Livestock sector requires immediate incentives: Study

More than 70 per cent of rural households are engaged in livestock-related production and businesses through which smallholders and many landless households earn a livelihood.

These smallholders and landless farmers are now facing the hard consequences from current Covid-19 situation, women are facing the hardest burden.

Ever since the first case of Covid-19 was detected in Bangladesh in the second week of March 2020, business activities have begun to decline. The business contexts and market systems are impacted further when the countrywide public holiday was enforced by the government from March 26 as a protective measure.

However, this has also significantly started to impact on livelihoods, agricultural production and income earning prospects of small holders’ farmers across the country. There is a need for immediate and mid- term support to help farmers. 

Shomosthi, SDC funded project of CARE Bangladesh, has conducted a rapid situation analysis which aims to draw attention of the government, donors and private sector for immediate collective actions.

"While the support provided by the government of Bangladesh and development partners to the country’s export sector is timely and important, the plight of people working in agriculture and the informal economy, many of whom live in poverty or are on the verge of falling back into poverty, should not be forgotten. Many great initiatives are gaining momentum to provide immediate relief to the urban poor, who have been hit hard by the lockdown. The assessment of the livestock sector by Shomoshti sheds light on the impact of the Covid-19 crisis in rural areas,” said Derek George, deputy director of cooperation, Switzerland Embassy in Bangladesh.

Given the importance of livestock rearing for the rural poor, the sector offers a potentially cost-efficient way to rapidly channel much-needed support to millions of poor households in rural areas, he added.

Primary findings show that the pandemic had started a rapidly declining trend in input demand, forward market trade, and basic supply chain functions. This resulted in a decrease in income from businesses on which thousands of entrepreneurs and producers are dependent for their livelihoods.

Dairy farmers are incurring a loss of Tk 189 million everyday as they are unable to sell four million litres of milk and forced to sell 3.7 million litres of milk at reduced price. There is a sharp fall in income as sales of 90 per cent of retailers, the income of 85 per cent of paravets, and 74 per cent of farmers dropped due to the current market situation.

The average daily customers and sales of 90 per cent of retailers have dropped by 46 per cent and 54 per cent respectively, compared to the scenario before the outbreak of Covid-19.

Daily customers have also dropped from 54 per cent to 25 per cent.  72 per cent of surveyed retailers report that they cannot collect their input on time due to restriction on transport and limited supply from companies.

About 97 per cent of entrepreneurs forecast that they will face huge losses if the situation continues for the next three months. Among them, 67 per cent of entrepreneurs will incur debts or scale down their businesses and 47 per cent will shut down their businesses. There is an adverse impact on household income as well.

Almost all respondents (95 per cent) report that their household income has decreased significantly while 50 per cent report increased expenditure in their households.

The study findings depict that 65 per cent of surveyed households used their savings, 33 per cent cut down on food intake, and 21 per cent took out loans for managing household expenditure.

Household burden of the women has also increased over 61 per cent and most unfortunately domestic violence increased by 28 per cent.

“The leadership provided by the government in response to Covid-19 is praiseworthy. While looking at the evolving Covid context and its potential impact, there are support required for immediate, mid-term and longer term period. It is also high time to pay attention to women who are bearing the hardest burden. Any further delay in response will be costly and may push people into longer-term poverty trap,” says Prabodh Devkota, deputy country director- Programmes, Care Bangladesh.

There were several recommendations made in the report. Subsidy is recommended on raw milk processing as it will encourage private companies to procure milk from farmers regularly and relaxing terms on providing loan could also be an option to help the farmers to revert back. The surplus amount of the raw milk can be processed as powder milk or other high value products which can be used as relief by the government and other development partners.

The study suggests ensuring steady supply of inputs by the private sector.  Relaxing restrictions on goods transportation by the government and strict market monitoring by the livestock department will help make market prices of inputs stable.

A multipurpose cash assistance for the farmers could be a needed intervention to buy necessary inputs to continue their farming during the pandemic.

There should be provision of soft loan for the livestock farmers through Bangladesh Krishi Bank, RAKAB, commercial banks and micro-finance institutions with a minimum rate of interest having no collateral and longer term of repayment schedule, recommends the study.

The data for the rapid survey was collected making phone calls to 172 respondents--72 entrepreneurs and 100 farmers-- of seven districts from three divisions in last week of April and first week of May.