Debating Pakistan’s dairy health - I

In an interview with BR Research last year, the country managing director of Tetra Pak claimed that Pakistan is the second largest milk producer in the world, yet no more than 40 percent of domestic output makes it to the market, with over 30billion litres of milk staying on farm for own-consumption and calf-feeding.

That should be a good thing, considering three-fifths of country’s population continues to live in rural areas even today, where on-farm milk availability of over 200kg per capita comes out at par with EU and developed world. Yet, forty percent of the country continues to suffer from undernourishment, with anthropometric deficits systematically higher in rural areas according to UN-FAO.

What explains this apparent contradiction? The poor health of the dairy value chain, according to a recent discussion held in Islamabad last week. Speaking at the occasion, Dorothee Boelling of International Farm Comparison Network (IFCN) noted that despite high levels of output, a lot of milk is wasted due to adulteration or non-optimal atmospheric storage conditions. The quantum of wastage is as high as 9billion litres by some estimates, roughly equivalent to annual production by Canada or Argentina.

Wastage resulting from low mechanization and investment due to small- herd size and subsistence farm holdings would not have been such a challenge given the abundance of output in absolute terms. Except, the problem is exacerbated by poor (and borderline hazardous!) husbandry practices beginning from hand milking, absence of silage in fodder, low-yielding breeds, poor returns to labour, lack of investment in vaccination and treatment, and perverse monetary incentives where productive cattle is sold during dry phase.

According to IFCN research, the litany of bottlenecks on both inputs and outputs sides have in fact resulted in a situation where the country may be facing a sizable deficit in milk and milk equivalents availability. This is an alarming situation not only because the ‘second-largest dairy output economy’ facing a deficit paints a dismal picture of value chain management, but also because as a domestically produced an inexpensive source of protein in an a nation facing a hunger/malnutrition crisis, a dairy-deficit is only bound to make the crisis worse.

This column presents a prologue of a series that aims to uncover the causes of distorted dairy value chain, beginning from farm structure, low herd size, poor quality and yielding breeds, cost of production, regulatory failures, price control, and comparison with regional best practices. Pakistan’s dairy challenge is neither simple nor dependent on a one-stop fix solution. Dairy and livestock contribute over 55 percent of agricultural GDP yet has been left on autopilot for a long time. A beginning of discussion on sectoral bottlenecks is long overdue but let’s begin with scratching the surface.