Economics of yak farming with relation to tourism in Nepal

B.K.P. Shaha

Directorate of Livestock Production, Department of Livestock Services, Ministry of Agriculture, Kathmandu, Nepal

Summary

Traditional yak farming in Nepal is declining at an alarming rate, characterised by a measured shift from traditional butter and hard cheese (Chhurpi) to modern Swedish style hard cheese, yak steak and as pack animals for tourism. Also there has been a positive shift in number of animals/herd due to economic reasons such as economic return per herd and per animal. It has been noticed that small herds (15 heads) show positive but very low gross margins compared to that of economically viable sized herds (55 heads). The economic return of a household running a hotel business in a yak raising area is five times higher than that of a household with an average herd size of 55 animals. However, yak, as a pack animal in the tourism sector, is essential to carry the loads of tourists in the Himalayan region of Nepal. Without yak and their crosses, it is impossible to strengthen the growing tourism industry in this remote and rugged terrain. In addition to this, the meat value of yak steak in these areas is another major reason closely associated with tourism development. To develop tourism in Nepal, there is an urgent need to readdress policies that affect yak husbandry for the mutual benefit of farmers as well as for rural-urban migration and employment. A slow transition policy has been prescribed in this paper to resolve the current issues related with yak husbandry and need for tourism.

Keywords: economy, Nepal, tourism, yak farming

Introduction

Yak husbandry is one of the important and indispensable aspects of the Sherpa's life in the high altitude rangelands of Nepal. Currently, about 56,488 yak and yak-cattle hybrids are present in Nepal and are distributed in the highlands of the 14 northern districts. Yak population in Nepal is declining (about 200 thousand yak and hybrids in 1961) at an alarming rate (Paudel 1993) due to lower economic benefits derived from yak husbandry. In addition, the more educated youth of the Sherpa community is unwilling to remain in traditional yak husbandry because of more lucrative opportunities in the trekking industry. Yak is one of a few domesticated animals that can survive in a cold and low oxygen environment that result in a low input feeding system. They have strong limbs, small solid hooves with hard edges and a narrow hoof fork that make them ideal for carrying heavy loads to supply both local and tourism demands in the rugged and snowy terrains of the Himalayas (Cai and Wiener 1995). As there is no suitable substitute animal for carrying such loads, yak and its hybrids remain an indispensable part of the trekking industry above 2500 metres above sea level (masl) (Joshi et al. 1994).

An attempt has been made in this study to highlight the usefulness of yak in the Himalayan rangeland of Nepal with special reference to the socio-economic relationship of the Sherpa community with tourism and yak husbandry. The constraints and potentials of yak husbandry in Nepal have also been identified and relevant policy implications have been suggested.

Materials and methods

The author visited Manang, Mustang, Solukhumbu and Rasuwa Districts of Nepal and interviewed yak farmers of Chame (Manang), Muktinath (Mustang), Tyangboche, Junubeshi villages and the government yak farm, Syangboche, in Solukhumbu district, and Chandanbari and Chilime villages of Rasuwa districts. Different types of participatory rural appraisal (PRA) tools were used to extract relevant data for this study. Other relevant data were collected from published and unpublished sources. Thus collected data were grouped into two categories of different herd sizes for comparative performance analyses. The major limitation of this study is data deficiency. Hence, this paper should be considered as a case study rather than a detailed survey.

Tourism and yak population

There are about 56,488 heads of yak and its hybrids in the country distributed over 14 Himalayan districts in the kingdom (Table 1). The highest yak population is present in Solukhumbu District, followed by Dolpa, Mustang, Rasuwa, Manang, Dolakha and Taplejung. The population distribution of yak and its hybrids in various districts of Nepal is directly related with the relative importance of the tourism sector in these areas. It is quite obvious to note that Mount Everest area attracts more high paying tourists than other trekking routes of Nepal. Hence, the yak population is the highest in Mount Everest trekking area compared to other trekking areas (Dolpa, Mustang, Manang, Helambu and Langtang). During 1996, the total trekking permits issued by the National Authority of Nepal were 6752, 4944, 15,562 and 1728 for Everest, the Helumbu and Langtang areas, Annapurna (Manang, Mustang) and other trekking routes, respectively (NRAN 1999). The yak and its hybrid population and flow of tourists clearly show a positive correlation both in terms of pack animal needs and its products such as raw milk and hard cheese for consumption by tourists.

Economics of yak husbandry

The following assumptions were made for the estimation of the gross margins of two prevailing yak herd sizes that are commonly observed in Nepal.

• Breeding males are left open for free grazing on communal pasture land, therefore, bear no cost of rearing;
• Four calves under 1 year (about less than 60 kg body weight) is equal to one adult animal;
• Two steers/bull is equal to one adult animal;
• Milking animals are fed 2 kg of good quality hay and 1 kg of potato or grain per day during the winter period of about 120 days;
• Draft animals are fed 3 kg of hay per day during two tourist seasons which last for about 150 days;
• All animals are fed either 1 kg of grain or locally grown potato during winter months of housing;
• Food transportation cost for herdsmen/herdswomen for two sizes of herd in alpine pasture are 30 and 60 persondays;
• Twenty percent of adult animals are culled for meat every year.

Table 1. Yak and hybrids population in Nepal.

District/village	No. of population
Taplejung	4036
Shankhuwasabha	3024
Solukhumbu	12,059
Sindhupalchowk	321
Ramechhap	1229
Dolakha	4470
Rasuwa	5027
Gorkha	3641
Manang	4709
Mustang	5037
Dolpa	6605
Mugu	2250
Humla	2029
Jumla	2051
Total	56,488

Source: DLSO (1999).

In a herd of 15 (A) adult animals the percentage composition of the gross income is highest from meat sale; followed by pack load income, milk sale, Chirpa (undercoat) sale and Pu (hair) sale (Table 2). On the variable cost structure side, the percentage composition of hay feeding cost/year (milking), hay feeding cost/year (draft), hay feeding cost/year (dry), grain/potato feeding (milking), herdsmen cost/year and food transportation cost/year are estimated to be 16, 30, 11, 18, 24 and 1.8%, respectively. The gross income from meat sale is the highest because of the popularity of yak steak among tourists. The gross return from pack animals arising from tourism (meat and pack animal value) is the biggest monetary attraction for the Sherpa community to rear yak. When these yak are culled, they become valuable as yak steak. Both meat and pack animal commodities are major incentives for modern yak husbandry in Nepal. Without the tourism source of income generated by yak husbandry, the positive but very low gross margin (Nepalese Rupee (NR) 30,825 of small herd size A), clearly signifies that traditional yak husbandry for milk and butter is no longer a profitable and sustainable enterprise, especially among the younger Sherpa population.¹

1. US$ 1 = 73 Nepalese Rupee (NR) in September 2000.

Table 2. Gross margin estimation of a herd of 15 adult animals (5 lactating cows, 5 dry cows, 5 castrated males and 4 calves).

A	Gross income	Unit	Yield/animal	Nos.	Rate	Amount NR1	Share (%)
	Milk sale (180 days lactation)	litre	225	5	30	33,750	9.07
	Chirpa sale/year	kg	1.5	15	250	5625	1.51
	Pu sale/year	kg	1.2	15	150	2700	0.73
	Meat sale/year	kg	150	3	400	180,000	48.38
	Off-farm income as load/year	day	150	5	200	150,000	40.31
	Total					372,075	100.00
B	Variable cost	Unit	Concentrates	Nos.	Rate	Amount	Share (%)
	Hay feeding cost/year (milking)	kg	240	5	45	54,000	15.82
	Hay feeding cost/year (draft)	kg	450	5	45	101,250	29.67
	Hay feeding cost/year (dry)	kg	160	5	45	36,000	10.55
	Grain/potato feeding (milking)	kg	120	15	35	63,000	18.46
	Herdsmen cost/year	day	270	2	150	81,000	23.74
	Food transportation cost	day	30	1	200	6000	1.76
	Total					341,250	100.00
C	Gross margin (A – B)					30,825

1. US$ 1 = 73 Nepalese Rupee (NR) in September 2000.

In the herd of 55 (B) adult animals, the percentage composition of the gross income is once again the highest from meat sale (55%), followed by pack load income (34%), milk sale (7.8%), Chirpa sale (1.6%) and Pu sale (0.8%). On the variable cost structure side, the percentage composition of hay feeding cost/year for milking Nak (female yak), hay feeding cost/year for pack yak, hay feeding cost/year for dry Nak, grain or potato winter feeding for milking Nak, herdsmen cost/year and food transportation cost for herdsmen are estimated to be 17, 32, 12, 25, 13 and 1.3%, respectively (Table 3).

Table 3. Gross margin estimation of the herd of 55 adult animals (15 lactating cows, 15 dry cows, 15 castrated and 10 steers along with 12 calves).

A	Gross income	Unit	Yield/animal	Nos.	Rate	Amount NR	Share (%)
	Milk sale (180 days lactation)	litre	225	15	30	101,250	7.78
	Chirpa sale/year	kg	1.5	55	250	20,625	1.58
	Pu sale/year	kg	1.2	55	150	9900	0.76
	Meat sale/year	kg	150	12	400	720,000	55.31
	Off-farm income as load/year	day	150	15	200	450,000	34.57
	Total					1,301,775	100.00
B	Variable cost		Concentrates	Nos.	Rate	Amount	Share (%)
	Hay feeding cost/year (milking)	kg	240	15	45	162,000	17.27
	Hay feeding cost/year (draft)	kg	450	15	45	303,750	32.37
	Hay feeding cost/year (dry)	kg	160	15	45	108,000	11.51
	Grain/potato feeding (milking)	kg	120	55	35	231,000	24.62
	Herdsmen cost/year	day	270	3	150	121,500	12.95
	Food transportation cost	day	30	2	200	12,000	1.28
	Total					938,250	100.00
C	Gross margin (A - B)					363,525

The gross income from meat sale is even higher in herd B than herd A because of the larger herd size (Joshi 1982). In addition to this, the gross return from pack animals used for trekking is the biggest monetary incentive to raise yak for the Sherpa community. After culling these yak are also valuable for local consumption. Both of these economic activities (meat and transportation) are the major incentives for modern yak husbandry associated with tourism in Nepal. However, the positive gross margin (NR 363,525) of herd B clearly signifies that the large share of income from meat and pack yak generated by tourism sector (NR 1.17 million) outweighs the income generated by traditional yak husbandry for milk, hard cheese and butter. Therefore, traditional yak husbandry is not a profitable enterprise.

The income generated from hotel operations and pack animals associated with the trekking business along the most popular trekking routes of Nepal is about five times higher than that of traditional yak husbandry in Nepal, all in the short period of about five months in a year. Without yak as pack and meat animals, there is a remote chance that the growing demand for food and transportation need for tourism and trekking sector in Nepal can thrive in the future.

Despite the lucrative incentives from yak husbandry of larger herd sizes, younger people in Sherpa are attracted toward more rewarding means of making money such as working as guides and porters for trekking and mountaineering expeditions. These people are aware of the hardship of yak husbandry in remote and inaccessible areas and the low return on investment as compared to the hotel and trekking businesses. For this reason and the cheap availability and accessibility of Tibetan yak, they prefer instead to import them as pack animals. This along with the high labour cost in the mountain region is major setback for traditional yak husbandry in Nepal. Therefore, there is an urgent need to find incentives to support traditional yak husbandry in Nepal.

Problems of yak husbandry

The major problems of the yak husbandry are:

• inadequacy of hay during winter months
• absence of loan disbursement programme for increasing the herd size to achieve economics of scale and efficiency
• lack of infrastructure such as roads and electricity for marketing high value yak cheese
• lack of an efficient yak breeding programme to maintain the genetic diversity
• absence of mobile cheese processing suitable for the transhumance system of yak husbandry as being done in other countries and
• closure of alpine pasture access in Tibet for Nepalese yak herders.

Solutions

So far as solutions to the above mentioned problems are concerned, the following policy prescriptions are suggested:

• Alpine pasture restoration programme, sustainable yak stocking rate along with control grazing scheme based on people's participation should be launched in the focused areas;
• To achieve economics of scale and efficiency in yak husbandry, subsidised credit facilities should be strengthened to the interested yak herders;
• Subsidised solar panel generated electricity should be availed to the migratory herds for better quality cheese production and cow dung saving for revitalising alpine pasture for optimal growth which, otherwise, would be used for cooking and heating;
• Separate government yak breeding station should be established for at least two pure lines for yak and one pure line for Chauri (fertile female) and Jhopka (infertile male) production to meet the immediate milk and pack animal needs along lower altitude trekking routes;
• Given the yak's ability to survive in harsh conditions and the people's ability to sustainably derive livelihood from it (Khan 1995), indigenous livestock management systems should be strengthened;
• Research and development on yak husbandry should be accomplished in the light of Nepalese perspective so that conservation of yak through sustainable utilisation could be achieved in the near future.

Acknowledgements

The author is grateful to the yak herders of Solukhumbu, Rasuwa and Upper Mustang districts for their valuable information for this study. The author also would like to acknowledge the help of Mr Ramchandra Devkota, Farm Manager of Livestock Farm, Syanboche, for his valuable help during this study.

References

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