An unintended consequence of poor performance of Pakistan’s traditional exporting sectors has led to a push for forex earnings from all possible sources. Indeed, exploration of various alternate avenues is a noble task. However, promotion of alternate exporting industries is often not accompanied by a cost and benefit analysis of the externalities created.
Take for example, halal meat bandwagon. For years, local industries were chided by academia for not following Malaysia’s suit in capitalizing on the global boom in demand for halal meat. Like most stories of regional jealousy, policymakers and local corporates finally heeded the call during the past decade when they realized that bovine worshipping Bharat had become one of the biggest global players on the scene.
A mix of neighbourhood envy and piety pushed local industry to scramble for the meat (no pun intended). Major business groups that wield considerable policy influence have entered the market in past 5 years that hitherto used to be the realm of medium-sized traders. Recent news of Chinese investors expressing interest in M&A with local players also indicate that the domestic industry may be close to leapfrogging the growth curve in coming years.
However, the enthusiasm surrounding meat and livestock industry misses the externalities involved in production throughout the supply chain. Take for example the water consumption involved in raising livestock for meat production, estimated using a concept known as “water footprint”, similar to carbon footprint.
But first, a little about water footprint, WWF defines water footprint of a product as the total volume of freshwater used to produce it, measured over the full supply chain. The concept while simplistic is useful in analysis since it accounts for water consumption volumes by source and polluted volumes by type of pollution.
According to baseline estimates by WWF, water consumption in production of 1 kilo of beef stands at 15,415 liters. To put this into context viz other traditional exporting commodities, manufacturing of a shirt requires just 2,495 litres of water. Thus, basic garment such as a shirt requires about 16 percent of water compared a kilo of beef.
Mind you, the estimates are based on global averages. In absence of local research and inefficient consumption practices in the country, it may be safe to assume that production in Pakistan may gorge up even higher levels of water.
This space is neither sufficient nor qualified to issue a judgment on whether the export-oriented meat production industry will prove to be a boon or a bane for Pakistan. However, one must highlight that policymakers have only recently begun to appreciate that the traditional water-thirsty crops may be doing more harm than good to the economy.
Researchers have noted that Pakistani agro-based exports are subsidizing European middle classes by up to $2 billion annually by exporting products that do not account for the cost of water consumed during production. Arguably, livestock has an even bigger water footprint. Therefore, there is an evident need to invest in research and explore externality costs of meat industry before it becomes too big of a vested interest for the policymakers to hold accountable.
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