Why UP’s meat plants have a beef with demonetisation

Poornima Joshi Meerut (Uttar Pradesh) | Updated on January 15, 2018

bl19_Cow protection   -  The Hindu


Several have shut; thousands laid off

Within ten days of the government’s announcement on demonetisation of ₹500 and ₹1,000 notes, meat processing plants in western Uttar Pradesh, already at the receiving end of action by cow-protection vigilantes, have begun shutting shop.

Units that have downed their shutters include MIQ Plant, Al Faheem and Al Saqib, all of which are links of a chain of abattoirs/processing plants in Uttar Pradesh. A majority of those in the meat and meat-related industries are Dalits and Muslims.

Meat exporters and businessmen BusinessLine spoke to estimate that roughly about 20,000 of these workers will be rendered unemployed because of the cash crunch.

Political unifier?

While the announcement and economic impact of demonetisation is too sudden for a political assessment, some, like former Meerut mayor and Bahujan Samaj Party (BSP) MP Haji Shahid Akhlaq, believe it will not sharpen communal divisions in the area, which has been polarised since the Muzaffarnagar riots of 2013. He believes the economic crisis is a unifying factor because it affects the Muslim meat exporter, his Dalit employees and the farmer from whom he buys his raw material.

For the moment, anxiety and fear is widespread in this industry, which is closely connected to the farmer and helps him by purchasing unproductive animals. Akhlaq, who also owns the multi-crore Al Saqib Meat Exports, says his meat plants are shut and he has had to lay off 1,000 workers.

Along with Punjab, Maharashtra and Andhra Pradesh, Uttar Pradesh is among the top buffalo meat-producing States. Statistics from the UP Animal Husbandry Department indicate that the State contributed 7,515.14 lakh kg of buffalo meat in 2014-15. While meat from sheep, goat, pigs and poultry is consumed domestically, buffalo meat is mostly exported.

Trade estimates indicate about 1.1 million tonnes of buffalo meat was exported, earning over $3.2 billion in forex. In all, the industry employs about 20 million people.

In Meerut, Yusuf Qureshi discusses his problems with friend and wholesale handloom trader Aditya Prakash Sharma. Both agree that the cash crunch will not ease for some months, and explain the workings of their trade and the criticality of cash.

While the exporters get paid by cheque — as the meat is exported to SouthEast Asia, Saudi Arabia, etc, — purchases are in cash. The animals are procured from small traders, who, in turn, buy them from farmers, or from mandis in places such as Sardhana and Lavad. While the exporters pay the traders in cash, the latter’s payment to the farmer, too, is in cash.

“Our unit is closed. We are not able to pay either the workers or the traders who supply us. The farmer is not able to sell his animals. It is a really bad time,” Yusuf Qureshi said.

Haji Akhlaq does not foresee any immediate solution. “My bank manager told me I will not be able to access the sum I require for some time. We have shut our factory but the running costs still have to be paid. This is a catastrophe,” he says.

Published on November 18, 2016

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