One major factor that could significantly determine the existence of nomads is dzud or snow disaster. A dzud is caused by serious lack of fodder resulting from ice covering the grass, low temperatures, strong winds or the previous year’s summer drought. Large numbers of animals die due to starvation and considerable damage is inflicted upon the nomads (Otani et al., 2004; Shinoda and Morinaga, 2005; Tachiiri et al., 2008). The 1999/2000 dzud was the severest in 50 years, killing 8.2 million head of livestock (Tachiiri et al., 2008). Global climate change could intensify droughts in Mongolia, and it is feared that intensified droughts would lead to aggravation of dzud (Shinoda and Morinaga, 2005). Moreover, degradation of the pastureland ecosystem due to overgrazing is thought to expand damages (Otani et al., 2004). Coping with the problems of dzud is a major challenge that Mongolia needs to address.

There are also challenges that emerged after democratization. In 1991, Mongolia transformed itself from a socialist country to a democratic country with a market economy. In connection with these changes, the negdel system under the socialist regime was dissolved, and the public sales channel of livestock products was closed. Hence nomads were forced to conduct marketing by themselves and the geographical distance to markets became important. As a result, a regional divide emerged, and many nomads are attempting to narrow the divide by moving close to Ulan Bator and other big cities and performing sedentary grazing there (Konagaya, 2007; Kato, 2007). Such a concentration of livestock results in over-grazing and impacts the pastureland ecosystem (Fujita, 2005). The Law on Land enacted in 1994 (as amended in 2002) authorizes heads of local governments to regulate seasonal movements and the number of animals one is allowed to own, but little success has been achieved (Fernandez-Gimenez, 2006).

In addition, due to the high inflation rates up to the early 1990s, as well as the willingness not to reduce livestock, which represented a form of capital in the face of their concern about the future, the nomads refrained from selling their livestock. Only cashmere, with its relatively high price in the international market could provide a livelihood that gained a cash income, leading to an increase in the number of goats kept by the nomads. As a result, an increase in the proportion of goats in the total livestock population has changed the balance of the grazing pressure that had been maintained for a long time. To cope with this problem, greater dispersion of livestock has been promoted through the use of the tax system. Mongolian pastoralists are set to be charged a livestock tax. Amendments to the income tax law in 2002 required a change in the livelihood taxation method. The amount of tax is determined by converting the number of livestock owned by each household into the equivalent number of sheep with different conversion factors according to the species. In the amendment, one goat is converted into the equivalent of 1.5 sheep, raising the taxation level on goats (Komatsu, 2008). This measure is considered to be an attempt to reduce the number of sheep.

As wells supplying water to camp sites are indispensable for pastoralism, under the socialist regime it was the State that took the initiative in installing and maintaining them. In the post-socialist era, the decline in the number of available wells due to the inadequate level of construction as well as operation and maintenance problems has led to a reduction in the area available for grazing, which in turn is considered to have caused local overgrazing. As a measure to deal with this problem, Action Plan of the Government of Mongolia for 2004-2008 stipulated a closely related objective of repairing 1,900 units of mechanical wells and digging an additional 800 units. In connection with this, the 2005 Action Plan of the Ministry of Food and Agriculture laid out the conditions for the effective use of wells and water source areas in grasslands (Komatsu, 2008).