Find out a sustainable solution to protect leather market
ALTHOUGH tanners were supposed to start buying rawhide at the government-fixed rates, merchants refused to sell, demanding the payment of a "considerable" portion of their arrears. It comes after seasonal traders, farmers and madrasas across the country threw away thousands of pieces of rawhide of sacrificial animals, approximately Tk 100 crore worth,Â after this Eid-ul-Azha, failing to sell those.
Merchants said the tanners should at least pay 50 percent of the Tk 400 crore dues in cash so that the total outstanding amount does get even bigger. The tanners also should say when and how they will clear the dues. The market in Posta is the biggest rawhide market of the country. The situation was similar in other rawhide markets, including Amin Bazar, Mymensingh, Thakurgaon and Jashore.
Tanners buy hide from the merchants on credit throughout the year and clear the dues in phases. They pay at least 40 percent of the dues every year before Eid-ul-Azha. The tanners last year paid only 5 percent of the outstanding amount, which is amounting to Tk 30 to Tk 35 crore. It was inadequate to buy rawhide at the government-set rates.
The government should figure out why the past dues of the merchants have not been paid on time. If this is due to legitimate reasons like relocation costs or the downward trend in prices of leather in the international market then it's fine but otherwise tanners should pay dues of the merchants without delay. What the ministry concerned can do is initiating a mechanism by which dues are paid within a reasonable time frame. If tanners can't pay then they can be blacklisted from exports or selling goods in domestic markets. This would go a long way to prevent them from committing financial mischief in the future. The Commerce Ministry may also fix a minimum price rate of rawhide at the field level to avoid similar crisis in future.
Small merchants are the lifeblood of our economy. If big firms like the tanneries don't pay their dues on time then they are essentially cheating themselves as it's the small trades which provide them with the cheap and quality raw materials which they need to sustain themselves.