Post Breakfast
Avian flu and the rural economy
THE past year has been an unmitigated disaster for the rural economy in Bangladesh. We have seen tens of millions of people affected first by the twin floods and then by the destructive cyclone Sidr. Unfortunately, the ravages of avian influenza have now further compounded the situation.
There were various estimates towards the end of last year about the financial losses created due to the floods -- to the infrastructure, to standing crops and to housing. There were various figures, but the consensus was that it had topped Taka 3,000 crore. Another recent report in the media has highlighted that Cyclone Sidr, according to a joint mission of donor agencies, caused Taka 7.59 billion of losses to industry, commerce and tourism. Sawmills, rice mills, ice factories, brick kilns, tile factories and potteries were among the businesses badly affected by the cyclone in the rural areas of south-west Bangladesh. Details of this report have now been submitted to the Economic Relations Division of our Ministry of Finance. It has also been noted in this report that the situation caused losses to output, income and employment throughout the affected areas. Losses in the non-agriculture productive sector, including small industries, were estimated at Taka 3.6 billion. The report also pointed out that 122,000 non-agricultural establishments in the 12 cyclone-hit districts were affected and this in turn cast a shadow on employment opportunities of more than 2.8 million people.
We have now received the third body blow dealt out by avian flu.
I normally write about issues related to international relations, good governance, corruption and strategy. This week I felt that it was obligatory that I write about bird flu. I am doing so because of several visits that I have undertaken over the last six weeks into the interior of our country. I had the opportunity to attend several meetings in different districts and wherever I went, one aspect was common -- economic depression and a growing sense of hopelessness.
Discussion with the village elders revealed anxiety and frustration with the steep rise in the cost of living, particularly food grains and sources of protein. It was also very evident that hundreds of small entrepreneurs who had taken up poultry farming as a source of living had been wiped out. Many spoke of having started their enterprises with funds received from relatives working abroad. Others mentioned that they had taken out loans from banks, micro-credit agencies or informal cooperative agencies. The ones that had obtained start up capital from remittances received from abroad appeared to be resigned to their fate. They hoped to start again, and not in the too distant future. However, those who had secured money from financial institutions appeared to be very depressed. They spoke of a harsh future, of their inability to repay their loan after the culling of their poultry. Some remarked that they would have to take their children out of school and also sell off their remaining livestock. There were also discussions about how they could be forced to sell off their homesteads and then migrate to an uncertain future in the cities.
I must honestly admit that I had no clue about the severity of the impact of avian flu on the rural economy. This was a hands-on experience, and definitely not a pleasant one.
Consequently, I followed with great interest the remarks made by microbiologists, physicians, small entrepreneurs and economists in a recent roundtable convened in Dhaka towards the end of February. The Poultry Breeders Association of Bangladesh pointed out that Bangladesh's poultry industry of around Taka 10,000 crore had already sustained a loss of Taka 4,000 crore due to this ongoing scourge of bird flu. I do not know if these figures are completely correct. What is true however is the enormity of the devastation associated with poultry farming, mostly located in the rural economy.
It is fortunate that till today, we have not had human infections from the H5N1 virus (transmitted from an infected chicken, pigeon or duck). This has taken place in China as well as in Indonesia. However, there has been a drastic change in our dietary habit. There has been a clear decision among most people, particularly in (comparatively cash-rich) urban areas, to drop poultry and eggs from their diet.
Bird flu first appeared as a threat in Bangladesh in February 2007. It mainly affected very small 'backyard' rural poultry farmers. It was contained with some difficulty. Unfortunately, this time round, it has spread among the larger, more institutionalised poultry farms. As a result, millions of chickens and ducks have been culled and tens of millions of eggs destroyed. By last count, it had manifested itself in 78 upazilas in 43 districts (out of a total of 64 districts). The subsequent culling of the birds after detection of the virus in any farm has been followed strictly according to the prescription endorsed by the FAO. This has decimated poultry farms in China, Thailand and Indonesia. It has now happened in Bangladesh.
The bordering State of West Bengal in India is also going through a similar epidemic but one really does not know which infection came first -- there or in Bangladesh. Nevertheless, one thing is common -- it has hit hard the common man -- both in terms of accessing to a cheaper source of protein and also in their effort to find additional income through a relatively small enterprise.
This crisis for the rural economy has several dimensions. It is not just a question of restoring confidence among the poultry breeders. Future steps will require careful planning, provision of cheaper accessing to funds and availability of better technical training for the poultry breeders. It will need re-assessment of phytosanitary standards and creating provisions for pre-emptive tackling of such a virus.
This time round the relevant authorities have failed miserably in taking adequate precautions and setting in place proper surveillance to tackle this menace. They need to re-examine very carefully all the measures that were undertaken to contain the epidemic and to identify the flaws that led to its failure. In this context, it would be advisable to set up a SAARC committee charged with the responsibility of agreeing on preventive measures that can effectively deal with such situations. It might also be useful to discover cheap vaccines that can be injected to stop the spread of such bird flu. The South Asian government could approach the FAO and the other international financial institutions for resource support in this regard.
Our government in the meantime should take more pro-active steps to re-vitalize the rural economy. This might be achieved by providing bank loans on cheaper interest structure, writing-off outstanding interest on loans given to small entrepreneurs in the affected areas (due to flood, cyclone or avian flu) and rescheduling loans. This will help to generate employment and other economic opportunities. The latent savings in the rural areas have in most cases been wiped out. They need a helping hand. Inability to provide it will hamper economic progress for the entire economy.
We have a very difficult year ahead of us. More likely than not, there will be increase in the price of fuel (including gas) and food grains. On the other hand, there will be shortage of energy and fertilizer. There will also be a slow but steady rise in the level of impatience associated with the dynamics of politics and elections. It will indeed be a hot summer. One can only hope that our present Administration will be able to effectively and meaningfully solve some of these emerging problems.