Wednesday, June 14, 2017

Animal Market Regulations: Some Immediate Concerns



D Dhanuraj and Rahul V Kumar*

India is predominantly an agrarian economy with a large section of its population depending on the sector for their livelihood. Cattle form a vital part of agriculture and allied activities. Various estimates suggest that India has a large bovine population with approximately 303 million cattle and water buffaloes alone. More than 60 million small and marginal farmers own a major part of these animals, which directly aid agriculture and form an essential part of the dairy and meat industry. The meat producing industry depends mostly on the unorganised sector for sourcing the products. This unorganised sector includes animal markets as well as slaughter houses. Estimates put the number of slaughter houses in the unorganised sector in India at 25000. The meat industry in India is estimated at approximately $15000 million. Various departments under the Ministry of Health and the Ministry of Commerce regulate the functioning of these markets.
It is in the context of these huge business prospects in the meat industry in India that the ‘Prevention of Cruelty to Animals (Regulation of Livestock Markets) Rules, 2017’ needs to be examined. The new regulatory framework attempts to regulate animal markets by introducing a set of rules restricting the sale of animals in these markets. Animal market in India is largely in the form of an open market with little formal controls. The rule provides a loose definition of a market to accommodate this informality. Accordingly, an animal market is defined as, “… a market place or sale-yard or any other premises or place to which animals are brought from other places and exposed for sale or auction and includes any lairage ... slaughter house ... and any place adjoining a market ... parking areas by visitors to the market ... animal fair and cattle pound where animals are offered or displayed for sale or auction.”
As such, the new regulations on animal markets could be a crucial step in formalising the markets and making efficient allocations within a formal structure. This could be considered as a novel initiative to reform the animal markets. However, we need to probe more into the functioning of such markets to understand the effect of the new rule on business transactions. An efficient market should be allowed to function freely with broad rules to ensure effective transactions between buyers and sellers. In the least, entry and exit from these markets should be convenient and prices tending towards competitive levels.
The Regulation of Livestock Markets Rules, 2017, is likely to create more hurdles towards a competitive market structure and bring in undue controls disrupting the existing animal markets. For instance, the rule constitutes the creation of a new bureaucratic framework  called the Animal Market Monitoring Committee, which will make it difficult for poor farmers to sell animals in these markets. A major hurdle is that such animals cannot be sold in the markets for the purpose of slaughter. Selling of cattle between the states is also restricted. Proof of sales (five copies to be maintained by not only the buyer and seller but also the local government officials, Chief Veterinary Officer and Animal Market Monitoring Committee) as well as documents to prove farmland ownership rights will be monitored by the authorities under the Animal Market Monitoring Committee for each sale of animals. These restrictions and documents make it extremely difficult for the small and marginal farmers to dispose of their old cattle stock to the meat producers through animal markets. This, in turn, is likely to affect not only the livelihood of these farmers but also the large meat export industry in India.

In India, multiple laws govern animal trade and various agencies monitor the trade at different levels. Since the State Governments have a major say in the matter, animal traders have to deal with the Central, State and Local Government legalisations. While each State Government has defined its own rules, governmental departments including health, Food Safety and Standards Authority of India (FSSAI), Pollution Control Board, Police etc monitor the trade. What matters the most are the rules and regulations that restrict opportunities for small and medium enterprises. It is easy to find fault with them, as they may not have the wherewithal to oblige to conform to the technical requirements that the law stipulates. In a way, these issues are similar to the challenges faced by street vendors. There is a need to study the matter carefully so that the smaller players could also make a decent living doing a decent job. These rules seem to be restricting them from trade and increasing opportunities to harass them. 

D Dhanuraj is Chairman of Centre for Public Policy Research and Rahul V Kumar is Research Consultant at Centre for Public Policy Research. Views expressed by the authors are personal and does not represent of CPPR

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