Returns from livestock are high, but overall extent of households rearing livestock has been falling, according to a study.
The study, conducted by Bangladesh Institute of Development Studies, revealed that inadequate livestock services, high costs of fodder and other factors could have set this trend.
However, unlike India, the rates of returns from raising cattle in Bangladesh are high and positive, the state-run think tank showed.
The study also found that appreciation of the value of cattle was the major contributing factor for the large positive returns.
The existence of cattle market where they can be freely traded for slaughtering or production of milk or for any other purposes is the key to high positive return in Bangladesh, the think-tank said.
The study titled 'Why do Bangladeshi cattle yield high positive returns?' was released in September.
The study show that rate of appreciation of the cattle value is high in Bangladesh.
In 2011, the value of bullocks and milk cows appreciated by 55 per cent whereas in 2015, bullocks and milk cows appreciated by 51 per cent and 28 per cent respectively.
Apart from this, it also disclosed that the average return from raising livestock (bullock/milk cow) is positive in Bangladesh.
The average annual return from raising bullocks was 8.0 per cent in 2011, but it went up to 14 per cent in 2015.
The average annual return from raising milk cows is much higher than the return from raising bullocks.
For instance, milk cows generated average annual return of 39.5 per cent (about five times higher than the returns from bullocks) in 2011 and 46 per cent (more than three times higher than the returns from bullocks) in 2015, it further added.
The study said rates of returns are maximised when households raise only one cattle. Profits start to decrease as number of cattle (herd size) increases. This is may be due to the space problem or limited grazing grounds in rural areas.
Proportionately more poor households raise livestock, but poor households get lower returns from raising livestock than their rich counterparts. This may be explained by relatively lower quality of the cattle owned by poor households, as per the study.
The study suggested that successful asset transfer-based anti-poverty programmes in Bangladesh are bundled up with provision of livestock services and transfer of cash.
Since rates of return are higher for poorer households, the possibility to reduce poverty through livestock transfers still remains, it added.
Talking to the FE, Dr Kazi Ali Toufique, Research Director, BIDS, who led the research team, said better-breed and hybrid cattle can help reduce poverty in society.
Relatively poor performance in the livestock sector despite high rates of returns is a puzzle for Bangladesh, he said.
Supply side constraints such as poor quality of livestock, livestock services, milk market, shrinking grazing ground, high fodder costs etc. are responsible for underperformance of the sector, he said.
Asset-transfer based anti-poverty programmes should be carefully designed to include other complementary services such as veterinary, credit and so on, Dr Kazi said.