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Market Economy vs. Risk Management: How Do Nomadic Pastoralists Respond to Increasing Meat Prices?

Abstract

A growing body of evidence shows that for nomadic pastoralists herd accumulation is an efficient strategy for buffering environmental variation and maximizes long-term survival. Pastoralists may thus view livestock as investments, or ‘banks on the hoof,’ that work as insurance against unpredictable environmental conditions. This perspective differs from strict market logic where producers are expected to follow the ‘law of supply,’ i.e., that when the price of a product rises suppliers should be willing to offer more of the product for sale. In terms of insurance, increased meat prices may make it possible for pastoralists to slaughter fewer animals for the same financial gain as when prices are low and subsequently convert unslaughtered animals to herd capital. This study investigates to what degree Saami reindeer herders follow a market driven or risk management logic by investigating how slaughter strategies are influenced by increasing meat prices. While slaughter strategies vary regionally in Norway, our results indicate that reindeer herders follow neither risk nor market considerations alone, but rather a combination, and support the general hypothesis that slaughter strategies entail balancing the benefits of increasing herd size against economic gain through meat sales. This has important management implications since current management schemes aiming to reduce the number of reindeer by stimulating slaughter rates through economic subsidies is based on the assumption that herders are meat producers motivated by monetary gains alone.

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Notes

  1. 1.

    Environmental hazards, such as drought, floods and icing significantly affect livestock survival and reproduction (cf. Næss 2013; Næss and Bårdsen 2013). Icing events and too much snow during winter resulting in mass starvation have been reported to dramatically reduce reindeer populations: for example, in 1918 one reindeer population was reduced by a third (Bjørklund 1990:79), and substantial reductions have been reported for 1958, 1962 and 1968 (Hausner et al. 2011:6). More recently, winters of 1997 and 2000 have been described as catastrophic, resulting in severe losses (Hausner et al. 2011:6).

  2. 2.

    The total number of licensed herders in Finnmark nearly doubled from 1950 to 1990. Part of the increase in the 1980s was more formal than real as an extra registration of units was conducted to compensate for insufficient registrations in 1979 (Riseth and Vatn 2009:96–8). For Finnmark in general, number of licensed owners peaked in 1987 and has declined since (Hausner et al. 2011:fig. 2).

  3. 3.

    Formerly the Reindeer Husbandry Administration.

  4. 4.

    This selection is focussed on herders who receive operating subsidies from the Norwegian Government since we assume that operating subsidies reflect a high level of dependence on reindeer husbandry for making a living (see Næss et al. 2009). To qualify for operating subsidies, siida-shares have to produce a quota amount of reindeer meat for sale, i.e., with the value of 50 000 NOK (100 NOK = $12.97 per 04.03.15) (see Næss et al. 2009:footnote 7).

  5. 5.

    Also, as year was excluded as a covariate (see below), all herders in this study would have slaughtered.

  6. 6.

    A survey of the slaughterhouses doing this, undertaken by the former Reindeer Husbandry Administration, indicates that the costs are around 5–10 NOK per kg. From 2004 the cost of transportation is also included for some of the slaughterhouses (Anonymous 2005b:9).

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Acknowledgments

Funding for this study was provided by the Research Council of Norway (grant number: 204174 and 240280/F10). We thank the Reindeer Husbandry Administration for access to data and Torkild Tveraa for preparing the data prior to the statistical analyses. We would also like to thank two anonymous reviewers whose comments improved the manuscript.

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Correspondence to Marius Warg Næss.

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Næss, M.W., Bårdsen, BJ. Market Economy vs. Risk Management: How Do Nomadic Pastoralists Respond to Increasing Meat Prices?. Hum Ecol 43, 425–438 (2015). https://doi.org/10.1007/s10745-015-9758-9

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Keywords

  • Risk management
  • Reindeer husbandry
  • Nomadic pastoralism
  • Norway