Chief Economic Advisor Arvind Subramanian used the occasion of the National Academy of Agricultural Sciences’ Foundation Day Lecture to urge caution on various policies that are aimed at restricting the slaughter of livestock. Along with the issue of gaurakshaks, the latest rules that prevent the sale of livestock in animal mandis if they are to be slaughtered have triggered an uproar – while the government claims the slaughter of livestock will continue to be governed by state government laws, others have argued this amounts to a ban on beef if the animals can’t be sold in markets.
On dairy and livestock, the CEA said, “two points are worth emphasizing”. While governments are free to choose their social policies, they have to be aware of their economic costs. “If social policies impede the workings of the livestock market, the impact on the economics of livestock farming could be considerable”.
Second, he added, as for any other farming, all costs need to be taken into account. “The economics of livestock farming, and hence the fate and future of this source of livelihood will depend critically on the terminal value of assets, in this case the no-longer productive livestock. If social policies drive this terminal value precipitously down, private returns could be affected in a manner that could make livestock farming less profitable” – he talked of the loss of income from the meat as well as the need to keep feeding the unproductive animals.
It is possible, he added, “that social policies could affect social returns even more adversely. Stray cattle, and a lot of it, will have to be looked after, otherwise diseases (foot and mouth) could spread, leading to health hazards and social costs”.
Subramanian’s lecture, on various agriculture policies, also dealt with the impact of concentrating MSP and procurement in a few crops in a few states, on the need to rationalize subsidies and the need for a rational exports policy.