China based corporation to invest $ one billion in dairy industry



July 22 - 28, 2002

The government has set up a board to boost domestic production of dairy and meat products and devise ways and means to promote their exports. The board which has strong representation from private sector will help a lot in developing a hitherto neglected sector of economy with immense potential.

The private sector has already taken a high step forward and made considerable progress in these areas, but it is still negligible in view of the vast potential available. The board will not only arrange government investment and support but will also play a role of facilitator to streamline these sectors besides creating better harmony between the government and Private Sector. The board will also strive to attract foreign investment to fully harness the immense potential of these neglected sectors of our economy.

It is heartening to note that the present government is focusing attention on some sectors of our economy which had remained neglected in the past despite immense potential. The dairy sector is one of them. Reports have appeared in the National press that the government is negotiating with some well-known multinationals in the world dealing with livestocks and dairy products for development of this sector in Pakistan.

According to reports a China based continental corporation with the help of an international consortium will invest about one billion US dollars in Pakistan to provide most modern technology to the dairy industry. The proposal have envisage establishment of a most modern and largest dairy farm for breeding and raising livestock animals using technology aimed at genetic research. It would ultimately result in raising and rearing a superior quality livestocks containing higher milk yield besides better quality.

Despite immense potentials, the dairy sector in Pakistan has been victim of criminal neglect by the successive governments in the country. Even at its present lowest-in-the-world yield per milk cattle, Pakistan is hugely surplus in milk productions but due to lack of proper planning, collection and distribution facilities, a major portion of the total production is consumed, per force, by the producer in the far flung areas. As against this we are importing about 25000 tonnes of powder milk annually to meet the demand of the urban areas at a cost of above 400 million dollars.

Pakistan ranks 7th among milk producing countries, with an estimated 21 billion liters of milk produced annually. Although this level of milk production is more than adequate on a per capita basis for today population, lack of processing and poor distribution system in a long 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 those that are difficult to access.

The milk yield per cow in the neighbouring country is about 3000 liters per lactation period as against 1000 liters in Pakistan. In western Europe the average exceeds 5000 liters in USA 9000 and Israel exceeds 7000 liter per lactation period. After extensive research Indian livestock ministry has introduced a programme to gradually replace buffaloes with cows, which give more milk, by educating their farmers through their well established cooperatives and successfully carried out the replacement programme during the last decade or so. During this period India has almost doubled its milk production from 38 to 72 billion liters and now ranks at No. 2 after USA with 74 billion in milk production. Despite feeding its huge population, India is exporting huge quantity of powder and processed and packed milk. To increase its yield of milk, India has made full use of its expertise who have been trained by the US. Through artificial insemination India have developed a new breed of cows which yield 3000 litres per lactation period instead of previous record of 1200 litres.

Pakistan's tremendous potential to increase its milk production has so far remained unexplored due to the inactivity of the government and the related bodies which were created with much of fanfare. This neglect appears criminal in view of the fact that milk production despite its lowest yield, is far ahead of the major cash crops, such as wheat, cotton, rice and sugarcane.

There is huge demand of both powdered & packed milk in the neighbouring countries of Iran, UAE, Saudi Arabia beside, Malaysia, and Philippine which Pakistan can successfully harness to its advantage if due attention is paid to this sector. By copying Indian plan Pakistan can also develop a new breed of cows within a period of about 4/5 years and thereby increase its production by over 100 per cent. Pakistan can become a big exporter of dry and processed milk with little efforts.

Presently in Pakistan only about 21/2 per cent of milk production is processed, about 57.5 per cent is supplied to urban areas in raw form in a most unhygenic conditions causing real health hazards. Rest is consumed by the farmers, mostly per force, specially in the farflung areas for lack of proper facilities to take it to deficient areas. About 75 per cent of the total production of raw milk is produced in Punjab, 14 per cent in Sindh, 10 per cent in NWFP and only 1 per cent in Balochistan. In Punjab we have more buffaloes than cows in about 60-40 ratio. In Sindh it is 50-50. In N.W.F.P. about 20 per cent buffaloes and 80 per cent cows. In Balochistan there are mostly cows.

Unlike other progressive countries where sale of raw milk is disallowed by law and processing is mandatory due to milk being one of the two major carriers of diseases (water being the other), Pakistan continue to allow 97.5 per cent milk to be distributed through the traditional gawala system. To the bacteria of tuberculosis and hepatitis that naturally occur in milk, the gawala adds many more varieties through the addition of contaminated water for its dilution. The contractors, who collect milk in bulk from villages in Punjab through the dodhis the middlemen, and sell it to the urban consumers, go a step further. They add unhyginically produced ice slabs, caustic soda to the milk they collect to present it from going bad due to intense heat in summers.

The ultra high temperature (UHT) process, although expensive, has proven to be a success in Pakistan as it increase milk's shelf life to 12 weeks. On the other hand, the pasteurization process inspite of it slow processing cost, has not made much of a headway due to the short shelf life of its product and its dependence on cold chain from production to consumption. Taking advantage of this cost factor, some in milk business have begun marketing loose milk in urban areas which they claim to be pasteurized.

The UHT process add heavily to the cost of milk as it requires huge investment to set up the plant, production of packing material and above all the collection cost of the milk making it beyond the purchasing power of poor and even lower middle class. Pasteurisation process is much cheaper comparatively as the process is much simple and packing material much cheaper. Small pasteurization plants can play an important role to meet the milk demand of cities and towns provided there is a strong and efficient organisation to ensure that all necessary precautions are taken and hygienic requirements for pasteurisation in process are met before supplying milk to the ultimate consumers. Village cooperatives in India have efficiently handled this problem and about 80 per cent of the milk requirement of urban areas are met through pasteurised milk at an average selling rate of Rs. 15 a litre as against Rs. 24 per litre in case UHT processed and packed milk as against Rs. 22 and Rs. 30 per litre respectively in Pakistan.

It is a good news that foreign investor has shown interest in Pakistan for tapping the rich potency for livestock farming and establishment of ultra modern dairy industry and thus Pakistan will earn more foreign exchange, giving more employment to the people and exporting to foreign countries particularly to Muslim countries.