Although one may find fancy figures like Pakistan is the 4th largest milk producing country in the world with one of the biggest herds of animals, the harsh reality haunting consumers depicts a totally different picture about performance of the dairy sector. The dismal state of affairs of dairy sector can be gauged from the fact that both availability as well affordability of milk has been compromised over the years.
Over 15 percent increase in the price of milk has been seen in about a year. Prices of fresh pasteurised milk soared to as high as Rs195/litre in the country last week, indicating steeply rising food cost for the consumers. More bad news would hit consumers in the upcoming fiscal year, starting July 1, 2022.
Trajectory for milk and other dairy products will only get worse in 2022-23 and may cross mark of Rs200/litre.
Availability of quality milk is also an issue, particularly with diminishing production compared to rising demand. As far as growth rate in milk production is concerned, in the year 2020-21, output of dairy sector showed 3.22 percent growth in milk volume. This annual growth rate has been constant for last several years.
As per Economic Survey 2020-21, annual growth rate of milk production stands at an even higher side at 3.5 percent to be precise. With up to 40 percent post-production losses mainly due to weak supply chain and other in-built flaws, net gain in milk production recorded at meagre 2.1 percent, which is not even enough to cater for demand generated by annual increase in population.
According to Dr Talat Naseer Pasha, a leading dairy sector-specialist, cost of production led to high milk prices in the country. Increase in feedstuff prices like chokar (wheat bran), straw and fodder. Additionally, heatwave had a negative impact on milk production this year. Moreover, corporate dairy farms breed in a way that results in lesser milk production in addition to impact of seasonal shortage on output.
Regarding jump in cost of production, Hafiz Wasi, a veteran veterinarian observed that adverse impact of heatwave coupled with rising cost of production tends to create an imbalance in productivity of dairy sector. Usually, in summer months, as much as 30 percent loss in milk has been observed, but this time heatwave had its own toll. The second reason were rising prices of every input used in dairy farming, which forced producers to raise milk prices accordingly.
Waqar Ahmad, who works with a leading multinational food giant, admitted that fresh milk was going wild. He however blamed soaring input costs, adding that prices of all raw material has gone up. He was of the view that the skyrocketing cost of production has been seen due to rise in operational cost in general. He also pointed out worldwide trend in food inflation one of the allied reasons behind spiralling prices of dairy products.
According to experts, establishment of a robust supply chain has been considered a key area where government lacks any role and it really hurts as far as productivity of dairy sector was concerned. High post-production losses have been attributed to ineffective supply value chain devoid of facilities for conserving a highly perishable product like milk. Government should facilitate establishment of such supply chain at grassroots level with backup energy arrangement in order to ensure minimum losses during transportation.
Meanwhile, according to a study, low productivity of animals in the country has been one of the underlying factors behind poor competitiveness of domestic dairy sector. As per findings of the study, although Pakistan is one of the largest milk producing country of the world, per animal yield has been on the lower side. With production of 57 million tonnes of milk annually from 24 million cows and buffaloes, the average annual yield stands at 1.62 tonnes per animal, which is only 62 percent of the world average.
However, study finds, all of the increase in production in the country was due to the expansion in animal stock, while at the global level per animal yield also improved. This along with the poor development in the milk value chain infrastructure in the country has reduced its competitive position in the domestic and international markets.
Moreover, the diversity in the milk processed products in Pakistan remained narrow around ghee production only, while the production and consumption of processed milk and dairy products, except yogurt, remained limited. Clearly, Pakistan is missing a great opportunity of benefiting from the fast-expanding international milk and milk-related product trade.
Despite showing reasonable growth in milk production, the real prices of milk after discounting for inflation, are increasing suggesting that there is an unmet milk demand in the country. Under the policy measures, federal government with its re-defined role under the 18th Constitutional Amendment undertook the following measures: i) Import of high yielding dairy cattle breeds of Holstein-Friesian and Jersey for enhanced milk production ii) Provision of semen and embryos of high yielding animals for the genetic improvement of indigenous low producing animals iii) Import of high quality feed stuff/micro ingredients for improving the nutritional quality of animals and poultry feed in order to encourage and promote the establishment of value addition in the country.
Federal government has been working on various projects for increasing milk productivity in the country. These include Livestock Insurance Scheme for Borrowers (LISB): It is aimed at minimising the risk of disease or death of animals due to accidents and natural calamities in livestock and dairy sector, the farmers’ have improved access to LISB. The scheme covers small farmers having up to 10 animals and the government bears premium subsidy up to 4 percent per annum. During the period July 2014 to December 2020, banks have submitted premium claims of Rs2.84 billion against 0.82 million beneficiaries.
