export competiveness
DESCRIPTION
Export Competiveness in the dairy sector of PakistanTRANSCRIPT
Pakistan Export Competitiveness
Dairy and Livestock
Rehan A KhanRehan A Hashmi
Imran RafiqShafqat SahiWaqar Abbas
Export Potential From 1960-2000 agricultural GDP grew by 3 per
annum The contribution of the livestock sub-sector to
agricultural GDP has increased from 26 to 522 (now 11 of total GDP)
The share of agriculture in the GDP has declined from 30 in 1980 to 24 in 2002
The livestock sector output grew by 3 until 1980 and over 5 thereafter
Within livestock subsector Dairy (milk) accounts for 66 of the value of output Meat accounts for 13 Poultry meat and eggs 8 and other products 13
Export Potential Livestock contributes significantly
towards national exports 85 - 90 per cent of total exports belong to
this sector 85-90 of milk consumption in both rural
and urban areas of Pakistan remains in the form of raw unprocessed milk and traditional processed milk products such as yoghurt gheebutter oil and butter
Consumer demand for processed (UHT) milk has been increasing slowly since the mid 1990s
Export Potential
Export Potential
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Country Strategy
A local context and rules thatencourages investment andsustained productivityimprovementndasheg Intellectual propertyprotection1048698 Meritocratic incentive systems across all major institutions1048698 Open and vigorous localcompetition
Country Strategy Public investment in livestock extension and services Promotion of dairy co-operatives Targeted dairy development projects Public sector investment in milk processing and marketing Facilitating private sector investment in dairy processing Import tariffs on milk powder and income tax exemption to
dairy farmers Other policies indirectly affecting the dairy sector
Promotion of Green Revolution technologies Exchange rate policies Tax policy for processed milk products and agricultural inputs Regulations banning animals in metropolitan city areas Regulations to control milk quality
Public investment
Promotion of Co-Operatives Idara-endashKissan (IK) 19000 farmer members of the co-
operative own the enterprise Daily collection is about 200000 L through 576 milk
collection centers 1992 to 2000 average annual sales increased from 4
M to 39 M Liters Currently daily processing and sales through 450
retail shops are roughly 70000 L unpacked pasteurized (open pasteurized) 20000 L pouch-packed pasteurized 30000 L UHT 80000 L converted to powder and other products
Targeted Dairy Development Punjab Smallholder Dairy Development
Project (UNDP) funded at a total cost $14 M Targeted 27000 poor rural households in 720
villages in six Tehsils in Gujranwala Division Milk production has increased by 265 among
the targeted households and sales per household increased by up to 69
The results of the project were so encouraging the project was incorporated into the Provincial Livestock Department
Investment in Milk Processing and Marketing Livestock Development Project was started in 1975 as an umbrella pilot
project in some districts of all four provinces with an investment of PKR 784 M It helped in creating capacity to process nearly one M Liters of milk per day
Currently Nestle occupies the largest market share of UHT milk in the country collecting milk from 130000 farmers in 3000 villages in Punjab Province The company also owns the biggest milk collection network collecting 1 M liters of
milk a day Engro has recently entered into the market with huge investment Currently there are 44 milk plants in the country with installed capacity of 5
M litres per day Only 13 plants are operational with about 40 capacity utilization in total Among these the installed milk powder processing capacity is about
100000 T per year plants operate at below 40 capacity due to competition with cheap milk powder
dumped from European Union (EU) countries which offer export subsidies Imported milk powder from EU is USD 1000 per tonne compared to USD 1920 for
local product The EU is offering an export subsidy of USD 660 per tonne for milk powder
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
Presence of high qualityspecialized inputs availableto firmsndash Human resourcesndash Capital resourcesndash Physical infrastructurendash Administrative infrastructure(eg business registration ruleslicensing property rights)ndash Information infrastructurendash Scientific and technologicalinfrastructurendash Natural resources
Factor Conditions-Physical Pakistan is the 5th largest producer of milk having the world 3rd
largest animal herd (appr 50M) employing approximately 44 of the workforce
Milk prices range from a low of 10 US$ per 100kg in Pakistan 29 US$ per 100 kg in the USA over 23 US$ per 100kg in Bangladesh
This high price seems to stem from a high demand for milk as opposed to relatively low volumes of production and limited availability
Globally milk yields per cow range from 960 to 10000 kgyear Within South Asia interesting trends and opportunities for
development appear to exist Small farms in Pakistan yield around 40 percent more than those
in India and Bangladesh Only the larger Indian farms which are very well managed and
rely on European dairy genetics reach milk yields around the 4000 kg mark
Factor Conditions-Capital ZTBL will disburse Rs 23M to dairy farmers
under a micro finance scheme The Government initiated projects to the
tune of Rs 71 B for strengthening livestock services improving disease control milk and meat production breed improvement animal husbandry management practices
Factor Conditions-Cost of Production Pakistan is ranked among the countries with lowest
cost of production in the world In all small farms the main cost component are the
opportunity costs of family labor The Pakistani milk producers are more competitive
than those of Europe and US The cost difference is more than 10 US $ per 100 kg
milk Large dairy farms in Pakistan have lower costs than
rest of the world farms and can be competitive milk producers in the future
Farms in Bangladesh will have difficulties to compete against imports from the world market and also from Pakistan
Factor Conditions-Foreign Real competition stems from producers in Oceania
and Latin America that have very low production costs Qatar Livestock Company is investing $1B in
corporate farms in Pakistan DFID of UK has granted a pound 25M project for dairy and
agriculture infrastructure investment Engro Chemicals will be investing $16B in agriculture
during next three years 5-10 major UAE groups will explore Pakistans
agriculture sector in corporate farming livestock and dairy sectors
Factor Conditions
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Sophisticated and demanding local customers1048698 Local customer needs that anticipate those elsewhere1048698 Unusual local demand in specialized segments that can be served nationally and globally
Demand Conditions - Domestic
Demand levels are closely associated with income growth and urbanization and linked to increased demand for quality food
safety and standardization changes in consumption habits and
lifestyles demand for convenience
Demand Conditions - Foreign Gulf countries imports 90 per cent of its
food requirements from the West and other countries
The Arab countries farm import bill is of more than $200 billion (Dh734 billion)
Demand for food in Arab world grew by around four per cent between 2002 and 2006
With reduction of subsidies in the wake of WTO the local livestock sector should have better opportunities to compete
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Access to capable locally based suppliers and firms in related fields1048698 Presence of clusters instead of isolated industries
Supporting Industry
Supporting Industry This sector provides raw material for the industry and livestock
creates market and capital Pakistan has well-developed poultry feed industry However the
cattle feed industry is now emerging There are now about 22 cattle feed production units which cater for
less than 5 per cent of the required concentrate needs Livestock also provides security against crop failure particularly in
Barani areas These animals produce
29472 M tons of milk 1115 M tons of beef 0740 M tons of mutton 0416 M tons of poultry meat 8528 B eggs 402 T tons of wool 215 T tons of hair 512 T skins and hides
Recommendations There is a strong rationale for Pakistan to promote
small-scale dairy production and if need be protect dairy markets from unfair and harmful competition
Pakistani government should resort to applying the safeguards provided in the WTO legislation to protect their dairy markets against subsidized imports from the EU or US
Use of exotic cattle genes for sustainable path to higher productivity
National and local breeding strategies need to address the realities of climate and disease risk
Services of artificial insemination should be extended Superior fodder should be identified and propagated
Recommendations Farmer organization has to be strengthened to ensure
that their interests are better represented on a national scale
Promote co-operatives and farmer groups for collection bulking and marketing milk Irrespective of whether targeted to the processing
industry or informal raw milk market Introduce licensing to informal traders and provide
them with simple appropriate technologies to extend shelf-life of raw milk This will dissuade traders from using harmful additives Will encourage consumers to pay a price premium for
assured quality Public policy should discourage concentration and
scaling-up of peri-urban dairy and encourage rural dairy for more equitable development
Recommendations While the market for UHT milk is expected to expand there is
need to diversify the products Setting up livestock business advisory service centers will be a
good investment for professionals Establishment of milk collection centers in the milk pockets
with chillers offer a good investment This will result in improved quality and quantity of milk
Not necessary to establish large dairy farms to promote commercialization of dairy If the necessary technologies are provided and market
institutions are promoted for small-scale milk producers and market agents overall employment and income generation can be increased
This may create a momentum for change in dairy production and marketing structure in the country propelled by general structural changes in the agricultural sector and the economy and most production units may gradually become larger
Export Potential From 1960-2000 agricultural GDP grew by 3 per
annum The contribution of the livestock sub-sector to
agricultural GDP has increased from 26 to 522 (now 11 of total GDP)
The share of agriculture in the GDP has declined from 30 in 1980 to 24 in 2002
The livestock sector output grew by 3 until 1980 and over 5 thereafter
Within livestock subsector Dairy (milk) accounts for 66 of the value of output Meat accounts for 13 Poultry meat and eggs 8 and other products 13
Export Potential Livestock contributes significantly
towards national exports 85 - 90 per cent of total exports belong to
this sector 85-90 of milk consumption in both rural
and urban areas of Pakistan remains in the form of raw unprocessed milk and traditional processed milk products such as yoghurt gheebutter oil and butter
Consumer demand for processed (UHT) milk has been increasing slowly since the mid 1990s
Export Potential
Export Potential
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Country Strategy
A local context and rules thatencourages investment andsustained productivityimprovementndasheg Intellectual propertyprotection1048698 Meritocratic incentive systems across all major institutions1048698 Open and vigorous localcompetition
Country Strategy Public investment in livestock extension and services Promotion of dairy co-operatives Targeted dairy development projects Public sector investment in milk processing and marketing Facilitating private sector investment in dairy processing Import tariffs on milk powder and income tax exemption to
dairy farmers Other policies indirectly affecting the dairy sector
Promotion of Green Revolution technologies Exchange rate policies Tax policy for processed milk products and agricultural inputs Regulations banning animals in metropolitan city areas Regulations to control milk quality
Public investment
Promotion of Co-Operatives Idara-endashKissan (IK) 19000 farmer members of the co-
operative own the enterprise Daily collection is about 200000 L through 576 milk
collection centers 1992 to 2000 average annual sales increased from 4
M to 39 M Liters Currently daily processing and sales through 450
retail shops are roughly 70000 L unpacked pasteurized (open pasteurized) 20000 L pouch-packed pasteurized 30000 L UHT 80000 L converted to powder and other products
Targeted Dairy Development Punjab Smallholder Dairy Development
Project (UNDP) funded at a total cost $14 M Targeted 27000 poor rural households in 720
villages in six Tehsils in Gujranwala Division Milk production has increased by 265 among
the targeted households and sales per household increased by up to 69
The results of the project were so encouraging the project was incorporated into the Provincial Livestock Department
Investment in Milk Processing and Marketing Livestock Development Project was started in 1975 as an umbrella pilot
project in some districts of all four provinces with an investment of PKR 784 M It helped in creating capacity to process nearly one M Liters of milk per day
Currently Nestle occupies the largest market share of UHT milk in the country collecting milk from 130000 farmers in 3000 villages in Punjab Province The company also owns the biggest milk collection network collecting 1 M liters of
milk a day Engro has recently entered into the market with huge investment Currently there are 44 milk plants in the country with installed capacity of 5
M litres per day Only 13 plants are operational with about 40 capacity utilization in total Among these the installed milk powder processing capacity is about
100000 T per year plants operate at below 40 capacity due to competition with cheap milk powder
dumped from European Union (EU) countries which offer export subsidies Imported milk powder from EU is USD 1000 per tonne compared to USD 1920 for
local product The EU is offering an export subsidy of USD 660 per tonne for milk powder
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
Presence of high qualityspecialized inputs availableto firmsndash Human resourcesndash Capital resourcesndash Physical infrastructurendash Administrative infrastructure(eg business registration ruleslicensing property rights)ndash Information infrastructurendash Scientific and technologicalinfrastructurendash Natural resources
Factor Conditions-Physical Pakistan is the 5th largest producer of milk having the world 3rd
largest animal herd (appr 50M) employing approximately 44 of the workforce
Milk prices range from a low of 10 US$ per 100kg in Pakistan 29 US$ per 100 kg in the USA over 23 US$ per 100kg in Bangladesh
This high price seems to stem from a high demand for milk as opposed to relatively low volumes of production and limited availability
Globally milk yields per cow range from 960 to 10000 kgyear Within South Asia interesting trends and opportunities for
development appear to exist Small farms in Pakistan yield around 40 percent more than those
in India and Bangladesh Only the larger Indian farms which are very well managed and
rely on European dairy genetics reach milk yields around the 4000 kg mark
Factor Conditions-Capital ZTBL will disburse Rs 23M to dairy farmers
under a micro finance scheme The Government initiated projects to the
tune of Rs 71 B for strengthening livestock services improving disease control milk and meat production breed improvement animal husbandry management practices
Factor Conditions-Cost of Production Pakistan is ranked among the countries with lowest
cost of production in the world In all small farms the main cost component are the
opportunity costs of family labor The Pakistani milk producers are more competitive
than those of Europe and US The cost difference is more than 10 US $ per 100 kg
milk Large dairy farms in Pakistan have lower costs than
rest of the world farms and can be competitive milk producers in the future
Farms in Bangladesh will have difficulties to compete against imports from the world market and also from Pakistan
Factor Conditions-Foreign Real competition stems from producers in Oceania
and Latin America that have very low production costs Qatar Livestock Company is investing $1B in
corporate farms in Pakistan DFID of UK has granted a pound 25M project for dairy and
agriculture infrastructure investment Engro Chemicals will be investing $16B in agriculture
during next three years 5-10 major UAE groups will explore Pakistans
agriculture sector in corporate farming livestock and dairy sectors
Factor Conditions
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Sophisticated and demanding local customers1048698 Local customer needs that anticipate those elsewhere1048698 Unusual local demand in specialized segments that can be served nationally and globally
Demand Conditions - Domestic
Demand levels are closely associated with income growth and urbanization and linked to increased demand for quality food
safety and standardization changes in consumption habits and
lifestyles demand for convenience
Demand Conditions - Foreign Gulf countries imports 90 per cent of its
food requirements from the West and other countries
The Arab countries farm import bill is of more than $200 billion (Dh734 billion)
Demand for food in Arab world grew by around four per cent between 2002 and 2006
With reduction of subsidies in the wake of WTO the local livestock sector should have better opportunities to compete
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Access to capable locally based suppliers and firms in related fields1048698 Presence of clusters instead of isolated industries
Supporting Industry
Supporting Industry This sector provides raw material for the industry and livestock
creates market and capital Pakistan has well-developed poultry feed industry However the
cattle feed industry is now emerging There are now about 22 cattle feed production units which cater for
less than 5 per cent of the required concentrate needs Livestock also provides security against crop failure particularly in
Barani areas These animals produce
29472 M tons of milk 1115 M tons of beef 0740 M tons of mutton 0416 M tons of poultry meat 8528 B eggs 402 T tons of wool 215 T tons of hair 512 T skins and hides
Recommendations There is a strong rationale for Pakistan to promote
small-scale dairy production and if need be protect dairy markets from unfair and harmful competition
Pakistani government should resort to applying the safeguards provided in the WTO legislation to protect their dairy markets against subsidized imports from the EU or US
Use of exotic cattle genes for sustainable path to higher productivity
National and local breeding strategies need to address the realities of climate and disease risk
Services of artificial insemination should be extended Superior fodder should be identified and propagated
Recommendations Farmer organization has to be strengthened to ensure
that their interests are better represented on a national scale
Promote co-operatives and farmer groups for collection bulking and marketing milk Irrespective of whether targeted to the processing
industry or informal raw milk market Introduce licensing to informal traders and provide
them with simple appropriate technologies to extend shelf-life of raw milk This will dissuade traders from using harmful additives Will encourage consumers to pay a price premium for
assured quality Public policy should discourage concentration and
scaling-up of peri-urban dairy and encourage rural dairy for more equitable development
Recommendations While the market for UHT milk is expected to expand there is
need to diversify the products Setting up livestock business advisory service centers will be a
good investment for professionals Establishment of milk collection centers in the milk pockets
with chillers offer a good investment This will result in improved quality and quantity of milk
Not necessary to establish large dairy farms to promote commercialization of dairy If the necessary technologies are provided and market
institutions are promoted for small-scale milk producers and market agents overall employment and income generation can be increased
This may create a momentum for change in dairy production and marketing structure in the country propelled by general structural changes in the agricultural sector and the economy and most production units may gradually become larger
Export Potential Livestock contributes significantly
towards national exports 85 - 90 per cent of total exports belong to
this sector 85-90 of milk consumption in both rural
and urban areas of Pakistan remains in the form of raw unprocessed milk and traditional processed milk products such as yoghurt gheebutter oil and butter
Consumer demand for processed (UHT) milk has been increasing slowly since the mid 1990s
Export Potential
Export Potential
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Country Strategy
A local context and rules thatencourages investment andsustained productivityimprovementndasheg Intellectual propertyprotection1048698 Meritocratic incentive systems across all major institutions1048698 Open and vigorous localcompetition
Country Strategy Public investment in livestock extension and services Promotion of dairy co-operatives Targeted dairy development projects Public sector investment in milk processing and marketing Facilitating private sector investment in dairy processing Import tariffs on milk powder and income tax exemption to
dairy farmers Other policies indirectly affecting the dairy sector
Promotion of Green Revolution technologies Exchange rate policies Tax policy for processed milk products and agricultural inputs Regulations banning animals in metropolitan city areas Regulations to control milk quality
Public investment
Promotion of Co-Operatives Idara-endashKissan (IK) 19000 farmer members of the co-
operative own the enterprise Daily collection is about 200000 L through 576 milk
collection centers 1992 to 2000 average annual sales increased from 4
M to 39 M Liters Currently daily processing and sales through 450
retail shops are roughly 70000 L unpacked pasteurized (open pasteurized) 20000 L pouch-packed pasteurized 30000 L UHT 80000 L converted to powder and other products
Targeted Dairy Development Punjab Smallholder Dairy Development
Project (UNDP) funded at a total cost $14 M Targeted 27000 poor rural households in 720
villages in six Tehsils in Gujranwala Division Milk production has increased by 265 among
the targeted households and sales per household increased by up to 69
The results of the project were so encouraging the project was incorporated into the Provincial Livestock Department
Investment in Milk Processing and Marketing Livestock Development Project was started in 1975 as an umbrella pilot
project in some districts of all four provinces with an investment of PKR 784 M It helped in creating capacity to process nearly one M Liters of milk per day
Currently Nestle occupies the largest market share of UHT milk in the country collecting milk from 130000 farmers in 3000 villages in Punjab Province The company also owns the biggest milk collection network collecting 1 M liters of
milk a day Engro has recently entered into the market with huge investment Currently there are 44 milk plants in the country with installed capacity of 5
M litres per day Only 13 plants are operational with about 40 capacity utilization in total Among these the installed milk powder processing capacity is about
100000 T per year plants operate at below 40 capacity due to competition with cheap milk powder
dumped from European Union (EU) countries which offer export subsidies Imported milk powder from EU is USD 1000 per tonne compared to USD 1920 for
local product The EU is offering an export subsidy of USD 660 per tonne for milk powder
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
Presence of high qualityspecialized inputs availableto firmsndash Human resourcesndash Capital resourcesndash Physical infrastructurendash Administrative infrastructure(eg business registration ruleslicensing property rights)ndash Information infrastructurendash Scientific and technologicalinfrastructurendash Natural resources
Factor Conditions-Physical Pakistan is the 5th largest producer of milk having the world 3rd
largest animal herd (appr 50M) employing approximately 44 of the workforce
Milk prices range from a low of 10 US$ per 100kg in Pakistan 29 US$ per 100 kg in the USA over 23 US$ per 100kg in Bangladesh
This high price seems to stem from a high demand for milk as opposed to relatively low volumes of production and limited availability
Globally milk yields per cow range from 960 to 10000 kgyear Within South Asia interesting trends and opportunities for
development appear to exist Small farms in Pakistan yield around 40 percent more than those
in India and Bangladesh Only the larger Indian farms which are very well managed and
rely on European dairy genetics reach milk yields around the 4000 kg mark
Factor Conditions-Capital ZTBL will disburse Rs 23M to dairy farmers
under a micro finance scheme The Government initiated projects to the
tune of Rs 71 B for strengthening livestock services improving disease control milk and meat production breed improvement animal husbandry management practices
Factor Conditions-Cost of Production Pakistan is ranked among the countries with lowest
cost of production in the world In all small farms the main cost component are the
opportunity costs of family labor The Pakistani milk producers are more competitive
than those of Europe and US The cost difference is more than 10 US $ per 100 kg
milk Large dairy farms in Pakistan have lower costs than
rest of the world farms and can be competitive milk producers in the future
Farms in Bangladesh will have difficulties to compete against imports from the world market and also from Pakistan
Factor Conditions-Foreign Real competition stems from producers in Oceania
and Latin America that have very low production costs Qatar Livestock Company is investing $1B in
corporate farms in Pakistan DFID of UK has granted a pound 25M project for dairy and
agriculture infrastructure investment Engro Chemicals will be investing $16B in agriculture
during next three years 5-10 major UAE groups will explore Pakistans
agriculture sector in corporate farming livestock and dairy sectors
Factor Conditions
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Sophisticated and demanding local customers1048698 Local customer needs that anticipate those elsewhere1048698 Unusual local demand in specialized segments that can be served nationally and globally
Demand Conditions - Domestic
Demand levels are closely associated with income growth and urbanization and linked to increased demand for quality food
safety and standardization changes in consumption habits and
lifestyles demand for convenience
Demand Conditions - Foreign Gulf countries imports 90 per cent of its
food requirements from the West and other countries
The Arab countries farm import bill is of more than $200 billion (Dh734 billion)
Demand for food in Arab world grew by around four per cent between 2002 and 2006
With reduction of subsidies in the wake of WTO the local livestock sector should have better opportunities to compete
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Access to capable locally based suppliers and firms in related fields1048698 Presence of clusters instead of isolated industries
Supporting Industry
Supporting Industry This sector provides raw material for the industry and livestock
creates market and capital Pakistan has well-developed poultry feed industry However the
cattle feed industry is now emerging There are now about 22 cattle feed production units which cater for
less than 5 per cent of the required concentrate needs Livestock also provides security against crop failure particularly in
Barani areas These animals produce
29472 M tons of milk 1115 M tons of beef 0740 M tons of mutton 0416 M tons of poultry meat 8528 B eggs 402 T tons of wool 215 T tons of hair 512 T skins and hides
Recommendations There is a strong rationale for Pakistan to promote
small-scale dairy production and if need be protect dairy markets from unfair and harmful competition
Pakistani government should resort to applying the safeguards provided in the WTO legislation to protect their dairy markets against subsidized imports from the EU or US
Use of exotic cattle genes for sustainable path to higher productivity
National and local breeding strategies need to address the realities of climate and disease risk
Services of artificial insemination should be extended Superior fodder should be identified and propagated
Recommendations Farmer organization has to be strengthened to ensure
that their interests are better represented on a national scale
Promote co-operatives and farmer groups for collection bulking and marketing milk Irrespective of whether targeted to the processing
industry or informal raw milk market Introduce licensing to informal traders and provide
them with simple appropriate technologies to extend shelf-life of raw milk This will dissuade traders from using harmful additives Will encourage consumers to pay a price premium for
assured quality Public policy should discourage concentration and
scaling-up of peri-urban dairy and encourage rural dairy for more equitable development
Recommendations While the market for UHT milk is expected to expand there is
need to diversify the products Setting up livestock business advisory service centers will be a
good investment for professionals Establishment of milk collection centers in the milk pockets
with chillers offer a good investment This will result in improved quality and quantity of milk
Not necessary to establish large dairy farms to promote commercialization of dairy If the necessary technologies are provided and market
institutions are promoted for small-scale milk producers and market agents overall employment and income generation can be increased
This may create a momentum for change in dairy production and marketing structure in the country propelled by general structural changes in the agricultural sector and the economy and most production units may gradually become larger
Export Potential
Export Potential
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Country Strategy
A local context and rules thatencourages investment andsustained productivityimprovementndasheg Intellectual propertyprotection1048698 Meritocratic incentive systems across all major institutions1048698 Open and vigorous localcompetition
Country Strategy Public investment in livestock extension and services Promotion of dairy co-operatives Targeted dairy development projects Public sector investment in milk processing and marketing Facilitating private sector investment in dairy processing Import tariffs on milk powder and income tax exemption to
dairy farmers Other policies indirectly affecting the dairy sector
Promotion of Green Revolution technologies Exchange rate policies Tax policy for processed milk products and agricultural inputs Regulations banning animals in metropolitan city areas Regulations to control milk quality
Public investment
Promotion of Co-Operatives Idara-endashKissan (IK) 19000 farmer members of the co-
operative own the enterprise Daily collection is about 200000 L through 576 milk
collection centers 1992 to 2000 average annual sales increased from 4
M to 39 M Liters Currently daily processing and sales through 450
retail shops are roughly 70000 L unpacked pasteurized (open pasteurized) 20000 L pouch-packed pasteurized 30000 L UHT 80000 L converted to powder and other products
Targeted Dairy Development Punjab Smallholder Dairy Development
Project (UNDP) funded at a total cost $14 M Targeted 27000 poor rural households in 720
villages in six Tehsils in Gujranwala Division Milk production has increased by 265 among
the targeted households and sales per household increased by up to 69
The results of the project were so encouraging the project was incorporated into the Provincial Livestock Department
Investment in Milk Processing and Marketing Livestock Development Project was started in 1975 as an umbrella pilot
project in some districts of all four provinces with an investment of PKR 784 M It helped in creating capacity to process nearly one M Liters of milk per day
Currently Nestle occupies the largest market share of UHT milk in the country collecting milk from 130000 farmers in 3000 villages in Punjab Province The company also owns the biggest milk collection network collecting 1 M liters of
milk a day Engro has recently entered into the market with huge investment Currently there are 44 milk plants in the country with installed capacity of 5
M litres per day Only 13 plants are operational with about 40 capacity utilization in total Among these the installed milk powder processing capacity is about
100000 T per year plants operate at below 40 capacity due to competition with cheap milk powder
dumped from European Union (EU) countries which offer export subsidies Imported milk powder from EU is USD 1000 per tonne compared to USD 1920 for
local product The EU is offering an export subsidy of USD 660 per tonne for milk powder
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
Presence of high qualityspecialized inputs availableto firmsndash Human resourcesndash Capital resourcesndash Physical infrastructurendash Administrative infrastructure(eg business registration ruleslicensing property rights)ndash Information infrastructurendash Scientific and technologicalinfrastructurendash Natural resources
Factor Conditions-Physical Pakistan is the 5th largest producer of milk having the world 3rd
largest animal herd (appr 50M) employing approximately 44 of the workforce
Milk prices range from a low of 10 US$ per 100kg in Pakistan 29 US$ per 100 kg in the USA over 23 US$ per 100kg in Bangladesh
This high price seems to stem from a high demand for milk as opposed to relatively low volumes of production and limited availability
Globally milk yields per cow range from 960 to 10000 kgyear Within South Asia interesting trends and opportunities for
development appear to exist Small farms in Pakistan yield around 40 percent more than those
in India and Bangladesh Only the larger Indian farms which are very well managed and
rely on European dairy genetics reach milk yields around the 4000 kg mark
Factor Conditions-Capital ZTBL will disburse Rs 23M to dairy farmers
under a micro finance scheme The Government initiated projects to the
tune of Rs 71 B for strengthening livestock services improving disease control milk and meat production breed improvement animal husbandry management practices
Factor Conditions-Cost of Production Pakistan is ranked among the countries with lowest
cost of production in the world In all small farms the main cost component are the
opportunity costs of family labor The Pakistani milk producers are more competitive
than those of Europe and US The cost difference is more than 10 US $ per 100 kg
milk Large dairy farms in Pakistan have lower costs than
rest of the world farms and can be competitive milk producers in the future
Farms in Bangladesh will have difficulties to compete against imports from the world market and also from Pakistan
Factor Conditions-Foreign Real competition stems from producers in Oceania
and Latin America that have very low production costs Qatar Livestock Company is investing $1B in
corporate farms in Pakistan DFID of UK has granted a pound 25M project for dairy and
agriculture infrastructure investment Engro Chemicals will be investing $16B in agriculture
during next three years 5-10 major UAE groups will explore Pakistans
agriculture sector in corporate farming livestock and dairy sectors
Factor Conditions
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Sophisticated and demanding local customers1048698 Local customer needs that anticipate those elsewhere1048698 Unusual local demand in specialized segments that can be served nationally and globally
Demand Conditions - Domestic
Demand levels are closely associated with income growth and urbanization and linked to increased demand for quality food
safety and standardization changes in consumption habits and
lifestyles demand for convenience
Demand Conditions - Foreign Gulf countries imports 90 per cent of its
food requirements from the West and other countries
The Arab countries farm import bill is of more than $200 billion (Dh734 billion)
Demand for food in Arab world grew by around four per cent between 2002 and 2006
With reduction of subsidies in the wake of WTO the local livestock sector should have better opportunities to compete
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Access to capable locally based suppliers and firms in related fields1048698 Presence of clusters instead of isolated industries
Supporting Industry
Supporting Industry This sector provides raw material for the industry and livestock
creates market and capital Pakistan has well-developed poultry feed industry However the
cattle feed industry is now emerging There are now about 22 cattle feed production units which cater for
less than 5 per cent of the required concentrate needs Livestock also provides security against crop failure particularly in
Barani areas These animals produce
29472 M tons of milk 1115 M tons of beef 0740 M tons of mutton 0416 M tons of poultry meat 8528 B eggs 402 T tons of wool 215 T tons of hair 512 T skins and hides
Recommendations There is a strong rationale for Pakistan to promote
small-scale dairy production and if need be protect dairy markets from unfair and harmful competition
Pakistani government should resort to applying the safeguards provided in the WTO legislation to protect their dairy markets against subsidized imports from the EU or US
Use of exotic cattle genes for sustainable path to higher productivity
National and local breeding strategies need to address the realities of climate and disease risk
Services of artificial insemination should be extended Superior fodder should be identified and propagated
Recommendations Farmer organization has to be strengthened to ensure
that their interests are better represented on a national scale
Promote co-operatives and farmer groups for collection bulking and marketing milk Irrespective of whether targeted to the processing
industry or informal raw milk market Introduce licensing to informal traders and provide
them with simple appropriate technologies to extend shelf-life of raw milk This will dissuade traders from using harmful additives Will encourage consumers to pay a price premium for
assured quality Public policy should discourage concentration and
scaling-up of peri-urban dairy and encourage rural dairy for more equitable development
Recommendations While the market for UHT milk is expected to expand there is
need to diversify the products Setting up livestock business advisory service centers will be a
good investment for professionals Establishment of milk collection centers in the milk pockets
with chillers offer a good investment This will result in improved quality and quantity of milk
Not necessary to establish large dairy farms to promote commercialization of dairy If the necessary technologies are provided and market
institutions are promoted for small-scale milk producers and market agents overall employment and income generation can be increased
This may create a momentum for change in dairy production and marketing structure in the country propelled by general structural changes in the agricultural sector and the economy and most production units may gradually become larger
Export Potential
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Country Strategy
A local context and rules thatencourages investment andsustained productivityimprovementndasheg Intellectual propertyprotection1048698 Meritocratic incentive systems across all major institutions1048698 Open and vigorous localcompetition
Country Strategy Public investment in livestock extension and services Promotion of dairy co-operatives Targeted dairy development projects Public sector investment in milk processing and marketing Facilitating private sector investment in dairy processing Import tariffs on milk powder and income tax exemption to
dairy farmers Other policies indirectly affecting the dairy sector
Promotion of Green Revolution technologies Exchange rate policies Tax policy for processed milk products and agricultural inputs Regulations banning animals in metropolitan city areas Regulations to control milk quality
Public investment
Promotion of Co-Operatives Idara-endashKissan (IK) 19000 farmer members of the co-
operative own the enterprise Daily collection is about 200000 L through 576 milk
collection centers 1992 to 2000 average annual sales increased from 4
M to 39 M Liters Currently daily processing and sales through 450
retail shops are roughly 70000 L unpacked pasteurized (open pasteurized) 20000 L pouch-packed pasteurized 30000 L UHT 80000 L converted to powder and other products
Targeted Dairy Development Punjab Smallholder Dairy Development
Project (UNDP) funded at a total cost $14 M Targeted 27000 poor rural households in 720
villages in six Tehsils in Gujranwala Division Milk production has increased by 265 among
the targeted households and sales per household increased by up to 69
The results of the project were so encouraging the project was incorporated into the Provincial Livestock Department
Investment in Milk Processing and Marketing Livestock Development Project was started in 1975 as an umbrella pilot
project in some districts of all four provinces with an investment of PKR 784 M It helped in creating capacity to process nearly one M Liters of milk per day
Currently Nestle occupies the largest market share of UHT milk in the country collecting milk from 130000 farmers in 3000 villages in Punjab Province The company also owns the biggest milk collection network collecting 1 M liters of
milk a day Engro has recently entered into the market with huge investment Currently there are 44 milk plants in the country with installed capacity of 5
M litres per day Only 13 plants are operational with about 40 capacity utilization in total Among these the installed milk powder processing capacity is about
100000 T per year plants operate at below 40 capacity due to competition with cheap milk powder
dumped from European Union (EU) countries which offer export subsidies Imported milk powder from EU is USD 1000 per tonne compared to USD 1920 for
local product The EU is offering an export subsidy of USD 660 per tonne for milk powder
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
Presence of high qualityspecialized inputs availableto firmsndash Human resourcesndash Capital resourcesndash Physical infrastructurendash Administrative infrastructure(eg business registration ruleslicensing property rights)ndash Information infrastructurendash Scientific and technologicalinfrastructurendash Natural resources
Factor Conditions-Physical Pakistan is the 5th largest producer of milk having the world 3rd
largest animal herd (appr 50M) employing approximately 44 of the workforce
Milk prices range from a low of 10 US$ per 100kg in Pakistan 29 US$ per 100 kg in the USA over 23 US$ per 100kg in Bangladesh
This high price seems to stem from a high demand for milk as opposed to relatively low volumes of production and limited availability
Globally milk yields per cow range from 960 to 10000 kgyear Within South Asia interesting trends and opportunities for
development appear to exist Small farms in Pakistan yield around 40 percent more than those
in India and Bangladesh Only the larger Indian farms which are very well managed and
rely on European dairy genetics reach milk yields around the 4000 kg mark
Factor Conditions-Capital ZTBL will disburse Rs 23M to dairy farmers
under a micro finance scheme The Government initiated projects to the
tune of Rs 71 B for strengthening livestock services improving disease control milk and meat production breed improvement animal husbandry management practices
Factor Conditions-Cost of Production Pakistan is ranked among the countries with lowest
cost of production in the world In all small farms the main cost component are the
opportunity costs of family labor The Pakistani milk producers are more competitive
than those of Europe and US The cost difference is more than 10 US $ per 100 kg
milk Large dairy farms in Pakistan have lower costs than
rest of the world farms and can be competitive milk producers in the future
Farms in Bangladesh will have difficulties to compete against imports from the world market and also from Pakistan
Factor Conditions-Foreign Real competition stems from producers in Oceania
and Latin America that have very low production costs Qatar Livestock Company is investing $1B in
corporate farms in Pakistan DFID of UK has granted a pound 25M project for dairy and
agriculture infrastructure investment Engro Chemicals will be investing $16B in agriculture
during next three years 5-10 major UAE groups will explore Pakistans
agriculture sector in corporate farming livestock and dairy sectors
Factor Conditions
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Sophisticated and demanding local customers1048698 Local customer needs that anticipate those elsewhere1048698 Unusual local demand in specialized segments that can be served nationally and globally
Demand Conditions - Domestic
Demand levels are closely associated with income growth and urbanization and linked to increased demand for quality food
safety and standardization changes in consumption habits and
lifestyles demand for convenience
Demand Conditions - Foreign Gulf countries imports 90 per cent of its
food requirements from the West and other countries
The Arab countries farm import bill is of more than $200 billion (Dh734 billion)
Demand for food in Arab world grew by around four per cent between 2002 and 2006
With reduction of subsidies in the wake of WTO the local livestock sector should have better opportunities to compete
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Access to capable locally based suppliers and firms in related fields1048698 Presence of clusters instead of isolated industries
Supporting Industry
Supporting Industry This sector provides raw material for the industry and livestock
creates market and capital Pakistan has well-developed poultry feed industry However the
cattle feed industry is now emerging There are now about 22 cattle feed production units which cater for
less than 5 per cent of the required concentrate needs Livestock also provides security against crop failure particularly in
Barani areas These animals produce
29472 M tons of milk 1115 M tons of beef 0740 M tons of mutton 0416 M tons of poultry meat 8528 B eggs 402 T tons of wool 215 T tons of hair 512 T skins and hides
Recommendations There is a strong rationale for Pakistan to promote
small-scale dairy production and if need be protect dairy markets from unfair and harmful competition
Pakistani government should resort to applying the safeguards provided in the WTO legislation to protect their dairy markets against subsidized imports from the EU or US
Use of exotic cattle genes for sustainable path to higher productivity
National and local breeding strategies need to address the realities of climate and disease risk
Services of artificial insemination should be extended Superior fodder should be identified and propagated
Recommendations Farmer organization has to be strengthened to ensure
that their interests are better represented on a national scale
Promote co-operatives and farmer groups for collection bulking and marketing milk Irrespective of whether targeted to the processing
industry or informal raw milk market Introduce licensing to informal traders and provide
them with simple appropriate technologies to extend shelf-life of raw milk This will dissuade traders from using harmful additives Will encourage consumers to pay a price premium for
assured quality Public policy should discourage concentration and
scaling-up of peri-urban dairy and encourage rural dairy for more equitable development
Recommendations While the market for UHT milk is expected to expand there is
need to diversify the products Setting up livestock business advisory service centers will be a
good investment for professionals Establishment of milk collection centers in the milk pockets
with chillers offer a good investment This will result in improved quality and quantity of milk
Not necessary to establish large dairy farms to promote commercialization of dairy If the necessary technologies are provided and market
institutions are promoted for small-scale milk producers and market agents overall employment and income generation can be increased
This may create a momentum for change in dairy production and marketing structure in the country propelled by general structural changes in the agricultural sector and the economy and most production units may gradually become larger
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Country Strategy
A local context and rules thatencourages investment andsustained productivityimprovementndasheg Intellectual propertyprotection1048698 Meritocratic incentive systems across all major institutions1048698 Open and vigorous localcompetition
Country Strategy Public investment in livestock extension and services Promotion of dairy co-operatives Targeted dairy development projects Public sector investment in milk processing and marketing Facilitating private sector investment in dairy processing Import tariffs on milk powder and income tax exemption to
dairy farmers Other policies indirectly affecting the dairy sector
Promotion of Green Revolution technologies Exchange rate policies Tax policy for processed milk products and agricultural inputs Regulations banning animals in metropolitan city areas Regulations to control milk quality
Public investment
Promotion of Co-Operatives Idara-endashKissan (IK) 19000 farmer members of the co-
operative own the enterprise Daily collection is about 200000 L through 576 milk
collection centers 1992 to 2000 average annual sales increased from 4
M to 39 M Liters Currently daily processing and sales through 450
retail shops are roughly 70000 L unpacked pasteurized (open pasteurized) 20000 L pouch-packed pasteurized 30000 L UHT 80000 L converted to powder and other products
Targeted Dairy Development Punjab Smallholder Dairy Development
Project (UNDP) funded at a total cost $14 M Targeted 27000 poor rural households in 720
villages in six Tehsils in Gujranwala Division Milk production has increased by 265 among
the targeted households and sales per household increased by up to 69
The results of the project were so encouraging the project was incorporated into the Provincial Livestock Department
Investment in Milk Processing and Marketing Livestock Development Project was started in 1975 as an umbrella pilot
project in some districts of all four provinces with an investment of PKR 784 M It helped in creating capacity to process nearly one M Liters of milk per day
Currently Nestle occupies the largest market share of UHT milk in the country collecting milk from 130000 farmers in 3000 villages in Punjab Province The company also owns the biggest milk collection network collecting 1 M liters of
milk a day Engro has recently entered into the market with huge investment Currently there are 44 milk plants in the country with installed capacity of 5
M litres per day Only 13 plants are operational with about 40 capacity utilization in total Among these the installed milk powder processing capacity is about
100000 T per year plants operate at below 40 capacity due to competition with cheap milk powder
dumped from European Union (EU) countries which offer export subsidies Imported milk powder from EU is USD 1000 per tonne compared to USD 1920 for
local product The EU is offering an export subsidy of USD 660 per tonne for milk powder
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
Presence of high qualityspecialized inputs availableto firmsndash Human resourcesndash Capital resourcesndash Physical infrastructurendash Administrative infrastructure(eg business registration ruleslicensing property rights)ndash Information infrastructurendash Scientific and technologicalinfrastructurendash Natural resources
Factor Conditions-Physical Pakistan is the 5th largest producer of milk having the world 3rd
largest animal herd (appr 50M) employing approximately 44 of the workforce
Milk prices range from a low of 10 US$ per 100kg in Pakistan 29 US$ per 100 kg in the USA over 23 US$ per 100kg in Bangladesh
This high price seems to stem from a high demand for milk as opposed to relatively low volumes of production and limited availability
Globally milk yields per cow range from 960 to 10000 kgyear Within South Asia interesting trends and opportunities for
development appear to exist Small farms in Pakistan yield around 40 percent more than those
in India and Bangladesh Only the larger Indian farms which are very well managed and
rely on European dairy genetics reach milk yields around the 4000 kg mark
Factor Conditions-Capital ZTBL will disburse Rs 23M to dairy farmers
under a micro finance scheme The Government initiated projects to the
tune of Rs 71 B for strengthening livestock services improving disease control milk and meat production breed improvement animal husbandry management practices
Factor Conditions-Cost of Production Pakistan is ranked among the countries with lowest
cost of production in the world In all small farms the main cost component are the
opportunity costs of family labor The Pakistani milk producers are more competitive
than those of Europe and US The cost difference is more than 10 US $ per 100 kg
milk Large dairy farms in Pakistan have lower costs than
rest of the world farms and can be competitive milk producers in the future
Farms in Bangladesh will have difficulties to compete against imports from the world market and also from Pakistan
Factor Conditions-Foreign Real competition stems from producers in Oceania
and Latin America that have very low production costs Qatar Livestock Company is investing $1B in
corporate farms in Pakistan DFID of UK has granted a pound 25M project for dairy and
agriculture infrastructure investment Engro Chemicals will be investing $16B in agriculture
during next three years 5-10 major UAE groups will explore Pakistans
agriculture sector in corporate farming livestock and dairy sectors
Factor Conditions
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Sophisticated and demanding local customers1048698 Local customer needs that anticipate those elsewhere1048698 Unusual local demand in specialized segments that can be served nationally and globally
Demand Conditions - Domestic
Demand levels are closely associated with income growth and urbanization and linked to increased demand for quality food
safety and standardization changes in consumption habits and
lifestyles demand for convenience
Demand Conditions - Foreign Gulf countries imports 90 per cent of its
food requirements from the West and other countries
The Arab countries farm import bill is of more than $200 billion (Dh734 billion)
Demand for food in Arab world grew by around four per cent between 2002 and 2006
With reduction of subsidies in the wake of WTO the local livestock sector should have better opportunities to compete
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Access to capable locally based suppliers and firms in related fields1048698 Presence of clusters instead of isolated industries
Supporting Industry
Supporting Industry This sector provides raw material for the industry and livestock
creates market and capital Pakistan has well-developed poultry feed industry However the
cattle feed industry is now emerging There are now about 22 cattle feed production units which cater for
less than 5 per cent of the required concentrate needs Livestock also provides security against crop failure particularly in
Barani areas These animals produce
29472 M tons of milk 1115 M tons of beef 0740 M tons of mutton 0416 M tons of poultry meat 8528 B eggs 402 T tons of wool 215 T tons of hair 512 T skins and hides
Recommendations There is a strong rationale for Pakistan to promote
small-scale dairy production and if need be protect dairy markets from unfair and harmful competition
Pakistani government should resort to applying the safeguards provided in the WTO legislation to protect their dairy markets against subsidized imports from the EU or US
Use of exotic cattle genes for sustainable path to higher productivity
National and local breeding strategies need to address the realities of climate and disease risk
Services of artificial insemination should be extended Superior fodder should be identified and propagated
Recommendations Farmer organization has to be strengthened to ensure
that their interests are better represented on a national scale
Promote co-operatives and farmer groups for collection bulking and marketing milk Irrespective of whether targeted to the processing
industry or informal raw milk market Introduce licensing to informal traders and provide
them with simple appropriate technologies to extend shelf-life of raw milk This will dissuade traders from using harmful additives Will encourage consumers to pay a price premium for
assured quality Public policy should discourage concentration and
scaling-up of peri-urban dairy and encourage rural dairy for more equitable development
Recommendations While the market for UHT milk is expected to expand there is
need to diversify the products Setting up livestock business advisory service centers will be a
good investment for professionals Establishment of milk collection centers in the milk pockets
with chillers offer a good investment This will result in improved quality and quantity of milk
Not necessary to establish large dairy farms to promote commercialization of dairy If the necessary technologies are provided and market
institutions are promoted for small-scale milk producers and market agents overall employment and income generation can be increased
This may create a momentum for change in dairy production and marketing structure in the country propelled by general structural changes in the agricultural sector and the economy and most production units may gradually become larger
Country Strategy Public investment in livestock extension and services Promotion of dairy co-operatives Targeted dairy development projects Public sector investment in milk processing and marketing Facilitating private sector investment in dairy processing Import tariffs on milk powder and income tax exemption to
dairy farmers Other policies indirectly affecting the dairy sector
Promotion of Green Revolution technologies Exchange rate policies Tax policy for processed milk products and agricultural inputs Regulations banning animals in metropolitan city areas Regulations to control milk quality
Public investment
Promotion of Co-Operatives Idara-endashKissan (IK) 19000 farmer members of the co-
operative own the enterprise Daily collection is about 200000 L through 576 milk
collection centers 1992 to 2000 average annual sales increased from 4
M to 39 M Liters Currently daily processing and sales through 450
retail shops are roughly 70000 L unpacked pasteurized (open pasteurized) 20000 L pouch-packed pasteurized 30000 L UHT 80000 L converted to powder and other products
Targeted Dairy Development Punjab Smallholder Dairy Development
Project (UNDP) funded at a total cost $14 M Targeted 27000 poor rural households in 720
villages in six Tehsils in Gujranwala Division Milk production has increased by 265 among
the targeted households and sales per household increased by up to 69
The results of the project were so encouraging the project was incorporated into the Provincial Livestock Department
Investment in Milk Processing and Marketing Livestock Development Project was started in 1975 as an umbrella pilot
project in some districts of all four provinces with an investment of PKR 784 M It helped in creating capacity to process nearly one M Liters of milk per day
Currently Nestle occupies the largest market share of UHT milk in the country collecting milk from 130000 farmers in 3000 villages in Punjab Province The company also owns the biggest milk collection network collecting 1 M liters of
milk a day Engro has recently entered into the market with huge investment Currently there are 44 milk plants in the country with installed capacity of 5
M litres per day Only 13 plants are operational with about 40 capacity utilization in total Among these the installed milk powder processing capacity is about
100000 T per year plants operate at below 40 capacity due to competition with cheap milk powder
dumped from European Union (EU) countries which offer export subsidies Imported milk powder from EU is USD 1000 per tonne compared to USD 1920 for
local product The EU is offering an export subsidy of USD 660 per tonne for milk powder
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
Presence of high qualityspecialized inputs availableto firmsndash Human resourcesndash Capital resourcesndash Physical infrastructurendash Administrative infrastructure(eg business registration ruleslicensing property rights)ndash Information infrastructurendash Scientific and technologicalinfrastructurendash Natural resources
Factor Conditions-Physical Pakistan is the 5th largest producer of milk having the world 3rd
largest animal herd (appr 50M) employing approximately 44 of the workforce
Milk prices range from a low of 10 US$ per 100kg in Pakistan 29 US$ per 100 kg in the USA over 23 US$ per 100kg in Bangladesh
This high price seems to stem from a high demand for milk as opposed to relatively low volumes of production and limited availability
Globally milk yields per cow range from 960 to 10000 kgyear Within South Asia interesting trends and opportunities for
development appear to exist Small farms in Pakistan yield around 40 percent more than those
in India and Bangladesh Only the larger Indian farms which are very well managed and
rely on European dairy genetics reach milk yields around the 4000 kg mark
Factor Conditions-Capital ZTBL will disburse Rs 23M to dairy farmers
under a micro finance scheme The Government initiated projects to the
tune of Rs 71 B for strengthening livestock services improving disease control milk and meat production breed improvement animal husbandry management practices
Factor Conditions-Cost of Production Pakistan is ranked among the countries with lowest
cost of production in the world In all small farms the main cost component are the
opportunity costs of family labor The Pakistani milk producers are more competitive
than those of Europe and US The cost difference is more than 10 US $ per 100 kg
milk Large dairy farms in Pakistan have lower costs than
rest of the world farms and can be competitive milk producers in the future
Farms in Bangladesh will have difficulties to compete against imports from the world market and also from Pakistan
Factor Conditions-Foreign Real competition stems from producers in Oceania
and Latin America that have very low production costs Qatar Livestock Company is investing $1B in
corporate farms in Pakistan DFID of UK has granted a pound 25M project for dairy and
agriculture infrastructure investment Engro Chemicals will be investing $16B in agriculture
during next three years 5-10 major UAE groups will explore Pakistans
agriculture sector in corporate farming livestock and dairy sectors
Factor Conditions
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Sophisticated and demanding local customers1048698 Local customer needs that anticipate those elsewhere1048698 Unusual local demand in specialized segments that can be served nationally and globally
Demand Conditions - Domestic
Demand levels are closely associated with income growth and urbanization and linked to increased demand for quality food
safety and standardization changes in consumption habits and
lifestyles demand for convenience
Demand Conditions - Foreign Gulf countries imports 90 per cent of its
food requirements from the West and other countries
The Arab countries farm import bill is of more than $200 billion (Dh734 billion)
Demand for food in Arab world grew by around four per cent between 2002 and 2006
With reduction of subsidies in the wake of WTO the local livestock sector should have better opportunities to compete
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Access to capable locally based suppliers and firms in related fields1048698 Presence of clusters instead of isolated industries
Supporting Industry
Supporting Industry This sector provides raw material for the industry and livestock
creates market and capital Pakistan has well-developed poultry feed industry However the
cattle feed industry is now emerging There are now about 22 cattle feed production units which cater for
less than 5 per cent of the required concentrate needs Livestock also provides security against crop failure particularly in
Barani areas These animals produce
29472 M tons of milk 1115 M tons of beef 0740 M tons of mutton 0416 M tons of poultry meat 8528 B eggs 402 T tons of wool 215 T tons of hair 512 T skins and hides
Recommendations There is a strong rationale for Pakistan to promote
small-scale dairy production and if need be protect dairy markets from unfair and harmful competition
Pakistani government should resort to applying the safeguards provided in the WTO legislation to protect their dairy markets against subsidized imports from the EU or US
Use of exotic cattle genes for sustainable path to higher productivity
National and local breeding strategies need to address the realities of climate and disease risk
Services of artificial insemination should be extended Superior fodder should be identified and propagated
Recommendations Farmer organization has to be strengthened to ensure
that their interests are better represented on a national scale
Promote co-operatives and farmer groups for collection bulking and marketing milk Irrespective of whether targeted to the processing
industry or informal raw milk market Introduce licensing to informal traders and provide
them with simple appropriate technologies to extend shelf-life of raw milk This will dissuade traders from using harmful additives Will encourage consumers to pay a price premium for
assured quality Public policy should discourage concentration and
scaling-up of peri-urban dairy and encourage rural dairy for more equitable development
Recommendations While the market for UHT milk is expected to expand there is
need to diversify the products Setting up livestock business advisory service centers will be a
good investment for professionals Establishment of milk collection centers in the milk pockets
with chillers offer a good investment This will result in improved quality and quantity of milk
Not necessary to establish large dairy farms to promote commercialization of dairy If the necessary technologies are provided and market
institutions are promoted for small-scale milk producers and market agents overall employment and income generation can be increased
This may create a momentum for change in dairy production and marketing structure in the country propelled by general structural changes in the agricultural sector and the economy and most production units may gradually become larger
Public investment
Promotion of Co-Operatives Idara-endashKissan (IK) 19000 farmer members of the co-
operative own the enterprise Daily collection is about 200000 L through 576 milk
collection centers 1992 to 2000 average annual sales increased from 4
M to 39 M Liters Currently daily processing and sales through 450
retail shops are roughly 70000 L unpacked pasteurized (open pasteurized) 20000 L pouch-packed pasteurized 30000 L UHT 80000 L converted to powder and other products
Targeted Dairy Development Punjab Smallholder Dairy Development
Project (UNDP) funded at a total cost $14 M Targeted 27000 poor rural households in 720
villages in six Tehsils in Gujranwala Division Milk production has increased by 265 among
the targeted households and sales per household increased by up to 69
The results of the project were so encouraging the project was incorporated into the Provincial Livestock Department
Investment in Milk Processing and Marketing Livestock Development Project was started in 1975 as an umbrella pilot
project in some districts of all four provinces with an investment of PKR 784 M It helped in creating capacity to process nearly one M Liters of milk per day
Currently Nestle occupies the largest market share of UHT milk in the country collecting milk from 130000 farmers in 3000 villages in Punjab Province The company also owns the biggest milk collection network collecting 1 M liters of
milk a day Engro has recently entered into the market with huge investment Currently there are 44 milk plants in the country with installed capacity of 5
M litres per day Only 13 plants are operational with about 40 capacity utilization in total Among these the installed milk powder processing capacity is about
100000 T per year plants operate at below 40 capacity due to competition with cheap milk powder
dumped from European Union (EU) countries which offer export subsidies Imported milk powder from EU is USD 1000 per tonne compared to USD 1920 for
local product The EU is offering an export subsidy of USD 660 per tonne for milk powder
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
Presence of high qualityspecialized inputs availableto firmsndash Human resourcesndash Capital resourcesndash Physical infrastructurendash Administrative infrastructure(eg business registration ruleslicensing property rights)ndash Information infrastructurendash Scientific and technologicalinfrastructurendash Natural resources
Factor Conditions-Physical Pakistan is the 5th largest producer of milk having the world 3rd
largest animal herd (appr 50M) employing approximately 44 of the workforce
Milk prices range from a low of 10 US$ per 100kg in Pakistan 29 US$ per 100 kg in the USA over 23 US$ per 100kg in Bangladesh
This high price seems to stem from a high demand for milk as opposed to relatively low volumes of production and limited availability
Globally milk yields per cow range from 960 to 10000 kgyear Within South Asia interesting trends and opportunities for
development appear to exist Small farms in Pakistan yield around 40 percent more than those
in India and Bangladesh Only the larger Indian farms which are very well managed and
rely on European dairy genetics reach milk yields around the 4000 kg mark
Factor Conditions-Capital ZTBL will disburse Rs 23M to dairy farmers
under a micro finance scheme The Government initiated projects to the
tune of Rs 71 B for strengthening livestock services improving disease control milk and meat production breed improvement animal husbandry management practices
Factor Conditions-Cost of Production Pakistan is ranked among the countries with lowest
cost of production in the world In all small farms the main cost component are the
opportunity costs of family labor The Pakistani milk producers are more competitive
than those of Europe and US The cost difference is more than 10 US $ per 100 kg
milk Large dairy farms in Pakistan have lower costs than
rest of the world farms and can be competitive milk producers in the future
Farms in Bangladesh will have difficulties to compete against imports from the world market and also from Pakistan
Factor Conditions-Foreign Real competition stems from producers in Oceania
and Latin America that have very low production costs Qatar Livestock Company is investing $1B in
corporate farms in Pakistan DFID of UK has granted a pound 25M project for dairy and
agriculture infrastructure investment Engro Chemicals will be investing $16B in agriculture
during next three years 5-10 major UAE groups will explore Pakistans
agriculture sector in corporate farming livestock and dairy sectors
Factor Conditions
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Sophisticated and demanding local customers1048698 Local customer needs that anticipate those elsewhere1048698 Unusual local demand in specialized segments that can be served nationally and globally
Demand Conditions - Domestic
Demand levels are closely associated with income growth and urbanization and linked to increased demand for quality food
safety and standardization changes in consumption habits and
lifestyles demand for convenience
Demand Conditions - Foreign Gulf countries imports 90 per cent of its
food requirements from the West and other countries
The Arab countries farm import bill is of more than $200 billion (Dh734 billion)
Demand for food in Arab world grew by around four per cent between 2002 and 2006
With reduction of subsidies in the wake of WTO the local livestock sector should have better opportunities to compete
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Access to capable locally based suppliers and firms in related fields1048698 Presence of clusters instead of isolated industries
Supporting Industry
Supporting Industry This sector provides raw material for the industry and livestock
creates market and capital Pakistan has well-developed poultry feed industry However the
cattle feed industry is now emerging There are now about 22 cattle feed production units which cater for
less than 5 per cent of the required concentrate needs Livestock also provides security against crop failure particularly in
Barani areas These animals produce
29472 M tons of milk 1115 M tons of beef 0740 M tons of mutton 0416 M tons of poultry meat 8528 B eggs 402 T tons of wool 215 T tons of hair 512 T skins and hides
Recommendations There is a strong rationale for Pakistan to promote
small-scale dairy production and if need be protect dairy markets from unfair and harmful competition
Pakistani government should resort to applying the safeguards provided in the WTO legislation to protect their dairy markets against subsidized imports from the EU or US
Use of exotic cattle genes for sustainable path to higher productivity
National and local breeding strategies need to address the realities of climate and disease risk
Services of artificial insemination should be extended Superior fodder should be identified and propagated
Recommendations Farmer organization has to be strengthened to ensure
that their interests are better represented on a national scale
Promote co-operatives and farmer groups for collection bulking and marketing milk Irrespective of whether targeted to the processing
industry or informal raw milk market Introduce licensing to informal traders and provide
them with simple appropriate technologies to extend shelf-life of raw milk This will dissuade traders from using harmful additives Will encourage consumers to pay a price premium for
assured quality Public policy should discourage concentration and
scaling-up of peri-urban dairy and encourage rural dairy for more equitable development
Recommendations While the market for UHT milk is expected to expand there is
need to diversify the products Setting up livestock business advisory service centers will be a
good investment for professionals Establishment of milk collection centers in the milk pockets
with chillers offer a good investment This will result in improved quality and quantity of milk
Not necessary to establish large dairy farms to promote commercialization of dairy If the necessary technologies are provided and market
institutions are promoted for small-scale milk producers and market agents overall employment and income generation can be increased
This may create a momentum for change in dairy production and marketing structure in the country propelled by general structural changes in the agricultural sector and the economy and most production units may gradually become larger
Promotion of Co-Operatives Idara-endashKissan (IK) 19000 farmer members of the co-
operative own the enterprise Daily collection is about 200000 L through 576 milk
collection centers 1992 to 2000 average annual sales increased from 4
M to 39 M Liters Currently daily processing and sales through 450
retail shops are roughly 70000 L unpacked pasteurized (open pasteurized) 20000 L pouch-packed pasteurized 30000 L UHT 80000 L converted to powder and other products
Targeted Dairy Development Punjab Smallholder Dairy Development
Project (UNDP) funded at a total cost $14 M Targeted 27000 poor rural households in 720
villages in six Tehsils in Gujranwala Division Milk production has increased by 265 among
the targeted households and sales per household increased by up to 69
The results of the project were so encouraging the project was incorporated into the Provincial Livestock Department
Investment in Milk Processing and Marketing Livestock Development Project was started in 1975 as an umbrella pilot
project in some districts of all four provinces with an investment of PKR 784 M It helped in creating capacity to process nearly one M Liters of milk per day
Currently Nestle occupies the largest market share of UHT milk in the country collecting milk from 130000 farmers in 3000 villages in Punjab Province The company also owns the biggest milk collection network collecting 1 M liters of
milk a day Engro has recently entered into the market with huge investment Currently there are 44 milk plants in the country with installed capacity of 5
M litres per day Only 13 plants are operational with about 40 capacity utilization in total Among these the installed milk powder processing capacity is about
100000 T per year plants operate at below 40 capacity due to competition with cheap milk powder
dumped from European Union (EU) countries which offer export subsidies Imported milk powder from EU is USD 1000 per tonne compared to USD 1920 for
local product The EU is offering an export subsidy of USD 660 per tonne for milk powder
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
Presence of high qualityspecialized inputs availableto firmsndash Human resourcesndash Capital resourcesndash Physical infrastructurendash Administrative infrastructure(eg business registration ruleslicensing property rights)ndash Information infrastructurendash Scientific and technologicalinfrastructurendash Natural resources
Factor Conditions-Physical Pakistan is the 5th largest producer of milk having the world 3rd
largest animal herd (appr 50M) employing approximately 44 of the workforce
Milk prices range from a low of 10 US$ per 100kg in Pakistan 29 US$ per 100 kg in the USA over 23 US$ per 100kg in Bangladesh
This high price seems to stem from a high demand for milk as opposed to relatively low volumes of production and limited availability
Globally milk yields per cow range from 960 to 10000 kgyear Within South Asia interesting trends and opportunities for
development appear to exist Small farms in Pakistan yield around 40 percent more than those
in India and Bangladesh Only the larger Indian farms which are very well managed and
rely on European dairy genetics reach milk yields around the 4000 kg mark
Factor Conditions-Capital ZTBL will disburse Rs 23M to dairy farmers
under a micro finance scheme The Government initiated projects to the
tune of Rs 71 B for strengthening livestock services improving disease control milk and meat production breed improvement animal husbandry management practices
Factor Conditions-Cost of Production Pakistan is ranked among the countries with lowest
cost of production in the world In all small farms the main cost component are the
opportunity costs of family labor The Pakistani milk producers are more competitive
than those of Europe and US The cost difference is more than 10 US $ per 100 kg
milk Large dairy farms in Pakistan have lower costs than
rest of the world farms and can be competitive milk producers in the future
Farms in Bangladesh will have difficulties to compete against imports from the world market and also from Pakistan
Factor Conditions-Foreign Real competition stems from producers in Oceania
and Latin America that have very low production costs Qatar Livestock Company is investing $1B in
corporate farms in Pakistan DFID of UK has granted a pound 25M project for dairy and
agriculture infrastructure investment Engro Chemicals will be investing $16B in agriculture
during next three years 5-10 major UAE groups will explore Pakistans
agriculture sector in corporate farming livestock and dairy sectors
Factor Conditions
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Sophisticated and demanding local customers1048698 Local customer needs that anticipate those elsewhere1048698 Unusual local demand in specialized segments that can be served nationally and globally
Demand Conditions - Domestic
Demand levels are closely associated with income growth and urbanization and linked to increased demand for quality food
safety and standardization changes in consumption habits and
lifestyles demand for convenience
Demand Conditions - Foreign Gulf countries imports 90 per cent of its
food requirements from the West and other countries
The Arab countries farm import bill is of more than $200 billion (Dh734 billion)
Demand for food in Arab world grew by around four per cent between 2002 and 2006
With reduction of subsidies in the wake of WTO the local livestock sector should have better opportunities to compete
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Access to capable locally based suppliers and firms in related fields1048698 Presence of clusters instead of isolated industries
Supporting Industry
Supporting Industry This sector provides raw material for the industry and livestock
creates market and capital Pakistan has well-developed poultry feed industry However the
cattle feed industry is now emerging There are now about 22 cattle feed production units which cater for
less than 5 per cent of the required concentrate needs Livestock also provides security against crop failure particularly in
Barani areas These animals produce
29472 M tons of milk 1115 M tons of beef 0740 M tons of mutton 0416 M tons of poultry meat 8528 B eggs 402 T tons of wool 215 T tons of hair 512 T skins and hides
Recommendations There is a strong rationale for Pakistan to promote
small-scale dairy production and if need be protect dairy markets from unfair and harmful competition
Pakistani government should resort to applying the safeguards provided in the WTO legislation to protect their dairy markets against subsidized imports from the EU or US
Use of exotic cattle genes for sustainable path to higher productivity
National and local breeding strategies need to address the realities of climate and disease risk
Services of artificial insemination should be extended Superior fodder should be identified and propagated
Recommendations Farmer organization has to be strengthened to ensure
that their interests are better represented on a national scale
Promote co-operatives and farmer groups for collection bulking and marketing milk Irrespective of whether targeted to the processing
industry or informal raw milk market Introduce licensing to informal traders and provide
them with simple appropriate technologies to extend shelf-life of raw milk This will dissuade traders from using harmful additives Will encourage consumers to pay a price premium for
assured quality Public policy should discourage concentration and
scaling-up of peri-urban dairy and encourage rural dairy for more equitable development
Recommendations While the market for UHT milk is expected to expand there is
need to diversify the products Setting up livestock business advisory service centers will be a
good investment for professionals Establishment of milk collection centers in the milk pockets
with chillers offer a good investment This will result in improved quality and quantity of milk
Not necessary to establish large dairy farms to promote commercialization of dairy If the necessary technologies are provided and market
institutions are promoted for small-scale milk producers and market agents overall employment and income generation can be increased
This may create a momentum for change in dairy production and marketing structure in the country propelled by general structural changes in the agricultural sector and the economy and most production units may gradually become larger
Targeted Dairy Development Punjab Smallholder Dairy Development
Project (UNDP) funded at a total cost $14 M Targeted 27000 poor rural households in 720
villages in six Tehsils in Gujranwala Division Milk production has increased by 265 among
the targeted households and sales per household increased by up to 69
The results of the project were so encouraging the project was incorporated into the Provincial Livestock Department
Investment in Milk Processing and Marketing Livestock Development Project was started in 1975 as an umbrella pilot
project in some districts of all four provinces with an investment of PKR 784 M It helped in creating capacity to process nearly one M Liters of milk per day
Currently Nestle occupies the largest market share of UHT milk in the country collecting milk from 130000 farmers in 3000 villages in Punjab Province The company also owns the biggest milk collection network collecting 1 M liters of
milk a day Engro has recently entered into the market with huge investment Currently there are 44 milk plants in the country with installed capacity of 5
M litres per day Only 13 plants are operational with about 40 capacity utilization in total Among these the installed milk powder processing capacity is about
100000 T per year plants operate at below 40 capacity due to competition with cheap milk powder
dumped from European Union (EU) countries which offer export subsidies Imported milk powder from EU is USD 1000 per tonne compared to USD 1920 for
local product The EU is offering an export subsidy of USD 660 per tonne for milk powder
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
Presence of high qualityspecialized inputs availableto firmsndash Human resourcesndash Capital resourcesndash Physical infrastructurendash Administrative infrastructure(eg business registration ruleslicensing property rights)ndash Information infrastructurendash Scientific and technologicalinfrastructurendash Natural resources
Factor Conditions-Physical Pakistan is the 5th largest producer of milk having the world 3rd
largest animal herd (appr 50M) employing approximately 44 of the workforce
Milk prices range from a low of 10 US$ per 100kg in Pakistan 29 US$ per 100 kg in the USA over 23 US$ per 100kg in Bangladesh
This high price seems to stem from a high demand for milk as opposed to relatively low volumes of production and limited availability
Globally milk yields per cow range from 960 to 10000 kgyear Within South Asia interesting trends and opportunities for
development appear to exist Small farms in Pakistan yield around 40 percent more than those
in India and Bangladesh Only the larger Indian farms which are very well managed and
rely on European dairy genetics reach milk yields around the 4000 kg mark
Factor Conditions-Capital ZTBL will disburse Rs 23M to dairy farmers
under a micro finance scheme The Government initiated projects to the
tune of Rs 71 B for strengthening livestock services improving disease control milk and meat production breed improvement animal husbandry management practices
Factor Conditions-Cost of Production Pakistan is ranked among the countries with lowest
cost of production in the world In all small farms the main cost component are the
opportunity costs of family labor The Pakistani milk producers are more competitive
than those of Europe and US The cost difference is more than 10 US $ per 100 kg
milk Large dairy farms in Pakistan have lower costs than
rest of the world farms and can be competitive milk producers in the future
Farms in Bangladesh will have difficulties to compete against imports from the world market and also from Pakistan
Factor Conditions-Foreign Real competition stems from producers in Oceania
and Latin America that have very low production costs Qatar Livestock Company is investing $1B in
corporate farms in Pakistan DFID of UK has granted a pound 25M project for dairy and
agriculture infrastructure investment Engro Chemicals will be investing $16B in agriculture
during next three years 5-10 major UAE groups will explore Pakistans
agriculture sector in corporate farming livestock and dairy sectors
Factor Conditions
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Sophisticated and demanding local customers1048698 Local customer needs that anticipate those elsewhere1048698 Unusual local demand in specialized segments that can be served nationally and globally
Demand Conditions - Domestic
Demand levels are closely associated with income growth and urbanization and linked to increased demand for quality food
safety and standardization changes in consumption habits and
lifestyles demand for convenience
Demand Conditions - Foreign Gulf countries imports 90 per cent of its
food requirements from the West and other countries
The Arab countries farm import bill is of more than $200 billion (Dh734 billion)
Demand for food in Arab world grew by around four per cent between 2002 and 2006
With reduction of subsidies in the wake of WTO the local livestock sector should have better opportunities to compete
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Access to capable locally based suppliers and firms in related fields1048698 Presence of clusters instead of isolated industries
Supporting Industry
Supporting Industry This sector provides raw material for the industry and livestock
creates market and capital Pakistan has well-developed poultry feed industry However the
cattle feed industry is now emerging There are now about 22 cattle feed production units which cater for
less than 5 per cent of the required concentrate needs Livestock also provides security against crop failure particularly in
Barani areas These animals produce
29472 M tons of milk 1115 M tons of beef 0740 M tons of mutton 0416 M tons of poultry meat 8528 B eggs 402 T tons of wool 215 T tons of hair 512 T skins and hides
Recommendations There is a strong rationale for Pakistan to promote
small-scale dairy production and if need be protect dairy markets from unfair and harmful competition
Pakistani government should resort to applying the safeguards provided in the WTO legislation to protect their dairy markets against subsidized imports from the EU or US
Use of exotic cattle genes for sustainable path to higher productivity
National and local breeding strategies need to address the realities of climate and disease risk
Services of artificial insemination should be extended Superior fodder should be identified and propagated
Recommendations Farmer organization has to be strengthened to ensure
that their interests are better represented on a national scale
Promote co-operatives and farmer groups for collection bulking and marketing milk Irrespective of whether targeted to the processing
industry or informal raw milk market Introduce licensing to informal traders and provide
them with simple appropriate technologies to extend shelf-life of raw milk This will dissuade traders from using harmful additives Will encourage consumers to pay a price premium for
assured quality Public policy should discourage concentration and
scaling-up of peri-urban dairy and encourage rural dairy for more equitable development
Recommendations While the market for UHT milk is expected to expand there is
need to diversify the products Setting up livestock business advisory service centers will be a
good investment for professionals Establishment of milk collection centers in the milk pockets
with chillers offer a good investment This will result in improved quality and quantity of milk
Not necessary to establish large dairy farms to promote commercialization of dairy If the necessary technologies are provided and market
institutions are promoted for small-scale milk producers and market agents overall employment and income generation can be increased
This may create a momentum for change in dairy production and marketing structure in the country propelled by general structural changes in the agricultural sector and the economy and most production units may gradually become larger
Investment in Milk Processing and Marketing Livestock Development Project was started in 1975 as an umbrella pilot
project in some districts of all four provinces with an investment of PKR 784 M It helped in creating capacity to process nearly one M Liters of milk per day
Currently Nestle occupies the largest market share of UHT milk in the country collecting milk from 130000 farmers in 3000 villages in Punjab Province The company also owns the biggest milk collection network collecting 1 M liters of
milk a day Engro has recently entered into the market with huge investment Currently there are 44 milk plants in the country with installed capacity of 5
M litres per day Only 13 plants are operational with about 40 capacity utilization in total Among these the installed milk powder processing capacity is about
100000 T per year plants operate at below 40 capacity due to competition with cheap milk powder
dumped from European Union (EU) countries which offer export subsidies Imported milk powder from EU is USD 1000 per tonne compared to USD 1920 for
local product The EU is offering an export subsidy of USD 660 per tonne for milk powder
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
Presence of high qualityspecialized inputs availableto firmsndash Human resourcesndash Capital resourcesndash Physical infrastructurendash Administrative infrastructure(eg business registration ruleslicensing property rights)ndash Information infrastructurendash Scientific and technologicalinfrastructurendash Natural resources
Factor Conditions-Physical Pakistan is the 5th largest producer of milk having the world 3rd
largest animal herd (appr 50M) employing approximately 44 of the workforce
Milk prices range from a low of 10 US$ per 100kg in Pakistan 29 US$ per 100 kg in the USA over 23 US$ per 100kg in Bangladesh
This high price seems to stem from a high demand for milk as opposed to relatively low volumes of production and limited availability
Globally milk yields per cow range from 960 to 10000 kgyear Within South Asia interesting trends and opportunities for
development appear to exist Small farms in Pakistan yield around 40 percent more than those
in India and Bangladesh Only the larger Indian farms which are very well managed and
rely on European dairy genetics reach milk yields around the 4000 kg mark
Factor Conditions-Capital ZTBL will disburse Rs 23M to dairy farmers
under a micro finance scheme The Government initiated projects to the
tune of Rs 71 B for strengthening livestock services improving disease control milk and meat production breed improvement animal husbandry management practices
Factor Conditions-Cost of Production Pakistan is ranked among the countries with lowest
cost of production in the world In all small farms the main cost component are the
opportunity costs of family labor The Pakistani milk producers are more competitive
than those of Europe and US The cost difference is more than 10 US $ per 100 kg
milk Large dairy farms in Pakistan have lower costs than
rest of the world farms and can be competitive milk producers in the future
Farms in Bangladesh will have difficulties to compete against imports from the world market and also from Pakistan
Factor Conditions-Foreign Real competition stems from producers in Oceania
and Latin America that have very low production costs Qatar Livestock Company is investing $1B in
corporate farms in Pakistan DFID of UK has granted a pound 25M project for dairy and
agriculture infrastructure investment Engro Chemicals will be investing $16B in agriculture
during next three years 5-10 major UAE groups will explore Pakistans
agriculture sector in corporate farming livestock and dairy sectors
Factor Conditions
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Sophisticated and demanding local customers1048698 Local customer needs that anticipate those elsewhere1048698 Unusual local demand in specialized segments that can be served nationally and globally
Demand Conditions - Domestic
Demand levels are closely associated with income growth and urbanization and linked to increased demand for quality food
safety and standardization changes in consumption habits and
lifestyles demand for convenience
Demand Conditions - Foreign Gulf countries imports 90 per cent of its
food requirements from the West and other countries
The Arab countries farm import bill is of more than $200 billion (Dh734 billion)
Demand for food in Arab world grew by around four per cent between 2002 and 2006
With reduction of subsidies in the wake of WTO the local livestock sector should have better opportunities to compete
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Access to capable locally based suppliers and firms in related fields1048698 Presence of clusters instead of isolated industries
Supporting Industry
Supporting Industry This sector provides raw material for the industry and livestock
creates market and capital Pakistan has well-developed poultry feed industry However the
cattle feed industry is now emerging There are now about 22 cattle feed production units which cater for
less than 5 per cent of the required concentrate needs Livestock also provides security against crop failure particularly in
Barani areas These animals produce
29472 M tons of milk 1115 M tons of beef 0740 M tons of mutton 0416 M tons of poultry meat 8528 B eggs 402 T tons of wool 215 T tons of hair 512 T skins and hides
Recommendations There is a strong rationale for Pakistan to promote
small-scale dairy production and if need be protect dairy markets from unfair and harmful competition
Pakistani government should resort to applying the safeguards provided in the WTO legislation to protect their dairy markets against subsidized imports from the EU or US
Use of exotic cattle genes for sustainable path to higher productivity
National and local breeding strategies need to address the realities of climate and disease risk
Services of artificial insemination should be extended Superior fodder should be identified and propagated
Recommendations Farmer organization has to be strengthened to ensure
that their interests are better represented on a national scale
Promote co-operatives and farmer groups for collection bulking and marketing milk Irrespective of whether targeted to the processing
industry or informal raw milk market Introduce licensing to informal traders and provide
them with simple appropriate technologies to extend shelf-life of raw milk This will dissuade traders from using harmful additives Will encourage consumers to pay a price premium for
assured quality Public policy should discourage concentration and
scaling-up of peri-urban dairy and encourage rural dairy for more equitable development
Recommendations While the market for UHT milk is expected to expand there is
need to diversify the products Setting up livestock business advisory service centers will be a
good investment for professionals Establishment of milk collection centers in the milk pockets
with chillers offer a good investment This will result in improved quality and quantity of milk
Not necessary to establish large dairy farms to promote commercialization of dairy If the necessary technologies are provided and market
institutions are promoted for small-scale milk producers and market agents overall employment and income generation can be increased
This may create a momentum for change in dairy production and marketing structure in the country propelled by general structural changes in the agricultural sector and the economy and most production units may gradually become larger
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
Presence of high qualityspecialized inputs availableto firmsndash Human resourcesndash Capital resourcesndash Physical infrastructurendash Administrative infrastructure(eg business registration ruleslicensing property rights)ndash Information infrastructurendash Scientific and technologicalinfrastructurendash Natural resources
Factor Conditions-Physical Pakistan is the 5th largest producer of milk having the world 3rd
largest animal herd (appr 50M) employing approximately 44 of the workforce
Milk prices range from a low of 10 US$ per 100kg in Pakistan 29 US$ per 100 kg in the USA over 23 US$ per 100kg in Bangladesh
This high price seems to stem from a high demand for milk as opposed to relatively low volumes of production and limited availability
Globally milk yields per cow range from 960 to 10000 kgyear Within South Asia interesting trends and opportunities for
development appear to exist Small farms in Pakistan yield around 40 percent more than those
in India and Bangladesh Only the larger Indian farms which are very well managed and
rely on European dairy genetics reach milk yields around the 4000 kg mark
Factor Conditions-Capital ZTBL will disburse Rs 23M to dairy farmers
under a micro finance scheme The Government initiated projects to the
tune of Rs 71 B for strengthening livestock services improving disease control milk and meat production breed improvement animal husbandry management practices
Factor Conditions-Cost of Production Pakistan is ranked among the countries with lowest
cost of production in the world In all small farms the main cost component are the
opportunity costs of family labor The Pakistani milk producers are more competitive
than those of Europe and US The cost difference is more than 10 US $ per 100 kg
milk Large dairy farms in Pakistan have lower costs than
rest of the world farms and can be competitive milk producers in the future
Farms in Bangladesh will have difficulties to compete against imports from the world market and also from Pakistan
Factor Conditions-Foreign Real competition stems from producers in Oceania
and Latin America that have very low production costs Qatar Livestock Company is investing $1B in
corporate farms in Pakistan DFID of UK has granted a pound 25M project for dairy and
agriculture infrastructure investment Engro Chemicals will be investing $16B in agriculture
during next three years 5-10 major UAE groups will explore Pakistans
agriculture sector in corporate farming livestock and dairy sectors
Factor Conditions
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Sophisticated and demanding local customers1048698 Local customer needs that anticipate those elsewhere1048698 Unusual local demand in specialized segments that can be served nationally and globally
Demand Conditions - Domestic
Demand levels are closely associated with income growth and urbanization and linked to increased demand for quality food
safety and standardization changes in consumption habits and
lifestyles demand for convenience
Demand Conditions - Foreign Gulf countries imports 90 per cent of its
food requirements from the West and other countries
The Arab countries farm import bill is of more than $200 billion (Dh734 billion)
Demand for food in Arab world grew by around four per cent between 2002 and 2006
With reduction of subsidies in the wake of WTO the local livestock sector should have better opportunities to compete
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Access to capable locally based suppliers and firms in related fields1048698 Presence of clusters instead of isolated industries
Supporting Industry
Supporting Industry This sector provides raw material for the industry and livestock
creates market and capital Pakistan has well-developed poultry feed industry However the
cattle feed industry is now emerging There are now about 22 cattle feed production units which cater for
less than 5 per cent of the required concentrate needs Livestock also provides security against crop failure particularly in
Barani areas These animals produce
29472 M tons of milk 1115 M tons of beef 0740 M tons of mutton 0416 M tons of poultry meat 8528 B eggs 402 T tons of wool 215 T tons of hair 512 T skins and hides
Recommendations There is a strong rationale for Pakistan to promote
small-scale dairy production and if need be protect dairy markets from unfair and harmful competition
Pakistani government should resort to applying the safeguards provided in the WTO legislation to protect their dairy markets against subsidized imports from the EU or US
Use of exotic cattle genes for sustainable path to higher productivity
National and local breeding strategies need to address the realities of climate and disease risk
Services of artificial insemination should be extended Superior fodder should be identified and propagated
Recommendations Farmer organization has to be strengthened to ensure
that their interests are better represented on a national scale
Promote co-operatives and farmer groups for collection bulking and marketing milk Irrespective of whether targeted to the processing
industry or informal raw milk market Introduce licensing to informal traders and provide
them with simple appropriate technologies to extend shelf-life of raw milk This will dissuade traders from using harmful additives Will encourage consumers to pay a price premium for
assured quality Public policy should discourage concentration and
scaling-up of peri-urban dairy and encourage rural dairy for more equitable development
Recommendations While the market for UHT milk is expected to expand there is
need to diversify the products Setting up livestock business advisory service centers will be a
good investment for professionals Establishment of milk collection centers in the milk pockets
with chillers offer a good investment This will result in improved quality and quantity of milk
Not necessary to establish large dairy farms to promote commercialization of dairy If the necessary technologies are provided and market
institutions are promoted for small-scale milk producers and market agents overall employment and income generation can be increased
This may create a momentum for change in dairy production and marketing structure in the country propelled by general structural changes in the agricultural sector and the economy and most production units may gradually become larger
Factor Conditions-Physical Pakistan is the 5th largest producer of milk having the world 3rd
largest animal herd (appr 50M) employing approximately 44 of the workforce
Milk prices range from a low of 10 US$ per 100kg in Pakistan 29 US$ per 100 kg in the USA over 23 US$ per 100kg in Bangladesh
This high price seems to stem from a high demand for milk as opposed to relatively low volumes of production and limited availability
Globally milk yields per cow range from 960 to 10000 kgyear Within South Asia interesting trends and opportunities for
development appear to exist Small farms in Pakistan yield around 40 percent more than those
in India and Bangladesh Only the larger Indian farms which are very well managed and
rely on European dairy genetics reach milk yields around the 4000 kg mark
Factor Conditions-Capital ZTBL will disburse Rs 23M to dairy farmers
under a micro finance scheme The Government initiated projects to the
tune of Rs 71 B for strengthening livestock services improving disease control milk and meat production breed improvement animal husbandry management practices
Factor Conditions-Cost of Production Pakistan is ranked among the countries with lowest
cost of production in the world In all small farms the main cost component are the
opportunity costs of family labor The Pakistani milk producers are more competitive
than those of Europe and US The cost difference is more than 10 US $ per 100 kg
milk Large dairy farms in Pakistan have lower costs than
rest of the world farms and can be competitive milk producers in the future
Farms in Bangladesh will have difficulties to compete against imports from the world market and also from Pakistan
Factor Conditions-Foreign Real competition stems from producers in Oceania
and Latin America that have very low production costs Qatar Livestock Company is investing $1B in
corporate farms in Pakistan DFID of UK has granted a pound 25M project for dairy and
agriculture infrastructure investment Engro Chemicals will be investing $16B in agriculture
during next three years 5-10 major UAE groups will explore Pakistans
agriculture sector in corporate farming livestock and dairy sectors
Factor Conditions
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Sophisticated and demanding local customers1048698 Local customer needs that anticipate those elsewhere1048698 Unusual local demand in specialized segments that can be served nationally and globally
Demand Conditions - Domestic
Demand levels are closely associated with income growth and urbanization and linked to increased demand for quality food
safety and standardization changes in consumption habits and
lifestyles demand for convenience
Demand Conditions - Foreign Gulf countries imports 90 per cent of its
food requirements from the West and other countries
The Arab countries farm import bill is of more than $200 billion (Dh734 billion)
Demand for food in Arab world grew by around four per cent between 2002 and 2006
With reduction of subsidies in the wake of WTO the local livestock sector should have better opportunities to compete
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Access to capable locally based suppliers and firms in related fields1048698 Presence of clusters instead of isolated industries
Supporting Industry
Supporting Industry This sector provides raw material for the industry and livestock
creates market and capital Pakistan has well-developed poultry feed industry However the
cattle feed industry is now emerging There are now about 22 cattle feed production units which cater for
less than 5 per cent of the required concentrate needs Livestock also provides security against crop failure particularly in
Barani areas These animals produce
29472 M tons of milk 1115 M tons of beef 0740 M tons of mutton 0416 M tons of poultry meat 8528 B eggs 402 T tons of wool 215 T tons of hair 512 T skins and hides
Recommendations There is a strong rationale for Pakistan to promote
small-scale dairy production and if need be protect dairy markets from unfair and harmful competition
Pakistani government should resort to applying the safeguards provided in the WTO legislation to protect their dairy markets against subsidized imports from the EU or US
Use of exotic cattle genes for sustainable path to higher productivity
National and local breeding strategies need to address the realities of climate and disease risk
Services of artificial insemination should be extended Superior fodder should be identified and propagated
Recommendations Farmer organization has to be strengthened to ensure
that their interests are better represented on a national scale
Promote co-operatives and farmer groups for collection bulking and marketing milk Irrespective of whether targeted to the processing
industry or informal raw milk market Introduce licensing to informal traders and provide
them with simple appropriate technologies to extend shelf-life of raw milk This will dissuade traders from using harmful additives Will encourage consumers to pay a price premium for
assured quality Public policy should discourage concentration and
scaling-up of peri-urban dairy and encourage rural dairy for more equitable development
Recommendations While the market for UHT milk is expected to expand there is
need to diversify the products Setting up livestock business advisory service centers will be a
good investment for professionals Establishment of milk collection centers in the milk pockets
with chillers offer a good investment This will result in improved quality and quantity of milk
Not necessary to establish large dairy farms to promote commercialization of dairy If the necessary technologies are provided and market
institutions are promoted for small-scale milk producers and market agents overall employment and income generation can be increased
This may create a momentum for change in dairy production and marketing structure in the country propelled by general structural changes in the agricultural sector and the economy and most production units may gradually become larger
Factor Conditions-Capital ZTBL will disburse Rs 23M to dairy farmers
under a micro finance scheme The Government initiated projects to the
tune of Rs 71 B for strengthening livestock services improving disease control milk and meat production breed improvement animal husbandry management practices
Factor Conditions-Cost of Production Pakistan is ranked among the countries with lowest
cost of production in the world In all small farms the main cost component are the
opportunity costs of family labor The Pakistani milk producers are more competitive
than those of Europe and US The cost difference is more than 10 US $ per 100 kg
milk Large dairy farms in Pakistan have lower costs than
rest of the world farms and can be competitive milk producers in the future
Farms in Bangladesh will have difficulties to compete against imports from the world market and also from Pakistan
Factor Conditions-Foreign Real competition stems from producers in Oceania
and Latin America that have very low production costs Qatar Livestock Company is investing $1B in
corporate farms in Pakistan DFID of UK has granted a pound 25M project for dairy and
agriculture infrastructure investment Engro Chemicals will be investing $16B in agriculture
during next three years 5-10 major UAE groups will explore Pakistans
agriculture sector in corporate farming livestock and dairy sectors
Factor Conditions
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Sophisticated and demanding local customers1048698 Local customer needs that anticipate those elsewhere1048698 Unusual local demand in specialized segments that can be served nationally and globally
Demand Conditions - Domestic
Demand levels are closely associated with income growth and urbanization and linked to increased demand for quality food
safety and standardization changes in consumption habits and
lifestyles demand for convenience
Demand Conditions - Foreign Gulf countries imports 90 per cent of its
food requirements from the West and other countries
The Arab countries farm import bill is of more than $200 billion (Dh734 billion)
Demand for food in Arab world grew by around four per cent between 2002 and 2006
With reduction of subsidies in the wake of WTO the local livestock sector should have better opportunities to compete
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Access to capable locally based suppliers and firms in related fields1048698 Presence of clusters instead of isolated industries
Supporting Industry
Supporting Industry This sector provides raw material for the industry and livestock
creates market and capital Pakistan has well-developed poultry feed industry However the
cattle feed industry is now emerging There are now about 22 cattle feed production units which cater for
less than 5 per cent of the required concentrate needs Livestock also provides security against crop failure particularly in
Barani areas These animals produce
29472 M tons of milk 1115 M tons of beef 0740 M tons of mutton 0416 M tons of poultry meat 8528 B eggs 402 T tons of wool 215 T tons of hair 512 T skins and hides
Recommendations There is a strong rationale for Pakistan to promote
small-scale dairy production and if need be protect dairy markets from unfair and harmful competition
Pakistani government should resort to applying the safeguards provided in the WTO legislation to protect their dairy markets against subsidized imports from the EU or US
Use of exotic cattle genes for sustainable path to higher productivity
National and local breeding strategies need to address the realities of climate and disease risk
Services of artificial insemination should be extended Superior fodder should be identified and propagated
Recommendations Farmer organization has to be strengthened to ensure
that their interests are better represented on a national scale
Promote co-operatives and farmer groups for collection bulking and marketing milk Irrespective of whether targeted to the processing
industry or informal raw milk market Introduce licensing to informal traders and provide
them with simple appropriate technologies to extend shelf-life of raw milk This will dissuade traders from using harmful additives Will encourage consumers to pay a price premium for
assured quality Public policy should discourage concentration and
scaling-up of peri-urban dairy and encourage rural dairy for more equitable development
Recommendations While the market for UHT milk is expected to expand there is
need to diversify the products Setting up livestock business advisory service centers will be a
good investment for professionals Establishment of milk collection centers in the milk pockets
with chillers offer a good investment This will result in improved quality and quantity of milk
Not necessary to establish large dairy farms to promote commercialization of dairy If the necessary technologies are provided and market
institutions are promoted for small-scale milk producers and market agents overall employment and income generation can be increased
This may create a momentum for change in dairy production and marketing structure in the country propelled by general structural changes in the agricultural sector and the economy and most production units may gradually become larger
Factor Conditions-Cost of Production Pakistan is ranked among the countries with lowest
cost of production in the world In all small farms the main cost component are the
opportunity costs of family labor The Pakistani milk producers are more competitive
than those of Europe and US The cost difference is more than 10 US $ per 100 kg
milk Large dairy farms in Pakistan have lower costs than
rest of the world farms and can be competitive milk producers in the future
Farms in Bangladesh will have difficulties to compete against imports from the world market and also from Pakistan
Factor Conditions-Foreign Real competition stems from producers in Oceania
and Latin America that have very low production costs Qatar Livestock Company is investing $1B in
corporate farms in Pakistan DFID of UK has granted a pound 25M project for dairy and
agriculture infrastructure investment Engro Chemicals will be investing $16B in agriculture
during next three years 5-10 major UAE groups will explore Pakistans
agriculture sector in corporate farming livestock and dairy sectors
Factor Conditions
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Sophisticated and demanding local customers1048698 Local customer needs that anticipate those elsewhere1048698 Unusual local demand in specialized segments that can be served nationally and globally
Demand Conditions - Domestic
Demand levels are closely associated with income growth and urbanization and linked to increased demand for quality food
safety and standardization changes in consumption habits and
lifestyles demand for convenience
Demand Conditions - Foreign Gulf countries imports 90 per cent of its
food requirements from the West and other countries
The Arab countries farm import bill is of more than $200 billion (Dh734 billion)
Demand for food in Arab world grew by around four per cent between 2002 and 2006
With reduction of subsidies in the wake of WTO the local livestock sector should have better opportunities to compete
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Access to capable locally based suppliers and firms in related fields1048698 Presence of clusters instead of isolated industries
Supporting Industry
Supporting Industry This sector provides raw material for the industry and livestock
creates market and capital Pakistan has well-developed poultry feed industry However the
cattle feed industry is now emerging There are now about 22 cattle feed production units which cater for
less than 5 per cent of the required concentrate needs Livestock also provides security against crop failure particularly in
Barani areas These animals produce
29472 M tons of milk 1115 M tons of beef 0740 M tons of mutton 0416 M tons of poultry meat 8528 B eggs 402 T tons of wool 215 T tons of hair 512 T skins and hides
Recommendations There is a strong rationale for Pakistan to promote
small-scale dairy production and if need be protect dairy markets from unfair and harmful competition
Pakistani government should resort to applying the safeguards provided in the WTO legislation to protect their dairy markets against subsidized imports from the EU or US
Use of exotic cattle genes for sustainable path to higher productivity
National and local breeding strategies need to address the realities of climate and disease risk
Services of artificial insemination should be extended Superior fodder should be identified and propagated
Recommendations Farmer organization has to be strengthened to ensure
that their interests are better represented on a national scale
Promote co-operatives and farmer groups for collection bulking and marketing milk Irrespective of whether targeted to the processing
industry or informal raw milk market Introduce licensing to informal traders and provide
them with simple appropriate technologies to extend shelf-life of raw milk This will dissuade traders from using harmful additives Will encourage consumers to pay a price premium for
assured quality Public policy should discourage concentration and
scaling-up of peri-urban dairy and encourage rural dairy for more equitable development
Recommendations While the market for UHT milk is expected to expand there is
need to diversify the products Setting up livestock business advisory service centers will be a
good investment for professionals Establishment of milk collection centers in the milk pockets
with chillers offer a good investment This will result in improved quality and quantity of milk
Not necessary to establish large dairy farms to promote commercialization of dairy If the necessary technologies are provided and market
institutions are promoted for small-scale milk producers and market agents overall employment and income generation can be increased
This may create a momentum for change in dairy production and marketing structure in the country propelled by general structural changes in the agricultural sector and the economy and most production units may gradually become larger
Factor Conditions-Foreign Real competition stems from producers in Oceania
and Latin America that have very low production costs Qatar Livestock Company is investing $1B in
corporate farms in Pakistan DFID of UK has granted a pound 25M project for dairy and
agriculture infrastructure investment Engro Chemicals will be investing $16B in agriculture
during next three years 5-10 major UAE groups will explore Pakistans
agriculture sector in corporate farming livestock and dairy sectors
Factor Conditions
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Sophisticated and demanding local customers1048698 Local customer needs that anticipate those elsewhere1048698 Unusual local demand in specialized segments that can be served nationally and globally
Demand Conditions - Domestic
Demand levels are closely associated with income growth and urbanization and linked to increased demand for quality food
safety and standardization changes in consumption habits and
lifestyles demand for convenience
Demand Conditions - Foreign Gulf countries imports 90 per cent of its
food requirements from the West and other countries
The Arab countries farm import bill is of more than $200 billion (Dh734 billion)
Demand for food in Arab world grew by around four per cent between 2002 and 2006
With reduction of subsidies in the wake of WTO the local livestock sector should have better opportunities to compete
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Access to capable locally based suppliers and firms in related fields1048698 Presence of clusters instead of isolated industries
Supporting Industry
Supporting Industry This sector provides raw material for the industry and livestock
creates market and capital Pakistan has well-developed poultry feed industry However the
cattle feed industry is now emerging There are now about 22 cattle feed production units which cater for
less than 5 per cent of the required concentrate needs Livestock also provides security against crop failure particularly in
Barani areas These animals produce
29472 M tons of milk 1115 M tons of beef 0740 M tons of mutton 0416 M tons of poultry meat 8528 B eggs 402 T tons of wool 215 T tons of hair 512 T skins and hides
Recommendations There is a strong rationale for Pakistan to promote
small-scale dairy production and if need be protect dairy markets from unfair and harmful competition
Pakistani government should resort to applying the safeguards provided in the WTO legislation to protect their dairy markets against subsidized imports from the EU or US
Use of exotic cattle genes for sustainable path to higher productivity
National and local breeding strategies need to address the realities of climate and disease risk
Services of artificial insemination should be extended Superior fodder should be identified and propagated
Recommendations Farmer organization has to be strengthened to ensure
that their interests are better represented on a national scale
Promote co-operatives and farmer groups for collection bulking and marketing milk Irrespective of whether targeted to the processing
industry or informal raw milk market Introduce licensing to informal traders and provide
them with simple appropriate technologies to extend shelf-life of raw milk This will dissuade traders from using harmful additives Will encourage consumers to pay a price premium for
assured quality Public policy should discourage concentration and
scaling-up of peri-urban dairy and encourage rural dairy for more equitable development
Recommendations While the market for UHT milk is expected to expand there is
need to diversify the products Setting up livestock business advisory service centers will be a
good investment for professionals Establishment of milk collection centers in the milk pockets
with chillers offer a good investment This will result in improved quality and quantity of milk
Not necessary to establish large dairy farms to promote commercialization of dairy If the necessary technologies are provided and market
institutions are promoted for small-scale milk producers and market agents overall employment and income generation can be increased
This may create a momentum for change in dairy production and marketing structure in the country propelled by general structural changes in the agricultural sector and the economy and most production units may gradually become larger
Factor Conditions
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Sophisticated and demanding local customers1048698 Local customer needs that anticipate those elsewhere1048698 Unusual local demand in specialized segments that can be served nationally and globally
Demand Conditions - Domestic
Demand levels are closely associated with income growth and urbanization and linked to increased demand for quality food
safety and standardization changes in consumption habits and
lifestyles demand for convenience
Demand Conditions - Foreign Gulf countries imports 90 per cent of its
food requirements from the West and other countries
The Arab countries farm import bill is of more than $200 billion (Dh734 billion)
Demand for food in Arab world grew by around four per cent between 2002 and 2006
With reduction of subsidies in the wake of WTO the local livestock sector should have better opportunities to compete
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Access to capable locally based suppliers and firms in related fields1048698 Presence of clusters instead of isolated industries
Supporting Industry
Supporting Industry This sector provides raw material for the industry and livestock
creates market and capital Pakistan has well-developed poultry feed industry However the
cattle feed industry is now emerging There are now about 22 cattle feed production units which cater for
less than 5 per cent of the required concentrate needs Livestock also provides security against crop failure particularly in
Barani areas These animals produce
29472 M tons of milk 1115 M tons of beef 0740 M tons of mutton 0416 M tons of poultry meat 8528 B eggs 402 T tons of wool 215 T tons of hair 512 T skins and hides
Recommendations There is a strong rationale for Pakistan to promote
small-scale dairy production and if need be protect dairy markets from unfair and harmful competition
Pakistani government should resort to applying the safeguards provided in the WTO legislation to protect their dairy markets against subsidized imports from the EU or US
Use of exotic cattle genes for sustainable path to higher productivity
National and local breeding strategies need to address the realities of climate and disease risk
Services of artificial insemination should be extended Superior fodder should be identified and propagated
Recommendations Farmer organization has to be strengthened to ensure
that their interests are better represented on a national scale
Promote co-operatives and farmer groups for collection bulking and marketing milk Irrespective of whether targeted to the processing
industry or informal raw milk market Introduce licensing to informal traders and provide
them with simple appropriate technologies to extend shelf-life of raw milk This will dissuade traders from using harmful additives Will encourage consumers to pay a price premium for
assured quality Public policy should discourage concentration and
scaling-up of peri-urban dairy and encourage rural dairy for more equitable development
Recommendations While the market for UHT milk is expected to expand there is
need to diversify the products Setting up livestock business advisory service centers will be a
good investment for professionals Establishment of milk collection centers in the milk pockets
with chillers offer a good investment This will result in improved quality and quantity of milk
Not necessary to establish large dairy farms to promote commercialization of dairy If the necessary technologies are provided and market
institutions are promoted for small-scale milk producers and market agents overall employment and income generation can be increased
This may create a momentum for change in dairy production and marketing structure in the country propelled by general structural changes in the agricultural sector and the economy and most production units may gradually become larger
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Sophisticated and demanding local customers1048698 Local customer needs that anticipate those elsewhere1048698 Unusual local demand in specialized segments that can be served nationally and globally
Demand Conditions - Domestic
Demand levels are closely associated with income growth and urbanization and linked to increased demand for quality food
safety and standardization changes in consumption habits and
lifestyles demand for convenience
Demand Conditions - Foreign Gulf countries imports 90 per cent of its
food requirements from the West and other countries
The Arab countries farm import bill is of more than $200 billion (Dh734 billion)
Demand for food in Arab world grew by around four per cent between 2002 and 2006
With reduction of subsidies in the wake of WTO the local livestock sector should have better opportunities to compete
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Access to capable locally based suppliers and firms in related fields1048698 Presence of clusters instead of isolated industries
Supporting Industry
Supporting Industry This sector provides raw material for the industry and livestock
creates market and capital Pakistan has well-developed poultry feed industry However the
cattle feed industry is now emerging There are now about 22 cattle feed production units which cater for
less than 5 per cent of the required concentrate needs Livestock also provides security against crop failure particularly in
Barani areas These animals produce
29472 M tons of milk 1115 M tons of beef 0740 M tons of mutton 0416 M tons of poultry meat 8528 B eggs 402 T tons of wool 215 T tons of hair 512 T skins and hides
Recommendations There is a strong rationale for Pakistan to promote
small-scale dairy production and if need be protect dairy markets from unfair and harmful competition
Pakistani government should resort to applying the safeguards provided in the WTO legislation to protect their dairy markets against subsidized imports from the EU or US
Use of exotic cattle genes for sustainable path to higher productivity
National and local breeding strategies need to address the realities of climate and disease risk
Services of artificial insemination should be extended Superior fodder should be identified and propagated
Recommendations Farmer organization has to be strengthened to ensure
that their interests are better represented on a national scale
Promote co-operatives and farmer groups for collection bulking and marketing milk Irrespective of whether targeted to the processing
industry or informal raw milk market Introduce licensing to informal traders and provide
them with simple appropriate technologies to extend shelf-life of raw milk This will dissuade traders from using harmful additives Will encourage consumers to pay a price premium for
assured quality Public policy should discourage concentration and
scaling-up of peri-urban dairy and encourage rural dairy for more equitable development
Recommendations While the market for UHT milk is expected to expand there is
need to diversify the products Setting up livestock business advisory service centers will be a
good investment for professionals Establishment of milk collection centers in the milk pockets
with chillers offer a good investment This will result in improved quality and quantity of milk
Not necessary to establish large dairy farms to promote commercialization of dairy If the necessary technologies are provided and market
institutions are promoted for small-scale milk producers and market agents overall employment and income generation can be increased
This may create a momentum for change in dairy production and marketing structure in the country propelled by general structural changes in the agricultural sector and the economy and most production units may gradually become larger
Demand Conditions - Domestic
Demand levels are closely associated with income growth and urbanization and linked to increased demand for quality food
safety and standardization changes in consumption habits and
lifestyles demand for convenience
Demand Conditions - Foreign Gulf countries imports 90 per cent of its
food requirements from the West and other countries
The Arab countries farm import bill is of more than $200 billion (Dh734 billion)
Demand for food in Arab world grew by around four per cent between 2002 and 2006
With reduction of subsidies in the wake of WTO the local livestock sector should have better opportunities to compete
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Access to capable locally based suppliers and firms in related fields1048698 Presence of clusters instead of isolated industries
Supporting Industry
Supporting Industry This sector provides raw material for the industry and livestock
creates market and capital Pakistan has well-developed poultry feed industry However the
cattle feed industry is now emerging There are now about 22 cattle feed production units which cater for
less than 5 per cent of the required concentrate needs Livestock also provides security against crop failure particularly in
Barani areas These animals produce
29472 M tons of milk 1115 M tons of beef 0740 M tons of mutton 0416 M tons of poultry meat 8528 B eggs 402 T tons of wool 215 T tons of hair 512 T skins and hides
Recommendations There is a strong rationale for Pakistan to promote
small-scale dairy production and if need be protect dairy markets from unfair and harmful competition
Pakistani government should resort to applying the safeguards provided in the WTO legislation to protect their dairy markets against subsidized imports from the EU or US
Use of exotic cattle genes for sustainable path to higher productivity
National and local breeding strategies need to address the realities of climate and disease risk
Services of artificial insemination should be extended Superior fodder should be identified and propagated
Recommendations Farmer organization has to be strengthened to ensure
that their interests are better represented on a national scale
Promote co-operatives and farmer groups for collection bulking and marketing milk Irrespective of whether targeted to the processing
industry or informal raw milk market Introduce licensing to informal traders and provide
them with simple appropriate technologies to extend shelf-life of raw milk This will dissuade traders from using harmful additives Will encourage consumers to pay a price premium for
assured quality Public policy should discourage concentration and
scaling-up of peri-urban dairy and encourage rural dairy for more equitable development
Recommendations While the market for UHT milk is expected to expand there is
need to diversify the products Setting up livestock business advisory service centers will be a
good investment for professionals Establishment of milk collection centers in the milk pockets
with chillers offer a good investment This will result in improved quality and quantity of milk
Not necessary to establish large dairy farms to promote commercialization of dairy If the necessary technologies are provided and market
institutions are promoted for small-scale milk producers and market agents overall employment and income generation can be increased
This may create a momentum for change in dairy production and marketing structure in the country propelled by general structural changes in the agricultural sector and the economy and most production units may gradually become larger
Demand Conditions - Foreign Gulf countries imports 90 per cent of its
food requirements from the West and other countries
The Arab countries farm import bill is of more than $200 billion (Dh734 billion)
Demand for food in Arab world grew by around four per cent between 2002 and 2006
With reduction of subsidies in the wake of WTO the local livestock sector should have better opportunities to compete
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Access to capable locally based suppliers and firms in related fields1048698 Presence of clusters instead of isolated industries
Supporting Industry
Supporting Industry This sector provides raw material for the industry and livestock
creates market and capital Pakistan has well-developed poultry feed industry However the
cattle feed industry is now emerging There are now about 22 cattle feed production units which cater for
less than 5 per cent of the required concentrate needs Livestock also provides security against crop failure particularly in
Barani areas These animals produce
29472 M tons of milk 1115 M tons of beef 0740 M tons of mutton 0416 M tons of poultry meat 8528 B eggs 402 T tons of wool 215 T tons of hair 512 T skins and hides
Recommendations There is a strong rationale for Pakistan to promote
small-scale dairy production and if need be protect dairy markets from unfair and harmful competition
Pakistani government should resort to applying the safeguards provided in the WTO legislation to protect their dairy markets against subsidized imports from the EU or US
Use of exotic cattle genes for sustainable path to higher productivity
National and local breeding strategies need to address the realities of climate and disease risk
Services of artificial insemination should be extended Superior fodder should be identified and propagated
Recommendations Farmer organization has to be strengthened to ensure
that their interests are better represented on a national scale
Promote co-operatives and farmer groups for collection bulking and marketing milk Irrespective of whether targeted to the processing
industry or informal raw milk market Introduce licensing to informal traders and provide
them with simple appropriate technologies to extend shelf-life of raw milk This will dissuade traders from using harmful additives Will encourage consumers to pay a price premium for
assured quality Public policy should discourage concentration and
scaling-up of peri-urban dairy and encourage rural dairy for more equitable development
Recommendations While the market for UHT milk is expected to expand there is
need to diversify the products Setting up livestock business advisory service centers will be a
good investment for professionals Establishment of milk collection centers in the milk pockets
with chillers offer a good investment This will result in improved quality and quantity of milk
Not necessary to establish large dairy farms to promote commercialization of dairy If the necessary technologies are provided and market
institutions are promoted for small-scale milk producers and market agents overall employment and income generation can be increased
This may create a momentum for change in dairy production and marketing structure in the country propelled by general structural changes in the agricultural sector and the economy and most production units may gradually become larger
Productivity and Business Environment
Factor Conditions
Related and Supporting Industries
Demand Conditions
Firm Strategy
1048698 Access to capable locally based suppliers and firms in related fields1048698 Presence of clusters instead of isolated industries
Supporting Industry
Supporting Industry This sector provides raw material for the industry and livestock
creates market and capital Pakistan has well-developed poultry feed industry However the
cattle feed industry is now emerging There are now about 22 cattle feed production units which cater for
less than 5 per cent of the required concentrate needs Livestock also provides security against crop failure particularly in
Barani areas These animals produce
29472 M tons of milk 1115 M tons of beef 0740 M tons of mutton 0416 M tons of poultry meat 8528 B eggs 402 T tons of wool 215 T tons of hair 512 T skins and hides
Recommendations There is a strong rationale for Pakistan to promote
small-scale dairy production and if need be protect dairy markets from unfair and harmful competition
Pakistani government should resort to applying the safeguards provided in the WTO legislation to protect their dairy markets against subsidized imports from the EU or US
Use of exotic cattle genes for sustainable path to higher productivity
National and local breeding strategies need to address the realities of climate and disease risk
Services of artificial insemination should be extended Superior fodder should be identified and propagated
Recommendations Farmer organization has to be strengthened to ensure
that their interests are better represented on a national scale
Promote co-operatives and farmer groups for collection bulking and marketing milk Irrespective of whether targeted to the processing
industry or informal raw milk market Introduce licensing to informal traders and provide
them with simple appropriate technologies to extend shelf-life of raw milk This will dissuade traders from using harmful additives Will encourage consumers to pay a price premium for
assured quality Public policy should discourage concentration and
scaling-up of peri-urban dairy and encourage rural dairy for more equitable development
Recommendations While the market for UHT milk is expected to expand there is
need to diversify the products Setting up livestock business advisory service centers will be a
good investment for professionals Establishment of milk collection centers in the milk pockets
with chillers offer a good investment This will result in improved quality and quantity of milk
Not necessary to establish large dairy farms to promote commercialization of dairy If the necessary technologies are provided and market
institutions are promoted for small-scale milk producers and market agents overall employment and income generation can be increased
This may create a momentum for change in dairy production and marketing structure in the country propelled by general structural changes in the agricultural sector and the economy and most production units may gradually become larger
Supporting Industry
Supporting Industry This sector provides raw material for the industry and livestock
creates market and capital Pakistan has well-developed poultry feed industry However the
cattle feed industry is now emerging There are now about 22 cattle feed production units which cater for
less than 5 per cent of the required concentrate needs Livestock also provides security against crop failure particularly in
Barani areas These animals produce
29472 M tons of milk 1115 M tons of beef 0740 M tons of mutton 0416 M tons of poultry meat 8528 B eggs 402 T tons of wool 215 T tons of hair 512 T skins and hides
Recommendations There is a strong rationale for Pakistan to promote
small-scale dairy production and if need be protect dairy markets from unfair and harmful competition
Pakistani government should resort to applying the safeguards provided in the WTO legislation to protect their dairy markets against subsidized imports from the EU or US
Use of exotic cattle genes for sustainable path to higher productivity
National and local breeding strategies need to address the realities of climate and disease risk
Services of artificial insemination should be extended Superior fodder should be identified and propagated
Recommendations Farmer organization has to be strengthened to ensure
that their interests are better represented on a national scale
Promote co-operatives and farmer groups for collection bulking and marketing milk Irrespective of whether targeted to the processing
industry or informal raw milk market Introduce licensing to informal traders and provide
them with simple appropriate technologies to extend shelf-life of raw milk This will dissuade traders from using harmful additives Will encourage consumers to pay a price premium for
assured quality Public policy should discourage concentration and
scaling-up of peri-urban dairy and encourage rural dairy for more equitable development
Recommendations While the market for UHT milk is expected to expand there is
need to diversify the products Setting up livestock business advisory service centers will be a
good investment for professionals Establishment of milk collection centers in the milk pockets
with chillers offer a good investment This will result in improved quality and quantity of milk
Not necessary to establish large dairy farms to promote commercialization of dairy If the necessary technologies are provided and market
institutions are promoted for small-scale milk producers and market agents overall employment and income generation can be increased
This may create a momentum for change in dairy production and marketing structure in the country propelled by general structural changes in the agricultural sector and the economy and most production units may gradually become larger
Supporting Industry This sector provides raw material for the industry and livestock
creates market and capital Pakistan has well-developed poultry feed industry However the
cattle feed industry is now emerging There are now about 22 cattle feed production units which cater for
less than 5 per cent of the required concentrate needs Livestock also provides security against crop failure particularly in
Barani areas These animals produce
29472 M tons of milk 1115 M tons of beef 0740 M tons of mutton 0416 M tons of poultry meat 8528 B eggs 402 T tons of wool 215 T tons of hair 512 T skins and hides
Recommendations There is a strong rationale for Pakistan to promote
small-scale dairy production and if need be protect dairy markets from unfair and harmful competition
Pakistani government should resort to applying the safeguards provided in the WTO legislation to protect their dairy markets against subsidized imports from the EU or US
Use of exotic cattle genes for sustainable path to higher productivity
National and local breeding strategies need to address the realities of climate and disease risk
Services of artificial insemination should be extended Superior fodder should be identified and propagated
Recommendations Farmer organization has to be strengthened to ensure
that their interests are better represented on a national scale
Promote co-operatives and farmer groups for collection bulking and marketing milk Irrespective of whether targeted to the processing
industry or informal raw milk market Introduce licensing to informal traders and provide
them with simple appropriate technologies to extend shelf-life of raw milk This will dissuade traders from using harmful additives Will encourage consumers to pay a price premium for
assured quality Public policy should discourage concentration and
scaling-up of peri-urban dairy and encourage rural dairy for more equitable development
Recommendations While the market for UHT milk is expected to expand there is
need to diversify the products Setting up livestock business advisory service centers will be a
good investment for professionals Establishment of milk collection centers in the milk pockets
with chillers offer a good investment This will result in improved quality and quantity of milk
Not necessary to establish large dairy farms to promote commercialization of dairy If the necessary technologies are provided and market
institutions are promoted for small-scale milk producers and market agents overall employment and income generation can be increased
This may create a momentum for change in dairy production and marketing structure in the country propelled by general structural changes in the agricultural sector and the economy and most production units may gradually become larger
Recommendations There is a strong rationale for Pakistan to promote
small-scale dairy production and if need be protect dairy markets from unfair and harmful competition
Pakistani government should resort to applying the safeguards provided in the WTO legislation to protect their dairy markets against subsidized imports from the EU or US
Use of exotic cattle genes for sustainable path to higher productivity
National and local breeding strategies need to address the realities of climate and disease risk
Services of artificial insemination should be extended Superior fodder should be identified and propagated
Recommendations Farmer organization has to be strengthened to ensure
that their interests are better represented on a national scale
Promote co-operatives and farmer groups for collection bulking and marketing milk Irrespective of whether targeted to the processing
industry or informal raw milk market Introduce licensing to informal traders and provide
them with simple appropriate technologies to extend shelf-life of raw milk This will dissuade traders from using harmful additives Will encourage consumers to pay a price premium for
assured quality Public policy should discourage concentration and
scaling-up of peri-urban dairy and encourage rural dairy for more equitable development
Recommendations While the market for UHT milk is expected to expand there is
need to diversify the products Setting up livestock business advisory service centers will be a
good investment for professionals Establishment of milk collection centers in the milk pockets
with chillers offer a good investment This will result in improved quality and quantity of milk
Not necessary to establish large dairy farms to promote commercialization of dairy If the necessary technologies are provided and market
institutions are promoted for small-scale milk producers and market agents overall employment and income generation can be increased
This may create a momentum for change in dairy production and marketing structure in the country propelled by general structural changes in the agricultural sector and the economy and most production units may gradually become larger
Recommendations Farmer organization has to be strengthened to ensure
that their interests are better represented on a national scale
Promote co-operatives and farmer groups for collection bulking and marketing milk Irrespective of whether targeted to the processing
industry or informal raw milk market Introduce licensing to informal traders and provide
them with simple appropriate technologies to extend shelf-life of raw milk This will dissuade traders from using harmful additives Will encourage consumers to pay a price premium for
assured quality Public policy should discourage concentration and
scaling-up of peri-urban dairy and encourage rural dairy for more equitable development
Recommendations While the market for UHT milk is expected to expand there is
need to diversify the products Setting up livestock business advisory service centers will be a
good investment for professionals Establishment of milk collection centers in the milk pockets
with chillers offer a good investment This will result in improved quality and quantity of milk
Not necessary to establish large dairy farms to promote commercialization of dairy If the necessary technologies are provided and market
institutions are promoted for small-scale milk producers and market agents overall employment and income generation can be increased
This may create a momentum for change in dairy production and marketing structure in the country propelled by general structural changes in the agricultural sector and the economy and most production units may gradually become larger
Recommendations While the market for UHT milk is expected to expand there is
need to diversify the products Setting up livestock business advisory service centers will be a
good investment for professionals Establishment of milk collection centers in the milk pockets
with chillers offer a good investment This will result in improved quality and quantity of milk
Not necessary to establish large dairy farms to promote commercialization of dairy If the necessary technologies are provided and market
institutions are promoted for small-scale milk producers and market agents overall employment and income generation can be increased
This may create a momentum for change in dairy production and marketing structure in the country propelled by general structural changes in the agricultural sector and the economy and most production units may gradually become larger