Livestock sector requires incentives immediately: Shomosthi

Shomosthi, a CARE Bangladesh project funded by the Swiss Agency for Development and Cooperation, has conducted a rapid situation analysis which aims to draw the attention of the government, donors and private sectors to supporting smallholder farmers.

Ever since the first case of Covid-19 was detected in Bangladesh, in the second week of March, business activities have been declining. 

The business contexts and market systems have been further impacted by the Covid-19 shutdown – enforced by the government from March 26 as a protective measure. 

This has also significantly started to impact the livelihoods, agricultural production and income earning prospects of smallholder farmers across the country. There is a need for immediate and mid-term support to help farmers. 

More than 70 percent of rural households have been engaged in livestock-related production and businesses through which smallholders and many landless households earn a livelihood. 

These smallholders and landless farmers – especially women – are now facing the hard consequences of the current Covid-19 situation.

Derek George, Deputy Director of Cooperation, Embassy of Switzerland in Bangladesh

"While the support provided by the Government of Bangladesh and development partners to the country's export sectors 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," said Derek George, Deputy Director of Cooperation, Embassy of Switzerland in Bangladesh.

"The assessment of the livestock sector by Shomoshti sheds light on the impact of the Covid-19 crisis in rural areas. 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 showed that the pandemic has started a rapidly declining trend in input demand, forward market trade, and basic supply chain functions. 

This has resulted in a decrease in income from businesses on which thousands of entrepreneurs and producers depend for their livelihoods.

Dairy farmers are incurring losses of Tk18.9 crore every day as they are unable to sell 40 lakh litres of milk and are forced to sell 37 lakh litres of milk at a reduced price. There is a sharp fall in income as sales of 90 percent of retailers, the income of 85 percent of paravets, and 74 percent of farmers dropped due to the current market situation. 

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

The number of daily customers has also dropped from 54 percent to 25 percent and sales from Tk18,300 to Tk9,977. Meanwhile, 72 percent of surveyed retailers report that they cannot collect their input on time due to restrictions on transport and limited supply from companies. 

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

Almost all respondents, 95 percent, report that their household income has decreased significantly while 50 percent report increased expenditures in their households. 

The study findings depict that 65 percent of surveyed households have used their savings, 33 percent have cut down on food intake, and 21 percent have taken out loans to manage household expenditures. The household burden on women has also increased over 61 percent and most, unfortunately, domestic violence increased by 28 percent. 

"The analysis and evidence offer strategic insights for immediate attention and quick actions to help smallholder farmers across the country. While looking at the evolving Covid-19 context and its potential impact, support is required for the immediate, mid- term and longer term period," said Prabodh Devkota, Deputy Country Director- Programs, Care Bangladesh.

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 a longer-term poverty trap," he added. 

There were several recommendations made in the report. Subsidies are recommended on raw milk processing – as they will encourage private companies to procure milk from farmers regularly – and relaxing terms on providing loans could also be an option to help the farmers to recuperate.

The surplus amount of raw milk could be processed as powdered milk or other high value products which could be used as relief by the government and other development partners. 

It is also recommended that a steady supply of inputs by the private sector be ensured.  Relaxing restrictions on goods transportation by the government and strict market monitoring by the livestock department will help stabilise market prices of inputs.

Multipurpose cash assistance for the farmers could be a needed intervention to buy necessary inputs to continue their farming through the pandemic. 

There should be a provision of soft loans for livestock farmers through Bangladesh Krishi Bank, RAKAB, commercial banks and micro-finance institutions with a minimum rate of interest, no collateral and longer terms for repayment.