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An Underutilized Sector

Tetra Pak Pakistan managing director says country’s dairy sector can contribute $30 billion to the economy

by Staff Report

Photo of Awais Bin Nasim courtesy Tetra Pak Pakistan

Pakistan’s dairy sector has the capacity to alleviate some of its economic problems if given the proper attention by authorities. Not only can it help meet the country’s protein needs, it can also boost foreign exchange reserves through dairy exports. Currently, Pakistan ranks fourth among major global producers of milk, but its exports amount to little-to-none due to a wide range of difficulties. These problems have only worsened due to the loss of millions of dairy livestock animals in this year’s floods.

To rise above these economic and situational challenges and empower the nation’s dairy sector towards economic contribution, an elaborate and effective strategy must be considered. According to an estimate by the Pakistan Dairy Association, the country has the potential to earn around $30 billion annually through the processing and export of dairy products to regional and international markets. In an exclusive conversation detailing the prevailing risks and potential solutions, Tetra Pak Pakistan Managing Director Awais Bin Nasim spoke with Pakistan Standard. Excerpts:

Pakistan, as the fourth largest country in terms of milk production, has a substantial dairy production volume. Why is this not reflected in the country’s current export mix?

According to the Economic Survey of Pakistan, the country produced around 59 billion liters of milk in the last fiscal year, however, it is true that Pakistan made zero dairy exports and still imports many dairy products such as cheese, butter, dry milk powder etc. This is an unfortunate reality but one we can tackle. On the other hand, India exported milk and dairy-based products around the world valued at around $325 million during the last year.

Lack of effective supply chain investment, specifically insufficient agricultural and milk production, is the primary cause of this rising import dilemma, which is also burdening our foreign exchange reserves. Conservative estimates suggest that our dairy sector has the economic potential to contribute around $30 billion to the national exchequer, however, more investment is required to make it a reality.

The dairy sector can transform the economic status of Pakistan, placing it amongst the world’s leading dairy exporters and also helping to tackle the issue of national food security. This can also be a way of increasing the income of dairy farmers, creating new employment opportunities within the sector, and improving the availability of safe milk products for local consumers.

Around 20 percent of milk is wasted annually per the Economic Survey of Pakistan. What steps must be considered to tackle this situation?

In Pakistan, nearly 20 percent of the milk produced, an approximate value of $0.1 billion, gets wasted every year for several reasons. The Economic Survey of Pakistan 2021-22 states that 15 percent is lost due to faulty transportation and lack of chilling facilities while five percent is lost due to suckling calf nourishment. A suitable regulatory framework must be put in place to address these issues and create more opportunities to benefit farmers as well as consumers.

Pakistan can easily prepare cheese and other dairy products but we are still spending valuable foreign exchange on their imports. What are the reasons behind it?

Theoretically speaking, Pakistan produces enough milk to meet its local demand, but we still spend billions of dollars each year to import milk-based dairy products. The demand for dairy products is ever-increasing around the world, which can be a potential revenue-generating opportunity for Pakistan. However, poor planning and lack of investment in modernizing the dairy sector infrastructure has forced Pakistan towards imports. As per the U.N.’s Food and Agriculture Organization, more than six billion people around the world consume milk and milk-based products, with the majority of these consumers residing in developing countries. Since the early sixties, per capita consumption of milk in developing countries has increased almost twofold.

This rise in milk consumption can be a potential opportunity for countries like Pakistan, which can export milk-based dairy products and earn valuable foreign exchange that is critically needed for its economic revival. Sadly, we are completely missing out on these opportunities.

Where does Pakistan stand in terms of average milk yield as compared with other countries, and how is it possible to improve its ranking?

The average daily milk yield per animal in Pakistan is around seven liters. Comparatively, statistics from the Food and Agriculture Organization quote the daily milk yield per animal in New Zealand as being five times higher while in the U.S. it is 10 times higher than this volume. Pakistan can also enhance its daily milk yield per animal if appropriate measures are adopted. Currently, Pakistan is trying to overcome the rising milk demand by increasing the quantity of livestock, instead of enhancing its milk production capabilities. It is necessary to formulate a national policy framework that allows proper training for farmers to understand and adopt modern dairy farming methods to achieve higher milk production instead of relying completely on the size of their herd.

Pakistan will have to step into the global market and claim its due share in dairy exports while competing against its established players including Indonesia, Thailand, Malaysia, Bangladesh, Sri Lanka, and Turkey. Since the enactment of the 18th amendment in the Constitution, milk and milk-based products have been neglected, but considering the current situation, there is an urgent need to change this approach.

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