Jump to... Background Incentives Resource user rights Other range resource Incentives and credit Range management

Background

Two broad categories of incentives influence natural resource management decisions among pastoralists. Variable incentives are considered to be factors such as prices, exchange rates, trade restrictions, interest rate policies, taxes and subsidies, which limit the net returns that producers can earn from herding or from range conservation activities. In a rangeland context, the existence of feed subsidies can be particularly significant. User-enabling incentives refer to elements of the producer’s environment that affect decision-making behaviour. Factors in this category include credit, land tenure, socio-economic conditions, producer support services and infrastructure such as roads and markets. Of these incentives, land tenure is the most contentious and possibly the most difficult to implement.

Incentive structures are crucial to understanding pastoralist resource use strategies, and therefore to designing successful projects.

Incentives and range resources

Feed Subsidies

Feed subsidies have often been introduced in drought relief packages (for example, in North Africa). They mitigate the effects of drought by preventing herders from bearing the economic burden of full production costs. However, they soon create a situation of dependency, as the number of animals subsisting solely on range grazing declines. Livestock feed subsidies cause market distortions leading to economic inefficiency. Also, there is an incentive for the number of animals on the range to exceed carrying capacity, leading to range degradation. Moreover, the common system of allocating feed per head creates a major incentive to increase herd sizes, placing additional pressure on the natural resource base. Although some feed subsidies in North Africa were targeted at poorer herders, the literature suggests that subsidies in fact tended primarily to benefit the wealthy herders, who had additional financial resources and were better integrated into the commercial economy.

Recently, the issue of feed subsidies as a drought mitigation strategy has been raised once again. Studies have demonstrated that saving core breeding assets during drought offers the best insurance of future livelihood security. However, subsidizing herders, whether for the purpose of risk management or to improve annual productivity, can create dependency and encourage overstocking. Therefore, a careful balance between the negative impact of subsidies and the need to prevent loss of animals during drought must be found when designing feed subsidy-based projects in the future.

Resource user rights

Pastoralist user rights consist of the systems that control and organize access to range resources. Security of user rights acts as an incentive for environmentally sound rangeland use by herders. For example, in Mongolia, a new land law was approved in 1996. It included the provision of long-term leases for winter/spring grazing areas, hay land and the designation and management of emergency grazing areas. Implementation of this law aimed to ensure good range management and the availability of hay supplies at herder level.

Unfortunately, the encouragement of secure access to range resources can be problematic. The best option is to build on traditional user rights. However, these are often extremely complicated, and may be undermined by such factors as population increases, economic changes and government policies including nationalization, sedentarization (curbing traditional mobility) or privatization. Privatization of land has the potential advantage of providing herders with an asset that could be used as a guarantee for loans. On the other hand, the expense of the land-titling process has meant that privatization has frequently only benefited better-off groups. In addition, the policy has sometimes been misused to sell pastoralist land to outsiders.

A further difficulty is that interventions must rely upon national and local state institutions to give legal status to pastoralist land tenure. For instance, an objective of the Kidal Food and Income Security Programme in Mali was to participate in a regional initiative to clarify and codify pastoral land tenure, with experimental distribution of dry season pastures to pilot cooperative sectors or smaller groupings.

IFAD’s comprehensive response to the issue of uncertain land tenure has been to:

• Study and support traditional land tenure systems.
• Support re-establishment of traditional systems where they have been marginalized or eroded. This was particularly urgent in Asian and East European countries making the shift from central planning to market economies, where IFAD’s strategy has been to encourage the governments to speed up the process establishing the legal foundation for judicial use and management of the grazing resources.
• Assist the development of herder organizations able to share and administer the land. IFAD’s customary emphasis on association development has done much to improve the land tenure situation in project areas, including in Morocco and the Central African Republic.
• Encourage consultation with other land users, such as farmers and hunters.

Other range resource use incentives

Other incentives that projects can use to promote the sustainable use of range resources include grazing fees to discourage overgrazing, improved market infrastructure to facilitate destocking and the formation of user groups to control water points.

In countries such as Syria and the Sudan, IFAD has used the improvement of infrastructure (e.g. markets, feeder roads and associated water points) as an incentive for pastoralists to destock. For example, in the National Livestock Project in the Central African Republic, three new markets were built and 84 were rehabilitated. The result was that herders increased off-take and used markets more frequently. Similarly, the project formulation report for the Kidal Food and Income Security Programme in Mali placed great emphasis on the fact that the development of local institutions is fundamental to assuring the good management of range resources, including both pasture and water. User groups were also formed in Morocco to facilitate the upkeep of water points.

Incentives and credit

IFAD has pioneered the support of indigenous organizational structures or groups as vehicles to deliver incentives such as credit. The advantages are that individual loan recipients can support one another in their activities, and peer pressure encourages the repayment of loans, particularly if groups, rather than individuals, are held financially responsible.

For example, credit was provided to 8400 herders organized in traditional ‘tent groups’ of 8-12 households through the Qinghai/Hainan Prefecture Agricultural Development Project in China, and similar initiatives took place in Central African Republic, Mongolia, and Niger.

The Livestock Development and Rangeland Management Project in the Central African Republic intended to facilitate mutual savings and credit schemes, including credit for input needs, credit for investment for personal gain (such as investment to increase herd size) and credit for investment for group projects. Herd reconstitution was to proceed under a pass-on-the-gift scheme, in which clients were given direct encouragement to provide repayment in kind, since it was their neighbours who would be receiving the animals.

Credit as an incentive for range management

In the Arhangai Rural Poverty Alleviation Project in Mongolia, households receiving restocking credit had to relocate to their original rural districts. They were also required to adopt traditional grazing management techniques (i.e. movement between spring, summer, autumn and winter pastures).

Projects that give insufficient consideration to incentives in the design stages may run into unexpected difficulties.

For example, by supporting increased forage supply, IFAD’s Northern Pasture and Livestock Development Project in China unintentionally provided a new incentive for households to acquire livestock. Consequently, total pasture per animal unit decreased by 20% over the course of the project, an outcome that had not been foreseen prior to implementation. Studies into appropriate herder incentives should be carried out at an early stage.

There is a need to advise governments on the environmental effects of perverse incentives.

The most important causes of distortions of herders’ incentives are generally beyond the Fund’s control. In the final analysis, it is national governments who must eliminate unnecessary feed subsidies, initiate legislation to promote secure land tenure and decide upon trade and financial policies. For example, difficulties arose in setting up community grazing areas in the National Livestock Project in the Central African Republic. No more than three such areas were established, in contrast to the appraisal objective of seven. Reasons for the shortfall included the complexity of the government administrative procedures and the lack of an administrative and legal framework to allocate exclusive grazing rights to herder groups.