Livestock and its produce constitute one of the most promising commodities in the primary and processed food sector. Worldwide consumption has doubled since 1995; trade grew from $77.18 billion in 2000 to $233.7 billion in 2020. But exports from South Asia are about $3.66 billion, only 1.8 per cent of the total global trade value; and the export of frozen bovine meat, that too mainly by India, is worth $3.10 billion. Clearly, the trade in other livestock produce — including dairy, 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 grew faster than the world average. The ratio of exports to gross production of livestock and its produce is only 0.61, which shows that South Asia’s participation in global trade is marginal. Trade with the world in dairy and processed milk is worth $1.02 billion, but imports by the SAARC nations make up 80 per cent of this volume.

Trade within the South Asian countries is trivial: among the eight nations of the South Asian Association for Regional Cooperation (SAARC), the trade amounted to only $134 million in 2020 and $146 million in 2019. Even the South Asian Free Trade Area (SAFTA) did not help to enhance intra-regional trade — its growth rates within the SAARC fell, after the SAFTA was signed., The intra-regional trade in dairy and processed milk products declined by 1.6 per cent, even when the absolute figures are estimated at an appreciably lower $60 million.

Improve policies

Policies are needed to improve South Asia’s trade in livestock, specifically in meat and dairy products. Some pointers may be found in policies formulated by Australia and New Zealand in the 1960s and 1970s that helped the countries become the top meat and dairy exporters of the world.

Till the first half of the 20th century, the productivity of livestock and its produce in Australia was circumscribed by the inability of British-breed cattle to adapt to extreme heat, seasonal variations in feed quality and availability and, in the wet tropics, tick infestation. This changed when the wheat-tolerant, tick-resistant Bos indicus breeds and large-framed European breeds were introduced to Australia and New Zealand in the 1960s and were crossed with British-breed stock. Soon after, with the acceptance of the European Union countries, most of the beef from Australasia was exported to emerging markets in the US and East Asia.

If South Asian countries, too, are to become a dominant supplier in the global trade of livestock and its produce, they, too, must focus on the tastes and preferences of foreign consumers and the quality they demand — that is the lesson to learn from the Australasian experience. The quality of meat and dairy products differs widely by country. It is absurd to expect developed economies to accept the quality of South Asian products.

If South Asian countries desire to improve the quality of their livestock and its produce, they must seek the assistance and guidance of pioneer economies in structurally modifying the environment of producing and processing livestock and its produce — cross-breed technology, machineries, and skill-sets.

To realistically target some decent pace of intra-regional trade, non-tariff measures (NTM) for livestock and its produce must be harmonised, at least within the SAARC countries; this argument is seconded by the values of some of the celebrated ratios that estimate the degree of NTMs, such as the frequency ratio and the coverage ratio. Both these ratios are 100 per cent for Sri Lanka’s animal and animal-related products, which means some form of NTM is being applied on all tariff lines of these products. The situation is similar for India and Pakistan.

The recommendations from the Terrestrial Animal Health Code of the World Organisation for Animal Health (OIE) are scientifically justified and aim to assure the sanitary safety of international trade in terrestrial animals; these should be implemented initially. Few of the recommendations of OIE include diagnostic tests for international trade, disease surveillance, dispute mediation using the good offices of the OIE and model international veterinary health certificates.

Some other constraints to South Asian intra-regional trade are cost of trade, the lack of international geographical indicator (GI) tags for livestock products, relatively higher SAFTA tariff rates, and lack of trade openness; these need to be addressed aggressively. Sri Lanka applies 9 per cent of preferential rates on livestock and livestock produce; within a free trade agreement framework, this is a high figure.

Until these challenges are addressed, and combined with aggressive policy formation for expanding and upscaling the technology and capacity-building routes to come up with quality products, South Asian trade — intra-regional or with the world — will continue to be enervated.

Anjani is a senior research fellow at International Food Policy Research Institute, New Delhi, and Abhishek is a senior econometrician at Dun & Bradstreet Technologies and Data Service, Chennai.

Related Topics