With the demonetisation exercise severely hitting their operations, meat exporters have asked the government to lift curbs on cash withdrawal and related transactions to help them pay the traders as well as small and marginal farmers from whom they purchase buffaloes for slaughter.
The All India Meat & Livestock Exporters Association (AIMLEA), in a representation to the commerce ministry, complained that the withdrawal limit of Rs.50,000 a week from the current account was not enough for these exporters to pay the entire chain of people – including traders (middlemen who purchase the buffaloes from farmers) and subsistence farmers - for the bovines, official sources said. They added that AIMLEA wants cash withdrawal and transaction curbs to be either done away with or eased. The commerce ministry has forwarded the representation to the finance ministry for further action. According to the AIMLEA, farmers who sell the bovines are mostly poor and without any bank account, and therefore, they are paid in cash, which they in turn use for activities including purchasing seeds and fertilisers and running their households. The buffalo meat sector in the country is largely unorganised. The regulators for the sector include the Agricultural & Processed Food Products Export Development Authority that falls under the commerce ministry’s jurisdiction as well as the Food Safety & Standards Authority of India (under the health & family welfare ministry).
Similar complaints from exporters in other sectors, on the problems that they are facing due to the demonetisation policy, are being compiled, sources said, adding that the commerce ministry will soon hold discussions on the issue with representatives from various Export Promotion Councils. An August 2016 report by ICRA Ltd said, “Indian buffalo meat exports have grown at a Compound Annual Growth Rate (CAGR) of 29 per cent, from Rs.3,533 crore in FY08 to Rs.26,682 crore in FY16, enabling (the country) to overtake its close competitors Brazil and Australia to become the largest exporter of buffalo meat/beef, accounting for nearly 20 per cent of the world’s total buffalo meat/beef exports (in volume terms).”
Buffalo meat has been the highest agri-related export item from India for the past two consecutive years and its contribution to the total export revenues of India has almost doubled to 1.56 per cent in FY2016 from 0.76 per cent in FY2011, it said. ICRA said it estimated that buffalo meat export revenues will grow to about Rs.40,000 crore by FY21, at a CAGR of eight per cent. The Indian buffalo meat sector has boomed thanks to the buffalo population increasing to 108.7 million in 2012 (as per the 2012 all India livestock census) from 43.4 million in 1951.
