EAPSI: Analyzing the Relationship Between Livestock Grazing and Locust Activity in Inner Mongolia, China

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Locusts are a devastating problem in many regions of the world with the risk potential highest for farmers and ranchers. This research seeks to quantify the impact of a locust infestation on livestock markets in Inner Mongolia, China. Locusts at high densities are known to compete with livestock for food, but it is important to also understand how this impacts meat production and prices. Furthermore, recent ecological study has demonstrated that locust density decreases when the number of animals grazed on a given area is reduced. Using data collected in collaboration with Inner Mongolia Agricultural University, this research will quantify the expected financial loss farmers will experience from locusts in this region. Using data on meat prices and yields, we calculate the own-price and cross-price elasticities of demand and supply for sheep, goats and other livestock produced in Inner Mongolia at the farm and retail level. These values are used to build an equilibrium displacement model, which calculates how changes in yield due to a production shock impact price and supply at the farm and retail level. We will examine two scenarios: one where the representative farmer grazes at a high intensity and one where the representative farmer grazes at a moderate intensity. The results of this model will be used to examine the expected financial loss a farmer will experience due to locusts in both scenarios which will be used to determine whether or not it is in the farmer?s best interests to reduce grazing intensity as a mitigation method. This NSF EAPSI award is funded in collaboration with the Chinese Ministry of Science and Technology.