Post COVID Challenges in Livestock trade  : PashuBajaar E commerce gearing up to provide a solution

Post COVID Challenges in Livestock trade : PashuBajaar E commerce gearing up to provide a solution

Post COVID Challenges in Livestock trading : www.Pashubajaar .com an alternative

Context

India has over 535 Million livestock (As per 20th Livestock census) of which over 300 million are large ruminant (Cow/Buffaloes) and 225 million small ruminant (Goat/Sheep). A large part of these livestock are traded live for rearing and processing pruposes. As per estimate, around 39% of livestock traded annually to meet rearing, breeding and meat purpose. Around 97% of global livestock is in Asia and India and china holds over 90% of it. On the other hand the pet population in India is somewhere over 15 million in 2016. On an average, estimates hold that 600,000 pets are adopted each year; according to Euro-monitor International, India has the fastest growing pet market in the world. Rising pet ownership rates have created massive demand for pet food and health products as well as accessories, and nowadays the Indian pet market is a USD 800 million strong industry estimated to be headed towards double digital growth in the coming years.

However livestock trade by n large has remained in the domain of informal sector with high cash dominance, inefficiency in procurement, traditional non transparent pricing methods and that leads to significant financial, technical, social and environmental issues at various nodes.

Livestock are largely traded through physical haat/mandies in India and seriously lacks even basic infrastructure. These livestock madies are largely managed by traders or auctioned by Municipalities/Gram Panchayts and management authority (Owner) charges a fee in the range of 50 to 150 for small ruminants and INR 500 to 1000 by large ruminants.  Mandies are characterised by dominance of small traders and aggregators , who collects it from farmers and then supply it to large traders/meat shops. System has worked for centuries and have its own merits but changing context of technology, production resources , cost of production and migration , a syetm change intervention seems need of time. Pandemic like COVID, high chances of zoonotic diseases and changing aspirations of next gen also augments some system change requirment.

Major problems of present system –

A.     Financial /Economic – In present process of mandi based livestock marketing where physical aggregation happens at a point , Farmers hae to travel 3-20 Km with their livestock , which requires expenses of 100 to 1000 Rs for small and large livestock respectively. As farmers normally have one or two saleable livestock at a point of time, cost per unit gets significant besides indirect cost wage loss or other engagements jeoparadised. Besides there is probabiluty of livestock not getting sold and in such cases have to bear the back to village travel cost. This sometimes also force farmers to sale their livestock in lower cost especially when competition in market (number of buyer & seller ratio is low) is less. Traders also sometime create nexus to exploit farmers as traders are from same area and most foten known to each other. This happens more in small mandies where outside traders hardly visit.

Other way out for farmer is to sale it to local tradres who transport it on a fixed day of mandies in somewhat agrregated form. They collect it from farmer normally by bike or by bicycle (In small livestock case) or by small vevicle for large livestock.. They keep a small enclosure to keep such livestock and manage feed & care and transport in bulk to identified mandies on a particular day of Mandi.

IN this process , Traders have high cost of acquistion. As there is lack of information of buyer and seller at particular time period and geography, Traders have to visit almost each livestock farmers house and identify salable livestock. This cost of locating seller finally reduces cost of acquisition. Traders have to put cost of locating seller and then other problem starts with fixing price of livestock , which being on estimated basis , takes a lot of time and energy (Sometimes multiple visits) , which again enhances cost of acquisition.

Besides such cost of locating seller, Mandies do charge fees for selling or purchasing livestock for place ans management. As mentioned above, this cost is normally taken from both buyer and seller in various proportions. Fees and charges in such mandies are also arbitrary and different for regualr visitors (traders) and occasional visitors (purchasers). Although most of Mandies give some sort of receipt but exact data of sale and purchase are hardly available.

B.     Technical/Physical problems – Present physical aggregation of large number of livestock with absence of health check up and kept in tight/close proximity has high chances of spread of deadly diseases. As livestock are stressed in such condition without proper food, absence of proper shed , water and often filthy conditions , chance of spread of diseases are very high and most often encountered.

Physical livestock mandies also had problems of space and basic infrastructure, which hardly seems to improve in near future, Besides seasonality like rainy season poses a serious threat to such space as water gets logged in most of such mandi places and roads to reach such mandies, which may invite and complicate further problems.

Physical mandies may function but pressure on it can be gradually replaced by virtual markets and mobile/web based aggregation of data as pentration of mobile has been significantly high and can be managed easily.

COVID and other zoonotic as well as infectious diseases can also be controlled through such process

Infrastructural issues - 

1. 70% of haats are organised in a filthy premises area and had a high chance of diseases spread and contamination. 

2. Basic facility for human and animal like drinking water, shades and animal overnight store facility is available with only 20% haats in India 

C.     Gender & Participation problems

Such mandies are largely male dominated especially in U.P, Bihar, M.P, Rajasthan where less than 1% women participate in such mandies. Most constraining factor for women is assessing the price, which as of traditional process require a significant trial and error and in turn gets tectonic assessment right only through practice for a longer period of time.

Participation issues -

1. 93% of seller and buyer interviewed are traders and only 7 % direct participation of livestock farmer was observed. Participation differed in various states and haats ( Sates 3% to 21% and Haat variation 1% producer participation to highest 25%) 

2. Women participation in livestock haat is less than 0.01% percent with very high difference between states. Highest women participation was observed in Maharashtra and lowest in U.P 

D.    Low Social perception of livestock Trading as occupation –

Socially livestock traders are seen as low level of profession across India and gets easily connected with “Butchering” , which in turn is considered a degraded profession. As whole value chain of livestock farming, especially small livestock like Goat/sheep involves low formal educated people with mostly unclean dress and face, profession gets lowly ranked and is not an aspirational business for rural youth especially next gen.

On the other hand there exists a high entry barrier in this market because community by exclusion from mainstream people gets very close and has been more of traditional business especially at small trader level , who operates in a territory of say 20-30 villages. There are variations in such territory based trader monopoly, it has been seen high in Rajasthan, Madhya Pradesh whereas low in tribal dominated districts.

As stated above, its ironical and contrasting to note such large business managed without much of technology, low efficiency, multiple technical issues and yet performing a large role in rural livelihoods.

There seems a urgent need to realign some of trade terms and process and use latest information technology, health care assessment, objective pricing system to transform it with efficiency and transparency to late it grow. There have been successful examples of getting such process enhancement done in milk, broiler and layer farming but same has not penetrated to Livestock and sheep production and marketing system. 

Virtual Market Like Pashubajaar and its vision and operational process

Vision -To Be India’s most trusted and reliable cost efficient livestock trading platform and replicate experiences across globe to lead the change

Mission -Enhancing efficiency of Livestock trade & marketing through integration of technology to establish transparent and efficient pro poor livestock trading

Objectives

1. Enhance farm gate price by 10 to 20% through enhancing efficiency of existing market channels

2. To enhance transparency in livestock trade (Small ruminants) by promoting quality grading live body weight based pricing

3. To enable community to easily sale and purchase livestock by creating web based information exchange system

4. To promote technology laced livestock traders to uplift social perception of livestock trading business

Building a win win proposition

Pashubajaar effort in fact is on developing a standardized system of Livestock pricing by and large acceptable to all players. Small ruminants like goats/sheep can have a basic price set on availability of meat and addition and reduction can be made by body scoring, sex, age, kidding and milk yield like factors. Similarly in case of milk and pet animals’ milk, breed, age, grading holds key to decide /fix price for trading.

Such standardization and information collectivization has following inherent advantages for the parties involved –

(A) For Livestock farmers –

? Easy and quick assessment making less prone to treachery

? Reasonable price and no fear of loss

? Women friendly and can reduce gender biasness in Livestock sale

? Can easily estimate feeding cost and output received (By comparing pre and post price at regular interval)

? High quality Livestock can get better price

? Advantages of seasonal meat price fluctuation can be passed on

(B) For Traders

? Reduction in bargaining time

? Easy access to collective information of marketable Livestock and hence higher business operation cycle

? No need of physical presence to share price of Livestock 

? Quality segregation will be possible

? Availability of high quality Livestock and bucks will be high

? In long term a more dependable relation for trading

Strategy - As discussed above, Pashubajaar endeavor to work on pricing standardisation and information collection and dissemination system of saleable goats. Proposed process focus to develop local market system for sustainable basis and provide bulk high price market linkages through central marketing units. We propose three tier structures to facilitate local and collective market facilitation –

Operational units

To achieve this we follow following phases and steps –

Phase I - In new clusters

Major activities –

? Selection & Training of Pashu Sakhies/market facilitator on live body weight based pricing technique

? Initiation of payment for price assessment

? Initiation of registration at village level for livestock sale and purchase and system for collectivization at cluster and central marketing unit

? Test and refinement of price assessment technique

This phase focus upon awareness building on live body weight based Livestock marketing. At each village level Pashu Sakhi or market activist will be trained on live body weight price estimation technique (As per standard manual developed). In field these village based market activist will initiate a digital weighing of Livestock (Evening, early morning and afternoon body weight without feed and water). A price will be declared based on developed assessment formula taking care of live body wieght, grading, sex, age and milk yield (in case of goats). Each Pashu Sakhi or market activist will have following basic infra structure to achieve this process –

1. Digital weighing machine (shared by two Village)

2. Small Livestock enclosure

3. Price declaration form with quality details

Pashu sakhies will register willingness of Livestock farmers to sale the livestick on declared price and a registration fee of Rs 5 shall be collected from Livestock owner. This registration will be valid for 30 days and in case Livestock are not sold in this time period, registration fee will be returned back to Livestock owner. However Rs 5 as Livestock price assessment charge will be levied and that will be direct income of Pashu sakhies as cost recovery towards investment made. Such registration information will be sent to local project office within 2 days and from project office on weekly basis to the central marketing unit (At The Pashu Bajaar, Lucknow).

First phase last for intial six months wherein adjustment in pricing technique and observation on actual price realization by Livestock farmer will be studied to plan for next phase. This phase used to be critical to fine tuning pricing technique, explore linkages for bulk sale and supply logistics related issues.

Major targeted outcome of this phase are –

(i) Standardised and fine tuned pricing technique

(ii) initial trial of data collection system and collectivization process

(iii) Assessment of volume of Livestock and quality to assess matching purchaser

(Iv) Exploration of potential market for bulk Livestock supply with special focus to rearing Livestock and institutional market.

Phase II – In existing work clusters  

Phase II area starts with declaration of per kg live body weight for procurement (to be revised quarterly) based on demand order received for goats. As strategically decided, marketing of only selected quality Livestock & bucks will be targeted through central marketing units (estimated 10% of total sales of the area) and this will focus on price correction measures through providing alternative market channel. It is estimated that another 20% selected Livestock and bucks shall be sold locally. However major sales channel will remain through informal system and only impact this process will target is to align better price to farmers by local traders due to reduction in indirect cost and alternative channel available to Livestock farmers. 

Dr.N.jeyaseelan --------

CEO, Virutcham Academy for Social Changemakers LLP | Helping PEOPLE & their BUSINESSES grow with a PURPOSE | 9244865356

4 年

Great sir. Congrats.

Rakesh Patralekh

Clean Energy - EV Enthusiast - Philanthropist 'Longway to go'

4 年

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