Pakistan at risk of facing milk shortfall

An interview with Dr Umer Farooq, livestock expert

Dr Umer Farooq Awan, an international dairy & livestock consultant is the Managing Director of Bovitech International, which provides consultancy services and one-stop solution for all inputs to dairy & livestock businesses in Pakistan. The company supplies bovine genetics as well as exotic animals (pedigreed cows), including cows from Holland, in addition to providing nutrition services and dairy management solutions. He has previously worked as a veterinarian and breeding farm manager in the UAE and as national sales manager in other leading livestock related services and inputs suppliers in Pakistan. He is frequently invited as a speaker on dairy and livestock related affairs in universities and industry conferences.

In this interview, Dr Umer talks about the challenges that the Pakistan's dairy and livestock industry is currently facing, and how they can be addressed involving both government and private sector interventions.

BR Research: What are some of the biggest problems in Pakistan's dairy and livestock industry?

Umer Farooq: Perhaps the biggest one is the fact that as a country we have not even protected, let alone developed or improved our livestock breeds - neither for dairy, nor for beef. Over time, Pakistan's human population has outpaced the proportionate population of her buffalo and cows, whereas beef and dairy yields of our animals have been falling. This has led to unmet demand. In the case of beef, as a country we are meeting the demand by shutting beef shops twice a week. In the case of milk, we meet our demand by importing powder milk. These are loud indicators of beef and milk shortage in the country.

Secondly, with increasing urbanisation, the younger generation of dairy farmers and livestock owners have been migrating to the city. The animal population is reducing as the ongoing generation changes hands, and in the next 5-10 years, there will be an even sharper reduction in local livestock. Other important factor after generation trends and lifestyle changes, is high input costs and lower yield of animals, which makes them commercially unfeasible. Therefore, the prospects of growing and developing local breeds are low.

Keep in mind that our government departments and universities lack adequate quality and quantity of professionals since everyone wants to study business or engineering to get a city job instead of becoming a vet or dairy or beef professional. The nature of policies implemented are short-term when in fact genetic returns demand long-term plans and need persistent focus to achieve the results.

BRR: Is there any shortage of milk in Pakistan and how do you see this industry evolving?

UF: Of the total fresh milk produced in Pakistan, no more than 5 percent goes to UHT and pasteurised milk; approximately less than 3 percent by some estimates. The rest is loose milk market which has no traceability. Over the long run, the trend of farmers producing that 95 percent non-traceable milk will be going down because of urbanisation. However, the demand for UHT milk will grow slowly, because consumers are not comfortable with UHT milk suppliers mixing skimmed milk or imported dry milk and selling it as milk, especially at a time when the world is shifting to fresh, chilled milk, whether pasteurised or not.

Latest legislations are heading in the direction where all the milk produced is to be converted into pasteurised milk, and to ultimately ban loose milk. This will be an interesting situation as nearly all processors are currently running at around half of their capacity. Powder milk is meeting around half of the demand of the processing industry. About 40,000 to 50,000 tons of powder milk is estimated to be imported, whereas smuggling from neighbouring borders is also a challenge. That said, to uplift milk standard and hygiene of small-scale tier-three farms is not as easy. The government's plans to screen for pasteurisation at the city entrances is still a question mark. Perhaps a model of small-scale pasteurisation plants at cost sharing at village levels could be an answer.

In order to grow local industry, imports of powdered milk should be discouraged, a strategy that has been adopted by neighbouring countries. This will increase the demand for local dairy milk by UHT processors, and thereby increase the demand for good quality breeds and bovine genetics. Even if imported powder is reduced by half, dairy farming in Pakistan could double, as per my estimates.

BRR: What is the solution to these problems, and do you think government policies are heading in the right direction?

UF: In the long run, we have to improve the quality of our bovine breeds. But for that we have to fix a lot of things, from trade policies, to policies affecting animal feed and medicines. There is a dire need to push for only pedigreed animal, if we are to move towards gradually developing our breed with long-term horizon and have our own livestock policy aimed at increasing milk yield per animal. For clarity sake, a pedigreed animal comes with at least three generation of certified records relating to feed, production patterns, farm history, breeding dates, semen history, type of semen etc.

In the short run, we will have to work both on better farm practises and import better breeds or at least their genetics. The problem with livestock departments in Pakistan is that they think that our local breeds such as Sahiwal and our buffaloes are still the best breeds in the world, which isn't a doable option from a commercial viewpoint due to low genetic potential.

We are enthusiastic to preserve and propagate indigenous cow breeds too, as they are national assets and heritage breeds. In this regard, it is our agenda to work towards sex-selection of local breed semen, which will help produce more female calves and enhance proliferation. Another project in the pipeline to segregate beef producing and milk producing lines of Sahiwal and Buffalo indigenous population.

Bear in mind that there are no local suppliers of cattle of any local breeding animals; there is no skill or breeding expertise in the local market. Even the corporate or formal sector is not doing proper breeding in the sense of having a breeding farm. As a nation, we are not even able to maintain the breeds of imported cattle.

BRR: Won't corporate farms solve the breed problem?

UF: Corporate farms are primarily mega ventures that focus on commercial animals, and are least concerned with breeding. They are following mainly US genetics as per the trends set by their international consultants. They follow international index of bovine semen, which are relevant for source countries but do not apply on main bulk of livestock population in Pakistan. Even our imported exotic cows, mainly from Australia, are cross-bred and need a sharply drafted breeding strategy to maintain and develop the breed. But due to their size advantage, corporate dairies have entirely a different picture.

BRR: Tell us about artificial insemination using imported bovine semen. Does that help towards breed improvement in the short run or long run?

UF: We have a significant number of descript cross-bred local and exotic animals. It surely helps to increase the milking yield of livestock. For the last ten years, local breeds - those who supply 95 percent of non-traceable milk - are being cross bred with imported semen so that at least the offspring gives better yields. For example, hypothetically, if a local animal yields 8 litres of milk and an exotic animal yields 30 litres, then by crossing the local animal with imported semen, the offspring can yield about 12-15 litres, depending upon feed and farm practises.

In fact, some third-tier loose milk farmers are more eager to get their animals inseminated by imported semen compared to second-tier loose milks farmers. This is because second-tier farmers have bigger herd size and cannot always afford to spend on imported cattle. Smallest farmer already has very few animals and is anxious to increase the yield, so he saves up and makes it a priority to use imported semen.

BRR: Can you shed light on these tiers that you are referring to?

UF: About 95 percent of total animals in Pakistan belong to those farmers who have between 1-10 animals. These are the third-tier farmers (mainly the backyard farmers). Most of these farmers supply loose milk to the middlemen, although some of them also sell milk directly through their own retail shops. Then there are about 250 to 300 farms that have between 100 to 500 animals. These second-tier farmers usually give milk to UHT processors.

Then there about 20 farms that have between 500 to 7000 animals; these are largely corporate farms. At the top of the pyramid there are only these 20 farms, of which there are only two that have more than 5000 animals, whereas 7-8 of those have 2000 to 4500 animals, and rest 10-11 of them have between 500 to 2000 animals. These big farms can make their own brands whether in pasteurised or UHT milk.

BRR: Given your genetics background what type of reforms are needed in cattle breeding industry. What type of breed should Pakistan try to develop whether locally or through imported genetics or cattle? We are told there is a trade-off between milk yield and milk fat.

UF: Pakistan is a market of higher milk solids, since Pakistanis like to have fat in their milk. There is no doubt about it; normal consumers have a developed taste for buffalo milk. The breeding policies of countries where obesity is a big issue, have defined very low levels of milk fats - no more than 3.5 percent. This is why such countries have adopted or developed breeds where the animal has the highest yield in the world, but with low fat content. On that note, all indices and breeding values are according to breeding policies of those foreign countries, which is why using those genetics will further dilute milk quality in Pakistan.

As a consequence of high milk yield, animals have shorter lives - no more than 2.5 lactations per animal after which the animal is sold in meat market. In Pakistan, where both beef and dairy prices are regulated, this model doesn't suit us as the resale value of animal in the beef market is not so high. Pakistan does not have a breeding policy at the moment but whenever we make one, we will have to think along such trade-offs while keeping the ground realties in mind.

BRR: Which country's genetics is relatively better aligned with Pakistan's market?

UF: If we compare dairy countries of the world, the Netherlands is a country whose cows have highest milk solids since more than 50 percent of Dutch Milk production is used for cheese making. Therefore, using Dutch genetics and importing Dutch cows is better aligned to local market norms. On a separate note we are aiming to conduct research and create an index for Pakistan, in line with local environment and market norms, so the farmer can evaluate and select semen and cows accordingly.

BRR: What are some of the key challenges to local dairy and livestock market from macroeconomic perspective?

UF: The key challenges are rupee's depreciation against the USD and Euro, which increases the landed prices of imported animals and genetics. But on the other hand, rupee's depreciation has also had a positive impact by increasing the landed price of imported milk powder, which in turn can increase the demand for milk supply from local market.

High duties and taxes are another challenge; if these are waived it will give an opportunity to the farmer to increase herd size and expand his business which is paramount to avoid the upcoming milk shortfall in this country. However, we hope that dairy sector's growth and development will gain pace in the coming years.