Livestock sector in Bangladesh requires immediate incentive due to loss experienced by farmers due to COVID-19

More than 70% of rural households in Bangladesh are engaged in production in Livestock sector and businesses through which smallholders and many landless households earn a livelihood.

These smallholders and landless farmers are now facing the hard consequences from the current Covid-19 situation, women are facing the hardest burden. Ever since the first case of COVID-19 was detected in Bangladesh in the 2nd week of March 2020, business activities have begun to decline. The business contexts and market systems are impacted further when the countrywide public holiday/ lockdown was enforced by the government from March 26 as a protective measure.

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However, this has also significantly started to impact on livelihoods, agricultural production and income earning prospects of smallholders’ farmers across the country. There is a need for immediate and mid- term support to help farmers.  Shomosthi, SDC funded project of CARE Bangladesh has conducted a rapid situation analysis which aims to draw attention of the government, donors and private sectors for immediate collective actions.  

“While the support provided by the GoB 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. Many great initiatives are gaining momentum to provide immediate relief to the urban poor, who have been hit hard by the lockdown. The assessment of the livestock sector by Shomoshti sheds light on the impact of the Covid 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.” says Derek George, Deputy Director of Cooperation, Switzerland Embassy in Bangladesh. 

Primary findings showed that the pandemic had started a rapidly declining trend in input demand, forward market trade, and basic supply chain functions. This resulted in a decrease in income from businesses on which thousands of entrepreneurs and producers are dependent for their livelihoods. Dairy farmers are incurring a loss of 189 Million (18.9 Crore) Taka every day as they are unable to sell 4 Million (Forty Lakh) Liter of Milk and forced to sell 3.7 Million (37 Lakh) Liter of Milk at reduced price. There is a sharp fall in income as sales of 90% of retailers, the income of 85% of paravets, and 74% of farmers dropped due to the current market situation.

The average daily customers and sales of 90% of retailers have dropped by 46% and 54% respectively, compared to the scenario before the outbreak of Covid-19. Daily customers have also dropped from 54% to 25% and sales from TK 18,300 to TK 9,977. While 72% of surveyed retailers report that they cannot collect their input on time due to restriction on transport and limited supply from companies.

Livestock Sector

About 97% of entrepreneurs forecast that they will face huge losses if the situation continues for the next 3 months. Among them, 67% of entrepreneurs will incur debts or scale down their businesses and 47% will shut down their businesses. There is an adverse impact on household income as well. 

Almost all respondents (95%) report that their household income has decreased significantly while 50% report increased expenditure in their households. The study findings depict that 65% of surveyed households used their savings, 33% cut down on food intake, and 21% took out loans for managing household expenditure. Household burden of the women have also increased over 61% and most unfortunately domestic violence increased by 28%. 

“The leadership provided by the government in response to COVID-19 is praiseworthy. The rapid assessment helps inform the policy and response plan for all the development and humanitarian communities including donors and the government. 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 context and its potential impact, there are support required for immediate, mid- term and longer term periods. 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.” says Prabodh Devkota, Deputy Country Director- Programs, Care Bangladesh.

There were several recommendations made in the report. Subsidy is recommended on raw milk processing as it will encourage private companies to procure milk from farmers regularly and relaxing terms on providing loan could also be an option to help the farmers to revert back. The surplus amount of the raw milk can be processed as powder milk or other high value products which can be used as relief by the Government and other development partners. It is also recommended to ensure steady supply of inputs by the private sector.  Relaxing restrictions on goods transportation by the government and strict market monitoring by the livestock department will help make market prices of inputs stable.

A 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 provision of soft loan for the livestock farmers through Bangladesh Krishi Bank, RAKAB, commercial banks and micro-finance institutions with a minimum rate of interest having no collateral and longer term of repayment schedule.

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