MILK INDUSTRY OF PAKISTAN
Dec 17 - 23, 2012
The Agriculture sector uninterrupted engages in recreation of Pakistanis economy since independence.
In the early time period it considered a dominant sector but due to the declining its performance due to the political, social, environmental and climate conditions its production yield goes down gradually and now it is the second largest sector in Pakistan. It accounting for over 21 percent of GDP, 45 percent of total labor force engaged with this sector. Around 63 percent of country population lives in rural areas is indirectly or directly linked with this sector for their livelihood. Agriculture sector have strong linkage with the rest of the economy that is unnoticed in statistics. Like, the livestock sector of Agriculture sector alone contributes 11% of the country's GDP, with an estimated 42 billion liters of milk produced per annum. Its importance lies in the fact that many rural families depend on their livestock for their daily nutrition and income.
Dairy is a major part of food consumption and it plays an important role in Pakistani diet in the form of milk, meat and egg. As per the Economic Survey of Pakistan 2009, Pakistan has a herd size of around 63 million animals, which is the 3rd largest in the world. About 35 million people are involved in dairy farming, deriving more than 40% of their total income from livestock. For these farmers, dairy animals provide milk for domestic consumption as well as meager income through the sale of milk. Milk is classified as the major dairy product due to its long-lasting benefits i.e. bone health, lower the risk of cardiovascular and blood pressure diseases, effective against obesity, type 2 diabetics, cancer and dehydration.
Pakistan is the 5th largest producer of milk in the world, its industry volume of dairy products reached at US$26 billion in rural and urban areas on the increasing population and domestic local consumption however the total milk production is not fulfilling domestic human needs. Current Production levels are around 35 billion liters and there are around 8 million farming households and a total herd size of 50 million animals. In monetary terms, the milk produced in Pakistan is worth Rs. 177 billion and the largest product in the entire agriculture sector. Currently only 3% of the total milk production is processed and marketed through the formal channels. Milk production is expected to grow an additional 3 billion liters in the next five years and the market for processed milk is growing at a steady rate of 20% per annum.
However, due to various reasons the milk industries affected and demand and supply gap started. In only Karachi the daily shortage has been reported at approximately four million liters. No doubt, the production of milk is increased over the past years; this increase is not concerned with the productivity per animal but is due to an increase in total number of animals. Some of the other reasons that decreases the productivity include: lack of genetic resources, delay in attaining puberty, shortage of optimal feed, high disease incidence, lack of an organized marketing system for livestock, Insufficient facility for research, shortage of veterinarians, lesser infrastructure facility in rural area and the maintenance of traditional farming practices.
The other main reason of the shortage was the flood that hit Pakistan in 2010, the total livestock (large & small animals) and poultry losses accounted 0.3 percent and 1.6 percent, respectively of the total population. As mentioned in the Economic Survey of Pakistan 2009, Pakistan is having approx 63 million animals which is 3rd largest herd size in the world, but due to lack of genetic resources and other factors, the major problem for small holding dairy farmers is the cattle and buffalos' milk productivity, which is not more than 4 liters to 5 liters per day for the whole duration of the lactation cycle; approx. 8 milk producing animals of Pakistan are equal to 1 animal of the developed world.
The season also affects the supply of the milk, its production drops by 55 percent of peak production in May-June. While there is a 60 percent increase in the demand in this season as compare to December when there is abundant supply. In the month of May, the milk has low quality and low shelf life but the prices go high because of the shortage created in the market.
In past, animals were imported or smuggled to Pakistan from Afghanistan but after 9/11, there was a 'U' turn as war in Afghanistan has adversely affected the livestock sector. Pakistan started exporting livestock to not only Afghanistan but also to the Gulf state and Iran because of mad-cow disease in Europe. This increase of exports required a corrective measure from the government to ensure a steady supply because the leather industries were faced by the shortage of raw material.
Another main issue is the adulteration and unhygienic practices while handling milk, middle-man usually adds ice to the milk in order to keep it fresh, it makes milk diluted and further more the ice contains contaminated bacteria because of poor quality water. Some of the middleman even adds vegetable oil to counter dilution; this causes major health issues and makes healthy milk very harmful and unhygienic. Again government regulation can solve this problem but due to lack of developed milk collection systems, only a small percentage of milk is properly collected and handled.
In terms of yield, Pakistan has 5 million animals that give 35 billion liters milk annually while U.S.A. has only 3.4 billion animals which gives 94.5 billion liters of milk, this means that we have 1.6 million animals more than United States but we produce 60 billion liters less milk annually.
Similarly, Germany's yields are 5 times more than Pakistan with one-third of the milk animals and New Zealand are 3 times more than Pakistan in livestock industry, depicting a huge loss in the potential economic value. The major problem for small holding dairy farmers is the dismal milk productivity of Pakistani cattle and buffalos which is less than 4 liters to 5 liters per day for the whole duration of the lactation cycle of around 305 days. On average a dairy animal in Pakistan yields 6-8 times less milk than a dairy animal of the developed world; approximately 8 Pakistani milk producing animals are equal to 1 animal of the developed world.
The major problem with dairy farming in Pakistan is the low milk yields of Pakistani cattle and buffaloes. This low production potential of Pakistani animals is mainly attributable to a few clearly identifiable issues such as lack of a systematic national breed improvement program, lack of availability of good quality fodder and nutrients and poor farm management practices.
The state of the milk industry is a striking example of Pakistan's habit of missing opportunities throughout a 65 years history tainted by insincere leadership and a form of crony capitalism that has stifled entrepreneurship. It is unfortunate that despite having full potential, Pakistan cannot export milk because the animal's yields are so low. The stakeholders and development experts agree that Pakistan's Dairy Sector has the capability to grow but is not considered due to various loopholes. The most critical one is the lack of coordination and vision for the dairy development among the support institutions and the government while implementing the desired strategy.
Pakistan needs to have a coordinated and integrated strategy/approach beginning from enhancing per animal productivity, going straight to milk procedures/procurement and minimize the wastage. With little efforts one can Pakistan's dairy industry into a multi-billion dollar enterprise by introducing modern techniques to farming.