He said that if social policies impede the workings of the livestock market, the impact on the economics of livestock farming could be considerable. These costs must be factored in for appropriate choices to be made.
The CEA said it must be recognised that the economics of livestock farming, and hence the fate and future of this source of livelihood, will depend critically on the terminal value of assets, in this case the no-longer-productive livestock.
"If social policies drive this terminal value precipitously down, private returns could be affected in a manner that could make livestock farming less profitable," he said.
The declining terminal value arises both because of the loss of income from livestock as meat and the additional costs that will arise from having to maintain unproductive livestock, he said.
But there is more, he said, adding that "it is possible that social policies could affect social returns even more adversely. Stray cattle, and a lot of it, will have to be looked after, otherwise diseases (foot and mouth) could spread, leading to health hazards and social costs".
The lecture comes against the backdrop of government banning sale and purchase of cattle from animal markets for slaughter.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.