The livestock sector has made significant progress in the 1990s, rising from 1% of GDP in 1989 to 10% in 1996. Livestock provide most of Bangladesh's draft power, rural transportation, manure, and fuel, in addition to meat, milk, eggs, hides, and skins. Buffalo milk is an important item of consumption, especially in the form of clarified butterfat. Small dairy farms (with 5–20 crossbred cows) have been growing fast in recent years. Entrepreneurs are encouraged by high liquid milk prices as well as government incentives under which the farmers receive cash to purchase dairy cows. In 1996, there were an estimated 20,750 small dairies; total milk production in 1999 was 2.1 million tons. There were about 23.4 million head of cattle, 820,000 buffaloes, 33.5 million goats, 1,110,000 sheep and 138 million chickens in 1999.
Much of the cattle stock is smuggled from India because of the reduced local availability of cows and bulls, especially during the midyear Muslim holiday of Eid Ul Azha, when cattle are sacrificed throughout the country. The cattle brought in from India may account for up to 30% of beef production. The scarcity of cattle in recent years is the result of lack of vaccines and fodder, natural disasters, and an absence of farmer incentives.