Wednesday, January 8, 2014, 09:12
Exploiting the green, green grass of home
By Wang Kaihao

Authorities in the Inner Mongolia autonomous region are considering building a successful business model for ecological industry on the vast prairies, but it's not a straightforward task. Wang Kaihao reports from Hohhot.

It has been six years since Buhchuluu launched an animal husbandry cooperative of 70 neighboring families. This herdsman of the Mongolian ethnic group from the Siziwang Banner in the city of Ulan Qab, describes their united efforts running the cattle feeding business as "just OK" although his annual income has reached 200,000 yuan ($32,700).

"What we did mostly was still small business," he said. "We were not allowed to raise too many cattle because of a rigid grass-livestock balance policy. It will be good for maintaining the grass, but the process is kind of passive."

The Ministry of Agriculture announced a national rule in 2005 limiting the head of livestock on each unit area of pasture to better protect the grasslands and maintain an ecological balance between animals and the grass. Each banner or county in the region involved then set up its own quotas.

The situation seemed to improve when Buhchuluu joined a program led by Monsod Drought-Resistance Greening Co Ltd, China's only listed company devoted to grassland ecological restoration, based in Hohhot, the capital of the autonomous region. The company provides grass seed to the husbandry cooperative initially free of charge. The herdsmen can pay back the cost with the cattle they produce, which annually saves up to 10,000 yuan for each family.

Wang Zhaoming, board chairman of Monsod, developed the plan for the profitable eco-friendly economy that has just taken off in Inner Mongolia covering an area of 64 million hectares of available grassland. Monsod's market value had approached 6 billion yuan by mid-December.

"Horticulture doesn't necessarily equate with an ecological industry," Wang explained. "Horticultural plants need large amounts of water and need to be carefully looked after. However, a sustainable ecological industry means the plants are able to grow healthily without the intervention of human beings. That's why you cannot call golf courses part of an ecological industry in spite of their flourishing grass."

Wang, who grew up in a herdsman's family of the Mongolian ethnic group, has traveled around Inner Mongolia in recent years to collect the seeds of disappearing grass varieties, which possibly have potential in the marketplace.

The business has nurtured more than 40 kinds of grass that possess multiple functions, including urban greening, anti-desertification and the restoration of reclaimed mining land.

It has recently begun to establish a gene bank with BGI, one of the world's leading genome sequencing centers and also known as the Beijing Genomics Institute prior to 2008, to better develop grass varieties which are both of high economic value and suitable to the arid environment of Inner Mongolia.

In late November, Monsod launched the nation's first grassland ecology industry alliance in Hohhot, which includes 28 relevant enterprises, academic institutions and social organizations. It plans to get more on board in the near future. Wang claims the association will unite efforts in different sectors to share resources, improve lukewarm business in the field and form a healthy and sustainable industry chain in grassland ecology.

"When a manufacturing enterprise grows, it naturally expands to its downstream and upstream products, but everyone in this alliance will do and only do what they are good at," Wang said. "We want to get more focused to offer products of higher quality. When we get fine enough grass, others can then produce fine beef, milk and honey, which will eventually alleviate people's concerns over food safety. We don't want too much business crossover within individual companies, but the results can be a win-win situation if we share resources and save costs."

According to Tian Qingsong, director of the administrative office at the Institute of Grassland Research under the Chinese Academy of Agricultural Sciences, which joined the alliance, a fine grass variety developed by academic institutions usually takes more than one decade to finally enter the market.

"The process is slow because we do not have enough capacity to take the risk marketing all the varieties and can only rely on government promotion. It's not economical in that way," Tian said.

"More involvement by enterprises will make things better. We offer our technical guidance and nurture mature technician squads within the enterprises, who are closer to the market and more able to develop varieties meeting different niche markets."

There have certainly been some successful trials on the Inner Mongolian grasslands.

The Ar Horqin Banner in the eastern city of Chifeng was named the nation's "grass capital" by the China Animal Agriculture Association in July. The banner has grown 40,000 hectares of high-yield grass since the local government began to promote growing the crop in 2008 as a solution to ameliorate desertified grassland and break down the problem caused by ensuring the grass-livestock balance policy was maintained. Most of the grass is alfalfa imported from the United States and Canada, according to Xu Feng, director of the Ar Horqin Grass Industry Association. The area is to be increased to 66,700 hectares by the end of 2015.

"However, alfalfa is only allowed to be planted in severely desertified areas, because we still need to keep the local original varieties because of ecological safety concerns," Xu said.

A hectare of local land can produce up to 15,000 kilograms of alfalfa, compared with merely 750 kg of local varieties.

Although Wang from Monsod said foreign seeds occupied the vast majority of alfalfa planted in Inner Mongolia, he also revealed local enterprises, including his, are exploring domestic breeds seeking equally high yields.

In 2012, Inner Mongolia established 500 model family ranches all over the region with certain criteria for their infrastructure and the application of eco-friendly economic patterns.

"A healthy business model combining the restoration of the natural environment while making money will still rely more on individual herdsmen, but their cooperative can be run in a more scientific way," said Yu Guangjun, head of the Economic Research Institute affiliated to the Inner Mongolia Academy of Social Sciences. He is cautiously optimistic about the potential.

"We can make more accurate calculations of the scale of the family ranch-based local price levels, incomes and ecological conditions, rather than simply make the same ranches everywhere. Inner Mongolia has various kinds of grasslands. No specific business model is suitable for such a vast land although it may work out across some areas."

"It will be easier to begin from the urban outskirts where enterprises are able to use more abandoned land. We have already seen some successful approaches."

Monsod finished an ecological restoration project in June, turning 692 hectares of wasteland in the northern outskirts of Hohhot into grassland as a new tourist site as well as a platform for more environmental experiments.

"But we are still waiting for a good example of a big company experiencing continuous profits from the vast grasslands, where more difficulties and uncertainties exist," Yu added.

Contact the writer at wangkaihao@chinadaily.com.cn

Yuan Hui also contributed to this story.