EXPORT POTENTIALS IN DAIRY SECTOR

KANWAL SALEEM
Aug 31 - Sep 06, 2009

Milk is as ancient as humankind itself is. It is the substance created to feed the mammalian infant. All species of mammals, from man to whales, produce milk. Many centuries ago, perhaps as early as 6000-8000 BC, ancient man learned to domesticate species of animals for milk production. These included cows, buffaloes, sheep, goats, and camels, all of which are still used in various parts of the world for the production of milk for human consumption.

Pakistan's dairy sector plays a significant role in the national economy with the value of the milk sector being more than that of the wheat and cotton sectors combined. The total milk (GP) production in the country is around 42199 million tonnes while milk (HC) production is 34064 million tonnes. Of them Punjab has share of 61.2 percent each. Buffaloes and cattle are the most important milch animals with small ruminants being of minor importance.

Some 95 percent of all milk is produced from small-scale rural and peri-urban holdings with 2-3 milking animals. There is a small commercial dairy sector around the major cities, especially Karachi, which is expected to grow, but for the foreseeable future small-scale producer will dominate the sector. Over 90 percent of the marketed milk is collected and distributed unprocessed through the informal market by traders and adulteration of the milk by them with water, chemicals, and drugs is reported to be widespread.

The dairy sector has remained neglected by the successive governments despite its vast potential. Even at its lowest yield per cattle as compared to world average, the country has surplus milk production. However, due to lack of proper planning and collection and distribution facilities, producers make use of a major portion of the produce in the far-flung areas per force. The country has immense potential to increase its milk production, experts told PAGE.

According to them, Pakistan can earn substantial foreign exchange through value addition of dairy sector. There is a huge demand of both powdered and packed milk in Iran, UAE, Saudi Arabia besides Malaysia and Philippine, which Pakistan can easily meet by harnessing its resources. Pakistan can also become a big exporter of processed milk if due attention is paid to the dairy sector.

Although the current level of milk production is more on a per capita basis for today's population, lack of processing and poor distribution system in a prolonged hot weather (milk has a shelf-life of only four hours under moderate temperatures) keeps it from reaching consumers in areas that are either deficient in milk production, particularly the urban centres, or have difficult terrain.

On the other hand, the milk yield per cow in India is about 3,000 liters per lactation period as against 1,000 liters in Pakistan. In Western Europe, the average exceeds 5,000 liters and in the United States 9,000 liters per lactation period. Through artificial insemination, India has developed a new breed of cows, which yield 3,000 liter per lactation period against its previous yield of 1,200 liters.

Unlike other progressive countries where sale of raw milk is disallowed by law, and processing is mandatory as milk being one of the two major carriers of diseases (water being the other), Pakistan continues to allow 98-per cent of its milk to be distributed through traditional system. People collect milk in bulk from villages in Punjab through the middlemen, and sell it to urban consumers.

The business of milk has brought prosperity for the rural population and the goal of poverty alleviation could be achieved by providing small animals to have-nots. The government must think on long-term basis and give animals to the needy population instead of giving hard cash under different programmes, experts recommended.

At present only about 2.5 per cent milk is processed, about 97.5 per cent is consumed as fresh milk in most unhygienic conditions causing real health hazards.

According to them, about 75 per cent of the total raw milk is produced in Punjab, 14 per cent in Sindh, 10 per cent in the NWFP and one per cent in Balochistan. In Punjab, the ratio of buffalos and cows is about 60-40, in Sindh 50-50, in NWFP 20-80 whereas in Balochistan there are mostly cows.

Livestock research institutions are generally weak and under funded and lack effective links with extension and other formal and informal institutions. Many of the research institutions are not capable of conducting applied or adaptive research.

MILK INDUSTRY OF PAKISTAN

The milk in Pakistan is predominantly produced under four different production systems that are:

Rural Subsistence Small holdings
Rural Market Oriented Small holdings
Rural Commercial Farms
Peri-urban/ Urban Dairying

The overall animal herd is thinly spread across thousand of square kilometers with an average of 3-5 animal per household and more than 40 million people in the rural area are engaged in livestock husbandry. Demand for milk and dairy products is increasing at a high pace due to population growth, urbanization, and increase in per capital income.

According to experts, dairy industry in Pakistan is mainly dependent on production of UHT milk. While market for UHT milk is expected to expand, there is a need to diversify the products. Diversified dairy products may include pasteurized milk, flavored milk, milk with various fat levels, condensed milk, milk powder, and various flavored and fat percentage yogurts.

Despite the fact that in dairy sector the production is mainly carried out in small family size enterprises, investments in milk and dairy products have increased. The very low level of milk and dairy products in our country compared to developed countries has increased the interest of foreign investors in this sector. In recent years, producers have started to launch new and specialized products on the market in order to increase consumption. Traditional products such as yogurt, cream, and traditional cheeses are processed with modern procedures.

Furthermore, dairy products such as fruit yogurts, mozzarella cheese, commonly consumed in western countries are now widely available in our country. Companies with sufficient capital carry out ice-cream production but as the market is not yet saturated, local companies are also increasing their investments in the occupation. Only partial amount of the total production of milk in Pakistan is packaged and large quantity of milk is sold openly. There is a huge gap between demand and supply of the packaged milk and milk products.

The country is looking forward for mechanization and industrial up-gradation in this sector. Sources in the L&DD Department told this correspondent that the Punjab government was working on a strategy for the progress of livestock and dairy development sector and it was also encouraging foreign investment in the sector. According to them, the government considers that uplift of livestock and dairy development sector could help eliminate poverty, generate employment opportunities as well as earn foreign exchange. The government is considering to promote public-private partnership to strengthen dairy sector.