Study on effects of
price de-capping on meat
and milk in Punjab

USAID-PUNJAB ENABLING ENVIRONMENT PROJECT

Scope of Work

Study on effects of price de-capping on meat and milk in Punjab

 1.     The Punjab Enabling Environment Project

The USAID - Punjab Enabling Environment Project (PEEP) is a five-year collaborative effort to assist the Government of Punjab in improving the business environment for the horticulture, livestock, and dairy subsectors. Since, conducive business enabling environment supports investment in businesses, and contributes to economic growth, PEEP’s interventions are designed to improve the business environment by supporting policy and regulatory reforms through private sector-led advocacy. These reforms are expected to spur new investments leading to new employment opportunities in the targeted sub-sectors. The implementation period of the project is five years (2014-2019). Besides, advocacy for policy interventions, PEEP is engaged in institutional capacity building of relevant public and private sector organizations for improving their efficiency in service delivery.

1.1.  Project Development Objective(s)

The major objective of PEEP is to spur private sector investment in horticulture, livestock and dairy sub-sectors, through creating a conducive business enabling environment and institutional capacity building of related stakeholders resulting in creating new employment opportunities for people associated with these sub-sectors. The expected results of PEEP’s are to leverage $180 million private sector investment and help create 15,000 direct and indirect jobs through various interventions in livestock, dairy and horticulture sub-sectors.

To achieve the above-mentioned objectives, PEEP has the following three project components:

Component 1: Accelerate advocacy for policy, regulatory and institutional reforms through the private sector, leading to early adoption, approval and implementation of the reforms;

Component 2: Support institutional capacity building to sustain reforms; and

Component 3: Mobilize private sector investments in horticulture, livestock and dairy sub-sectors through improvement in the BEE.

 2.     Proposed study on effects of removal of livestock price caps

2.1.  Background:

The livestock sector plays a major role in national economy. Livestock constitutes 11.1 % of the total GDP and accounted for about 58.9 % of agricultural value added at the micro level.  It employs about 30-35 million people in the rural areas who rely on livestock for approximately more than one third of their income. Agriculture sector of Pakistan is based on traditional methods of production. Being a country that has majority rural population and agriculture-based industry, livestock farming plays a pivotal role in the economy of Pakistan. Livestock production is an integral part of Pakistan's agriculture sector and plays a vital role in national economy. It is central to the livelihood of the rural poor in the country and can play an important role in poverty alleviation and can uplift the socio-economic conditions of our rural masses. Unfortunately, in Pakistan there is still a gap in meat industry. Livestock also serves as a security against crop failure in some agricultural systems, such as arid agriculture.

In Pakistan, meat production systems are based on traditional management practices and are inefficient. Currently, meat sector in Pakistan is working on an informal basis from animal raising to meat selling. Majority of the farming is done on subsistence level. Farmers focus on raising animals for getting meat and milk products mainly for their own consumption and to get cash income through small scale sales. There are very few progressive farmers, which are running the business of dairy farming in a professional manner. But still there is no meat production model at small and medium level. Sacrificial occasion market is the only factor of success in traditional fattening systems.

A study commissioned by PEEP on “Effect of Price Capping on Livestock Farm Economics” in 2017 revealed that the meat price capping is another major factor that affects the economy of small poor livestock producers. In the current market structure, animal traders (beopari) purchase animals from the rural areas and sell these animals to the animal markets in the urban areas. Butchers purchase these animals from animal markets and slaughter them for selling meat in rural as well as urban areas. Butchers act as meat traders and dominate the meat market both in rural and urban areas. There is a huge shortage of slaughter animals for meat supply. The animal growth cycle needs a certain period to fill the gap made by slaughtered animals but rapid increase in daily use, change in consumption patterns, use of more meat in food table and economic up lift has increased the demand by many folds resulting in slaughtering of premature animals, poor carcass quality and quantity wise and increase in price.

The study also showed that the main reason of low meat production is the policy of price capping of meat, which negatively affects the meat animal market. The producer (farmer) is not able to get reasonable profit from its meat animal, that’s why there is no increasing trend for meat animal production in future. De-capping of meat prices in local market is a prerequisite to improve the meat production system and its supply in the country. This will be a way forward to improve the product’s supply in the country and to increase the country’s share in the global Halal food trade. There is a need to establish linkages among all the players involved in meat industry (from producer/farmer to meat animal traders to meat processor (butcher) or meat processing company to meat exporters as well as livestock departments for better services and innovations in meat industry.

At government level following measures were taken in the past:

• On August 24, 2016, Agricultural Commission constituted a Sub-committee on Livestock and Dairy Development Department (L&DDD) issue.
• On September 16, 2016, Agriculture Department on the direction of Chief Minister, Punjab constituted a sub-committee on price de-capping of milk and meat prices which recommended that:
  • Immediate price de-capping on milk and meat prices.
  • On January 1, 2017, another meeting of Agriculture Commission held and approved the de-capping of milk and meat prices and Agriculture Commission requested L&DDD to initiate a summary for Chief Minister, Punjab.
• Currently, milk and meat prices are fixed by District Administration under price control & prevention of price profiting and hoarding Act, 1977.

Potential impact of price de-capping may be as under:

a)       The livestock produce (milk & meat) will obtain adequate value in the market, leading towards rural prosperity and poverty alleviation as 89% livestock farmers are landless, subsistence level and poorest of the poor.

b)      Investment will be attracted, which will further trigger production leading towards job creation in rural and semi-urban areas; that will address the rural urban migration as well.

c)       Enhanced growth will meet domestic demand leading towards tapping export market, generating foreign exchange, strengthening of supply chain ultimately minimizing adulteration issues and avoiding black market economy.

d)      Consumers will get healthy food items of premium quality at competitive rates in medium to long term.

e)      This will develop business model in dairy/meat industry as per analogy of poultry sector resultantly farmers will invest in developing value chain, processing and value-added products.

2.2.  Justification of Study

In Pakistan, the livestock farmers are facing many problems. However, the most crucial factor which directly and adversely affects these poor farmers is price fixation by the relevant authorities presumably disregard to the cost of production born by the producer. This scenario discourages the Livestock producers who adopt many unethical business practices to meet their ends for improving the profitability. Similarly, in meat sector, either meat of low quality or dead animals has become a common practice in the wake of price fixation. This scenario has unlimited repercussions related to health and wellbeing of end consumers.  Likewise, the prevailing situation does not encourage the livestock farmers for value addition which can enhance their income many folds from the same produce. The findings of the study will provide an evidence based information for policy makers to decide the features of meat and milk policy for the development of the livestock sector.

3.     Study Objectives

Following are the objective of the proposed study:

• To collect the information on the prevailing market conditions of meat and milk in the perspective of price fetched by the farmers and paid by the consumers.
• To collect data on meat and milk marketing infrastructure and the market players having critical role in deciding the cost of production and sale price of the meat and milk.
• To qualitatively validate the information through the focus group discussions and interviews.
• To analyze the data collected through survey and draw inferences on the impact of pricing of meat and milk on the producers and consumers.
• To study and document, the periodic change in vertical market linkages to facilitate the livestock farmers for business purposes. 
• To document and recommend the policy framework on price fixation of meat and milk supported by empirical evidence and field data.

4.     Scope of Work

The scope of this consultancy is to conduct Price De-capping survey and find out if the De-capping will be feasible and viable solution for market forces to determine the market prices of meat and milk as is in the case of poultry and other commodities. The consultant will prepare a “Price De-capping survey report” using appropriate qualitative and quantitative methods to provide detailed information on key variables and indicators that will be measured periodically.

5.     Methodology

A mixed method study will be designed to achieve the research objectives. The empirical data will be collected from all stakeholders including Livestock farmers, middle men, retailers, opinion leaders and economists. For quantitative study, a questionnaire survey (n=900) will be conducted from nine divisions of Punjab. For quality study, focus group discussions (FGD) (n=4) and in-depth interviews (n=45) equally distributed from divisions of Punjab will be conducted. The quantitative data will be analysed by using SPSS and AMOS software, whereas the qualitative data will be analysed through nVivo software by using thematic analysis.

5.1.  Data Collection and Analysis

i)        The consultant will develop and pre-test the survey tool which will be used for the study

ii)      The consultant will plan, design, and implement training of enumerators and supervisors.

iii)   The consultant will collect primary data using pre-tested questionnaire from the individuals selected in the sample based on the statistical sampling techniques.

iv)    After the price de-capping data is collected, the consultant will design and implement a database to hold all the statistics to run analysis in the future. The database should be of a type that will allow easy entry, retrieval, amendment, storage and backup of data.

v)      A mixed data collection strategy will be deployed to uncover quantitative and qualitative insights and findings in price de-capping. 

vi)    The consultant shall provide detailed analysis including the descriptive statistics (averages, standard deviations, variances, and percentages), frequency tables, bar charts/pie charts along with the interpretations for each indicator of the tool. The consultant may use appropriate software to carry out detailed analysis of the data.

vii)  The consultant will collect data from the stakeholders in the targeted districts.

5.2.  Sampling

The total sample of the study is following:

Sr. No.	ToRs	Research Methodology	Respondents	Quantity	Sampling details
1	Impact of demand and supply chain of livestock produce	Mixed method	Producers, retailers and consumers	900	100 from each divisional headquarter
				45	5 individual interviews from each divisional headquarter
2	Deviation/impact on inflation rate	Qualitative	Economists and members of price control committees	40	Officials of State Bank of Pakistan, other bankers and other academic researchers in major cities like Lahore and Islamabad
Total				985
3	Analysis on the social impact	Qualitative	Opinion leaders among society and consumers	4	FGDs in Lahore, Islamabad, Faisalabad and Gujranwala

The quantitative part of the study will be conducted using randomized convenient sample of 900 from nine divisional headquarters of Punjab. A random sample of 100 individuals will be picked from each divisional headquarter. For qualitative part of the study, focus group (n=4) and interviews (n=45) equally distributed from divisions of Punjab will be conducted. Collectively, the instruments and feedback will provide a comprehensive insight into the dynamics of the targeted divisions.

 6.     Deliverables

The expected output (deliverables) should include, but not limited to, the following:

1. Within 5-person days of issuance of task order the consultant should submit a detailed plan of execution;

1. Within 15-person days of the start of assignment, the consultant will provide preliminary report on data collection from field work;
2. Within 20-person days of completing the field work, the consultant will share a draft report documenting the findings of the de-capping survey;

4. The consultant will submit a comprehensive final report (hard and soft copies), consisting of quantitative and qualitative findings. The report should, specifically, cover the socio-economic impact of price de-capping on meat and milk enterprises.
5. Final report should include but not limited to the following:

• Executive summary
• Acknowledgement
• List of Acronyms and abbreviations
• Table of contents
• Background – brief description and context
• Objectives of the study
• Purpose and expected use of the study
• Methodology including sampling and data collection techniques
• Main results and findings of the study
• Key observations
• Lessons learned and recommendations
• Conclusion
• Annexes to the report
• Terms of reference of the study
• Time schedule / Time table
• Survey instruments

6. The consultant will also provide following at the end of the assignment:
• Detailed data/ analytical data tables and database (soft copies).
• Filled questionnaires (original hard copies) and detailed notes.
• Profile of respondents.

1. The consultant is required to make a Power Point presentation to PEEP Program Team at the end of the assignment.
2. The final report will be due within one week after receiving comments and feedback from PEEP.

 7.     Quality Control

The consultant will follow strict codes of professionalism and quality control in the data collection and reporting. PEEP M&E section and Component 2 of PEEP will be overall responsible for monitoring the whole process and may conduct surprise checks at any stage of the price de-capping exercise.

 8.     Timeframe

Time for completing the assignment and provision of final report is within 70 days of signing of the contract agreement (with 40 man-days of Level of Effort (LoE)). The consultant will provide a work plan detailing all activities from initiation to the submission of final deliverables as listed down under IV above.

 9.     Intellectual Property Rights

All outputs under the assignment shall be the sole property of USAID-PEEP. The consultant shall not exercise any rights, on all the outputs and cannot share the same with any outsiders without the prior permission of PEEP management.

10.Qualification and experience

• Advanced university degree in a related field, preferably in livestock/dairy/social sciences/ etc.
• At least 8 years of professional experience of conducting surveys.
• Current knowledge of the latest roles and trends in the livestock sector particularly its service delivery model, advocacy and policy reforms.
• Experience in developing survey tools, hold FGD and conduct PRA/RRA.
• Strong writing skills, and experience of presenting complex technical information in an easily comprehensible way for non-specialist readers.
• Good communication skills and fluency in English and Urdu.

11.Duty Station:

The duty station for this consultancy is Lahore, but travelling to various districts of Punjab is required for the completion of the assignment.

12.Reporting:

The daily monitoring and oversight of the consultant’s work will be the responsibility of Component 2 Lead – HICD Specialist and M&E section.

13.Level of Efforts

The LoE for the assignment will be 40-person days and breakdown is given below.

Sr. No.	Activity	No. of days
1	Desk review/research	3
2	Data collection from nine divisions (100 from each)	22
3	Data entry, analysis and report writing	13
4	Submission of final report and presentation	2
Total		40