EIDUL Azha provides a natural stimulus to livestock trade in the country, which not only results in massive cash transfers from the urban to the rural economy every year, but also generates huge economic activity in the cities.

Transporters, middlemen, fodder sellers and slaughterers make their share of profits in the run up to, and during, the three-day ritual. The quantum of trade during this one month is so colossal that it helps sustain growth of the sector the whole year round.

The experts think that it was because of this trade that the sector’s annual growth touched a healthy rate of 3.76 per cent this year and livestock’s share in the agriculture economy grew to 58.92pc.

Historically, this trade volume has been undocumented in the country. However, the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) made an assessment of the trade last year and maintained that the event generated $3.5 billion in 2016 — including $2.8bn in livestock trade and $700 million in allied activities such as shopping and transportation.

The role of this massive cash transfer is restricted to poor farmers’ temporary and basic poverty alleviation rather than any permanent change in their economic status

According to the FPCCI, 35pc of households sacrificed around eight million animals that year, including four million goats, 2.7m cows, 800,000 lambs and 30,000 camels. Using a conservative average price of Rs60,000 per cow, Rs20,000 per goat or lamb and Rs80,000 per camel, the total cost of animals comes up to $2.8bn.

Furthermore, transporting animals from villages to city markets and to individual houses cost $47m, whereas fodder collectively cost $35m. These figures subsequently became the basis of the first ever study by the University of Veterinary and Animal Sciences (UVAS): “Study of Economic Activity in Lahore Livestock Market during Eidul Azha in 2016.”

The study produced some beneficial empirical data when it maintained that markets were a combination of farmers—36.3pc— and middlemen—63.5pc. Overall sales remained 59.4pc— 29,077 animals were sold out of 48,876 brought to the market. Around 57pc of the people preferred small animals while 34.4pc preferred large ones.

Goats formed 43pc of the sale and cows 34pc, outnumbering all other options such as sheep, buffaloes and camels. A major shift was witnessed towards large animals because of financial reasons.

The role of this massive transfer, according to experts, is, by and large, restricted to temporary and basic poverty alleviation rather than any permanent change in the economic status of farmers in the countryside. The impact of money is lost because of two reasons: pattern of ownership of livestock and the sheer number of farmers involved.

“Over 88pc of livestock farmers are smaller and landless — raising only two, three animals,” says Talat Naseer Pasha, vice chancellor of UVAS and the guardian of the study.

The financial benefit of the trade depends on their share of the market, which remains negligible on an individual level. But they certainly get a premium price during Eid as compared to sales during any other time of the year.

There is another segment within those farmers called middle-class farmers, who are better aware, raise better stock and also bring their animals themselves to the market, bypassing the middleman. They make good money and their lives improve in the process. However, they are certainly smaller in number if not volumes, Mr Pasha maintains.

“Though the money transfer sounds colossal, but the spread is so far and wide that it fails to make any visible impact in rural lives,” says Abad Khan, a farmer from the Central Punjab region. After all, more than eight million families involved in livestock rearing lay claims over the money.

It is also because a major portion of the income goes into reinvestment, which starts within a month of the sale of animals. The earlier they buy, the cheaper those smaller animals are. Thus, farmers immediately begin buying new calves for the next year.

The profits they are left with normally go to meeting social obligations or returning loans that they had taken during the year. Thus, the role of it for a majority of farmers is limited to poverty alleviation only, Khan claims.

“Beyond small and middle farmers is the reality of big farmers, involved in commercial farming and animal fattening,” says Maqsood Jutt from Okara. These three to four per cent of the people are the main beneficiaries of the trade.

They use huge quantities of feed and silage, generating massive economic activity of their own. The requirement for feed is particularly high during the last two to three months of raising animals.

“Of late, the trade has suffered from two limiting factors: ban on export of live animals and skin and hides, says Muhammad Shabir — a skin trader from the city. It has led to massive drop (up to 70pc) of their prices.

The collecting of hides was feeding an elaborate social network of charity, which now faces the risk of reduced business.

Published in Dawn, The Business and Finance Weekly, August 27th, 2018