«FAO ANIMAL PRODUCTION AND HEALTH paper ADDING VALUE TO LIVESTOCK DIVERSITY Marketing to promote local breeds and improve livelihoods Cover ...»
Neither the producers nor the local traders are aware of the market value of what they are selling to the wholesalers. These have come to dominate the market, so the pastoralists and local traders currently have few options but to sell to them at the prices they set.
During the Soviet era, the mountain farmers and transhumant pastoralists of southern Kyrgyzstan used to work for state livestock collective farms that mainly produced finewooled sheep. In the mid-1990s the state farms were dissolved, and their former employees had to create their own enterprises. Many now keep livestock. The better-off raise sheep, cattle or yaks, which are regarded as more prestigious animals, while poorer families keep goats, which are cheaper to buy and manage, and produce more offspring.
With no incentive to produce better-quality fibre, many livestock keepers have crossbred their local animals with Pridon and Angora goats, which were introduced to collective farms in the north of the country during the Soviet era. They produce more fibre, but of a lower quality: it is coarser, and the Pridon fibre is dark. It sold well in the old Soviet Union, but is less prized in the international market, where it is not regarded as true cashmere.
The reputation of Kyrgyzstan goat fibre is poor, as the few European buyers who trade in northern and central Kyrgyzstan are increasingly offered coarse, low-quality “cashgora” from the Pridon crosses.
The breed that produce the ultra-fine cashmere is known as jaidari, which simply means “local”. As the crossbred goats become more common in Kyrgyzstan, the jaidari goats are in danger of disappearing altogether. That would mean the loss of a valuable genetic resource, since ultra-fine cashmere is rare. And it would mean a missed opportunity for PART 1: Wool and cashmere 31 pastoralists to gain better prices for their cashmere. If the local breed dies out altogether, they will have lost this chance forever.
But a chance still exists. Introduced to the north of the country, the imported breeds have not yet reached the high Pamirs in the south. The jaidari goats in these areas could be used to rejuvenate cashmere production in Kyrgyzstan.
A LACK OF SUPPORTThe trade in cashmere is new in Kyrgyzstan, and indeed in the rest of former Soviet Central Asia. It was only in the late 1990s that the buyers from China and other countries started coming every spring to buy cashmere from farmers and pastoralists in Kyrgyzstan. At first they bought cashmere from northern and central Kyrgyzstan, and they reached the Pamirs only around 2003.
As a result there are no government programmes or skills among research or extension
organizations to support rural people in this new activity. Nor is there any official information about the amount of fibre and cashmere production, sales or export from Kyrgyzstan:
no government department has taken responsibility for collecting this information. Donor organizations and NGOs have been reluctant to embark on cashmere projects, perhaps due to lack of interest among national decision-makers, and inexperience in taking on a new and somewhat technical development activity.
This is in sharp contrast to the situation in the two principal cashmere-producing countries, China and Mongolia. In Mongolia, cashmere has long been known as a major component of many pastoralists’ incomes, and there have been numerous efforts by donors, NGOs and the government to improve research, provide market information and training for producers, and regulate the markets. China leads the world in improved cashmere breeds and has a highly organized system of marketing, processing and manufacturing cashmere. In 2008, pastoralists in western China sold their raw cashmere to local traders for $32 per kg – way above the prices paid in Kyrgyzstan.
The best quality cashmere – fine, white, and of the appropriate length and style – is rare and difficult to source. World demand for cashmere garments is growing as incomes rise in the Russian Federation and the Far East. China, the source of the majority of the world’s cashmere goats and garments, is unable to satisfy this demand. This is why Chinese buyers have so enthusiastically sought raw cashmere from Kyrgyzstan and other Central Asian countries in the last few years.
PROJECT INTERVENTIONSFinding ways for producers and other local people to benefit from this unique resource is the aim of Odessa Centre Ltd. and the Kyrgyz Cashmere Producers’ Association, initially supported by the Aga Khan Foundation (Box 6). In 2004, Odessa Centre was commissioned by the Aga Khan Foundation’s Mountain Societies Development Support Programme (MSDSP) to investigate the potential for livestock development to benefit farmers in Kyrgyzstan’s Osh province. It identified cashmere marketing as a new and very active commercial activity, and recommended that the MSDSP develop cashmere training and information packages for farmers and small-scale local traders to increase their sales margins.
In 2008, another Aga Khan Foundation grant enabled the Odessa Centre to trial-run a Adding value to livestock diversity
BOX 6 Collaborating organizations
Cashmere Producers’ Association. Based in Osh, Kyrgyzstan, this NGO focuses on breeding cashmere goats and marketing their fibre. It is run by Sabyr Toigonbaev, the only local professional expert on cashmere goat selection and breeding.
Odessa Centre Ltd. A British research and consultancy company focusing on extensive pastoral livestock production and marketing.
The Aga Khan Foundation’s Mountain Societies Development Support Programme. A programme to support community organizations introduce improved technologies and establish small enterprises.
cashmere marketing project in several regions of southern Kyrgyzstan. The project aimed to
find a market for cashmere produced by the poorest villagers. Efforts have included:
Studies on the production and marketing of cashmere Research on the characteristics of cashmere in remote districts Training pastoralists on producing high-quality fibre Reviving the local jaidari breed of goats Promoting marketing links with buyers from Europe.
These following sections describe these activities.
STUDIES ON THE PRODUCTION AND MARKETING OF CASHMEREThe study focused on Alay and Chong Alay, in Osh province along the southern border with Tajikistan. The villages in these two districts lie at high altitudes, from 1 500 to over 3 200 metres, while the Chong Alay range rises to the highest mountain in Kyrgyzstan, Peak Lenin. Crop farming is limited by the long, cold winters and a lack of irrigation. Livestock are the mainstay of people’s livelihoods.
In Alay district, the buying season starts in March, when goats at the warmer lower altitudes start moulting. By June, when the buying season ends, goats in villages at the highest altitudes over 2 500 metres in southern Alay and Chong Alay districts are moulting. There are 15–20 traders in Alay district, which has 58 villages, and about six traders in Chong Alay district, which has 18 villages. During the season, Kyrgyz traders from the main rural towns go to the villages and collect fibre house-to-house from farmers. When they get enough, they bring it to Osh city. Only a few producers bring fibre directly to warehouses in the city, and sell it for a higher price.
For the past 5 years, Chinese companies have been buying raw cashmere sourced from Kyrgyz farmers in the southern regions of Osh province, through local Kyrgyz purchasing agents. The combed down, goat skins and sheared goat fibre (whole fleece) are collected at warehouses in the two main cities, Osh and Bishkek (the national capital). There are about ten such warehouses in Osh, where Chinese citizens collect cashmere and sheep wool and sort the fibre into grades.
There are well-established contacts between the Chinese buyers and local traders. Some of them work on a formal agreement basis, and others just by verbal agreement. On the basis of long-term cooperation, the Chinese buyers trust some of the traders. At the beginning of each season, they advance money to the traders to buy raw fibre.
The cashmere is then sent to factories to remove the coarse hair, leaving the fine cashmere to be “carded” (combed so all the fibres lie in the same direction), spun into yarn, and woven or knitted into fabrics and garments. Much of this processing is done outside Kyrgyzstan: in China, Mongolia, Kazakhstan, Uzbekistan and Europe.
For washing and to remove the coarse outer hair, the fleeces (and a small amount of combed cashmere) are either taken to one of the few enterprises in Kyrgyzstan that can do this, or they are trucked directly to China. Chinese factories then spin, weave and manufacture the cashmere into garments, or they export processed cashmere to Europe for manufacture by luxury designer companies, mainly in the United Kingdom and Italy.
To comb or to shear?
International market prices for cashmere are highly sensitive to quality. However, in southern Kyrgyzstan, Chinese buyers do not encourage livestock keepers to sort their raw cashmere and do not offer any price differentials for different qualities. Producers thus lose a lot of the value of sorting raw cashmere into fineness grades and colours, which attract different prices on the international markets.
It is possible to produce a product that is of much higher value by combing the goats when they begin to moult, rather than shearing them. A generation ago, some village women used to do this to make yarn for knitting into garments for their families. But most Osh traders have stopped accepting combed cashmere, so the villagers stopped combing and now mostly sell shorn whole fibre.
Shearing has several disadvantages:
Fearing that a cold spell could kill shorn animals, many livestock keepers shear their goats late in the spring season – often after the animals have started moulting and left some of the valuable cashmere caught on bushes when they browse.
In common with other Central Asian goats, Kyrgyz jaidari goats have rather short cashmere, while the international market requires fibres at least 4 cm long. Shearing does not cut the fibre next to the skin, so it can reduce the fibre length by 1 cm or more. That reduces the market value accordingly.
Because they sell unsorted, whole fleeces, the livestock keepers do not benefit from the high-quality fibre they produce, and they have no incentive to produce the best quality or maintain the local breed. The buyers prefer whole fleeces, which they have sorted in China, where labour costs less than in Kyrgyzstan.
Despite these disadvantages, the herders have no incentive to laboriously comb the valuable cashmere from their goats, since buyers usually accept only the fleeces.
PART 1: Wool and cashmere 35
The price of cashmere Figure 8 shows that the farm-gate prices of untreated fleeces and combed cashmere for Kyrgyz producers rose from 2004 to 2007, but dropped in 2008 due to the world economic downturn and a decline in demand for luxury goods, which affected cashmere prices all over Asia. Combed fibre fetched three times the price of the unsorted whole fleece.
The project team found that when their cashmere was combed out, a few goats produced up to 350 g of fibre fine enough for commercial use. Those were the best producers;
on average, goats in Chong Alay district produced 168 g of cashmere, while animals in Alay produced 198 g. At the prices prevailing in late May 2008, this would mean an income of $2.80–3.30 per animal. Typical villagers have 7–8 goats, so could have earned $21–25 by selling cashmere.
Cashmere is a secondary income source for the villagers, whose main source of income is selling live animals. A young goat sells for about $25, but a typical villager with 8 goats cannot afford to sell more than one or two animals a year. In Gansu province in western China, by contrast, goat keepers earn their main cash income from selling cashmere because the cashmere prices are much higher there.
Herders in Mongolia, Ladakh (in India) or China earn higher prices for their cashmere because they have learned how to sort their cashmere by quality and colour, and sometimes have created marketing cooperatives. Kyrgyz producers, on the other hand, do not have such cooperatives, and they do not sort their raw cashmere on-farm or in the village at present.
Adding value to livestock diversity How much cashmere is available?
Official livestock production statistics appear to be gross underestimates. The provincial government levies a head tax on livestock, which discourages villagers from declaring all their animals to tax collectors. This applies particularly to goats, which the authorities consider are ecologically damaging, so a higher tax is levied on goats than on sheep. Villagers, NGOs and junior government officials all say that the official numbers are too low, and unofficial head counts seem to confirm this. Actual goat numbers in Alay are perhaps three times the official statistics, and in Chong Alay five times. That means that Alay district could produce up to 22 tonnes of combed cashmere, worth some $350 000, or around $6 000 per village in 2007. Chong Alay could produce up to 7.8 tonnes, worth $125 000, or more than $7 000 per village. The livestock keepers could earn even more if they sorted the cashmere into colour and grade classes.
RESEARCH ON THE CHARACTERISTICS OF CASHMERE IN REMOTEDISTRICTS The project team collected cashmere from over 1 000 goats from 156 livestock keepers’ flocks in 51 villages in Alay and Chong Alay districts, as well as three districts in Naryn province, in central Kyrgyzstan. It sent the samples to a commercial laboratory in Denver, USA. Here is a summary of the findings.
Remote districts have the finest cashmere. Some indigenous goats in remote Alay and Chong Alay districts produce very high-quality cashmere, comparable to the best in China and Mongolia. Some 38% of the samples from Chong Alay district had fibre diameters of less than 15 microns, while 27% of the samples in neighbouring Alay district did so. Only 4–5% of the samples from these two districts were more than 18 microns in diameter, which would not classed as true cashmere.