LAHORE - Massive-scale import of dry milk and whey powder has been damaging local milk farmers, as they are unable to get the right price of their milk.
This was stated by Vice Chancellor of the University of Veterinary and Animal Sciences (UVAS) Prof Talat Naseer Pasha in an exclusive talk with APP here on Sunday. He said that European Union was giving subsidy to their farmers to produce milk that’s why their farmers were growing and they had acquired a strong position in milk production.
About the potential of agriculture and livestock sectors, Prof Pasha said that Pakistan is an agricultural country with world’s one of the best irrigation systems, fertile lands and all four seasons. Agriculture sector contributes about one fourth to the country’s GDP and is believed to be the backbone of the rural economy, as it provides employment to 45 per cent workforce of the country, he added.
While livestock is an integral part of the agriculture sector, it contributes 55.1 per cent to the agricultural value added, and approximately 12 per cent to the national GDP, he said.
Responding to a question about the rise and fall of investment in the dairy sector, the VC said that milk is largely the single most commodity of the livestock sector and the value of milk alone exceeds combined value of wheat, rice, maize and sugarcane in the country. More than 8 million farming families are associated with livestock sector and majority of them are small-holders and landless.
This depicts the critical dependence of 40 to 50 million rural people on the livestock sector. Selling milk for meeting day-to-day needs has become a visible phenomenon in the country during the last two decades and hence livestock farming has become vital in generating instant cash flows for the rural population. Historically, majority of the livestock farming has been fragmented into small holders, as smaller herd size is 1-6 animals.
As a result of various dairy development initiatives since 2005, tremendous improvement had been witnessed in dairy farming where commercial and corporate sector in dairy farming emerged. The country has seen phenomenal growth in investment in dairy farming during the last one decade. The emerging commercial scale farmers had positively influenced the whole livestock farming sector in terms of transforming practices, sharing modern knowledge and skills and attracting international service providers. The trend of investment in the dairy farming continued until 2013 when this growth started declining and has currently been halted, he added.
About the declining trend in the dairy sector, Prof Pasha said that livestock farmers especially samll farmers have been facing various issues for the last few years, that have not only hampered the growth in this sector but eventually put the livelihoods of 40 to 50 million people at stake. One of the major issues that has adversely impacted livestock sector is the unchecked import of milk powder and whey powder in the country, as the duty regime is just 20 per cent for such imports that makes it easy to get it dumped in Pakistan.
These imports have shaken the dairy sector stake-holders particularly the producers/ farmers. It’s worth mentioning here that Pakistan is considered the third largest milk producing country in the world with nearly 50 billion liters of annual production.
However, despite having one of the largest animal population base and huge local production of milk, the import of powders indicates manipulation in the value chain, resulting in net economic loss both to producers and consumers. In short, the dairy farming sector is at the verge of devastation due to influx of skimmed milk powder and whey milk powder (SMP&WM) from across the globe, the VC added.
The use of SMP&WP in the dairy processing industry, dairy related products, biscuits, sweet making, confectionary industry and tea whitening segment has deprived the local farmers of getting the right price of their commodity and eventually triggered a discouraging wave in the developing dairy farming sector.
The VC said that import of SMP&WP, according to the United Nations database, Pakistan imported 35 million kilograms of milk powder in 2012 worth $102.1 million, 22 million kilograms in 2013 worth $70.8 million and 34 million kilograms in 2014 worth $117 million. At the same time, Pakistan imported 19.5 million kilograms, 18.3m Kgs and 20.2m Kgs of whey powder in 2012, 2013 and 2014 worth $13.4 million , $15 million and $16.9 million, respectively.
From 2007 onwards, there has been a shift in focus of Pakistani dairy processors from selling milk to selling recipe products made out of SMP&WP and vegetable fat etc. These products are generally called tea whiteners and dairy liquids.
According to estimation by dairy industry experts, in 2014, the share of recipe products (other than milk) in litre-age term has gone up to 59 percent in total sales while plain white milk is only 41 percent. Since these recipe products are made using SMP&WP for dairy processor, the cost of production of these products is far below the raw milk prices, which ultimately deprives dairy farmers of a better price for their raw milk, the VC claimed.
When asked what should be done to halt the import of dry milk and whey milk to help the local farmers to continue their business, he suggested levying 100 to 150 per cent duty on import of dry and whey milk.