The concept of farm-to-fork can be complicated when it comes to meat. Fresh meat could be from the farm next door—or it could be from 10,000 kilometers away, having just arrived on a flight from the other side of the globe. With advances in cold chain transportation and logistics, distances that once took meat weeks to travel are covered in days, if not hours. And for a handful of low- and middle-income countries, meat exports are big business.
Mongolia’s rich pastoralist history, current livestock surplus, and geographic proximity to major markets offer intriguing potential for the development of a strong export-oriented red meat value chain. Today, the livestock sector provides a livelihood to roughly 150,000 herder households. Many of these families are among the poorest in the country, struggling with debt and vulnerable to the extreme effects of poverty. Entering into the global value chain (GVC) for red meat could provide new opportunities for economic growth, job creation, and poverty reduction, especially in rural areas.
The growth of the global middle class in emerging economies and demand for new product segments in response to dietary trends has global buyers looking to new sources of supply. This opening up of market access has meant new opportunities for trade, but it has also introduced new food safety risks, reinforced the need for efficient and effective regulation, and increased the urgency for potential exporters to reach ever-higher levels of competitiveness.
The growing appetite for meat on the Chinese market is arguably the biggest driver of meat’s global growth. Total meat consumption in China has quadrupled over the last 30 years. And while pork remains the primary choice of consumers, China is now importing over US$3 billion dollars’ worth of beef and mutton each year.
The opportunity to feed Chinese demand has provided the incentive for public and private sector actors across the globe to work together to upgrade production and process capabilities, reform quality infrastructure and regulation, and improve trade facilitation in the hopes of securing a share of the market.
In Mongolia, accessing the Chinese market has always been the plan, but only very small volumes have ever been exported. Despite this, there is a commonly held belief that Mongolian producers can rapidly scale up exports to meet rising Chinese demand. A landmark cooperation agreement between Mongolian and Chinese officials opened access to the Chinese market for Mongolian meat in August 2016, and hopes were high. But within mere months a disease outbreak in the remote Western part of the country led China to once again ban imports of raw meat from its northern neighbor.
Mongolia’s inability to convince trade partners of the safety of its products has resulted in stop-and-start, arms-length trade for decades now. With few long-term buyer-supplier relationships, there is little evidence of the knowledge, skills, and technology spillovers more common in integrated value chains.
Recent value chain analysis by the World Bank Group examines how Mongolian producers might be able to overcome animal health and other challenges to enter into this highly competitive global value chain. It also identifies other markets in the GVC that may provide alternative opportunities for Mongolian producers to increase exports, including countries in the Middle East and Southeast Asia.
A forthcoming report, titled Sector Competitiveness in FDI Attraction in Agribusiness, will provide a list of prioritized actions to be taken within the next 18 months that can help to seize the potential of Mongolia’s red meat sector. This will require introducing needed laws currently hung up in the Mongolian parliament, redesigning incentive structures, and sequencing program implementation to support production chains with the best chance of competing on international markets.
The good news is that Chinese companies, in particular, are eager to develop the Mongolian livestock sector as a key supplier for their supply chain. In some cases, Chinese companies have already been collaborating with Mongolian producers—despite the Chinese ban—to improve capacity and meet the necessary standards for attaining permission to export to China. It’s these types of knowledge, skills, and investment flows inherent in GVC participation that make greater participation imperative to improving competitiveness in Mongolia’s red meat sector.
Mongolia’s rich pastoralist history, current livestock surplus, and geographic proximity to major markets offer intriguing potential for the development of a strong export-oriented red meat value chain. Today, the livestock sector provides a livelihood to roughly 150,000 herder households. Many of these families are among the poorest in the country, struggling with debt and vulnerable to the extreme effects of poverty. Entering into the global value chain (GVC) for red meat could provide new opportunities for economic growth, job creation, and poverty reduction, especially in rural areas.
The growth of the global middle class in emerging economies and demand for new product segments in response to dietary trends has global buyers looking to new sources of supply. This opening up of market access has meant new opportunities for trade, but it has also introduced new food safety risks, reinforced the need for efficient and effective regulation, and increased the urgency for potential exporters to reach ever-higher levels of competitiveness.
The growing appetite for meat on the Chinese market is arguably the biggest driver of meat’s global growth. Total meat consumption in China has quadrupled over the last 30 years. And while pork remains the primary choice of consumers, China is now importing over US$3 billion dollars’ worth of beef and mutton each year.
The opportunity to feed Chinese demand has provided the incentive for public and private sector actors across the globe to work together to upgrade production and process capabilities, reform quality infrastructure and regulation, and improve trade facilitation in the hopes of securing a share of the market.
In Mongolia, accessing the Chinese market has always been the plan, but only very small volumes have ever been exported. Despite this, there is a commonly held belief that Mongolian producers can rapidly scale up exports to meet rising Chinese demand. A landmark cooperation agreement between Mongolian and Chinese officials opened access to the Chinese market for Mongolian meat in August 2016, and hopes were high. But within mere months a disease outbreak in the remote Western part of the country led China to once again ban imports of raw meat from its northern neighbor.
Mongolia’s inability to convince trade partners of the safety of its products has resulted in stop-and-start, arms-length trade for decades now. With few long-term buyer-supplier relationships, there is little evidence of the knowledge, skills, and technology spillovers more common in integrated value chains.
Recent value chain analysis by the World Bank Group examines how Mongolian producers might be able to overcome animal health and other challenges to enter into this highly competitive global value chain. It also identifies other markets in the GVC that may provide alternative opportunities for Mongolian producers to increase exports, including countries in the Middle East and Southeast Asia.
A forthcoming report, titled Sector Competitiveness in FDI Attraction in Agribusiness, will provide a list of prioritized actions to be taken within the next 18 months that can help to seize the potential of Mongolia’s red meat sector. This will require introducing needed laws currently hung up in the Mongolian parliament, redesigning incentive structures, and sequencing program implementation to support production chains with the best chance of competing on international markets.
The good news is that Chinese companies, in particular, are eager to develop the Mongolian livestock sector as a key supplier for their supply chain. In some cases, Chinese companies have already been collaborating with Mongolian producers—despite the Chinese ban—to improve capacity and meet the necessary standards for attaining permission to export to China. It’s these types of knowledge, skills, and investment flows inherent in GVC participation that make greater participation imperative to improving competitiveness in Mongolia’s red meat sector.
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