Food sector

Last year investment of 39.8 trillion tugriks has been made into Mongolia’s food sector, and workplace in the sector has been increased by 10.6 percent. By the end of 2008, food processing sector total production incresed by 19.1 percent, and reached 163.4 trillion tugriks at the constant prices 2005. Food supply level increased, showing increase of 17.8% in meat and meat products, 28.2% increase in milk and milk products, and 22.5% increase in flour and flour products respectively.

Mongolia consumes over 7 million heads of livestock annually for food purposes, produces 200 thousand tones of meat, and fully meets the domestic demand through our production. From the total produced meat, 30% accounts for beef, 40% for mutton, 15% for goat meat and about 15% for horse meat. Number of livestock used for food in 2007 accounts for about 17.4% of the total livestock. At the country’s average, 100-120 kilograms of meat is allotted per person.

Only 5-10% of the meat produced in agriculture is prepared in livestock slaughter industries, and mainly exported.
There are 29 livestock slaughter industries are operating at the country level, with capacities to produce 85 thousand tones of meat per annum. These industries have cooling storage with capacities to store 25 thousand tones of meat at once, and are actively have been working to meet the Capital city, Darkhan and Orkhon aimaks’ population’s demand. The average export of meat is 10 000 tones per annum, of which 97% is exported to Russia.

By the end of 2008, 43 million livestock have been counted In Mongolia, and 41.7% of it has a resource of 465.2 million liters of milk. Only 8 million liters, which is equivalent to 2% of the total milk produced in agriculture, is processed in dairy plants annually.

For milk and milk products, average of 130.8-146.7 liters of milk is allotted to each person in 2007. Although this corresponds to the appropriate level of milk usage, a person living in urban areas consuming 4 times less milk than those living in rural areas.

Over 70 tones (25 million liters per annum) of milk is produced daily at the country’s level, and about 200 dairy plants with capacity to produce wide range of dairies are in operation.

The Government of Mongolia has approved “Milk” national program, and started its implementation in 2007. With aims of creating conditions to develop big number of dairy farms in major cities, supporting processing industry and farmers cooperation and building small milk processing industries in remote aimaks, it is working to build 4 centers to cool and store 500-5000 liters of milk, 22 complex facilities to process 400-1000 liters of milk daily through the investment of 1.8 trillion tugriks.

In the last year, our country has accumulated 200.0 thousand tones or 1.8 times more wheat than in 2007, 143.6 thousand tones or 26.4 percent more tomato as compared to previous year, 81.6 thousand tones or 9.6 percent more vegetables than in 2007, and has generated opportunities to fully supply for the population’s 100 percent demand for potato, 50 percent demand for flour, and 49 percent for vegetable through domestic production.

The Government has also provided loan interest and policy support to poultry husbandry. As a result of this, about 71 million eggs were supplied for the population consumption in 2008 only.
 
Livestock sector

Livestock sector One of the Mongolia’s main economic sector, agricultural sector produces about 20 percent (2 266 505 million tugriks) of the country’s GDP as of 2008, from which 89.3 percent is produced by livestock sector. 39.9 percent or 386.2 of total workers are working in agricultural sector in Mongolia, which includes 171.5 thousand herder households, and 366.2 thousand herders in livestock sector.
 
The age group of herders is as follows: 48.5% is 16-34 years old, 38.7% are 35-60 years old, and the remaining percent belongs to those more than 60 years old. According to the preliminary results of the 2008 livestock census 43.3 mln. livestock was counted, of which 0.3 mln.camel /0.6%/, 2.2 mln.horse /5%/, 2.5 mln.cattle /5.8%/, 18.4 mln.sheeps /42.4%/ and 20.0 mln.goat /46.1%/. The total number of livestock increased by 7.5 percent or 3.0 mln.heads compared with the 2007, of which camel by 2.2 percent or 5.8 thous., cattle by 3.2 percent or 77.6 thous., sheep by 8.1 percent or 1372.3 thous., goat by 8.8 percent or 1621.5 thous increased, but heads of horse decreased by 2.3 percent or 52.6 thous.   
 
Mongolia produces average of 22.1 thousand tones of wool, 5.6 thousand tones of cashmere, 1.2 thousand tones of camel wool, 170.4 thousand tones of meat, 7.5 million hides and skins, 335 million liters of milk annually. From the total production, 41.4% of wool, 77.6% of cashmere, 12.9% of meat is exported to China, Russia and Japan. The Government of Mongolia is implementing specialized programs and projects on increasing benefit from livestock, and intensifying the livestock sector. Considerable advances have been noted in the livestock quality as a result of importing livestock and animals of pure breed from countries like Russia, China, Germany, France and Canada. While the number of farmers specialized in growing livestock and animals of pure breed was not even 100 in 2005, this number has now increased to 920, which includes 12 612 cows in 409 dairy farms, 5285 cows in 48 beef farms, 11582 pigs in 154 pork farms, 309.9 thousand birds in 207 poultry farms respectively. Also 2200-2500 kilograms of milk, 180-214 kilograms of meat from each cow, 250-290 eggs from each bird is used annually. The Government of Mongolia is working to bring the products produced in our farms closer to the level of developed countries, and therefore aims to fully supply for major cities population by its natural and healthy products, and further increase export.
 
Crop sector

As the end of 2008, there are 192.5 thous.hectares of sown area, which consists of 154.0 thous.hectares of cereals, 12.3 thous.hectares of potatoes, 6.4 thous.hectares of vegetables and 5.5 thous.hectàres of fodder crops. Compared with the 2007, the total sown area was decreased by 5.0 percent or 10.2 thous.hectares, but sown area of cereals, potatoes, vegetables and fodder crops were increased by 26.4 percent or 32.2 thous.hectares, 7.2 percent or 0.8 thous.hectares, 4.5 percent or 0.3 thous.hectares and 12.4 percent or 0.6 thous.hectares respectively.

In 2008, total amount of 212.9 thous.ton cereals, 134.8 thous.tones potatoes and 78.9 thous. ton vegetables were harvested. As well as 1009.8 thous.tones hay harvest and 27.6 thous.tones hand made fodder were prepared. Compared with the 2007, volume of cereals, potatoes, vegetables and hay harvest were increased by 98.1 thous.tones or 85.5 percent, 20.3 thous.tones or 17.7 percent, 2.5 thous.tones or 3.2 percent and 76.7 thous.tones or 8.2 percent respectively, but hand made fodder was decreased by 7.7 thous.tones or 21.9 percent.

For 2008 year, increase in harvest production is promoted by “Third Campaign for Reclaiming Virgin Lands”, which was adopted and carried out by Mongolian Government, technological reforms and nice weather condition in harvest regions over the period of harvesting in Northern Central Mongolia. In the core headings to develop Mongolian socio-economic in 2008, increase productions for grain output to 130.0 thousand tonns, 55.0% of domestic market for vegetables and 95.0% of potatoes, respectively, have put in intention of central government. In 2008, state had hoarded 212.9 thousand tonns grain, and 54.9% of vegetable had provided by domestic production and government purposes had fulfilled. But for potatoes, only 79.2% of the market had provided by domestic production and the purpose was not fulfilled.

Crop sector is one of Mongolia’s main industrial sectors that produces over 20 percent of total agricultural products, and supports over 60 000 cultivators’ work and living.

Mongolia has successfully organized the first “Virgin land campaign” in 1959 and second campaign in 1976 respectively with the help of technique and economics of then Soviet Union. As a result of this, the size of arable turn has reached 1.2 million hectares, and the country was able to fully meet the domestic demand through seed, potato, vegetable, livestock provender production. For instance, it has cultivated seeds in 673.3 thousand hectare land, accumulated 840.0 thousand tones of yield, and has imported about 100 thousand seeds at the country level in 1989.

Mongolian crop sector has private sector entities that are 100 percent privatized, and as of today, there are total of over 1100 entities, organizations and individuals that occupy 606.9 thousand hectare land of which 795 own up to 300 hectare, 140 own up to 300-600 hectare, 102 possess up to 600-1500 hectare, 47 own up to 1500-3000 hectare, and 19 own more than 3000 hectare spaces respectively.

These entities employ over 290 engineering and technical staff, and operate with over 960 tractors, 526 combines and other agricultural trailer machines, of which 70 percent have been utilized before 1990.

The occupancy rates of cultivated land in aimaks are as follows: 59.6% of seed, 22.2% of potato and other vegetables in Selenge aimak; 12.7% of seed, 19.1% of potato and vegetables in Tuv aimak; 14.9% of seed, 6.4% of potato and vegetables in Bulgan aimak; 8.3% of seed, and 6% of potato and vegetables ion Khuvsgul and Darkhan-Uul aimaks respectively. The above 5 aimaks cultivate the total 95.4% of seed, and 58.2% of potatoes and vegetables at the country level.

In the last few years, the state has provided support of 11.7 trillion tugriks on restoration and development of irrigative crop, on construction and repair work of new irrigation systems. As a result of this, the current size of irrigation land has reached 35.0 thousand hectares.

However, due to certain factors such as change in atmosphere, impact of warming, financial capability of entities running plantation operations and lack of professional workers resulted in exploiting only 30 percent of total crop land, and as of 2007, 47% of necessary vegetable, 86% of potatoes have been provided by domestic production.

Hence, the Government of Mongolia has generated the national program on crop development “The third wilderness campaign”, and as a result of its implementation, 205.8 thousand tones of seed, 142.1 thousand tones of potatoes, 80.6 thousand tones of vegetables, and 15.7 thousand tones of livestock provender plants have been accumulated in 2008 respectively.

As compared to the previous year’s accumulated yield, there is an increase in seed by 91.2 thousand tones, 28.5 thousand tones increase in potato, and 1.5 thousand tones increase in vegetable; 100% of potato, 49% of vegetable is supplied by domestic yield.
 
Light Industry

Looking at Mongolia’s average Gross Domestic Product of 2004-2007 sector structure, processing industry accounts for 3.6 percent. This amount is 5 times less than agriculture, shooting, forestry, construction sectors; over 6 times more than mining, extracting industries; over 2 times less than transportation, communication sectors, 2 times lower than real estate, rental, and other business sectors respectively. This means that the basis for stable social and economic development, the value added real production has not held in our country.

The amount of high technology saturated products in processing industry is still retained in a low level. According to UNIDO report, 85 percent of our country’s export products are first level processed raw materials and only about 10 percent value added finished products produced using advanced technology.

Mongolia’s “National integrated development policy based on millennium development goals” has been defined through the following 5 main development policies: Geology and mining, heavy industry; processing industry; small and medium industry service; agriculture and food industry; travel and tourism; and is planned to be implemented at the following two levels: 2007-2015, and 2016-2021.

Mongolia prepares 21 thousand tones of fleece, 6 thousand tones of goat cashmere, 1000 tones of camel wool, 400 thousand ox hide, 300 thousand horse hide, 3.3 million sheepskins, 3 million goatskins annually.

Although national industries make up 40% of cashmere, 36% of wool, the value added end product is still low. In skin and hide sector, 10% of horse hide, 80% of ox hide, 90% of sheepskin, 16% of goatskin is exported in semi-processed condition.
As of today, there are over 40 small and medium industries in wool processing sector, over 50 in cashmere processing industry, 100 small braiding workshops, over 30 industries in skin and hide processing industry, 300 industries in wood processing sector, 200 small and medium industries in printing sector respectively.

Policies on developing livestock origin raw material processing industry are focused on widening complete processing steps, and generating small and medium industrial complexes that produce end products such as knitted, leather, shoes, and other clothing, rather than focusing on establishing more first level industries that exceed the raw material’s resource.

According to the Government’s aim to develop processing industry as a priority sector, within the frame of industry development policy, Parliament of Mongolia has approved and implementing the “The main directions on establishing and developing industrial and technological parks” with the purpose of supporting the production of export products capable of competing in the foreign market; reducing unemployment; facilitating stable development in region; improving foreign trade balance; as well as increasing integration of Mongolia to the world market.

Within this work frame, necessary research has been made on conditions and possibilities of province centers on which industrial and technological parks are planned to be established. Based on this, technical and economic basis, plotting, research on environmental condition, and master plans to develop industrial and technological park in Darkhan, Erdenet, Uliastai cities, and Baganuur, Bagahangai, Nalaikh, Khan-Uul districts have been made respectively.

Moreover, according to research made on each aimak and soum, the draft of “Directions on developing industries in provinces” through 2009-2012 is being produced.