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Is the cow being milked dry?

Published: Monday, Dec 28, 2015

FE-PRI EAU

Posted : 28 Dec, 2015 00:00:00

 

 

Bangladesh’s contemporary meat and dairy sector

Is the cow being milked dry?

Syed Mafiz Kamal

Bangladesh has a livestock crisis. This is because the country depends heavily on Indian beef for its protein intake. With the latest Indian crackdown on cattle trade, the problem has become dire as the price of cattle meat spiked over 40 per cent recently. Domestic supply, according to one recent estimate, only meets roughly 50 per cent of the country’s demand, indicating that it has been largely dependent on India for years. Policy analysts claim that the issue can be resolved by boosting indigenous production.

Is the cow being milked dry?

To put into perspective, Bangladesh is one of the lowest meat consuming countries with an annual consumption of only 3.2 kg per person. Bangladesh’s meat consumption is lower than other countries in the region, including India and Pakistan. The highest meat consumption is by Australia, which is 90 kg per person. Bangladesh’s low consumption is due to the reality that 80 per cent of the population consists of poor and middle-class, with a per capita income of $1314, who consume meat occasionally. With increasing incomes, the demand for meat is set to rise. It is projected that the annual demand for meat will hit 4.7 million tonnes in 2015 whereas the supply will barely reach 1.4 million tonnes. Hence, this underlines an existing crisis.

Apart from the market crisis, the importance of the livestock sector lies in its contribution to the Bangladesh economy. Its contribution, according to Bangladesh Bureau of Statistics (BBS), has fallen by 0.6 per cent, from approximately2.4 to 1.8 per cent, in past eight years. The sector contributes 12 per cent of the total agricultural output. It is a labour intensive sector. According to the latest Labor Force Survey (LFS) of 2010 the sector employs 6.4 million people. Thereby, the sector accounts for more than 10 per cent of the country’s total employment. Hides, a by-product of the cattle industry, contributes over 3.0 per cent of the country’s exports, in the form of leather products. The livestock sector contributes heavily to meeting Bangladesh’s protein demands. The protein supply is in meat forms, along with poultry, eggs and milk.

Another issue within the sector that deserves attention is milk. Does Bangladesh have a milk crisis? The answer depends on how important milk is considered in the nation’s protein or nutritional mix. In spite of successful strives in public health measures, the country remains persistently malnourished. In Bangladesh, 25 per cent of the population are undernourished and 36 per cent of children are stunted. According to World Health Organization (WHOO, Bangladesh is on the lower-end of the global protein consumption, especially that of milk. With such striking deficiencies, milk can provide the much-needed protein for the nation.

The reality is, the Bangladeshis consume very little milk. The per capita milk consumption in Bangladesh is 18 kg per year, significantly lower than other countries in the region. In comparison, India and Pakistan consume 90 kg and 190 kg of milk per capita respectively. It is primarily because of the availability of cows. Unlike India and Pakistan, the problem in Bangladesh is land shortage. Due to high population density and problems of soil erosion, its arable and pastoral lands are declining. A noteworthy fact is that Bangladesh has one of the highest cattle densities, i.e. number of cattle heads per hectare, in the world. However, the country’s milk yield is one of the lowest. It is because the majority of the cows are low yielding local breeds, rather than cross-breeds which can yield two to three times more milk. Since the past decade, the cross-breed cows have been growing in numbers.

According to a report by the IFCN Dairy Research Centre, there is a striking shortage in milk supply in Bangladesh. Bangladesh experienced a 3.6 per cent growth in milk production in the decade since the beginning of the century. During the same time, consumption increased by 4.0 per cent. The demand is therefore fulfilled by imported milk, which is in the form of powdered milk or baby formula. As a result of population growth, urbanization and rise in income, the demand for milk is expected to surge in the future. Unlike India and Pakistan, it is common to find processed powered milk, rather than liquid milk, across Bangladesh. This is due to a myriad reasons, but primarily because of immature markets and poor transporting infrastructure. Tea-stallers popularly use condensed-milk to make the most common drink in the nation, milk-tea. The share of imported milk and milk derivatives, which are significantly cheaper, would sharply increase if the tariffs, which ranges from 35 – 90 per cent, are reduced. Milk is largely imported from three advanced economies: Denmark, Holland and New Zealand.

As for domestic production, the dairy sector in Bangladesh consists of smallholders. The milk is usually supplied via traditional informal markets. In traditional markets, smallholders sell their milk, mostly directly but at times through middlemen, to sweetshops, tea stalls or consumers, without any formal contract. Farmers from remote areas get 60 per cent lower prices than their urban counterparts. The formal dairy market is in form of cooperatives, comprising 20 per cent of the market. Milk Vita, a public entity, is the first and the largest agro-processing cooperative. Milk Vita paved the route for many private enterprises such as Aarong and Pran to adopt the cooperative model.

The government of Bangladesh (GoB) has taken note of this milk crisis. Bangladesh Bank (BB) has created a fund of $127 million to finance various schemes aimed to narrow the milk production gap. The farmers and other stakeholders are now offered a low 5.0 per cent interest rate on milk related ventures. The BB will further provide another 5.0 per cent subsidy to the banks who are giving out these loans. The initiative is expected to help milk producers resolve the milk deficiency, in span of five years.

Much of the meat and milk crisis in Bangladesh can be resolved by expanding the formal sector. It is an issue of food security of the country. Thus, targeted policies need to be formulated to avoid any expansion, or spillover of the crisis into any other sectors. Increased number of cross-breed cows will help meet the milk demand. The banking sector should continue to provide financial support to small, and medium-sized dairy enterprises. This will stimulate the sector. Policy measures should also be focused on cow feeds, which are expensive and at-large imported.

Producing ample milk and meat is an essential policy imperative. It will not only fulfill the nation’s dietary and nutritional needs, but also boost the economy. The cattle farming sector has the potential to generate both employment and income. A livestock sector-focused policy prescription will channel money to poorer segment of the nation. There is no reason Bangladesh cannot meet its rising demand for milk and meat, without protectionist policies. If the right measures are taken, the country can match the meat and dairy production of its South Asian counterparts. A new motto needs to be adopted: raise a cow in every rural household.

[Syed Mafiz Kamal is a Senior Research Associate at Policy Research Institute (PRI). He can be reached at skamal@pri-bd.org]

- See more at: http://old.thefinancialexpress-bd.com/2015/12/28/127977#sthash.LZxzA6I3.dpuf

 

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