THE Economic Coordination Committee and the Islamabad High Court stand together on the issue of banning the export of live animals. Though their reasons are different, the common objective is to bring down prices of animals.

The ECC accepted a long standing demand of Pakistan Tanners Association (PTA) to put an end to the export of live animals to Afghanistan and other countries. The court’s order came in the wake of upcoming Eidul Azha.

Given the high prices of live animals, tanners had raised the prices of animal hides, other by-products and meat in domestic markets. This has increased the input costs of leather factories and meat processing units resulting in decrease of exports as leather products and processed meat are more value added products than live animals. In this context, the ban on exports of live animals serves in the interest of Pakistan’s economy. The court also pointed at exports of live animals as the reason behind scarcity of animals in local market, resulting in increasing prices of sacrificial animals.

My hypothesis is: the ban on exports of live animals is a bad policy decision but with good intentions. It does attend to the issues of high prices of animals, and negative effects on allied industries. But, will the ban lower the prices? The question may expose the weakness in the logical framework of the decision. There would be hardly a dissent over the economic principle of supply and demand as sole determinant of prices.

Logically speaking, when supply outperforms demand, prices taper. Instead of increasing the supply of animals, the decision curtailed the demand (exports) so as to meet the supply and keep the prices from further rising. However, this supply flood or decrease in demand has put the supplier at a disadvantage due to decrease in returns. They may be discouraged into abandoning rearing livestock. The situation will expose the country to severe shortage of animals. By this logic, the export ban of live animals is a bad policy decision.

The fallacy is usually inherent in such ‘bring price down’ slogans is an outcome of lack of understanding of individual rights and responsibilities. If consumer has a right to get goods and services at lower price then, whose responsibility is it to provide those goods and services at the price demanded? Rights create corresponding responsibilities; it would be an unrealistic to assume that a livestock farmer in Rahimyar Khan has responsibility to provide cheap goat for a physician in Islamabad. It is the market that determines the price and fair price is given when voluntary exchange happens. It is the farmers right to sell his property wherever and whenever to anyone and anywhere at any price subject to voluntary agreement. This is how the sanctity of property rights can be upheld and lead to greater public good.

The writer is a research analyst in a Islamabad-based think tank.

syed.samimulhassan@gmail.com