Cattle Regulation to Hurt Rural Economy, Affect Marginal Farmers

Apart from impacting the leather industry, the cattle slaughter restrictions will also erode the value of livestock.

File image of men loading a cow onto a truck in the Jantar Mantar. (Photo: Reuters)

• Animals are sparingly used for agricultural purposes now.
  
• Livestock’s contribution to the country’s GDP is nearly five percent.
  
• Growth in livestock has outpaced the overall agriculture growth since the 1980s.
  
• 70 percent of livestock estimated to be owned by small and marginal farmers and landless labourers.
  
• Better regulation can happen if legal production and export of meat is encouraged.

What would have been the brand value of Mahendra Singh Dhoni if he were just a wicketkeeper? A lot less than what it has been all these years. He has been a celebrated cricketer because of his unmatched skills as a top-class finisher while batting, a safe pair of hands behind stumps, and an innovative captain. He has been an all-rounder par excellence, perhaps one of the best that world cricket has ever had.

The point is very simple – anyone who is a multi-tasker, and a good one at that, commands a premium valuation. There is value erosion if any of the functions is taken away. Doesn’t the same rule apply to cattle also?

Domestic animals in the country have broadly served three main purposes – as a provider of milk and meat, and as dependable resource for ploughing farms. Introduction of tractors made cattle redundant for farming.

Data also shows that the proportion of males (predominantly used in agriculture) in overall livestock population has been consistently falling. According to the latest livestock census, while the population of male cattle fell by 13 percent between 2007-2012, that of female cattle rose by an impressive 29 percent. The similar trend is visible for buffaloes and other domestic animals, according to the 2012 census.

Only Milch Cows to Retain Value For Owners

The new cattle trade regulation introduced by the Centre last week, if it stays in its present form, has ensured that cattle slaughter for procuring meat is going to be very difficult. According to the regulation, animals can be purchased and sold from marketplaces, only after giving an undertaking that they will not be slaughtered and will be used only for agricultural purposes.

The new regulation, however, does not apply to sale-purchase of animals outside of marketplaces. But experts say that such transactions are going to be extremely limited in number in the age of aggressive gau rakshaks. And if they do take place against all odds, cattle owners are unlikely to get market-driven price value for their stock.

Livestock Sector Grew Faster And Contributed to Poverty Reduction Since The 1980’s

With the two functions – meat and agriculture – of cattle almost gone, what will be the real worth of livestock held by the people?

Let us remember that livestock plays a very important role in the rural economy, and contributes nearly five percent to the country’s gross domestic product (GDP) or roughly Rs 6 lakh crore, according to a government report.

The share of livestock in the agriculture GDP, which stood at just 12 percent in the 1980’s, has gone up to nearly 25 percent now. A 2015 National Council of Applied Economic Research (NCAER) paper says that the growth in livestock has outpaced the overall agriculture growth in the country since the 1980’s. Increasing focus on rearing animals for meat and milk would have contributed to this outperformance.

Now that there are restrictions in place on cattle slaughter, not only will it impact the 13 billion dollar leather industry, and the 4 billion dollar-worth meat exports, it will also lead to erosion in the value of existing livestock.

And who will suffer the most? Not members of a particular community or a particular caste. A large pool of landless labourers and marginal farmers in India’s villages are going to bear the brunt of the new regulation.

Image for representative purpose. (Photo: iStock)

According to reliable estimates, 70 percent of livestock is held by small and marginal farmers and landless labourers. They are going to suffer the most if there are unreasonable restrictions on sale and purchase of cattle.

There Are Better Ways to Check Illegal Transportation of Cattle Across The Border

Proponents of the new regulation argue that the move is aimed at checking illegal transportation of cattle across the border.

An Economic Times report has quoted a government insider as saying that:

The rules aim to regulate livestock markets and fairs, that’s all. This is to ensure that they don’t degenerate into hubs of unlawful activity.

Government insider

Fair enough. Illegal trafficking must stop and illegal slaughterhouses flouting all rules must be regulated. But banning sale-purchase of animals at market places for slaughter is not the solution.

A more effective way to deal with the problem would be to liberalise the existing licensing regime.

If opening a legal slaughterhouse is made less cumbersome, more and more people will be inclined to adopt the legal route. After all, they will have an opportunity to service the thriving leather industry and meat export market. If there is greater economic incentive to produce meat legally and export it, why will anyone indulge in illegal transportation of cattle to Nepal or Bangladesh.

And a growing leather and meat export industry will ensure that cattle owners get fair compensation for animals they raise. It will be a win-win situation sans short-term political dividend.