Govt must be aware of economic costs of policies: CEA on cattle sale ban

Environment Ministry notified its ban on the sale and purchase of livestock for slaughter

The government's Chief Economic Advisor Arvind Subramanian has sounded caution over the cattle sale restrictions, saying such policies could "adversely" impact the economics of livestock farming in India.

Addressing fellows of the National Academy of Agricultural Sciences (NAAS) in New Delhi on Monday evening, Subramanian said while the governments had the right to frame social policies but considering economic costs of such policies was also imperative.

"On dairy and livestock, two points are worth emphasising. The governments have the right to choose their social policies. But in doing so, they must be fully aware of the economic costs of these policies.

"If social policies impede the workings of the livestock market, the impact on the economics of livestock farming could be considerable. These must be costed for appropriate choices to be made," the economist said giving the foundation day lecture of the government-funded institute that conducts research in agriculture and allied sectors.

He stressed that the economics of livestock farming "must be recognised" also because "the fate and future of this source of livelihood will depend critically on the terminal value of ... 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."

Subramanian said the declining terminal value arises because of two factors -- loss of income from livestock as meat and the additional costs to maintain an unproductive livestock.

"But there is more. It is possible 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 (like foot and mouth) could spread, leading to health hazards and social costs."

He said Indians who under-consume proteins "to the detriment of their health" needed "both reduced cereal-centricity and at the same time promoting - not hindering - alternative sources of protein from pulses, dairy and livestock".

The economist's caution follows Environment Minister Harsh Vardhan's comments that the government was alive to the concerns over the new rules governing cattle trade and slaughter.

The Environment Ministry last month notified its ban on the sale and purchase of livestock for slaughter in animal markets across the country, triggering widespread criticism.