Boosting the Livestock Trade – The Hindu BusinessLine
Livestock and its products are one of the most promising commodities in the primary and processed food sector. World consumption has doubled since 1995; trade increased from $ 77.18 billion in 2000 to $ 233.7 billion in 2020. But South Asia’s exports represent around $ 3.66 billion, or only 1.8% of the value total world trade; and the export of frozen beef, again mainly from India, amounts to $ 3.10 billion. Obviously, trade in other livestock products – including dairy products, poultry and animal fats – is insignificant.
South Asian countries trade more with the world than with each other; trade between South Asia and the world has grown faster than the world average. The ratio of exports to gross production of livestock and its products is only 0.61, showing that South Asia’s participation in world trade is marginal. Global trade in dairy products and processed milk is worth $ 1.02 billion, but imports from SAARC countries account for 80 percent of this volume.
Trade within South Asian countries is insignificant: Among the eight countries of the South Asian Association for Regional Cooperation (SAARC), trade was only $ 134 million in 2020 and $ 146 million in 2019. Even the South Asian Free Trade Area (SAFTA) did not help improve intra-regional trade – its growth rates within SAARC fell after the signing of SAFTA. an amount significantly less than $ 60 million.
Policies are needed to improve the livestock trade in South Asia, especially meat and dairy products. Some clues can be found in the policies formulated by Australia and New Zealand in the 1960s and 1970s that helped countries become the world’s leading meat and dairy exporters.
Until the first half of the 20th century, the productivity of livestock and their products in Australia was limited by the inability of British-bred cattle to adapt to extreme heat, seasonal variations in quality and availability. from food and, in the humid tropics, to tick infestation. . This changed when the tolerant, tick resistant wheat Bos indicus Large European breeds and breeds were introduced to Australia and New Zealand in the 1960s and were crossed with British bred animals. Soon after, with the acceptance of European Union countries, the bulk of Australasian beef was exported to emerging markets in the United States and East Asia.
If the countries of South Asia are also to become a dominant supplier in the global trade of livestock and its products, they too must focus on the tastes and preferences of foreign consumers and on the quality they demand – this is the lesson to be learned from the Australasian experience. The quality of meat and dairy products differs considerably from country to country. It is absurd to expect developed economies to accept the quality of South Asian products.
If the countries of South Asia wish to improve the quality of their livestock and its products, they must seek the help and guidance of pioneer economies to structurally change the environment for the production and processing of livestock and its products – crossing technology, machinery and skills. sets.
To realistically target a decent pace of intra-regional trade, non-tariff measures (NTMs) for livestock and livestock products need to be harmonized, at least in SAARC countries; this argument is supported by the values of some of the famous ratios which estimate the degree of MNT, such as the frequency ratio and the coverage ratio. These two ratios are 100 percent for animal and animal related products from Sri Lanka, which means that some form of NTM is applied on all tariff lines for these products. The situation is similar for India and Pakistan.
The recommendations of the Terrestrial Animal Health Code of the World Organization for Animal Health (OIE) are scientifically justified and aim to ensure the safety of international trade in terrestrial animals; these should be implemented first. Few of the OIE’s recommendations include diagnostic tests for international trade, disease surveillance, dispute mediation using the good offices of the OIE, and model international veterinary health certificates.
Other constraints to South Asia’s intra-regional trade are the cost of trade, the lack of international geographic indicator (GI) labels for livestock products, the relatively low tariff rates. higher SAFTA and lack of trade openness; these need to be treated aggressively. Sri Lanka applies 9 percent preferential rates on livestock and livestock products; under a free trade agreement, that’s a high number.
Until these challenges are met and combined with an aggressive policy to expand and expand technology and capacity building pathways to deliver quality products, South Asian trade – intra-regional or with the world – will continue to grow. ‘to be mad.
Anjani is Principal Investigator at the International Food Policy Research Institute, New Delhi, and Abhishek is Principal Econometer at Dun & Bradstreet Technologies and Data Service, Chennai.