Selective breeding. The same way thoroughbreds are built like.......well races horses. Or a better example is the Sheltie or mini poodle. A Sheltie is a Collie thats been bred down in size and poodles come in 3 different sizes. When you want a certant trait refined like size you take those that best show said trait. For small dogs you bred the runts of litters together until you get a smaller size. Forced evolution if you will.
They've been around for 400 years without problems. Genetically, it's not likely to increase the occurrence of recessive traits more than breeding roses to be red.
Over the past 100 years there has been a great amount of disagreement regarding the origins and genetic characteristics of miniature horses. Some miniature horse breeds such as the Falabella horses of Argentina were developed in a totally separate environment from the tiny European miniature horses of the eighteenth century, and independent breeding programs have been established on every continent. In the USA in the 1960s, these horses were called midget ponies, while in South America they were known as Falabella horses. In the 1970s a movement arose to change the name of tiny horses to miniature horses, and many registries were established with standard sizes ranging from 28 inches to 38 inches.
Once I read Augurey's post, this was my thought, too. I'd love to have a hobby horse or two running around the yard (I have a few acres to work with). I wonder how well they get along with dogs or cats; it's probably a case-by-case thing, though.
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