How the ban on informal import of cattle from India can boost investment in the local market

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Tightened security to curb informal import of cattle from India has created the scope for the local investors to develop the country’s own cattle market.
Due to the immense potential of the cattle market, entrepreneurs have started investing in it. Domestic demand for meat, milk, raw hide and protein intake increased significantly in Bangladesh with the rise of per capita income. Many cattle farmers who had previously given up cattle rearing resumed their farming following the demand spike in the last one and half years.

By Doulot Akter Mala

India has never given approval for the export of cows due to the religious sentiments of the majority of its population. According to Indian media reports, the Indian government has warned its Border Security Forces (BSF) several times to curb informal import of cattle to Bangladesh.

Cattle Crisis-03

As the informal trade of cattle from India ran rampant in Bangladesh, farmers used to feel uncertain about investing in cattle farming fearing financial losses. Indian smuggled cows were available in the country’s market, especially during Eid-ul-Ajha, at cheaper prices. However, this influx reduced significantly after the BJP Government of India came to power. As per the claim of the Indian Government, previously about 2.3 million cattle were smuggled into Bangladesh every year. In recent times they have been able to bring the number down to around 300,000 to 350,000.
India has never given approval for the export of cows due to the religious sentiments of the majority of its population. According to Indian media reports, the Indian government has warned its Border Security Forces (BSF) several times to curb informal import of cattle to Bangladesh. The Indian Express reported last May that the Indian Home Ministry, Rajnath Singh, has urged various states and the BSF to clamp down on cattle smuggling to Bangladesh.
Following the Indian Government’s stand, there was concern among the traders and buyers, ahead of Eid-ul-Azha in September, regarding the supply crunch of cows. There was doubt over the capacity of the local farmers to meet the demand for cows ahead of Eid as Bangladeshis were largely dependent on the supply of cattle from the Indian side.

How Indian Cows Were Entering Bangladesh:
Indian cows entered Bangladesh through different borders as ‘unclaimed’ animals. Customs charge Tk 500 per cow and hand them over to the traders. Although they know about the illegal trade, they keep quiet considering the country’s need for beef and leather and also because of the extra profit they’re making.
The cows enter Bangladesh through some corridors at the India-Bangladesh border near Rajshahi, Jessore, Khulna, Sylhet and Chittagong from various Indian states. Customs seize the cows as they enter the country without owners then as per customs formality, they auction them off.

Contribution of the Livestock Sector to GDP:
The Livestock Sector is yet to reach the point where it can satify domestic demand completely. Its contribution to GDP has declined to 1.66% during FY 2015-16 from 2.38% in FY 2005-06, according to the statistics of the Economic Review – 2016 published by the Ministry of Finance (MOF).
Although the sector grew by 3.21% in FY 16, investment still remained low.
Bangladesh is known as one of the countries with the highest densities of livestock in the world with 145 ruminants per square kilometer but the domestic supply still falls short of the domestic demand.
Until February 2016, number of cattle heads stand at 54.22 million.
Cattle production increased by only 7.59 lac in the span of eight years, from 2008-09 to February 2016.
Production of goat has increased at a much higher rate. It increased to 257.11 lac in 2016 from 224.01 lac in 2008-09.
Due to the slow pace of cattle production, the domestic supply base of meat, milk, hides and skins is weak as per the data from the Department of Livestock Service (DLS) of the government. According to this data, domestic production of milk and meat can meet only 43% and 67.2% of the local demand for protein intake respectively. Thus, a large part of the demand for milk and meat is met by the Indian cattle coming into the country.

Cattle Crisis-02

Reasons behind Slow Growth of Cattle Market:
Cow smuggling from India increased significantly, especially during Eid-ul-Azha. As a large portion of demand was met by the smuggled cows from India, local farmers were less interested in cow rearing. Indian cows were sold at much cheaper prices than that of the Bangladeshi cows.
Local farmers found poultry and other businesses more lucrative than that of the cattle farming. After incurring losses on cow rearing, many shifted their businesses to other sectors. Furthermore, cattle are highly vulnerable to various diseases and large scale death and such other sufferings of animal can destroy the farmers.
However, restrictions on cattle export from India have changed the situation in recent times. Industry sources said some 50,000 new small and medium-scale cattle farms opened across the country in recent years. They are ready to take the risk with a more positive mindset regarding their return on investment.

Boost in Demand for Local Beef:
Beef is now selling in the local markets at an all time high price of around Tk 450 per kilogram which was around Tk 340 a year ago. Demand for indigenous varieties of beef experienced a massive leap in the market following India’s move to stop their outflow of cattle to Bangladesh.

Preparation for Meeting Eid-ul-Azha Demand for Cattle:
According to the DLS data, some 3.3 million cows were sacrificed on the occasion of Eid-ul-Azha last year. Thus, cattle traders recently assured that 3.5 million cows are ready for sale for the upcoming Eid-ul-Azha. They have reared a million more cows this year expecting a boom in cattle sales during the festival. Also, some seven million goats and sheep have also been reared for the festival.
Cattle traders are confident regarding ensuring the adequate supply of the sacrificial animal this year. It has been claimed that investment in cow rearing increased by almost 40% in recent years following the local demand surge for bovine which was assisted by the supply restriction from India. Cattle farmers are coming forward to invest in this sector after they have gained profit last year in the occasion of Eid-ul-Azha.
However, numerous areas in the country experienced severe flooding this year. The farm owners in those flood-affected areas have expressed their worry over transportation problems for taking their livestock to the markets. Most of the cattle traders in Rangpur, Bogra, Sirajganj, Pabna, Narsingdi, Munshiganj, Kustia, Jhenaidah, Chuadanga and other areas of the country target the Dhaka and Chittagong cattle markets where they expect to earn a handsome profit.

Concerns Regarding Cow Fattening:
The reduction in the number of cows from India has also resulted in local farmers using steroids to fatten cows. However, the inexperience of the farmers in using these techniques has raised concern regarding the health of the cows they are selling.
It has been alleged that many cattle farmers are using excessive steroids to fatten their cows to increase weight to sell them at higher prices. The meat of those cows may cause serious harm to the public health. There are veterinary doctors’ booths present in the markets to check the health of the cows but they hardly scrutinize them properly. Last year, farmers fattened 30 lac bulls for sale during Eid. In addition, nearly 12 lac bulls reared by the farmers were also brought into the Eid markets, according to provisional estimates by the Department of Livestock Services (DLS).

Dependence of the Leather Industry on Indian Cattle:
Indian cattle heads meet around 50% of the local demand for hides and skins. It is feared that prices of the products may escalate in the domestic markets due to supply restriction on cattle. The local leather industry may be forced to import increased amounts of raw hide to produce their export products. Currently, Bangladesh imports raw hide from India, Italy, UK, Australia, Thailand, Brazil, Taipei, Philippines and Egypt.
The local leather companies are already hesitant about procuring raw hide from domestic sources due to certain quality aspects. According to the Bangladesh Tanners Association (BTA), a large stock of raw hide that tanners collected during last year’s Eid-ul-Azha remained unsold.
According to the Department of Livestock Services, 48% of the annual demand for leather in the country is met during the Eid-ul-Azha.

Conclusion:
Both the government and private sector have to come up with different initiatives to develop the country’s livestock sector. Milk production has almost doubled to 52.30 lac tons in FY2015-16 from 26.50 lac tons in FY2007-08. Meat production also jumped to 46.59 lac tons from 10.40 tons in that period, according to the DLS data.
There have been some steps taken by the local authorities to reprimand the situation. This is further facilitated by the likes of the Artificial Breeding Research Center in Savar, the enactment of the Livestock Law by the Parliament and the enforcement of animal feed rules.
Dr. Khondaker Moazzem, Additional Research Director of the private research think-tank Center for Policy Dialogue (CPD) has postulated that attention must be given to developing livelihood in the border areas to stop illicit cattle smuggling from India.
“Poverty in the border region forces many people to involve themselves in the risky cattle trading business which may also lead to their deaths near the borders,” he said. It is believed that around 90% of the border shootings are caused due to cattle smuggling from India.
He also stated that, “It is fact that there is a huge scope to develop a bilateral supply chain between India and Bangladesh through the cross border trade of cattle. Creating special provisions under its national policy and state acts/rules by allowing cross-border trade, India could facilitate that process.”
The business scope and opportunity created in the country’s cattle market can encourage new entrepreneurs by offering easy term loans, smooth market access and a competitive market environment. Easy availability of bank credit at low costs and animal husbandry facilities at farmers’ door steps can also facilitate cattle farming.
The government should ensure all support to small and marginal farmers and encourage them to set up cattle farms and rear animals at household level.

 

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