HIGH POTENTIAL OF LIVESTOCK AND DAIRY SECTOR

SHAMIM AHMED RIZVI
Mar 23 - 29, 2009

Livestock and diary products sectors, despite having immense potential, have been victims of criminal neglect by the successive governments in Pakistan. Even at its lowest yield per cattle as compared to world level, Pakistan is seventh largest milk producing country in the world and has surplus milk production. However, due to lack of proper planning and collection and distribution facilities, the producers perforce finish a major portion of produce in the far-flung areas while imported powdered milk fulfills the demand of the urban areas.

Livestock accounts for 52.3 percent of agriculture value added and 11 percent of national GDP. It contributes in foreign exchange income and shares 8.5 percent of total exports of Pakistan (Economic Survey of Pakistan 2008). Only the animals and their meat are not exported but livestock is an important source of raw material especially for leather, carpet, and woolen cloth industry. Livestock is a farm of soil security for the poor, who cash it at the time of need and it serves as security against crops failure in barani (rain-fed) areas. Due to these benefits, more than 8.5 million small and landless families in the rural areas rear livestock as their main livelihood source.

Economic experts agree that livestock and dairy sectors are immune from the impact of the global recession. Consumption of food items is, after all, the very last item in a household budget that is likely to be negatively affected due to a recession. Thus, any attempt of the government to extend support to this sector in an effort to make it an engine of growth within the current year will bear fruit. Those who insist that manufacturing has higher value addition and, therefore, the focus must be on higher value adding products must accept that in today's climate, manufactured products are suffering from a loss of market. "It is an irony," the Economic Survey 2007-08 argues in complete support of this view, "that the entire government machinery has focused attention on major crops, that too on only four crops (rice, cotton, wheat, sugarcane), which account for only 34 percent to agriculture value added, while livestock, which accounts for 52 percent, has never received similar attention". Milk production despite its lowest yield is even today for ahead of the total value of cash crops.

The outgoing government headed by Gen. Musharruf/Shaukat Aziz, in March 2006, approved an ambitious five-year Live Stock development policy envisaging a more than double increase in the production of milk and meat. The policy was launched with a big fanfare but unfortunately, nothing is visible on the ground even after the lapse of almost 3 years. According to the policy, the government was to focus on enhancing the production of meat, milk, and wool through a number of measures to meet the target of 6 to 7 percent of overall Live Stock growth rate by 2009-10. The major thrust in the policy was to encourage private sector for playing the lead role in development of livestock sector. Nothing seems to have been done so far in pursuance of the policy's objectives. With increase in population, the demand for milk and meat is increasing with every passing day. In effect to continued neglect of this important sector, the price of meat, milk and milk products have soared during the last two years. The prices of packed milk have risen from Rs25 per liter to Rs35, curd from Rs35 to Rs50. Mutton has gone up to Rs260 per kg from Rs200 making these items beyond the reach of common person. It is now imperative to increase the production of livestock products, like meat, milk, cheese, and eggs in order to keep the prices of essential items within the reach of common person.

The government and private sector partnership can bring revolutionary change in Pakistan's dairy sector, which needs concrete steps for professional management and consolidation of resources available in the farm sector. At present, only few business groups have the monopoly over the dairy farming and are out for minting money by selling products at a price of their choice. These business groups engaged in the dairy business are taking full advantage of government's negligence toward dairy sector. As a consequent to the negligence of the corporate culture in our farming sector, more than 60 million small farmers were deprived of their due benefits.

Experts feel that only few good policies of the government can bring a rapid improvement in poverty level as dairy sector has its roots all over rural areas of the country. They said that more than a dozen studies and surveys conducted by different institutions have confirmed that dairy sector has its volume of production nearly at a level of wheat and other agriculture products like cotton.

However, milk powder import into the country has been reduced from 40,000 metric ton to virtual end. At present, only few brands of milk powder are imported for infants. In the last financial year, dairy sector provided Rs40 billion to the national kitty, which was almost 9 percent of the overall export earnings of the country. Therefore fresh milk production in the country is still playing a major role in reducing poverty, experts said. The role of livestock in rural economy may be assessed by the fact that 50 to 65 million of the total rural population hold 2 to 3 cattle/buffalo and 5 to 6 sheep and goats per family and derives 30 to 40 percent of income.

The livestock population comprises 38.9 million buffaloes, 28.9 million cows and oxen, 24.2 million sheep, 49.2 million goats and 0.8 million camels. They are producing more than 32 million tons of fresh milk. Pakistan exports more than Rs.53 billion of livestock annually of which products worth Rs10 billion are exported to EU member countries. While it is heartening to learn that Pakistan has exported about 1 billion dollar of cattle and meat during the last year but this export has resulted in sharp rises in their prices making them beyond the reach of common person in Pakistan.

There is a huge potential in livestock and diary development in Pakistan and we can earn without affecting the Pakistani consumers adversely by harnessing the abundant resources available in the country. Out of Balochistan's total areas of about 35 million hectors only about 1.5 million hectors (about 4 percent only) is under cultivation. The remaining is rangeland, which offers tremendous potential for boosting population of sheep and goats as these uncultivated areas provide for almost 90 percent of feed requirement of these animals. Similarly, vast lands of Azad Kashmir and northern areas, not under cultivation, can be utilized to rearing sheep, goats, cows, and bulls to augment meat as well as milk production.

In Punjab and Sindh there is a huge potential for development of diary products, which after adequately meeting domestic requirements can be a big source of foreign exchange earning. According to an estimate, Pakistan produces 31 billion liters of milk annually. Although this level of milk production is more than adequate on a per capital basis for today's population, lack of processing and poor distribution system are deficient in milk production. The milk yield per cow in the neighboring 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 in Israel over 7000 liter per lactation period. After extensive research, India livestock ministry has introduced a programme to replace gradually 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. India besides feeding its huge population is producing huge quantity in the form of diary milk and processed and packed milk and earning billion of through exports.

The Economic Survey 2007-2008 points out that "in order to achieve higher sustained growth in agriculture value added, it is absolutely necessary to give due attention to the livestock and dairy sector to achieve multiple objective of attaining food security and well as poverty reduction." Livestock's contribution to the GDP has been steadily rising - from 417,120 million rupees in 1999-2000 to 599,217 million rupees in 2007-08. During 1999-2000, milk production rose by 6 million tones however increase in beef during these years was only half a million tones and mutton actually declined from 649,000 tones to 566,000 tones. Poultry output rose significantly during these years - from 322,000 to 554,000 tones, which accounts for market price adjustments between poultry and beef/mutton and the difference in the percentage price escalation between the two. However, these developments are insignificant in comparison to India. India's milk production raised from 79.4 million tones in 2001 to 95.5 million tones in 2007. Although, part of the rise may be attributable to the fact that cows are considered sacred in India, the fact remains that the country has a viable livestock sector. It is considered a major producer of the world livestock and dairy sector, and is included in statistics released by Denmark, the world's leader in livestock and dairy production as well as exports. One would have hoped that in line with the recommendations made in the Economic Survey the present government would have begun formulating as well as implementing some policies in this regard. A viable policy must envisage (i) incentives which are comparable to the major crops which still receive substantial subsidies for inputs for example fertilizers; (ii) ending legal imports and smuggling of foreign dairy products freely available in the markets of major cities and (iii) tax incentives that would strengthen this sector.