Fly over Mongolia in summer and the steppes look as green as they must have done when Genghis Khan and his armies galloped across the land — but the switch is startling as the flight crosses the border into China’s Inner Mongolian region. The ground suddenly turns brown.

The danger facing Mongolia is that its steppes may be transformed into a desert similar to the one eating away at neighbouring China. The culprit is the humble goat — and the fascination of fashionistas for cashmere.

On the Mongolian steppes, the emptiness and the silence inspire awe. From time to time a huge, tawny eagle drifts on the breeze, watching for small animals to snatch amid the grasses. The only movement on the ground comes from the flocks of sheep and goats, yaks and cattle that roam, heads down, as they munch their way across the grasslands.

Here and there white yurts – the portable dwellings used by the nomadic people — stand out on the endless sea of grass. At one cluster of four yurts, a mother gathers her teenage children, slings a metal bucket over each arm and sets out to milk the horses, a hundred of which graze with their foals near by. The fermented milk is turned into airag, the national drink.

The family’s other animals have been moved for the summer to a more remote area where the grass is greener. The total flock numbers several hundred beasts; nothing too large by Mongolian standards, the mother explains. It is virtually a subsistence living. However, the goats and their fine, downy cashmere brings in cash that enables the family to buy such luxuries as a satellite dish or a motorcycle.

Most flocks now include as many goats as they do sheep. This represents a huge shift, officials say, from the days when the latter outnumbered the former two to one.

The money to be earned from “diamond fibre” cashmere, so prized among wealthy shoppers in Europe and the US, has resulted in Mongolia’s population of cashmere goats soaring to 40 million in 2007 from 25 million in 1993.

The World Bank warned of grave consequences for the environment and for farmers. “Mongolian herds will be at greater risk of severe weather conditions if growing livestock populations and deteriorating pastureland is not reversed,” it said in a report. A combination of the sharp hooves of the goats and their voracious consumption of all greenery — including roots — is harming the steppes. Sheep graze more lightly, skimming the leaves and grasses.

The Ministry of Nature and Environment has estimated that the grassland is thinning out across 75 per cent of this vast country, two thirds the size of Western Europe, while 7 per cent is already desert. This increases the risks posed by the devastating storms, or dzuds, that can wipe out entire flocks, while falling cashmere prices, as a result of the global financial crisis, could wreak havoc.

David Sheehy, of the US-based International Centre for the Advancement of Pastoral Systems, said in the World Bank report: “The decline in the quality of pastureland in Mongolia is of great concern. If the current trend continues, pastureland and herds may be more vulnerable to dzud and drought.”

He was clear about the cause. “The growing number of goats has been a major reason behind this but there is also the general problem of too many livestock and the added impact of climate warming.”

In China, where the problem of desertification and loss of pastureland is far more advanced, the authorities have decimated goat flocks and ordered more rotational farming. That means cashmere buyers have turned to Mongolia for supplies, pushing up the price in recent years. The prestigious Italian textile group Loro Piana, for example, sells its own-label cardigans for more than £1,000 each but also supplies more mainstream brands with cashmere sourced from Mongolia.

The financial crisis has taken its toll but there may be a silver lining to what herders regard as a dark cloud looming over their living standards. Wholesale prices have almost halved in the past year — but that could, in fact, be good news for the environment, according to the analyst Dalkhaijav Damiran, from the University of Saskatchewan in Canada. “The drop in cashmere prices might make it a good time to reduce the number of goats in a herd,” he said.

The UN Development Fund last year began a four-year project to combat desertification and improve land management, but Mongolian officials remain anxious. They have warned that as much as 96 per cent of the country could become desert if more is not done to stem the seemingly inexorable advance of the sands.

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