quality of these domestic products fails to meet international standards, leading most Mongolians to purchase imported food products from abroad. The Bank of Mongolia reports that Mongolia spends around $500 million on food imports annually. This reliance on higher quality through imports is driven, in part, by the low technological base in the domestic food production industry. For this reason the Mongolian agricultural sector engages in very little domestic processing of food and animal products. MOFALI reports show that domestic meat production has remained generally flat from 2008 through 2016. Challenges with upgrading existing production technology and the lure of exporting higher value-added agricultural products as leather or cashmere continue to slow development of domestic food production.
Web Resources
Mongolian Resources
American Chamber of Commerce in Mongolia
Bank of Mongolia
Business Council of Mongolia
Customs General Administration
Embassy of Mongolia, Washington, DC
General Agency for Intellectual Property and State Registration
General Agency for Specialized Inspection
General Authority for Social Insurance
General Tax Authority of Mongolia
Government of Mongolia
Ministry of Food, Agriculture, and Light Industry
Mongolian Builders Association
Mongol National Chamber of Commerce and Industry
National Statistics Office of Mongolia
Parliament of Mongolia
U.S. Resources
U.S. Embassy in Mongolia Commercial Specialists: Ulaanbaatar-Econ-Comm@state.gov
U.S. Embassy, Ulaanbaatar
U.S. Department of Commerce
U.S. Department of Commerce Advocacy Center
U.S. International Trade Administration
U.S. Trade and Development Agency
U.S. Export-Import Bank
U.S. Overseas Private Investment Corporation
U.S. Department of State