Upgrading infrastructure and cold storage is crucial to resolving the supply chain inefficiencies in Pakistan’s dairy sector, reducing milk losses and quality issues, according to WealthPK.

“With 95% of milk sold unprocessed, the country’s dairy industry faces significant challenges, including inefficiencies in the supply chain that lead to substantial wastage,” M. Mansoor, former director general of the Livestock & Dairy Development Department Punjab, told WealthPK.

Livestock plays a significant role in the country's economy. According to statistics, it contributes 60% to the agriculture sector and 11% to the national GDP. Despite this, the sector’s productivity is low, with an average milk yield of 2-3 liters per day and a slow growth rate.

“However, lack of adequate processing facilities and an inefficient supply chain have left a large portion of milk sold directly from farms to the consumers without processing. This practice not only increases health risks but also results in a considerable portion of milk going to waste, further impacting local farmers and the industry,” he said.

Mansoor added that logistical challenges, such as limited cold storage and poor transportation facilities, are key barriers preventing milk from reaching consumers in its optimal state. As milk is highly perishable, inadequate cold chain solutions lead to quality deterioration, forcing farmers and vendors to sell it quickly, often at reduced prices.

“With dairy products contributing around 11% to the agricultural GDP, addressing these inefficiencies can play a significant role in supporting economic growth and food security. However, transforming the sector requires an integrated approach that involves both public and private sector investment,” Dr. S. Murtaza, PSO at the National Agricultural Research Centre (NARC), Islamabad, told WealthPK.
 
He emphasized the need for partnerships among the government, private investors, and dairy cooperatives to modernize the sector. By upgrading the infrastructure and integrating advanced logistics, Pakistan can significantly reduce milk wastage and ensure that more milk undergoes processing to improve quality and shelf life.

The government must incentivize private companies to invest in milk processing plants, while the private sector can bring in technology and expertise to enhance efficiency, he said.

Potential incentives may include tax breaks for dairy processing projects, subsidies on cold storage equipment, and low-interest financing for dairy entrepreneurs.