The economics of beef

The economics of beef

By ARVIND KALA | 24 October, 2015
Just as the fate of camels, donkeys and mules is linked to their economic value, so it is with beef. India’s beef trade sees a reverse gender selection at work. India has two cows to one male bovine. And three female buffaloes to one male buffalo. The eco

Before talking of beef economics, let’s look at camels in India. Their number dropped 22% in five years from 517,000 camels in 2007 to 400,000 in 2012. India’s donkey population has dipped even more in the same period, from 438,000 to 319,000. However, the number of mules shot up 43%. India’s mule population was 137,000 eight years ago, according to the 2007 Livestock Census. The number rose to 196,000, according to the next census in 2012.
What’s happening? The answer is simple. Camel and donkey numbers have fallen because their economic value has fallen. With roads coming up everywhere, villagers in Rajasthan and Haryana need less of camel-carts or load-carrying donkeys. Transporting goods in motorized vehicles is cheaper. So both these animals are dwindling in number.
Beef traders, workers in a protest against a ban on the slaughter of bulls and bullocks in Mumbai, in March 2015.  REUTERSIn contrast, mule numbers have risen 43% because rampant construction all over the Himalayas has raised the mule’s economic value. The animal is an irreplaceable last-mile carrier in mountain terrain.
When a house or building is built in the Himalayas or high up on any hill terrain, a lorry brings and dumps bricks, stones, sand, and cement on the nearest road. It’s the mule which goes back and forth carrying the construction material to the building site. A motorised goods carrier cannot replace the mule. Hilly terrains have no roads on which the carrier can move. So mule numbers go up. They earn money for their owners.
Just as the fate of camels, donkeys and mules is linked to their economic value, so it is with beef. India’s beef trade sees a reverse gender selection at work. India has two cows to one male bovine. And three female buffaloes to one male buffalo. The economics of beef determines this female: male cattle ratio.
Female bovines and buffaloes rise in number because they give valuable milk. But the economic value of male buffaloes and bulls comes from something different. The value comes from three things they provide: labour, meat, and leather.
Of this, their labour value has become largely redundant. Agriculture is mechanizing fast and farmers can access common-ownership tractors to plough their fields. Bull-power has become less and less needed.
So the only way to realise the value of male bovines and male buffaloes is from their meat and hide. But more and more states are banning their slaughter. The bans are impoverishing millions of animal-owning farmers by turning one of their assets, a male buffalo or male bovine, into a liability.

India is the world’s largest exporter of buffalo meat. Our buffalo meat export was $3.20 billion in 2012-13. Imagine the tens of thousands of jobs generated by a Rs 28,000-crore business and the dire consequences of disrupting a long supply chain that begins from a farmer and ends up on the dining-tables of homes in the Middle East and Russia. Can a beef ban be enforced in India? Impossible. If there’s a demand for a good or service, somebody will provide it.

Think of it this way. Buffalo meat in Delhi retails for Rs 180 a kilo. Let’s say a male bovine or male buffalo provides 800 kilos of meat. Let’s also say that a farmer gets only Rs 50 per kilo from meat traders. Multiply Rs 50 by 800 kilos and the animal’s value translates into Rs 40,000 from meat alone. In economic terms, the animal is money on hooves.
If a farmer cannot harvest this meat, what will he do with his animal? The answer is obvious: he will let it loose outside his home, nobody will feed the animal, the animal will wander around, and disrupt traffic by hunkering down on roads and pavements. Hungry and thirsty, the animal will take weeks and months to die slowly in the sun. As it happens with old cows on Indian streets.
India is the world’s largest exporter of buffalo meat. Our buffalo meat export was $3.20 billion (Rs 20,800 crore) in financial year 2012-13. The exports jumped to $4.35 billion (Rs 28,275 crore) in 2013-14 (Business Standard 10 December 2014). Interestingly, India’s largest meat-export company Al-Kabeer is owned by a Hindu Sabharwal family.
Imagine the tens of thousands of jobs generated by a Rs 28,000-crore business and the dire consequences of disrupting a long supply chain that begins from a farmer and ends up on the dining-tables of homes in the Middle East and Russia. Heaven help India. We are perfect in axing our feet.
Can a beef ban be enforced in India? Impossible. A ban cannot resist one inexorable logic of the marketplace. If there’s a demand for a good or service, somebody will provide it. Like a dry Gujarat is awash in liquor.
So a ban on beef will not curb its supply or availability. Smugglers will take cattle across state borders. It’s the easiest thing to do. For example, let’s assume (wrongly) that beef is largely eaten by India’s Muslims, not by Hindus. Well, Orissa’s Muslims number just 2.2% of the state’s population. Neighbouring Orissa is West Bengal, with a 27% Muslim population (2011 census, as quoted by The Times of India). The obvious thing will happen. Smugglers will transport Orissa’s male bovines and male buffaloes to West Bengal to feed Muslim consumers. Similarly, 40% of Kerala consists of beef-eating Muslims and Christians. They’ll get cattle and beef smuggled from largely Hindu Tamil Nadu and Karnataka next door.
One final point. Meat is the world’s best source of protein. Proteins build bodies. India’s protein intake has always been low. And it has dropped both in urban and rural areas, according to the National Sample Survey Organization (NSSO), a highly respected government agency.
Last year, NSSO reported that rural India saw a protein intake drop. From 60.2 grams per capita in 1993 to 56.5 grams per capita in 2011. The drop in urban India was from 57.2 grams to 55.7 grams in the same period (The Times of India, 27 December 2014). So sad. Protein on hooves going waste. And people not getting enough protein.
Arvind Kala is a freelance journalist, which he says is s euphemism for being unemployed.

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