Even as the ‘beef ban’ and demonetisation hit Indian industries, bovine meat comes to Indian’s economic rescue. But steps must be taken to help the industry seize new opportunities.
In 2014, India surpassed Brazil and Australia to become the largest bovine meat exporting country in the world. Bovine meat became India’s top agricultural export item ($4,781.18 million), ahead of basmati rice ($4,518.25 million) in 2014-15. India’s bovine meat consists only of buffalo meat (carabeef) due to cultural reasons. With 58% of the world’s buffalo population, India is home to the world’s largest population of cattle and buffalo. The bovine meat industry plays a significant part in employment generation in the agricultural sector. As Abusaleh Shariff pointed out in The Wire previously, about 10% of the rural labour force is employed in livestock rearing and related occupations, which constitutes around 26% of the total agricultural value added. The major states where such buffalo meat production centres exist are Uttar Pradesh, Andhra Pradesh, Maharashtra and Punjab. These abattoirs conform to international hygiene standards, with zero hand-touch-processing and regular visits by halal inspectors from the importing countries. Major export destinations during 2014-15 were Vietnam, Malaysia, Egypt, Thailand and Saudi Arabia. The increase in share of bovine meat in the total import of food items in these nations along with a steep rise in export of bovine meat from India have been illustrated in the following figures.
One of the most important factors for the increased bovine meat export from India is the comparative advantage that India enjoys over its competitors. According to Meat & Livestock Australia, a meat industry research company, the cost of production of bovine meat in India is much lower compared to its competitors like Brazil and Australia. Gravity model studies have shown that distance plays a crucial factor in the trade of perishable commodities like bovine meat. Given India’s geographical location, it can easily cater to markets in the Gulf as well as in the East Asian countries. Meat production in India is generally a by-product of livestock rearing. Water buffaloes are sent to the abattoir once they grow old. In other competing nations such as Brazil, cattle are reared specifically for the purpose of meat production. This makes their bovine meat industry expensive compared to its Indian counterpart.
On the demand side, with rising incomes in the developing world and an expanding youth population, food preferences are shifting towards a protein rich diet. In such a scenario, India stands to gain from the rising demand for meat products. There have been recent instances of meat adulteration in some European countries. However, there has been no such report of adulteration in the Indian bovine meat industry. Moreover, restrictions had been imposed on imports from EU nations on account of Bovine Spongiform Encephalopathy (BSE) or what is popularly called mad cow disease. These are some of the other factors, which may explain why India suddenly became a favourite source for bovine meat.
The story of this pink revolution can thus overwhelmingly be attributed to the comparative cost advantage of Indian carabeef vis-à-vis its exporting competitors rather than any domestic conducive policies of the government. According to the Report of the Working Group on Animal Husbandry and Dairying 2012-17, the major constraints in the bovine meat industry include poor infrastructure, such as proper abattoirs and cold storage facilities, which are essential for this industry to thrive. Without direct government support, these problems will persist and can outweigh the cost advantage enjoyed by this industry.
The upsurge of right wing ideologies and politics around beef also worsens the situation, with some states even banning buffalo slaughter. In order to give an impetus to the dairy industry, the government has introduced policies like the National Dairy Plan (NDP Phase-1), 2011-18 and National Programme for Bovine Breeding and Dairy Development (NPBBDD), 2014-15. However, no such policy eagerness has been noticed for the bovine meat industry. This political and administrative failure is clearly reflected in the decline in the export of bovine meat from 14.7 lakh mt in 2014-15 to 13.14 lakh mt in 2015-16. The value of exports also declined significantly registering a negative growth rate of 15.8%.
However, with China recently lifting its ban on bovine imports from India, the Indian bovine meat industry is expected to witness another surge due to the large market access. This can expand the market for Indian exporters and enable India to remain a leader in bovine exports in the future. The current political leadership must cast aside their myopia and enable this critical sector of India’s economy to realise its true potential.
Varun Kumar Das and Debamanyu Das are based at the Indira Gandhi Institute of Development Research, Mumbai.