Cattle prattle: Leather in line to follow RMG magic

Imtiaz A. Hussain   | Published: September 10, 2018 21:29:10 | Updated: September 14, 2018 21:21:52

'As Bangladesh's second-largest export-earner, leather merely supplies 0.5 per cent of the gigantic global market, whose net worth spirals rapidly beyond $215 billion. With a new effluent-treated facility in Savar and a governmental directive to shift all Hazaribagh tanneries there, the hope is to expand exports five-fold, to $5.0 billion by 2020'

Great Eid business is possible in Dhaka that does not have to subordinate piety to profits, but it must build upon pre-planning. At stake is animal sacrifice, its relationship with the leather industry, and why both the cattle and hide markets failed this year. It is essential to first note the distinction between, and importance of, private sector engagement and government intervention: the country's productivity growth and progress requires both, the former to bring the resources and get the juices flowing, the latter to steady the ship and ensure smooth sailing.

For a start, though we cannot control external (foreign) cattle-supply or leather-demand, there are exogenous factors that can be regulated (factors outside the cattle and leather industries but within the country): where to sacrifice animals, how to get them into the country, what best way to transfer the hides to tanneries, and why the clean-up process must be consistent with an upwardly-mobile middle-income country.

This year's cattle-market was so unregulated that many cow suppliers returned home with their cows in tow and a crushing debt. Either lower sales or market saturation intervened. Similarly for the leather market: government-fixed prices of Taka 45-50 per square foot for cow hide within Dhaka and Taka 35-40 outside the metropolitan collided with seasonal traders (intermediaries), who were instructed to not go above Take 35 in the city.

Market-failures that these entail were partly preconditioned by India's cattle-flow ban into Bangladesh. This invited some unholy practices. Smuggling skyrocketed. Cows were squeezed horizontally through thick barbed border wires and arrived at markets with cuts and slashes. Pious Muslims, nature-lovers, humanist, in short, decent humans would be aghast at such treatment. Open border-trade may be the most efficient exchange possible between Bangladesh and its adjoining Indian provinces. Apparently, it was less important to India than the country's right-wing agenda to ban cattle-flows to Bangladesh. Though domestic cattle production skyrocketed in response, a worse cattle market-failure was averted. The necessary market adjustment was unpleasantly absent, in both the border and market. Eid should not be scarred by inhuman smuggling and a saturated Dhaka market (the largest in the country). Last year's 10.5 million cattle sale expanded to 11.5 million this year, suggesting more stable prices next year.

Linking this cattle market to the leather market needs more government nudging. Dhaka's 25 official cattle-markets were not enough. Expanding and endowing them with more tasks than merely marketing are pivotal to the country's future: outlawing private animal slaughter is more consistent with a middle-income society and necessary for disease prevention. Opening many more official sacrificial sites would ease this concern, in addition to collecting and selling hides on the spot. It is only a hop, skip, or jump from such a one-stop selling, slaughter, and sale shop to on-line market transactions: consumers picking their cow on-line, with all the necessary details (how much meat to be expected, to package for home-delivery, to donate to specified charities), and clicking their preferred slaughter options. Similarly for tanneries: bidding for their needed raw materials, specifying type (cow, goat, sheep), paying (giving bKash and the likes a little more business), and post-Eid collection mode. Here the government could tax purchases by tanneries without effluent-treatment facilities. Since the bulk of the country's leather input stems from Eid collection, a broader appraisal helps outline how much more efficiently this industry can be made, especially as it stands in line to follow the country's ready-made garment (RMG) magic.

         Started in Naraynganj by the same R.P. Shaha of Kumudini Hospital/Bharateswari Homes fame in Mirzapur, Tangail, before Pakistan was created, the leather industry shifted from the late 1950s to a new community: Hazaribagh, meaning, ironically today, 'a thousand gardens'. Housing over 200 tanneries, and emitting acids, salt, and toxins into the Buriganga River, Hazaribagh resembles a thousand putrid, stench-filled, health-endangering latrines instead. It is (or hopefully was) the fulcrum of Bangladesh's latest billion-dollar industry, producing almost 200 million square-feet of leather, boasting 2,500+ footwear producers, in addition to many other new products. As Bangladesh's second-largest export-earner, leather merely supplies 0.5 per cent of the gigantic global market, whose net worth spirals rapidly beyond $215 billion. With a new effluent-treated facility in Savar and a governmental directive to shift all Hazaribagh tanneries there, the hope is to expand exports five-fold, to $5.0 billion by 2020.

Internal reforms feed external market viability. An early section discussed the exogenous factors behind both cattle and leather markets; but there are endogenous forces to also control (those within the industries, but not necessarily within the country). For leather this would, for example, require global leather market adjustments, given the plummeting prices concurrently (one reason why Dhaka Eid hides could not be sold at expected prices). China, our top leather market, cut back on imports last year, and its tariff-war with the United States this year is likely to impact the leather industry, slashing future prices further. Converting leather stockpiles into innovative end-products for craving consumers across the world becomes the industry's biggest challenge, demanding private sector ingenuity: rather than government bailouts, the industry must rise to the occasion, anticipate fads and fashions, seize pacesetting product opportunities, seek new markets, and support the government's Eid sacrificial site-expansion.

A similar predicament faces the cattle (or animal) industry. Just as genetically-modified foods and fruits have begun threatening the natural food and fruit produce, so too have chemical-treatment of animals entered the picture. Here, too, governmental intervention through meat-standards and testing would be a massive incentive, the sooner, the better.

Two, not-at-all new tasks remain: control the pollution, and centralised Eid market management. Over 200 tonnes of solid waste-water pour into our once-pristine but now-dead rivers each day from the tanneries. The Savar-shift should be the first of many such moves to help recover Nature's beautiful endowments. Augmenting the domestic cattle/goat/sheep industries by coordinated Eid-sales and raw-hide transfers from sacrificial sites to tanneries not only reduces input-purchase costs but also output-selling prices, not just of the Kawran Bazar cow, but also the Fifth Avenue 'Made in Bangladesh' leather-jacket sale in New York.

In a city where smiling does not come naturally, a more coordinated Eid-ul-Azha celebration might serve as the antidote. Dhaka could shift from being the 'most congested' or 'second-most unlivable' city to becoming an increasingly thriving and recommended metropolitan.

Dr. Imtiaz A. Hussain is Professor & Head of the newly-built Department of Global Studies & Governance at Independent University, Bangladesh.


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