No one could accuse the present Government of a lack of a sense of drama. The last few months in particular have witnessed one spectacular move after another – so completely unexpected that they have caught even the Government’s diehard supporters gasping. And each manoeuvre has led to a trail of shrill debates, speculations, analyses, protests, jubilation as to the ‘real’ reason behind the unanticipated move.
The latest in this series is the notification by the Union government, announced barely three days before the start of the holy month of Ramzan, banning slaughter of bovine animals, including cows, buffaloes, camels, calves, oxen, etc. This has led to a spate of reactions from all over the country, especially from states where substantial sections of the population consume beef or buffalo meat. The outrage in the social media has spilled into various kinds of protests, some of which have turned violent, and are making regular headlines in the mainstream media too. In all this din several extremely important decisions of the Government are getting away virtually uncontested, even unnoticed – such as the selling out of major public sector units (PSUs) in various industries.
Amid all this noise, let us try to make sense of this decision of the Government. We will start with understanding the legality of the notification and its immediate implication for the trade in cattle. Then we would analyse the impact of the notification on various sectors of the economy and the people engaged in them. And finally we would try to explore the possible reason(s) for the notification by the ruling party, which by all accounts would not only further rip the already damaged secular fabric of the country, but also severely harm the economic life of the people. Or, in other words, we would attempt to figure out who stands to gain from the notification. Appendix 1 gives an overview of the impact of the notification on related industries.
The legality of the notification
In an unprecedented move, on 23rd May, 2017 the Ministry of Environment, Forest and Climate Change brought in a notification titled ‘Prevention of Cruelty to Animals (Regulation of Livestock Markets) Rules, 2017’, under the Prevention of Cruelty to Animals Act, 1960. This notification effectively bans buying and selling of cattle for slaughter. Before we go into the implications and effect of this notification on various sections of the population, let us try to appreciate the extraordinary legal manoeuvre this represents.
Given the diversity of our country, constitutionally, laws on cow or animal slaughter are exclusively under states’ jurisdiction and come under the Department of Agriculture and Animal Husbandry. The idea being that the state governments are in the best position to decide on this issue in accordance with the local climate, food habits, fodder availability, customs, etc. And cow slaughter is already regulated and/or prohibited by various state level legislations in our country, reflecting the historicity and specific requirements of the local population. It needs to be noted that the specific Directive Principle (Article 48 of the Constitution) is based only on economic considerations and does not recognise prohibition and regulation of slaughter due to any religious sentiments. Thus, constitutionally, the Central Government does not have the power to introduce a bill in the Parliament prohibiting cow slaughter all over India. Hence the Government had to resort to indirect means, invoking the Prevention of Cruelty Act, 1960 which is part of the Concurrent List, i.e., it comes under both the Centre and the state government.
Even so, the Prevention of Cruelty Act explicitly states that killing of animals for food is not an offence unless it is done causing “unnecessary pain and suffering”. Further, killing of animals permitted by other legislations cannot be made into an offence under this Act. Thus the Government is in violation of the Constitution even in using the tactic of invoking an unrelated Act to ban cattle slaughter on the plea of its overriding concern for the ‘welfare of animals’. The concern is selective: none is shown towards the numerous other animals we consume – goat, sheep, rabbits, fowl, fish, etc. The Government has been at pains to point out that the notification is not for a ‘beef ban’ but merely in order to regulate the cattle market. However, as several reports have pointed out, this technicality is irrelevant, and this in fact amounts to a virtual ban on beef consumption. Something much deeper seems to be going on, and we need to explore further.
What is the implication of the notification?
In a 23-page notification, the Government of India has made trade in cattle, which includes cows, buffaloes, calves, heifers, bulls, bullocks and camels, practically impossible. Technically the notification states that these animals cannot be traded in the ‘animal market’ for slaughter, and this would be ensured by an elaborate bureaucracy. Typically cattle are traded in the local fairs, and weekly markets and most slaughterhouses also source their animals from these places. But the loose definition of animal market in the notification ensures that almost any place could come under its ambit. Hence this virtually means that bovine animals cannot be sold or bought for slaughter anymore.
The notification lays down elaborate paperwork even for purchases other than for the purpose of slaughter. The notification also mandates the creation of two new committees, in addition to the already existing State Animal Welfare Board mandated by the 1960 Prevention of Cruelty to Animals Act – one for regulation of the animal market (District Animal Market Monitoring Committee), and one for its management (Animal Market Committee).
Briefly, the following documentation and verification would have to be done for every transaction:
- Seller/Authorised agent
submit a written and signed declaration stating the name and address of the owner of the cattle with a photo identification proof, details of the identification of the cattle, stating the cattle has not been brought to the market for slaughter.
provide documentary proof (relevant revenue document) that (s)he is an ‘agriculturist.’
give a written declaration that he/she shall not sell the animal for a period of six months from the date of purchase, shall not sell the cattle outside the state and shall abide by the rules relating to transport, etc.
- Animal Market Committee
- obtain the expenses incurred for each animal, as approved by the District Animal Market Monitoring Committee, so as to provide the basic facilities for animals and people
- retain the declaration of the seller
- verify that purchaser is an ‘agriculturist’
- keep a record of the name and address of the purchaser with identity proof
- keep the declaration of the purchaser
Further, after a sale (and before the removal of the animal) the proof of sale has to be made out in five copies – one each for the purchaser and the seller, a third copy to tehsil office of the residence of purchaser, a fourth copy to the Chief Veterinary Officer in the district of purchaser and the last copy to be kept intact in the record by the Animal Market Committee. All these documents have to be maintained by the Animal Market Committee for a period of six months and would have to be produced on demand to an Inspector.
Every head of cattle traded would have to follow the above mentioned procedure– the elaborate paperwork, copies in quintuplets, identity proof and documents, all. In a country with over a third of the rural population officially illiterate and barely 5.4 per cent having education up to higher secondary this seems like a cruel joke. And of course one can safely guess the proliferation of extortion and exploitation for the millions of cattle holders which is likely to ensue given that the process is so suited to find loopholes in. Perhaps it will provide ‘employment’ to the millions of ‘educated’ unemployed youth entering the job market every year – for a payment they might do the paperwork!
There has been a lot of discussion in the press on the implication of the notification for the religious sentiments and secular values of our country, let us try to understand at some length the economic implications of this recent Government move.
The economic implications of the notification
The cattle economy is a complex economy and several significant industries are intricately connected with it. India’s cattle population, estimated at over 300 million, is the largest in the world, accounting for a third of global bovine population. In India, cattle are primarily raised for milk production and consumption, both by individuals as well as the dairy sector. The other important utility of cattle is for manure, fuel and as draught animals. In the 1970s around half of the power requirements of the farm sector (for ploughing, pressing oil, transport, etc.) were sourced from draught animals. But over the years their importance have declined and at present they account for merely 5 per cent of the requirement with tractors providing around 50 per cent of the motive force. Thus at present cattle are raised only for milk and manure (though chemical fertilisers now constitute over two-thirds of the total fertiliser consumption).
With the cost of feed itself at Rs 125-150 per day per head of cattle (apart from other costs such as housing and medicine), it is uneconomical to maintain unproductive animals. This implies that the excess animals including male calves, bulls, bullocks, male buffaloes and non-productive or dry female buffaloes and cows need to be removed from the cycle. Hence even to maintain the dairy sector, animals need to seamlessly flow into the meat market, and any restrictions on this natural flow would lead to stray cattle and loss of financial input to the cattle owner. According to the 19th Livestock Census, 2012, there are over 5.2 million stray cattle in the country, and most of them are cows and bulls, because cow slaughter is banned in around 18 states. This also contributes to the hazardous cattle smuggling across state borders.
Markets for beef and leather and leather products are in essence a by-product of the dairy sector, complementing it by absorbing the non-productive cattle, and hence are crucial for the economic viability of the sector. It needs to be noted that these industries are not in the farm sector, hence putting a clause that only an ‘agriculturist’ can acquire cattle completely disregards these markets. As Sagari Ramdas points out:
The economic value of an animal, despite it not being purchased by another farmer, exists because of all post-farm downstream economic values of the cattle economy after slaughter: cattle beef as a critical part of food cultures and a cheap source of protein, cattle skin the basis of India’s thriving leather industry …and its offal used widely in the pharmaceutical and manufacturing industries.
Impact on beef market – domestic and export
The impact of the notification would be first felt by the beef market of the country. India ranks fifth in the world in meat production,with anannual production of around 6.5 million tonnes, and bovine meat contributes around two-thirds of this.
Exports of beef
The media has been agog regarding the implication of the ban on beef exports of the country. India and Brazil are the biggest beef exporters in the world, each accounting for a fifth of total exports. It is interesting that the export of beef (or rather buffalo meat, also referred to as carabeef), which had been increasing over the years, has gone up steeply precisely in the years the present Government has been in power. At present, with annual exports of Rs 26,682 crores, it has surpassed Basmati rice as the number one agricultural export of the country.Given the stringent hygiene and sanitary requirements for international market, exports of beef and beef products are tightly controlled by Agricultural and Processed Food Products Export Development Authority (APEDA) within the Ministry of Commerce and Industry. According to the APEDA India has 66 approved units which operate both as abattoirs and meat processing facilities, and 34 units solely for meat processing. All the exports are routed through these units. This lucrative market is definitely going to be adversely affected by the notification.
Domestic market for beef
What is less talked about, however, is the effect the notification would have on domestic consumption. The blanket ban on cattle trade for slaughter through animal markets would virtually cripple the estimated Rs 1 lakh crore (Rs 1 trillion) domestic meat and allied industries market. It would disproportionately hurt the Muslim and the Dalit communities more, who own the thousands of roadside meat shops and slaughterhouses. It is not only those who sell and trade beef who are going to get negatively affected by the ban, but also all those who consume beef (carabeef and cow beef). The total domestic consumption of beef and carabeef is around 2.4 million tonnes, and because of its affordability it is the second most consumed animal protein next to chicken. This is a very important component of nutrition for the poorest of our country given the exorbitant prices of food grain and pulses. And yet the per capita consumption of beef/carabeef in India is very low, both because of the difficulty in obtaining it, due to religious sentiments and Government prohibition, as well as because of the lack of adequate infrastructural facilities to store and process the meat. In other words, this market has a tremendous potential for growth and could have provided cheap and accessible nutrition to the vast numbers of malnourished, but, given the ban, it is likely to be seriously affected.
There are 3,600 registered slaughterhouses in the country, but there are many more slaughterhouses functioning ‘illegally’. The APEDA estimates that there are over 30,000 such slaughterhouses all over the country. By any reasonable guess, these would be all small entrepreneurs, mostly of the Muslim or Dalit community, and many of them would be ruined because of this notification. The state likely to be most affected is the most populous state of the country and with some of the worst human development indicators – Uttar Pradesh. U.P.alone accounts for over a fifth of the national meat production (21per cent), and just short of half of the total meat exports (43per cent) of the country. There are no reliable data on the number of people employed in the slaughterhouses of the country, including U.P. (and that is true for all data involving the most underprivileged of the society in spite of the huge fanfare about big data and digital economy). Yet it can be safely said that tens of thousands of people would be rendered unemployed in U.P. itself because of this ban. Incidentally, U.P. also has the dubious distinction of having the second highest rate of open unemployment (58 in 1000), much higher than the national average of 37 in 1000. But, more importantly, the open unemployment rate among youth is even higher – every sixth person in the age group of 18 to 29 in the state is unemployed, compared to the national average of every tenth person. The situation would only get worse with this notification.
Impact on leather and leather products
The most important downstream industry for slaughtered (dead) non-productive cattle is leather and leather products. According to Government data the Indian leather sector is worth about $18 billion (Rs 1.17 lakh crore), of which exports account for around $6 billion and the domestic market is $12 billion. This is a particularly labour-intensive sector, and reportedly provides direct employment to around 3 million people. Significantly, around 55 per cent of the workforce is below 35 years of age, which indicates that there is a continuous flow of skills across generations and also that it is able to absorb the constant stream of new entrants in the job market. This is significant, because over 12 million young people join the burgeoning job market every year, and so far the present Government’s record has been abysmal. Employment generation in the eight sectors tracked by the Labour Bureau’s quarterly survey has fallen precipitously from 9.5 lakhs a year in 2010 and 2011 to less than 2 lakhs a year under the Modi government.  This in spite of tall promises made during electoral campaign and the recent data jugglery(of including new sectors in the name of ‘re-examining the methodology’). This does not even cover 2 per cent of the fresh entrants into the labour market, let alone the existing army of unemployed.
According to experts, Rs one crore investment in the leather and leather products sector can create 250 jobs.And that is probably because over 80 per cent of the manufacturing and processing in leather is done by Small and Medium Enterprises (SMEs). And these units, working with very thin margins and against intense competition to meet uncertain international and domestic demand, would be hit the hardest with the notification under discussion.
Interestingly, leather and leather products is one of the thrust sectors under the much touted ‘Make in India’ initiative of Prime Minister Narendra Modi. In fact, the Centre has recently announced a Rs 4,000 crore incentive package to boost further employment in the sector. This is ironic, given that the same Government’s notification on slaughter of animals is akin to a death knell for the existing units and the workers in the sector. According to a recent article in Reuters, Nayyar Jamal, general secretary of Kanpur’s Small Tanners’ Association, estimates that in already in Kanpur’s leather and related industries alone, 400,000 people have been rendered temporarily jobless.
But it is not only the downstream economies which are going to be hurt by the notification; in fact the primary industry – that of milk and milk products — is likely to be seriously affected by it.
Impact on dairy industry –milk and milk products
India is the largest milk producer of the world, with milk production doubling in just 15 years to around 160 million tonnes (2015-16). The per capita availability of milk has increased from 176 gms/ day in 1991 to 337 gms/day in 2016. This is in sharp contrast to the trend in food grain availability over the last 25 years. According to National Sample Survey Organisation consumer surveys, between 1993-94 and 2011-12, the per capita annual household consumption of cereals has declined from 155 kg to about 129 kg, though production has been growing over the last four decades. But what is probably a matter of graver concern is that the availability of pulses has been declining consistently in spite of imports. Per capita production of pulses at 15 kgs (in 2012-13) per annum, is in fact lower than that available in 1965-70 which was 18.5 Kgs – it was the lowest in 2002-03 when it hit 10.5 kgs per capita per annum.
This has serious implications for the availability of nutrition for the people of our country. The latest End of Childhood Reportyet again puts India at the top of the list, with the most number of children in the world under the age of five who are moderately or severely stunted due to malnutrition. At a staggering 48 million children, our ‘Shining India’ accounts for a third of total 156 million stuntedchildren in the world. According to IndiaSpend analysis based on data from National Family Health Survey 2015-16 (NFHS-4), only 1 in 10 children in the age group 6 months to 22 months gets an adequate diet. To make matters worse around a third of Indian girls in the age group 15 to 19 years are also stunted. But even more importantly 1 out of every 5 girls in the age group of 15 to 19 years are married and are forced to have children at that very young age. A stunted child-mother without adequate access to nutrition giving birth to a stunted baby who also does not have enough nourishment – the cycle continues.
The enormity of the situation can be gauged by the fact that merely to restore the pulse intake level from 41.9 grams per capita per day presently to the level preceding the Green Revolution (69 grams per capita per day in 1961) would require the availability to increase by 65 per cent! This is where the significance of supplementing the diet with animal protein like poultry, mutton, pork, beef, fish, milk and milk products really comes in. And in a country with a sizeable proportion of vegetarians, milk and milk products are a very significant protein source in the diet, accounting for about the same share of proteins all-India as pulses. Moreover, animal proteins are relatively higher-quality proteins, much better utilised by the body than the proteins in cereals or even pulses.
Out of the total milk produced in the country approximately 40 per cent is retained by the producer for personal consumption and the rest (referred to as surplus milk) is sold in the market. Of the surplus milk that is available for sale, about 30 per cent is bought by the organised sector, consisting of co-operatives such as Amul, Mother Dairy (wholly-owned subsidiary of NDDB) and Nandini (Karnataka Cooperative Milk Producers Federation (KMF), as well as private sector players such as Nestle and Danone. The rest – over 70 per cent of the surplus milk — is absorbed by the unorganised sector, primarily the local door to door milk suppliers, doodhwalas (milkmen). According to an estimate the Indian milk economy is worth around Rs 5 lakh crore, and has been growing at a compound annual growth rate of 15-16 per cent, making it one of the fastest growing sectors of our economy. The organised milk economy, which consists of liquid milk (55 per cent) and milk products, is worth Rs 80,000 crore; some milk products like cheese and flavoured milk are growing at an even faster rate.
Unlike other large milk producing countries, in India milk is primarily produced in small dairy farms. According to the United Nations Food and Agricultural Organisation, India has over 75 million dairy farms with the vast majority of them having fewer than 10 cows/buffaloes each.A unique feature of the Indian dairy sector is the high share of the consumer rupee flowing into the hands of the primary milk producers, thanks to the extensive network of dairy cooperatives.
The National Dairy Development Board provides a rough picture of the economics of a small dairy farm (for both a 10-cattle head farm and a 20-cattle head farm) to help those who intend to enter the business. A brief summary of a 10-head cattle farm is given in Table 1 below.
As is evident from Table 1 above, according to NDDB’s calculations a 10-cattle head farm with an investment of around Rs 71 lakh can earn a net profit of approx Rs 11.6 lakh over seven years – i.e. about 16 per cent on investment. But significantly about half of the profit is earned by sale of the animal – Rs 5.5 lakh. In other words dairy cows are deemed to go dry or unproductive in seven years and if anybody buys them it would be presumably for beef and leather. But if the dairy farmer is not allowed to sell his cattle then his profit would reduce to around Rs 6 lakh over seven years which is just over 8 per cent. Even that is only part of the story. He cannot sell the cattle and yet he would have to feed his cattle (in spite of their being unproductive). The life span of a cow/buffalo is over 25 years. This would entail a further expenditure of around Rs 80 lakhs (assuming two more seven year cycles) for food alone, with almost no income (barring what would be earned by selling manure and whatever little milk the cattle would produce). Thus in this scenario the dairy farm becomes economically unviable.
This brings us to the crucial conclusion that the notification leading to a virtual beef ban, ostensibly to ‘save the cow/buffalo’, would in fact do exactly the opposite. If the milk market becomes economically ‘unviable’ then ‘cows’ become unviable too. And this is not mere speculation, but is corroborated by facts, as argued by Ramdas with regard to the indigenous cow population.
Whilst India’s population of fine indigenous cattle breeds keeps decreasing year by year, Brazil’s cattle populations of Ongole, Kankrej and Gir breeds – imported from the Indian sub-continent nearly 200 years ago – keep increasing. We have laws to ‘protect’ cows, ban cow slaughter and ban the consumption of beef… In Brazil, on the other hand, beef-based cattle production systems are the driving force behind its flourishing indigenous Indian cattle breed populations.
Apparently, pure Indian cattle breeds (Indicine) or Indian cattle breed crossed, comprise 80per cent of Brazil’s total cattle population of 214 million. By contrast, successive livestock censuses in India have shown that indigenous stock has been decreasing over the years. Between 1997 and 2012, India’s indigenous cattle population declined by over 15 per cent from 178 million to 151 million, which is less than the figure at the time of independence in 1947 (155 million), when all cattle were indigenous breeds.
Cattle rearing is not an isolated activity but is intricately related to the entire agrarian economy as pointed out by Ramdas:
The cynical fetishisation of cows by Hindutva politicians is not only profoundly anti-farmer but, paradoxically, also anti-cow. What these bigots fail to realise is that the cow will survive only if there are pro-active measures to support multiple-produce based cattle production systems, where animals have economic roles. The system must produce a combination of milk, beef, draught work, manure and hide, as has been the case in the rain-fed food farming agriculture systems of the sub-continent over the centuries.
Policy measures and notions of development which do not take into account this essential aspect of the agrarian economy cause harm rather than good, and the brunt is felt by the most vulnerable sections of the population. A closer examination of the livestock and crop economy is imperative to gauge the total impact of the notification.
Impact on livestock economy, crop production and land holding
Seventy years after independence the majority of the population (over half of the working population) are still dependent on agriculture and allied activities for their livelihood. This in spite of the fact that the ‘relevance’ of crop agriculture to the GDP has been steadily declining over the years, and is now pegged at just over 10 per cent of GDP, as seen in Table 2.
Table 2: Gross Value Added by Agriculture and Allied Activities
(in Rs ‘000 crores)
Actually, the majority of the people are stuck in the agrarian economy because they simply do not have any other occupational choice. According to the 70thround of the National Sample Survey (NSS), approximately 156 million households live in rural India, which is about 9 million households more than what was reported in 2003. And yet the total agricultural area owned has been declining over the years – at present it is around 92.37 million hectares 13 per cent less than what it was in 2003 (107.23 million hectares) and 23 per cent less than what it was in 1971-72 (119.64 MHA). Consequently the average area owned per household has also declined drastically from 1.53 hectares in 1971-72 to just 0.59 hectares in 2013. As is evident from Table 3 around 83 per cent rural households have less than 1 hectare land (in fact 7.4 per cent households are actually landless even by the very narrow definition used by the NSS, i.e., those with less than .002 hectares)) and they account for less than 30 per cent of the total land owned. In contrast the top 7 per cent of the rural household own about half (46.7 per cent) the total land available. In a situation where income from agriculture is declining and uncertain – given the unpredictability of monsoon, vagaries of markets, rising prices of inputs and fluctuating prices of the produce, it takes immense courage and fortitude to continue with it, even if one had access to a large viable plot of land. But as is evident from Table 3 the majority of Indian farmer households (75.4 per cent) are marginal (whose land holding ranges from 0.002 to 1 hectare per household). Or in other words over 118 million households in rural India have merely 0.23 hectares on an average per household – a plot of land which would not even cover the food requirements of the household, let alone other essential expenses.
Table 3: Livestock Holding by Rural Households across Different Sizes of Operational Landholding
Source: 70th round NSS report ‘Livestock Ownership in India, 2011-2012’, pp 24, 25
So how do these households survive on agriculture? Well, they do not. That is, these households were running a deficit. The NSS 2013 shows that at least one member of over 3/4th of the households in the marginal landholding category had to stay away from the village to seek employment. Compared to that, only about 2 per cent of the households with land over 4 hectares needed to go outside the village to seek employment. But, given the employment scenario, even this is obviously inadequate to meet the expenses of the households.
Therein lies the importance of livestock holding as a supplementary source of income for the most vulnerable section of the population. And since there has been a consistent growth in the livestock economy, it does not seem to be merely a temporary coping mechanism. In fact, Richard Mahapatra of Down to Earthargues that over the last decade and a half, India’s small and marginal farmers have made a conscious shift to livestock rearing to adapt to uncertain monsoon and dwindling income from regular crops. This is corroborated by ground level data – as seen in Table 3, approximately 2/3rd of the livestock population in rural India (including bovine, ovine, pig and poultry) are owned by marginal householdsand if small farm households (owning between 1 to 2 hectares of land) are included, the figure goes up to almost 90 per cent of the total livestock population.
At Rs 5.7 lakh crore the livestock economy is substantial – it accounts for over 4.5 per cent of the total Gross Value Added (GVA) of the country. By comparison, the income from crops, the main engine of the agrarian economy, is Rs 13 lakh crore, or just over double that of the livestock economy. But this still does not capture the growing significance of the livestock sector. A constant price comparison over the last five years (2011-12 to 2015-16) shows that the crop economy has been stagnant, in fact it has declined marginally – in 2011-12 it was Rs 9.85 lakh crores and in 2015-16 it was Rs 9.75 lakh crores. By contrast, the livestock economy has grown by almost 30 per cent in real terms in the five years from 2011-12 to 2015-16. It could be argued that 2015-16 was the second successive year of drought in the country, which might explain the lack of growth in crop production. But, the drought would have also affected livestock badly, and yet it showed an impressive growth, thus validating our assertion that livestock rearing has emerged as a reliable means of supplementary livelihood in rural India. Fig 1 graphically demonstrates the growing importance of livestock in the agrarian sector. But this is merely a tiny fraction of the actual potential of this sector, given the vast untapped domestic market for milk, meat, leather and other ancillary industries. Apparently India’s livestock productivity is 20 to 60 per cent lower than the global average, primarily because of insufficient feed and fodder, inadequate breeding and reproduction facilities and increasing diseases among animals. One can safely guess that with a little incentive and policy support the sector is likely to boom. (It probably needs to be added, however, that the reasons for lower livestock productivity in India are more complex. Marginal peasants keep livestock with multiple considerations. They minimise expenditure on feed, since a sizeable share of the milk is for their own consumption. Maintaining cattle which meet global productivity levels may be beyond the spending capacity of marginal peasants.)
Fig 1: Percentage Contribution of Various Components of Agriculture and Allied Activities at current prices 2011-12 to 2015-16
Thus over 93 per cent of Indian farm households (with landholding up to 2 hectares) are able to hold on to their tiny piece of land by supplementing farm income with livestock rearing. But barely so, as for almost 70 per cent of farmer households, total income from all sources (cultivation, farming of animals, non-farm business and wages) was still less than consumption expenditure.Households with livestock as a major source of income include the most vulnerable sections of our society and therefore are over-represented by women, SCs, STs, Muslims and even the landless. According to the 70th round NSS report on Livestock Holding, over 90 per cent of the land (smaller than 0.002 hectares, so unviable for crop production) owned by the 7.5 million landless householdsis used to farm animals and fisheries.
If an entrepreneur is defined as ‘person who organizes and manages any enterprise, with considerable initiative and risk’, then these people are the true entrepreneurs of our nation: The self employed majority who have innovatively risen to all the adversities dished out to them by the global market and local constraints. All the gimmicks of the present Government with fancy terms like ‘Stand up India’, ‘Startup India’ and ‘Make in India’ have not been able to create any jobs, and the Government and its think tanks have blamed their epic failure on the global recession, lack of adequate skills, stringent labour laws, corruption, and a plethora of other reasons. Meanwhile the poorest of the poor have survived amidst immense uncertainties and adversities, without any incentive measures, or even policy acknowledgement by the Government. Instead of supporting their efforts the Government has actually dealt a death blow to the most vulnerable sections of the population. As has been discussed earlier, livestock rearing entails constant replacement of older and unproductive cattle by young stock and any constraint on this flow would make it economically unviable. And this is precisely why the notification, which implies a virtual ban on cattle slaughter, would be fatal for the livestock economy as it exists in the country today.
So which interests are served by the notification?
Since the present Government came to power in 2014 the cow and politics around the cow have never left the headlines. Over the last three years there have emerged a plethora of vigilante groups – the ‘gaurakshaks’ — accompanied by a spate of gruesome lynchings and harassment all over the country, usually directed Muslims and particular oppressed castes. At first glance, the party in power seems to be sacrificing its aggressively neoliberal ‘economic agenda’ to appease the ideological commitment of its parent organisation to ushering in a ‘Hindu Rajya’. The 23rd May notification regulating cattle slaughter seems to fit in with this logic too – as is evident from all the discussions above. The move does not seem to make any economic sense as it is likely to have disastrous implications not only for the beef economy, but also to both the upstream sectors (milk and livestock in general) as well as downstream sectors such as leather and leather products, involving almost the entire population of the country.
Hence one is almost tempted to agree with the assertion of Justice Rajinder Sachar that ‘the RSS has now made up its mind that 2019 is its target to declare India a Hindu Rashtra after the BJP returns to power’ and that is the primary political agenda of these moves. But one remains confused because certain decisions and policies of the government (demonetisation and the 23rdMay notification) seem to hurt the economic interests of vast sections of population whose support the party badly needs. No doubt the Muslims and Dalits are worst hit, but Government decisions such as demonetisation and the restrictions on cattle trade hurt crores of self-employed, petty businessmen and shopkeepers, contractors and middlemen as well, irrespective of their religious affiliations.
However, history teaches us that even actions which appear motivated by non-economic considerations may serve underlying (and unstated) economic objectives. The medieval European crusades to the Holy Land may have mobilised armies of fanatical Christian volunteers, but they also wound up serving various worldly interests of the Church, the merchants of the Italian city states and the rulers of medieval Europe. And more recently in 1991, just before George Bush Sr. began the bombardment of Baghdad, he stated that “the moral purpose” of the war could be found in an Amnesty International report detailing the tortures and killing of Kuwaitis by Iraqi soldiers. There was no mention of Kuwait’s oil resources. But the world already knew the real reason, which was candidly declared by Lawrence Koth, former US assistant defence secretary, who said, “If Kuwait grew carrots, we wouldn’t give a damn.” Our own rulers of today, in unguarded moments, reveal this division of public postures and private ends in their thinking. For example, BJP president Amit Shah recently said admiringly of Gandhi that he was a “chatur baniya” (a cunning member of the business caste from which Gandhi hailed), who used the Congress as a “special purpose vehicle”, to be discarded when the work of achieving ‘independence’ was achieved. Whether or not one subscribes to Shah’s views on Mahatma Gandhi, or on the role of the Congress Party, one should probably pay close heed to this assertion, as it provides an insight as to how Amit Shah thinks. Indeed that is of utmost importance, given that by all accounts he is the ‘master strategist’ of the party and has been recently ‘elected’ as the party President for the second term.Probably, certain dramatic recent measures of the Modi government, while garbed as crusades against one or the other type of alleged social evil, actually function as “special purpose vehicles” to serve certain powerful economic interests. Let us look at the recent notification in this light.
Prima facie, the simple notification on animal slaughter seemed to affect directly only the beef eating section of the population, who, though substantial, are not in a majority. After the initial outrage which sprang up in different parts of the country, even that concern seemingly was allayed by the recent clarification by the Union Home Minister Shri Rajnath Singh,that ‘the Centre was not against beef consumption’. And he is in a sense correct — the notification is not against ‘beef consumption’ but against ‘beef production’ along with production of milk and milk products, leather and leather products and livestock in general, as is done today.
As has been discussed above, the beef economy is intricately and organically linked to several other sectors and in its totality it affects the economic interests of almost the entire population of the country. Consequently any change, which obstructs, restricts or stops the flow of money and material from one sector to the other would be detrimental to the entire cycle. And that is what the notification is likely to do. But who would gain from this? A cursory glance at these sectors internationally provides a clue to that. India is one of the major players in all the markets related to cattle economy – beef production, leather, leather products, milk and milk products, etc — but, in spite of its formidable size, these markets are largely disaggregated. They are part of livelihood economy and function mostly through innumerable tiny and even household level operators. Internationally, however, the scene is very different – most of these sectors are dominated by a few very large players, producing through highly mechanised industrial production methods. Let us examine each of the sectors in the light of this fact.
Beef and carabeef
The major beef producing nations of theworld such asUSA, Australia and New Zealand produce beef by growing animal feed on large areas where food could instead be grown to feed human beings. In Brazil and other countries of Latin America, large beef corporations are steadily converting huge tracts of natural prime Amazonian forests, home to indigenous peoples, into grazing lands.Compared to India these systems are environmentally unsustainable, contributing massively to carbon emissions. The notification under discussion is aimed at the animal market, but has no directives for large slaughterhouses with in-house breeding facilities, similar to those mentioned above. Thus can one deduce that the notification is merely to take away the business from small and tiny operators to large players in the name of prevention of cruelty to animals? (One is not even going into the discussion of how cruelly animals are treated in large industrial scale slaughterhouses.)
Similarly, the dairy industry worldwide is monopolised by a few large multinational corporations, and is run like any other profit-focused business. It operates through large corporate dairies with hundreds of cows each, in stark contrast with the Indian dairy industry, which is based on the aggregation of the output of millions of small and marginal households owning mostly two to three cattle head each. Further, given the extremely disaggregated supply, there are uncertainties in both the supply quantity and supply volumes. Probably this is the reason why multinational companies have not been able to make inroads in the lucrative and growing dairy sector of the country. Fonterra of New Zealand, with a turnover of over four times that of Amul, did enter the market in a joint venture with Britannia in 2001, but had to exit in 2009. The reason for the failure of the venture, according to industry sources,was as follows:
A dairy business cannot succeed here unless it develops its own milk procurement network. But that does not fit in with Fonterra’s main purpose, which is to market the milk of its 11,000 farmer-shareholders rather than that of Indian farmers.
R S Sodhi,who heads Amul, put it pithily: ‘To make money in dairy business you must make milk’.
However, given the slump in the global demand for milk and milk products, and the huge oversupply in some countries like New Zealand, Australia and several EU nations, India remains a very lucrative market to enter. According to a US department of agriculture report, New Zealand has a surplus of milk production of over 15 million tonnes and EU at present has surplus stocks of Skim Milk Powder (SMP) of about 4.2 lakh tonne. The Indian dairy industry has been able to survive the onslaught of dumping of milk and milk products because of the tariff protection provided to the sector -currently the import duty on Skim Milk Powder (SMP) is 15 per cent while in case of butter it is as high as 40 per cent. Over the last several years there has been relentless international pressure on India to reduce import duties on agricultural products including the dairy sector. The latest is the Regional Comprehensive Economic Partnership (RCEP), a mega-regional economic agreement being negotiated between the 10 Association of South-East Asian Nations (ASEAN) countries and their six FTA partners: Australia, China, India, Japan, New Zealand and South Korea, under the ambit of Free Trade Agreement (FTA). The country’s two major dairy cooperatives have urged the Government to keep dairy products outside the ongoing trade negotiations, but the threat is real.And with the notification on animal slaughter, which is likely to jeopardise the existing milk economy and the sustenance of millions of farm households, is it far-fetched to deduce that this would help open up the sector for the large players – both existing firms and new entrants?
Leather and leather products
The leather and leather product industry in India had been largely restricted to the small scale sector till as recently as 2002. Processing of raw hide, tanning, manufacturing of finished leather and even footwear production were carried out by small units in industrial clusters. As has been mentioned above, even today 80 per cent of production takes place in small and medium units. The emphasis in this sector in the last two decades has been on the exports market and at present India is a significant player in the global market. But the Indian leather industry still operates on large volumes and low price, and hence remains vulnerable to competitive pressure from several other developing countries and of course China – the largest producer in the world. The small units in this sector have been able to survive in this price sensitive environment because of easy access to abundant and very cheap labour and raw material (hides of cattle). And hence the recent notification has serious implications for the survival of leather clusters around the country. In fact the exports have already declined significantly.There has already been a rise of medium and even large units who would have the financial clout to maintain larger stocks of raw material and also have access to formal hide procuring procedures. But in the near future this $18 billion industry could lure several large national and multinational companies. At least, that is what the Government hopes for, as is evident from policies listed under the Make in Indiainitiative:
- De-licensing of the entire leather product sector to ‘facilitate expansion on modern lines with state-of-the-art machinery and equipment’.
- Permission of 100per cent Foreign Direct Investment through the automatic route.
- Abolition of Central Excise duty and import duty on raw hides and skins, semi-processed leathers like wet blue, crust leather or finished leather.
And this brings us to the livestock economy – which in spite of its humble size is crucial for the survival of the majority of this country. As has been discussed above, except for the top 7 per cent of the rural population, the rest, with land holdings less than 2 hectares per household (including the landless households), need to supplement their income through cultivation with livestock farming and wages to meet their subsistence requirements. However, even that falls short of their meagre consumption expenditure, leading to widespread indebtedness. Apparently the debts of farmer households, as a percentage of their annual income, has risen from 49.6 per cent in 2002-03 to 61 per cent in 2012-13, an increase of 11.4 percentage points. The livestock economy is anyway under distress because of the shrinking pasture and grazing land all over the country, leading to crisis in fodder availability. Only 4 per cent of total cultivable land in India is available for fodder production, and it has remained stagnant for the last four decades in spite of the milk production having increased eight-fold in these years. Currently, all three types of fodder are in short supply — green to the extent of 63per cent, dry 24per cent and concentrates as much as 76per cent.The recent notification would make the economy completely unviable for the majority of rural households. But the implication would not be restricted to the loss of thelivestock sector. Without the supplementary income, the marginal and small rural farm households will not be able to hold on to their land either. In spite of their micro holdings, together, the marginal and small farmers still own over 53 per cent of the total land under cultivation – around 50 million hectares, an area slightly less than France or more than twice the area of United Kingdom. This is the scale of land potentially up for grabs, land unencumbered by the intricacies of inconveniences like the Land Acquisition Act as it would be sold ‘voluntarily’ by their distressed owners. So is this the real motive for this ‘innocuous’ notification – naked land grab on a national scale? The analysis above definitely indicates so. And it may well not be as farfetched as it may appear at first.
Since the late 1980s and the early 1990s, International Monetary Fund (IMF) and the World Bank have been pressurising India to open up its economy. And the Indian government has been very obliging too, in return for the loans doled out to the country by these institutions over the years. India, with a total borrowing amounting to $102.1 billion between 1945 and 2015, tops the list of countries in receipt of loans from the World Bank. Over the last two and a half decades, successive governments of this country have implemented measures which have driven millions of people out of agriculture. They have dismantled the immense state-owned seed supply system, reduced agrarian subsidies, let public agriculture institutions go to disrepair, and given incentives for the growing of “cash crops” to earn foreign exchange. This, in turn, has made the entire agrarian economy, susceptible to global uncertainties and machinations of large corporations.
A recent opinion piece in Forbes magazine on the ongoing farmer protests in several Indian states puts the Government’s agenda as bluntly as possible. Titled ‘But India’s farmers should go bust, that’s how economic development works”, the piece begins:
There are protests, and calls for political action, over the plight of India’s farmers at present — and the one important point we’ve got to get across to people is that India’s farmers should be going bust because that’s how economic development actually happens. People stop doing low productivity things like rain fed labour intensive agriculture and go off and do more productive things like working in factories or producing services. It’s entirely true that we should make the transition as painless as possible, no doubt about that, but we do not want to be preventing the change from happening because that just keeps everyone poorer than they need to be. The harsh truth is that not being able to make a living doing something is the universe’s method of telling you, you should be doing something else.
The agrarian crisis, which has caused misery to millions of farmers and led lakhs of them to commit suicide, did not just happen, but was a planned outcome of conscious Government policies.
It has been a quarter of a century since India ‘broke the shackles’ of protection and ushered in the era of economic liberalisation. And the ‘Indian economy’ has done well – the GDP has grown over eight-fold, from $293 billion to over $2.4 trillion at present. India has been hailed as one of the most happening economies by the global leaders and international press, primarily due to its impressive and consistent economic growth over several years. Apparently there are even better days to come. In May this year, NITI Ayog has come up with an action plan to make India a $7.5 trillion (at 2015-16 prices) economy in the next 15 years. This general euphoria is marred by one small inconvenient detail, which keeps cropping up every once in a while (often in alternative or non-consequential media): namely, that though India has done well the majority of Indians have not. And however much the rulers and their coterie of advisors try to deny this, the facts stubbornly confirm the assertion that only the very few at the top of the pyramid have gained through this extraordinary bonanza. The share of the top 1 per cent of the population has increased from about 36 per cent in 2000 to 54 per cent in 2016 – thriving even through the greatest global recession since the Great Depression. For the majority though, India’s extraordinary economic growth has resulted in acute misery and immiseration. As we have tried to argue above, this was not an unplanned outcome, but rather the outcome of the rulers’ deliberate policy. In the last few years many have criticised the ruling party’s policies as being “majoritarian”, but we think they are incorrect. India’s Government policies have never been majoritarian, they have always been minoritarian – the minority of the elite.
India has never had a coherent pro-people policy which could have ensured equitable distribution of prosperity to all. But over the last two decades, the people in power seem to have stopped even appearing to do so, except as rhetoric during the run up to the elections. In fact, the Indian people are treated as a continued source of embarrassment by the rulers of this country, and their condition has been relegated to an inconvenient footnote of their grand scheme of things. In short the people do not count any more. That is why the Forbesarticle is refreshingly honest when it brazenly asserts that ‘Indian farmers should go bust’ and that it is true that “the government did not want more income to farmers since it was not in tune with its economic reform policies”. It captures the actual agenda of the rulers, and we should appreciate it. Cavalier assertions that the Government is for Sabka Saath, Sabka Vikas insult the brave efforts of the people who have been fighting a losing battle to hang on to a semblance of dignity in their lives.
How much would the vast majority continue to endure, and for how long? No one knows for sure. But even as we write this piece the entire country is reverberating with protests and demonstrations of peasants who have been short-changed in spite of producing bumper crops. In response, the various state governments have been at times repressing the protests, at times scampering around offering concessions and loan waivers to assuage this collective fury. Is this a harbinger of change? We do not know that either. The only thing we know for sure is that — change will not come from above!
Manali Chakrabarti is an Independent Researcher. This article was originally published in RUPE blog
 Comments and suggestions by RUPE and Rahul Varman are gratefully acknowledged
Though the subject of cow slaughter has been fraught with controversy right from the framing of the Constitution. http://www.thehindu.com/opinion/lead/cow-slaughter-and-the-constitution/article18683942.ece
Members would be the district collector or magistrate, chief veterinary officer, jurisdictional divisional forest office, two representatives from animal welfare organizations, and a representative of the Society for the Prevention of Cruelty to Animals (SPCA). It would, among other things, ensure that an animal market has adequate shade, lighting, toilets, non-slippery flooring, and sand pits for rolling of equines, before any new animal markets are registered.
Members include the chairman of the local authority, the chief municipal officer, a tahasildar member, the jurisdictional policy inspector, a veterinary officer, a representative of the SPCA, and two representatives from animal welfare organization, and would be responsible for the “upkeep of a market or for the provision of fixed facilities there and for ensuring the welfare of the animals being traded”.
 The Central government submitted a report to the Supreme Court underlining the need of Aadhaar card to protect cows from being smuggled. It said: “Each cow and its progeny across India should get a Unique Identification Number for tracking.”http://www.businesstoday.in/current/economy-politics/every-cow-progeny-should-get-unique-identification-number-centre-tells-sc/story/250659.html
The report said that “stunting” is a condition that “prevents children from developing to their full potential, both mentally and physically” when a child does not get enough food and nutrients. It is caused because of chronic malnutrition in first 1,000 days of a child’s life.
 Using the politically correct ‘she’ would be grossly incorrect
 “While many may find this unsettling, the hard reality is that agriculture has become virtually irrelevant to the overall GDP growth in India” Arvind Panagariya. http://www.columbia.edu/~ap2231/ET/et97-July%2030%203007.htm
According to Wikipedia (accessed on June 18th, 2017) Gross value added(GVA) is the measure of the value of goods and services produced in an area, industry or sector of an economy. GVA = GDP + subsidies – (direct, sales) taxes. https://en.wikipedia.org/wiki/Gross_value_added
 NSS 70th Round ‘Household Ownership and Operational holding 2013’, pp 23-24
 Ibid., p 16-18
They probably earn a living as wage labourers in other people’s land or dairy farms, but rearing animals and fish provides essential supplement to their frugal consumption.
70th round NSS report ‘Livestock Ownership in India, 2011-2012’, p18
Who headed the Sachar Committee which studied the socio-economic and educational status of Muslims
 Huberman, Leo, (1936) Man’s Worldly Goods: The Story of the Wealth of Nations, pp20,21
http://www.thehindu.com/news/national/centre-not-against-beef-consumption-rajnath/article18854483.ece. Among the opponents of the ban were some members of the BJP itself, such as the chief minister of Arunachal Pradesh, Pema Khandu.
 This becomes relevant given that the notification has been issued by the Ministry of Environment.
 It came under the Government’s reserved manufacturing list for small scale sector.