my final project 20003 document (2)

Two model countries for dairy production in south Asia

Chapter 1

Introduction:

Dairy products are derived from milk, the secretion of the mammary glands of mammals,

usually cows (bovine), sheep, goats, buffalo, mare, camel, or yak. Most dairy products originate

from bovine milk and, to a lesser extent, sheep and goat milk. As milk contains approximately

80 to 90 percent water, it is prone to undesirable microbial growth with concomitant product

deterioration. To prevent this problem from occurring, and to ensure a longer shelf life, milk is

processed to form different products such as ice cream, cheese, milk powders, yogurt, butter,

lactose, and anhydrous milk fat (also known as butter oil). Milk can be separated into a cream

fraction and a skim milk fraction by a centrifugation technique called separation. This process

concentrates the fat present in the milk into the cream phase, leaving a skim or partially

skimmed phase with much lower fat content. The speed of centrifugation can be adjusted to

yield different fat content in cream. Milk processing applies different preservation techniques to

allow for longer storage of dairy products. Milk powders are produced by concentration to

remove some of the water, followed by atomization into a fine mist and drying at high

temperatures. Heat and dehydration (water removal) are employed to give a long shelf life for

milk powders. Ice cream is a dairy product preserved by the action of freezing. Yogurt and

cheese are both fermented products. A bacterial culture is used to inoculate milk, for which the

primary function is to lower the pH from 6.7 (typical for fresh bovine milk) to 4.2 for yogurt and

in the range 4.6 to 6.0 for most cheese varieties. The bacterial cultures also assist in breaking

down proteins and fats in the milk product to develop some of the flavor. The preserving

function of added bacterial culture is to compete with unwanted pathogens for nutrients. Thus

cheese and yogurt are preserved by dehydration, acidification, and competition with pathogens

for survival in the product.

Brief introduction of south Asia

South Asia, also known as Southern Asia, is the southern region of the Asian continent, which

comprises the sub-Himalayan countries and, for some authorities, also includes the adjoining

countries on the west and the east. Topographically, it is dominated by the Indian Plate, which

1

http://www.answers.com/topic/gland

http://en.wikipedia.org/wiki/Asia

http://en.wikipedia.org/wiki/Region

http://www.answers.com/topic/centrifugation-2

http://www.answers.com/topic/skimming

http://www.answers.com/topic/lactose

http://www.answers.com/topic/yoghurt

http://www.answers.com/topic/yak-1

http://www.answers.com/topic/camel


rises above sea level as the Indian subcontinent south of the Himalayas and the Hindu Kush.

South Asia is surrounded (clockwise, from west to east) by Western Asia, Central Asia, Eastern

Asia, Southeastern Asia and the Indian ocean.

South Asia typically consists of Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and

Sri Lanka. Some definitions may also include Afghanistan, Burma, Tibet, and the British Indian

Ocean Territories. Iran is also included in the UN sub region of "Southern Asia," although many

sources consider Iran as being part of West Asia. Various universities' departments of South

Asian Studies also, by and large, reject the idea that Iran is part of South Asia.

South Asia is home to well over one fifth of the world's population, making it both the most

populous and most densely populated geographical region in the world. The region has often

seen conflicts and political instability, including wars between the region's two nuclear-armed

states, Pakistan and India. South Asian Association for Regional Cooperation is an economic

cooperation organization in the region.

South Asia is the poorest region on the earth as well as Sub-Saharan Africa, and it has the lowest

GDP per capita. Poverty is commonly spread within this region. According to the poverty data

of world bank, there was more than 40% of the population in this region lived on less than $1.25

per day in 2005, compared to 50% of the population in Sub-Saharan Africa.

Bhutan has the highest GDP per capita in the region, while Nepal has the lowest. India is the

largest economy in the region; it is the world's 12th largest or 4th largest by purchasing power

adjusted exchange rates. Pakistan has the next largest economy and the 5th highest GDP per

capita in the region , followed by Bangladesh. If Iran is counted, it is the richest economy and

the second largest in region. According to a World Bank report in 2007, South Asia is the least

integrated region in the world; trade between South Asian states is only 2% of the region's

combined GDP, compared to 20% in East Asia.

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http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita

http://en.wikipedia.org/wiki/Wars_and_conflicts_between_India_and_Pakistan

http://en.wikipedia.org/wiki/East

http://en.wikipedia.org/wiki/West

http://en.wikipedia.org/wiki/Indian_subcontinent


Chapter 2

Methodology of the study:

Literature review

In the paper named ‘The White Revolution- Dhoodh Darya” is aimed at disseminating

information on the untapped potential of the dairy sector in Pakistan. The paper gives detailed

information, consolidated and obtained from different stakeholders. These include the industry,

farmer groups, government departments, development institutions, earlier research papers,

consultants and independent opinion holders.

Additionally a thematic strategy is also proposed, both at the policy level (Bridging the

government with the dairy sector for supportive policy), and at the implementation level

(Bridging the farmer with the market mechanism and the industry).

In the paper “Analysis of milk production system in Peri-urban areas of lahore (pakistan)” is an

attempt to investigate the market structure, sources of milk production and average unit of

productivity in peri-urban areas of Lahore. Using primary data of year 2007 from some selected

peri-urban areas of Lahore, the results of this study reveal that the lack of training and dairy

related education hinders opportunity of value addition with undue cost of poor transportation,

low quality and mismanaged distribution.

The report on “Milk and Dairy Products in India –Production, Consumption and Exports

(Second Edition – September 2009) this report by Hindustan Studies & Services Ltd. and

Impolitic covers all aspects of production, consumption and exports of milk and dairy products.

Starting from an analysis of the economic and social environment, the report looks at drivers

and impediments of growth of dairy sector in India. It gives statistics and insights into domestic

market dynamics of liquid milk, dairy fats (butter and ghee), curd, processed cheese, table butter

as well as for traditional Indian dairy products like khoa, paneer, chhana etc. The report has

detailed country-wise export statistics for each dairy product for the years 2004-05, 2005-06,

2006-07, 2007-08 and April-December 2008. The report has forecast of production,

consumption and exports for years up to 2012 / 2013.

In the study “A review of milk production in Bangladesh with particular emphasis on small

scale producers” the writer describe the purpose of study was to gain insight into the household

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and farm economics of small-scale dairy farmers in Bangladesh and to obtain estimates of their

cost milk production so as to measure aim being qualitative insight rather then quantitative.

The paper on “The development of dairy industry in Bangladesh” was undertaken to get an

understanding of the slow growth or stagnation of the dairy industry. In this study the writer have

identify several factors that may be contributing to this scenario. He also proposes some policy

changes to boost the growth of the industry:

In the paper “Improved Market Access and Smallholder Dairy Farmer Participation for

Sustainable Dairy Development “the writer focus on the importance and potential of Sri Lankan

dairy industry in the country’s economy. The dairy industry has a potential in contributing to the

development the economy of Sri Lanka. Milk production has been a traditional industry which

has survived thousands of years, playing a key role in infant feeding and alleviating nutritional

poverty in all age groups. The dairy sector is important due to the extensive employment

opportunities the industry offers.

The writer also pointed out that Sri Lanka is largely self-sufficient in most animal products apart

from dairy. The consumption of dairy products increased dramatically since the country adopted

open economic policies in the mid 1970s. Sri Lanka is currently about 15 – 20% self-sufficient

in milk, been mostly achieved with use of imported milk powder.

Problem statement

To explore two model countries in respect of dairy products in South Asia

Purpose statement

The basic need is to explore two model countries in south Asia regarding dairy products

and to explain the measure taken by those particular countries for dairy products and other

countries may fallow these measures to speed up dairy products in their own country.

Collection of data

For the sake of the completion this project we have gone through secondary data. The sources of

data are the current economic surveys of south Asian countries. Mainly data is taken from

different articles written on dairy sector of the south Asian countries.

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Chapter 3

Brief Description of south Asian Countries in Dairy

1 India

India forms a natural sub-continent with the Himalayas to the north. The Arabian Sea and the Bay of

Bengal, which are sections of the Indian Ocean, lie to the west and east respectively. India's neighbours

are China (Tibet), Bhutan and Nepal to the north, Pakistan to the north-west, and Burma to the north-

east. To the east, almost surrounded by India, is Bangladesh. Near India's southern tip, across the Palk

Strait, is Sri Lanka.

India has 28 states with constitutionally defined powers of government. The states vary greatly in size,

population and development. Each state has a Governor appointed by the President for 5 years, a

legislature elected for 5 years, and a Council of Ministers headed by a Chief Minister. Each state has its

own legislative, executive and judicial machinery, corresponding to that of the Indian Union.

Country in Brief

Area: 3,287,623msq km (1,269,219 sq miles)

Population:1,136,000,000(Sept2007est)

Capital City: New Delhi

Languages: The official language of India is Hindi, written in the Devanagari script and spoken

by some 30% of the population as a first language. Since 1965 English has been recognised as

an 'associated language'. In addition there are 18 main and regional languages recognised for

adoption as official state languages.

Religions: India is a secular state and freedom of religion is protected under the Constitution.

The main religious groups are Hindus (81.3%), Muslims (12%), Christians (2.3%), Sikhs

(1.9%).

Currency: Rupee

Basic Economic Facts

GDP: : $1,090 billion (2007)

GDP per head: $714 per head (2006)

Annual Growth: 8.4% (2005-2006)

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Inflation: 5.6% (2006 est.)

Major Industries: Textiles, chemicals, food processing, steel, transportation equipment, cement,

mining, petroleum, machinery, software, gems and jewellery, leather manufactures.

Dairy in India

India is the world's largest milk producer and in absolute terms its growth in milk production

over the medium term is projected to considerably exceed that of any other major milk

producing region. Animal productivity in India's traditional milk production regions continues to

improve. Buffalo milk, which has higher constituents than cows' milk, represents an increasing

share of total milk production and this trend is expected to continue.

Annual production 74.3million tons

Per capita production 214 gm/day or 78 kg/year

Techniques of production

Sources of production 33.6% cows

63.6%buffalo

2.8% goats

%Share in GDP

2. Pakistan

Pakistan is about three-and-a-half times the size of the UK. It shares borders with 4 countries: India to

the east, China to the north east, Iran to the south west and Afghanistan along the western and northern

boundaries. Pakistan's coastline on the Arabian Sea is 1,064 km long. The climate can be roughly split

into 3 seasons: cool (October through February), hot (March through June), and wet (July through

September). There are, however, significant regional variations.

Pakistan is divided into 4 provinces: Balochistan, North West Frontier Province (NWFP), Punjab and

Sindh. Pakistan-administered Kashmir is known in Pakistan as Azad Jammu and Kashmir (AJK).

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Country Facts

Area: 803,940sqkm (499,545sqmiles)

Capital City: Islamabad

Population:162.4million

Populationbelowpovertyline:40%(2000estimate)

Literacy rate: Male: 61.7% / Female: 35.2% / Total: 48.7%

Official languages: English and Urdu

Languages spoken: Punjabi, Sindhi, Pashto, Urdu, Balochi, English and many other local

languages

Religions: Islam (97%), Hinduism, Christianity and others (3%)

Currency: Rupee

Basic Economic Information:

GNP (FY 2007 - 2008): Rs.5822.1 billion

GDP (FY 2007 - 2008): Rs.5926.0 billion

GDP Growth Rate (FY 2007 - 2008) 5.8%

Inflation (July 2007 – June 2008) 10.3%

Major Industries: Cotton yarn and thread, raw cotton, cotton fabrics, rice (EIU data)

Major Trading Partners: USA, Japan, Germany, UK, Italy

Major Foreign Investors: USA, UK, UAE and Norway

Average Exchange rate (14 January 2009): £1 = 116.02 PKR (Pakistan Rupee) US$1 = 79.14

Dairy in Pakistan

Pakistan is endowed with a large livestock population well adapted to the local environmental

conditions. The national herd consists of 33.0 million heads of cattle, 29.9 million buffaloes,

27.4 million sheep, 58.3 million goats and 1.0 million camels. Livestock produce approximately

43.562 million tons of milk, making Pakistan the 3rd largest milk producer country in the world.

Livestock also produce 1.601 million tons of beef, 0.590 million tons of mutton, 41.54 thousand

tons of wool, 21.99 thousand tons of hair and 57.937 million skins and hides (Government of

Pakistan, 2009)

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Annual production 43 million tons

Per capita production 230 kg per year

Techniques of production 62% buffalo/ 34.4% cattles 3.6%sheeps,

goats etc.

Sources of production About90%small household farms/10%camurcial farming

%Share in GDP

3 Sri Lanka

The Democratic Socialist Republic of Sri-Lanka, the most picturesque tropical Island in the Asian region

has a total area of about 25,300 sq. miles (66,000 sq. km.) with an estimated population of around 20

million. The population has been growing at a moderate rate of 1.2% per annum. Three quarter of the

population lives in rural areas with the influx to urban metropolitan areas being relatively modest.

Ethnically 72% are Sinhala, 18% are Tamils by birth Sri-Lankan and Indian origin and 7% are moors.

Nearly 70% are still engaged in agricultural and labor intensive plural income earning activities.

Based on rainfall pattern, the Island can be divided into two major zones: the wet zone (average

annual rain fall of 75-100 inches) in the southwest quadrant, and the Dry Zone (average annual rainfall of

35-75 inches) covering the rest of the Island and 64% of the area. A narrow transitional band between the

dry and wet zone is sometimes referred to as the Intermediate zone. About three quarters of the

population resides in the wet zone.

Dairy in Sri Lanka

The dairy industry has a potential in contributing to the development the economy of Sri Lanka.

Milk production has been a traditional industry which has survived thousands of years, playing a

key role in infant feeding and alleviating nutritional poverty in all age groups. The dairy sector

is important due to the extensive employment opportunities the industry offers. Sri Lanka is

largely self-sufficient in most animal products apart from dairy. The consumption of dairy

products increased dramatically since the country adopted open economic policies in the mid

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1970s. Sri Lanka is currently about 15 – 20% self-sufficient in milk, been mostly achieved with

use of imported milk powder.

The Government at the same time has an ambitious target for growth in dairy production, to

increase towards 50% self sufficient target in milk products by 2015. At the current growth rate

of 1 – 2% p.a., the sector will need to grow at about 15% annually for the next eight years with

no increase in total consumption. This is an uphill task given the current state of the industry.

Prior to the opening of the economy in 1977, the domestic sources of milk provided nearly 80

percent of Sri Lanka’s consumption needs. Given the current levels of malnutrition in the

country, particularly among pre-school children and pregnant mothers, milk production is an

important activity both for improvement of nutrition, saving foreign exchange and creation of

employment opportunities


Per capita production 5.37/kg p.a

Techniques of production Wet mid farming

Sources of production 83.95%cows

16.04% buffalo

%Share in GDP 0.8%

4. Bangladesh

Bangladesh has roughly the same land area as England and Wales. It is enclosed by Indian

territory except for a short south-eastern frontier with Burma and borders the Bay of Bengal in

the south. The alluvial plain of the Ganges-Brahmaputra river system - the largest delta in the

world, forms most of the country; water flow is second only to that of the Amazon. To the east

of the delta lie the Chittagong Hill Tracts. Flooding is normal and life has adapted to take

account of this but occasionally excessive flooding, as in 1988, 1998, and 2004 caused

widespread destruction and loss of life. Bangladesh remains vulnerable to natural disasters and

to the impact of climate change. Arable land is extremely fertile. Bangladesh's principal natural

resource is natural gas.

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Country in Brief

Area: 144,000 sq km (55,599 sq miles)

Population: 135 million (2003 estimate)

Capital City: Dhaka, 11 million (2005 estimate)

People: Bengalis (98%), and small numbers of tribes people.

Languages: Bangla, and some tribal languages. English quite widely spoken by those with education.

Religion(s): Islam (89%), Hinduism (10%). Buddhists and Christians make up about 1% of the

population

Currency: Taka

Basic Economic Facts

GDP: US$50,929million (BangladeshBank2003)

GDPperhead:US$381

GDPGrowth:5.3% for 2003(forecast for 2005 is 5%)

Consumer Price Inflation: 6.1 %( 2004)

Principal Exports: Garments account for 80% of Bangladesh’s exports to the UK. Seafood is

also a significant Bangladesh export. Almost 10% of Bangladesh’s world-wide exports go to the

UK.

Aid & development: The Department for International Development (DFID) has one of its

largest programmes in Bangladesh. On current plans, the UK expects to spend £114 million in

the year to 31 March 2008.

Dairy in Bangladesh

The importance of bovine livestock to Bangladesh economy cannot be over stated. Even though

the sub sector contributes only 3% to the GDP, it provides full and part time employment to

about 20% of Bangladesh rural population and accounts for 18% of the agricultural export

earnings.

The consumption of milk and milk products in Bangladesh is very low even when compared to

neighboring countries. The average daily consumption is 42ml per day/person against a

recommended allowance of 250ml/day. Bangladesh would currently need to import or produce

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five times its current production if it is to meet the WHO recommended daily requirement. Thus

there is a huge requirement.

Milk imports in Bangladesh have increased from 2.2 billion takas in 1996 to about 8 billion

takas today. The EU has gradually removed subsidies on its milk products. In addition the

devaluation of the taka has also negatively impacted on balance of payments for dairy products.

In the retail market the price of powdered milk has more than doubled in the past decade.


Per capita production 13kg/p.a

Techniques of production Traditionally

Sources of production 37%cattels,

62%buffalos, goats

%Share in GDP

Table : 1 Overall data analysis

Name of Annual Per capita Source of Techniques of %Share Exports

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countries production production production production in GDP

Pakistan 43 million

tons

230 kg per

year

62% buffalo/

34.4% cattles

3.6%sheeps,

goats etc.

About90%small household farms/10%camurcial farming

0.43%

India 74.3million

tons

214 gm/day

or 78

kg/year

33.6% cows

63.6%buffalo

2.8% goats

Sri lanka 0.18million

tons

5.37/kg p.a 83.95%cows

16.04% buffalo

Wet mid farming 0.8%

Bangladesh 2.11million

tons

13kg/p.a 37%cattels,

62%buffalos,

goats

Traditional

farming

On the basis of above analysis we can select Pakistan and India as the best model countries for

dairy industry in South Asia because Pakistan and India has made a great deal of progress in

dairy sectors. We can declare these countries as the model countries for dairy industry in South

Asia. Steps taken by Pakistan and India for the improvement of dairy industry are discussed in

the next chapter.

Chapter 4Modal countries (Pakistan and India)

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Pakistan

Pakistan is endowed with a large livestock population well adapted to the local environmental

conditions. The national herd consists of 33.0 million heads of cattle, 29.9 million buffaloes,

27.4 million sheep, 58.3 million goats and 1.0 million camels. Livestock produce approximately

43.562 million tons of milk, making Pakistan the 3rd largest milk producer country in the world.

Livestock also produce 1.601 million tons of beef, 0.590 million tons of mutton, 41.54 thousand

tons of wool, 21.99 thousand tons of hair and 57.937 million skins and hides (Government of

Pakistan, 2009).

In Pakistan, the main contribution of milk comes from buffaloes, which produce 62.0% of the

total milk supply. In fact, traditionally buffaloes have been raised as dairy animal and cattle as

draught animal. Currently, cattle produce 34.4% of the milk supply, while the remaining is

contributed by camels, goats and sheep (Government of Pakistan, 2009). Buffalo milk contains

higher butter fat (6 to 8%), is rich in taste and is preferred by majority of the people.

Milk is the single largest commodity in the livestock and agriculture sectors in terms of value.

The total value of the milk (Rs. 1307 billion) exceeds the combined value (Rs. 1013 billion) of

major cash crops (cotton, wheat, rice, maize and sugarcane) in the country.

Sale of milk by the farmers brings daily cash to them. If it is assumed that only 50% of milk

produced in the country is marketed (the remaining 50% is consumed at home), the cash flow to

the rural economy due to sale of milk comes to be Rs 653.430 billions annually or Rs. 1.790

billion daily.

Milk Production

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Table 2 Milk production and consumption in Pakistan

species units 2006-07 2007-08 2008-09

Milk Gross

production

000 tons 40,872 42,191 43,028

Cows “ 13,913 14,437 14,982

Buffalos “ 25,465 26,231 27,028

Sheep’s “ 35 35 36

Goats “ 682 700 719

Camel “ 777 787 798

Milk consumption in Pakistan

species units 2006-07 2007-08 2008-09

Milk Gross

consumption

000 tons 32,996 34,064 35,160

Cows “ 11,130 11,550 11,985

Buffalos “ 20,372 20,991 21,622

Sheep’s “ 35 35 36

Goats “ 682 700 719

Camel “ 777 787 798

Source: Ministry of Livestock and Dairy Development

The contribution of dairying to the national economy is of the order of Rs.540 billion (with 97%

as informal non-documented economic activity), and is expected to grow at 4% per year under

current scenario. If the process is accelerated with process improvement and focus

improvements identified through this White Paper, a growth level of 20% can be achieved.

Being a highly perishable commodity and produced primarily in the heart of the rural

environment, milk reaches the consumer only with much difficulty and increased cost. Urban

usage of milk is only 30% with the formal milk processing industry handling only 2 to 3 %

(around 1 billion liters) of total milk production of the country. For the other 97%, a multi-

layered distribution system of middlemen has evolved for milk supply. An estimated 20% of

current milk production is lost from income generation due to fragile infrastructure facilities

required for a highly perishable commodity like milk. As a result of these factors, Pakistan is a

net importer of milk and milk products. An important goal for the dairy industry of Pakistan is

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to meet the needs of the people of Pakistan, such that while imports are welcome they are not

necessary. Small and marginal land holding farmers and landless laborers dominate milk

production in Pakistan.

These small holding farmers usually practice dairy farming as a by-product of the crop sector.

Fig: 1

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Structure of Dairy Farming in Pakistan (Comparative to other countries):

Dairy Farming has always been considered as a by-product of cropping in Pakistan; it is not an

independent activity as in Europe and other countries with developed industries. This parallel

application of two kinds of farming is described as mixed farming. The benefits of mixed

farming include: the waste or farm residue of agri-farms is utilized in dairy farms; likewise,

dairy farm residue is utilized in agri-farms thus minimizing losses to farmers. However, the

weakness is that in the absence of enhanced management techniques for dairying, its

profitability relative to other forms off arming has been overshadowed. This has hampered the

growth of a specialized sector with specific dairy innovative techniques.

The vast majority (about 70%) of dairy farmers in Pakistan are smallholding farmers. Up to 43%

of dairying households in Pakistan maintain herd sizes of one to two animals while another 28%

of the households maintain herds ranging from three to four animals. Some 90% of milk

production comes from smallholding farmers. Many believe that only large mechanized farms

are the solution to increased profitability and quality. While this is true for many US, EU and

other developed countries having achieved a level of farm mechanization, the challenge is to

achieve the goals of profitability and quality while recognizing the situation in Pakistan.

Milk Collection and Distribution system

While the structure of the dairy processing industry has improved dramatically, milk collection

and distribution is fragmented compared to systems found in other countries. There is a need to

improve the supply chain from farmer to consumer in Pakistan. There is very limited data

available on the routes to market or the distribution channels employed in Pakistan. Most of the

milk produced in the farms is consumed at the household level. The surplus is marketed at the

local markets in form of liquid milk or purchased by milk collectors and transported to urban

areas through different distribution channels.

The milk supply and marketing chain involves different players such as milk collectors (dodhis),

traditional cream manufacturers and "Khoya" (milk concentrate for local sweets) makers and

retailers. (The traditional cream and khoya is often very unhygienic and is made in dirty work

conditions hence is a danger to human health). Dodhis or milk collectors play an important role

in collection and the marketing chain of the dairy sector of Pakistan. The dhodhi community

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may even reach a million in number. Based on their financial and technical abilities, they can be

classified in three groups of small, medium and large-scale milk collectors. The small-scale milk

collectors collect an amount of 200-400 kg milk per day from different farms, often in remote

areas. Some of them make long-term contracts at a predetermined price offering a share of the

milk price in advance to the farmers. In small towns, they may directly market the milk, but in

larger urban areas, they sell the milk to the large collectors. Medium scale milk collectors collect

400-800 kg milk per day in a manner similar to the small milk collectors, but on a larger scale.

This group may carry out door to door milk delivery and marketing in some nearby urban

markets using different means of transportation. Large-scale milk collectors collect 1.5 to 3 tons

of milk/day, purchased often from the small and medium scale collectors and act as middlemen

between them and retail shopkeepers. Large scale milk adulteration is practiced mostly by this

group of large scale milk collectors.

The rural supply chain for processed milk industry has three patterns: milk collection through

third-party milk collectors; self-collection system of dairy plants and farmer cooperatives. Third

party collection and self-collection are the more prevalent collection systems, whereas to date

dairy co-operative systems have failed to succeed in Pakistan.

Of the total milk sold by the farmers, 15 - 19% is thought to be wasted en route-to-market due to

spoilage from a lack of proper cooling, storage, and transport systems. There is an imperative

need to prevent the wastage of milk, which is the result of a poor cold chain. Milk being a highly

perishable commodity does not give many choices for storage or channels; consequently, the

unorganized middlemen as a speedy substitute to a cold chain dominate the supply chain. Both

investment and regulation are required to develop the cold chain, which will help consolidate the

milk collection system. The cold chain infrastructure is envisaged as a means to create rural

entrepreneurs in the rural economy. Improved supply chains may reduce milk collection costs

faced by the processing industry, presently averaging around 16% of the factory gate costs (with

the remainder being the price paid for the milk).

Supply and Demand

As a food item, all milk (both milk and milk equivalents) is second only to cereals in level of per

capita consumption in Pakistan. The annual per capita consumption level at the national level is

190 liters. Province wise, per capita consumption stands at 246 Kg in Sindh, 132 Kg in Punjab,

86 Kg in NWFP, and 108 Kg in Baluchistan. Due to rising inflation and high poverty levels, the

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majority of Pakistani consumers are price conscious. Therefore, demand for open, raw milk is

high compared to processed milk. Hence, raw milk is the primary dairy product marketed in the

country. Over 90 percent of the marketed milk is collected and marketed unprocessed through

the informal market by a multi tiered layer of marketing agents. The supply of milk to meet

domestic demand has usually lagged. To meet this gap, powdered milk is imported every year.

During July 2006– November 2007, dairy products worth Rs. 2320.42 million ($38.6 million)

were imported. The Statistics Division lists the product only as ‘Milk and Milk Food for

Infants’. There are too many cumulative statistics presented at all levels without much

consideration for the ground realities. This only creates confusion when designing long term

effective strategies for development of dairy by both the private sector and the donors. That is

why strategies are recommended to address issues related to data availability.

Characteristics of Milk Production Systems in Pakistan:

Fig: 2

The milk production system currently prevailing in Pakistan can be characterized by their

location, herd size, feeding practices and marketing opportunities. These production systems

based on rural and urban areas offer immense potential for rapid growth in indigenous milk

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production from their current lower milk yields by improving upon animal management and

feeding practices in the short-run and by bringing about a marked improvement in the animal

stocks in the long-run. For illustrative purposes, we distinguish here three milk production

systems in Pakistan and highlight their main

Rural Milk Production Systems:

Fig: 3

In rural areas of Pakistan, both subsistence and market oriented milk production systems are

rampant. A most common age-old practice for rural families was to keep milching animals to

meet family’s subsistence needs of milk and milk products whereby excess milk was converted

in to butter or ghee for home consumption. At that time there was very little demand, if any, for

commercial milk production within the village. However, with burgeoning urbanization a vast

market for milk and ghee gradually developed in most parts of Pakistan, which encouraged

commercial milk production by subsistence as well as market oriented dairying households.

The subsistence dairying households in Pakistan keep buffaloes and cows in smaller herd sizes

while market oriented households keep larger herd sizes for commercial milk production. Up to

43% of the dairying households in Pakistan still operate under conditions of subsistence by

maintaining herd sizes of one to two while another 27 to 28% of the households operate under

conditions of near subsistence where the herd sizes range from three to four animals (Table 1).

The rest of the dairying households appear to be maintaining larger herd sizes of cattle and

buffaloes located in rural and urban areas that operate essentially for commercial supply of milk.

19


The subsistence or near subsistence dairying households mostly consist of small farmers, tenants

or landless laborers. These dairying households have very high stakes in dairy production

because dairy income supplements their other income from farming or agricultural labor.

Therefore, smallholder dairying is seen as a tool of raising effective incomes of these

impoverished rural households. Interventions in dairy economy aimed at benefiting these

impoverished classes involve high returns from a policy standpoint.

Poor management and feeding of animals is one of the key characteristics responsible for lower

milk yields in Pakistan. Artificial insemination can be extremely useful for breeding of cattle

and buffaloes, but the farmers in Pakistan are still not inclined to accept this method for various

reasons. The fact is that only 4% to 4.5% of dairying households in Pakistan use artificial

insemination (see Table 2) in buffaloes and cows with a slight edge to farmers in Khaber

Pakhtoonkhuwa (KPK) over all other provinces. Artificial insemination facilities have either not

been introduced in many parts of Pakistan or this service is not available nearby to be used at the

time of need.

City and Peri-urban Milk Production:

The oldest form of milk supply in urban areas consists of animal population of cities, which was

(and still is) kept in stables in the outskirts of cities and towns. In other cities, small-scale dodhis

(milkmen) used to transport fresh milk to urban consumers on foot or on bicycles from peri-

urban areas, which still persists in more or less the same form. However, with rapid urbanization

the municipal limits of growing towns and cities are extended, which brought most of these

stables inside main cities. Civic authorities of few metropolitan cities (e.g., Karachi, Lahore and

Rawalpindi) have made concerted efforts to remove dairy animals from city limits leading to

establishment of Gawala Colonies around urban areas. In other cities, buffalo and cow herds are

still kept on stables gathered over the urban area. Some urban families also keep a large

ruminant milch animal (e.g., buffalo or cow) in their streets, garages, or backyards to obtain

guaranteed supply of fresh and unadulterated milk.

Commercial Dairy Farming:

This involves keeping larger herd sizes usually about 30 or more animals where production depends

on modern feeding practices with wheat and rice straw, purchased concentrates, green feeds such as

barseem, sorghum and maize, and other agricultural by-products. They often take full advantage of

20


available breeding practices, e.g., artificial insemination, to improve their herd quality. Some of

them have also installed their own pasteurization or processing equipment. Due to superior feeding

and management practices, yearly milk yield per animal in these production units is relatively

higher. However, the share of such farms in total milk production is very low.

Potential of Dairy Farming in Pakistan

On the dairy farming side, Pakistan can boast of being the fourth largest producer of milk with

an annual production of 35 billion liters of milk for human consumption. The gross production

is much higher as around 20 per cent of the production is consumed either by the calves or

wasted otherwise. It also boasts of having approximately 66 million of dairy animals with some

pride breeds of buffalo and cow comparable to the world's best species. Unfortunately, we are

still a net importer of milk and other dairy products. Low productivity because of substandard

feeding and / or malnutrition of animals coupled with the low profitability for the immediate

producer are the root causes of sector's underperformance. The common person or the ultimate

consumer has to pay more than double of what the farmer gets. Intermediaries that take

advantage of weak or no linkages between the producer and the final consumer gobble a major

chunk of price benefits. The milk is sold in raw form, with only three per cent going to the

processing industry, which in turn sells the processed milk in cities at exorbitantly high prices.

There are more than 8 million dairy farming households in the country, which are engaged in the

milk business in an informal economy. The animal holding size, likewise the land holding size,

is also very dismal - 2 to 5 animals per household. Various studies by national and international

organizations suggest that there is a huge untapped potential in Pakistan's dairy farming sector

that needs revamping on modern lines to properly connect to the formal economy on one hand

and afford the modern livestock farm techniques on the other. High profile public and private

investment, small-farmer-friendly government policies coupled with the market and

Infrastructure support can enhance productivity and efficiency of this sector manifold

21


India:

India is the world's largest milk producer and in absolute terms its growth in milk production

over the medium term is projected to considerably exceed that of any other major milk

producing region. Animal productivity in India's traditional milk production regions continues to

improve. Buffalo milk, which has higher constituents than cows' milk, represents an increasing

share of total milk production and this trend is expected to continue.

However, consumption growth in India will absorb much of this increased milk production due

to growing population, additional demand for value added products and increased incomes

levels among the middle classes.

Evolution of Indian Milk Production

140,000 Fig :4

130,000

120,000

Ton

nes

110,000

100,000

90,000

80,000

70,000

60,000

2000 2002 2004 2006 2008 2010 2012 20142001 2003 2005 2007 2009 2011 2013 2015

History OECD FAPRI

Sources: OECD, FAPRI

India's net trade in dairy products is unlikely to change considerably over the medium term.

Even though FAPRI sees milk production in India growing at a slower rate than OECD, FAPRI

also considers that consumption growth will be slower and hence India's export capacity in SMP

increases over the period

More than 2,445 million people economically active in agriculture in the world, probably 2/3 or

even more ¾ of them are wholly or partly dependent on livestock farming. India is endowed

with rich flora & Fauna & continues to be vital avenue for employment and income generation,

22


especially in rural areas. India, has 66% of economically active population, engaged in

agriculture, derives 31% of Gross Domestic Product (GDP) from agriculture. The share of

livestock product is estimated at 21% of total agricultural sector.

Total milk production

In India, the market milk industry may be said to have started in 1950-51 when the Central

Dairy of Aarey Milk Colony was commissioned and went into stream. The industry is still in its

infancy and barely 10 per cent of our total milk production undergoes organized handling.

Summary of utilization of milk in India

Table 3 Utilization of milk in India

Items Percentage in relation to

Total milk production Total quantity converted into

milk products

Fluid milk 44.5 -

Manufactured milk 55.5 (100)

Ghee 32.7 58.9

Dahi 7.8 14.0

Butter 6.3 11.4

Khoa 4.9 8.8

Ice cream 0.7 1.3

Cream 1.9 3.4

Other products 1.2 2.2

(Source: F.A.O, 2007)Trade:

MY 2010/11 exports of NFDM are forecast to increase marginally to 35,000 tons compared to

30,000 tons in MY 2009/10. Strong domestic demand for milk powder is expected to keep

export figures lower during MY 2009/10 and during MY 2010/11. The MY 2008/09 export

figure for NFDM is revised down to 35,000 tons to reflect data published by the Ministry of

Commerce, GOI. Exports of butter for MY 2010/11 are forecast by Post at 10,000 tons

compared to 5,000 tons in MY 2009/10. The MY 2008/09 export figure for butter is revised up

to 15,000 tons according to the data published by the Ministry of Commerce.

23


Fig: 5 Indian Exports of Dairy Products in MY 2008/09 (Apr.-Feb)

Source: Global Trade Source Information Services database (GTIS)

Fig: 6 Country-Wise Exports of Indian Dairy Products in MY 2008/09 (Apr.-Feb) & MY 2007/09 in Metric Tons

Source: Global Trade Source Information Services database (GTIS)

24


Indian imports of dairy products are not substantial in volume. The volume of imports during

MY 2008/09 was approximately 9,130 tons. More than 80 percent of dairy imports are butter

and fats, whey and products, milk and cream, milk powders, and baby foods. However,

increased lean-season milk supply shortages and rising demand for full-cream milk and milk fats

are expected to lead to a rise in future imports of non-fat dried milk (NFDM) and butteroil. India

is expected to import around 30,000 tons of butter and other fats during the current year

compared to an import of 5,000 tons during MY 2008/09.

The National Dairy Development Board (NDDB) was planning to import milk powder under the

tariff rate quota (please see table C for details on the tariff rate quota) but high international

prices dampened import prospects. Strong demand for imported processed cheese and other

high-value dairy products and ingredients by luxury hotels, food processing industries and fast

food chains is also expected to track with increasing consumer income, exposure to international

foods, and expansion of the Indian food retail sector. Imports of high-value dairy products such

as lactose and whey powder may also increase given the fast growth in the food processing,

pharmaceutical, and health food industries.

Table 4 INDIAN DAIRY PRODUCTS IMPORTS IN METRIC TONS (2007/08 & 2008/09)

Source: Global Trade Information Services database (GTIS)

25

MY(2007-08) MY(2008-09)MMMYDairy products MY 2008-

DAIRY PRODUCTS 2007- 2009

Feb)WHEY & PRODUCTS 1,003 1,055BUTTER & OTHER FATS 973 5,029MLK POWDERS, BABY FOODS ETC. 799 901CHEESE & CURD 758 677BUTTER MILK, YOGURT ETC. 143 195CASEIN 97 58MILK ALBUMIN 90 93ICE CREAM 89 44CASEIN GLUES & OTHER DERIVATIVES 52 76MILK & CREAM (NOT CONCENTRATED) 39 1,003TOTAL 4,043 9,131


In recent years there has been wide spread and increasing interest through out the world in

creating newer channels of utilization for the by-products of the dairy industry. Conversion of

edible substances into non-food items is not ordinarily justifiable especially in countries where

there is an overall shortage of milk supplies. It has always been realized that economic disposal

of by-products is an essential perquisite to profitable dairying.

1950 – 17 million tones

1996 – 70.8 million tones

1997 – 74.3 million tones

(Projected) 2020 – 240 million tones

Expected to reach- 220 to 250 million tones – 2020

India contributes 35% of total Asian milk

India contributes to world milk production rise from 12-15 % & it will increase up to 30-35%

(year 2020).

Storage;

Modern milk plants hold both raw and pasteurized milks for a much longer period than before.

Normally the milk storage capacity is equal to one day’s intake. This allows a more nearly

uniform work-day for processing and bottling operations with less dependence on the time for

receiving raw milk. Storage tanks are used in Milk Plants for the storage of raw, pasteurized, or

processed products, often in very large volumes. Because of the longer periods of holding,

storage tanks are among the most important items of equipment. They must be designed for ease

in sanitation, preferably by the circulation-cleaning method. In addition, the tanks should be

insulated or refrigerated, so that they can maintain the required temperature throughout the

holding period. Agitation should be adequate for homogeneous mixing, but gentle enough to

prevent churning and incorporation of air.

Packaging

Although the glass milk bottle is still the traditional packaging medium for retail milk

distribution, single-service paper/plastic containers are increasingly being adopted for the same

purpose. A survey has shown that in some European countries they have captured two-thirds of

26


the market. A beginning in this field has also lately been made in India. As far as milk

packaging is concerned, paper is a carrier for a water-proof layer of either polyethylene or wax.

The provision for 5 to 10 per cent of synthetic fibers is said not to influence the printing or

folding capacity of the paper, but rather to provide better wet strength. Dominated, in milk

packing, by polyolefin’s (such as polypropylene and polyethylene’s), used singly or blended to

offer a wide range of materials, plastics have superseded paper in recent times. The polyolefin’s

of interest are coating grades for cartons, film grades for sachets and extrusion/blowing grades

for bottles.

Distribution of milk is the last or final stage of the market milk industry. Others are preparatory

to placing the product into the hands of the consumer. The quality of the product alone will not

assure its wide distribution, which should be planned and executed intelligently.

Quality Control

It is well established that milk can be a potential carrier of disease producing organisms. Milk-

borne epidemics have occurred in the past throughout the world. Unless proper precautions are

taken, such outbreaks of milk-borne diseases can occur anywhere, any time, especially if raw

milk is consumed.

Fig: 7 Flow chart of conversion of milk into traditional Indian dairy products

Cultured Condensed Acid Precipitation

1. Shrikhand 1.Mishti dol 1.Paneer

2.Ghee 2.Rabri 2.Sandesh

3.Lassi 3.Kheer 3.Chhana

4.Kadbi 4.Khoa 4.Rasgoola

5.Pantoda

Burfi Pedha Kalakand Gulabjamun 6.Rasmalai

27


Table: 5 Commodities, Dairy, Milk, Nonfat Dry, PSD India

Source: Department of Commerce, U.S. Census Bureau

28

2008 2009 2010

2008 2009 2010

Market Year Market Year Market Year

Dairy, Milk, Nonfat Dry Begin: Apr Begin: Apr Begin: Apr2008 2009 2010India

USDAOld

USDAOld

USDAOfficial Official Official JanData Post Data Post Data

Data Data Data

Beginning Stocks 15 15 15 15 15 15 10(1000 MT)

Production 345 345 345 370 370 370 400(1000 MT)

Other Imports 0 0 0 0 0 0 0(1000 MT)

Total Imports 0 0 0 0 0 0 0(1000 MT)

Total Supply 360 360 360 385 385 385 410(1000 MT)

Other Exports 38 38 35 38 38 30 35(1000 MT)

Total Exports 38 38 35 38 38 30 35(1000 MT)


Conclusion

Dairy products are derived from milk, the secretion of the mammary glands of mammals, usually cows

(bovine), sheep, goats, buffalo, mare, camel, or yak. Most dairy products originate from bovine milk and,

to a lesser extent, sheep and goat milk. In our study we were assigned the tasked to fine out the two model

country in Asia in dairy products.

India succeeds to achieve the high level production of dairy products and expected to reach-220 to 250

million tones – 2020. India contributes to words milk production rise from 12-15 % &it will increase up

to 30-35 % (year 2020). More than 2,445 million people economically active in agriculture in the world,

probably 2/3 or even more ¾ of them are wholly or partly dependent on livestock farming. India is

endowed with rich Flora & Fauna & continues to be vital avenue for employment and income generation,

especially in rural areas. India, has 60 % of economically active population, engaged in agriculture,

derives 31% of Gross Domestic Product (GDP) from agriculture. The share of livestock product is

estimated at 21% of total agriculture sector.

The second country is Pakistan milk is a single larger commodity in the livestock and agriculture sector in

terms of value. The total value of milk (Rs.1370 billion) exceed the combined value (Rs.1013 billion) of

major cash crops (cotton, wheet, rice, maize and sugarcane) in the country.

We study as whole these countries dairy products share in GDP and role of dairy in country production

and finalized to used these entire indicators that Pakistan and India two are the model counties in the

region in dairy products.

29

http://www.answers.com/topic/yak-1

http://www.answers.com/topic/camel

http://www.answers.com/topic/gland


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31


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my final project 20003 document (2)

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