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ENHANCING DAIRY SECTOR EXPORT COMPETITIVENESS IN PAKISTANAn Assessment of Governmental PoliciesAgriculture PolicyTraditionally, agriculture has played a central role in the economy of the Pakistan. It accounts for over 21%of the GDP and employs over 45% of the total labour force of the country. The agriculture sector remains asignificant supplier of raw materials to the industrial sector as well as is a major contributor in the exports ofPakistan. Despite the fact that Pakistan is an agrarian economy, appropriate and well thought outagriculture policy is mainly not available in the country.After the 18th constitutional amendment, agriculture and livestock has been transferred from the federal listto the provincial list. The Ministries of Food and Agriculture and the Ministry of Livestock and DairyDevelopment have been devolved and their roles transferred to the provinces. Livestock still holds majorimportance in the agriculture economy of Pakistan. Therefore the national policy and planning,international and provincial coordination on animal diseases, import/export of livestock and livestockproducts, research on livestock diseases and animal quarantine still remain with the federal government. Anew ministry, namely Ministry of National Food Security and Research, has been established and givencertain important federal level functions in addition to the functions of the devolved ministries anddepartments.To study the governmental policies towards agriculture and especially livestock and dairy, two nationalplanning documents can be referred under the government’s Framework for Economic Growth, the“Annual Report 2011-12” and the “Vision 2030”, both prepared by the Planning Commission of Pakistan.The thrust of the framework remains “growth in agriculture by enhanced agricultural productivity, improvedsector governance, sustainability of the system, reduction of volatility and augmenting competitiveness inagricultural marketing and trade, and improvement of the investment climate in the sector.”According to the annual report 2011-12, the livestock sector remained resilient despite heavy losses in theface of the unprecedented floods of 2010 and 2011 and consistently achieved the growth target of 4%consecutively during the periods 2010-11and 2011-12. However, the dairy production remained below thetarget (i.e. 39 million tons as 46 million tons). The annual report further emphasises the need for better andstable functionality of the Pakistan Dairy Development Company (PDDC) under the Ministry of NationalFood Security and Research.Other than the emphasis on research on the federal and provincial levels, devising a sustainable strategyfor development of cool chain system is needed at the provincial levels to counter significant milk losses.Dairy Development Initiatives in 2012-13Several initiatives have been taken by the federal government under the Public Sector DevelopmentProgram (2012-13). These include allocation of an amount of Rs. 495 million for on-going and new projectsby the Ministry of National Food Security and Research. These include:i. Research for Agriculture Development Program including animal sciences,ii.iii.“Special Programme for Strengthening SPS Facilities and Quality Inspection Services inCompliance with WTO-Establishment of integrated National Animal and Plant HealthInspection Services (NAPHIS)”, andUp-gradation and establishment of animal quarantine Stations in Pakistan.The Government of Punjab has allocated an amount of Rs. 2.6 billion for the year 2012-13 for the livestockunder the Medium Term Development Framework 2011-14.Sindh has allocated Rs. 2.3 billion for 16 programs relating to livestock, while the rest of the provinces andterritories have also increased their funding and program portfolio for livestock and dairy sectors.51
ENHANCING DAIRY SECTOR EXPORT COMPETITIVENESS IN PAKISTANThe federal government in collaboration with the Food and Agriculture Organization of the United Nations(FAO) has executed a project to progressively control the Foot and Mouth Disease (FMD) in three yeartime (2011-13) in Pakistan. The program is being funded by the United States Agriculture Department.USAID has initiated a project in Khyber Pakhtunkhwa (KPK), Punjab and Sindh that includes sustaining thesurvival of livestock through the provision of feed, fodder and medicine under the Flood RecoveryAgriculture Programs. The Dairy Program also funded by the USAID, to the tune of Rs. 2.5 million for2011-14, aims to increase the productivity of 12,000 small-scale dairy farmers by 15-20% through farmmanagement techniques, artificial insemination and promoting linkages with suppliers and higher valuemarkets.The Vision 2030The Vision 2030 explains that the lack of essential development of the dairy and livestock sector has beendue to poor quality of feed and health coverage, indiscriminate breeding of genetically inferior livestock thatresults in lower productivity, outdated and limited marketing facilities, lack of investment in R&D andmarket infrastructure. On the other hand, the sector has remained resilient by showing a sustained growthrate of 4-5 % in the past decade without any major investment. The government’s vision is an efficient andcompetitive sustainable agriculture sector ensuring food security and having ability to contribute to theeconomic development for Pakistan.The Livestock and Dairy Development PolicyThe Government of Pakistan launched its first ever Livestock and Dairy Development Policy in 2007 whichformally identified the livestock sector as the major source of economic growth and poverty alleviation forthe country. The policy aimed to bring significant positive changes in the livestock and dairy sectors ofPakistan. Contrary to making livestock as part of the agricultural policy as per previous practice, the sectorwas given significance to provide an independent policy framework to accelerate its development.The policy recognized that the demand for livestock and dairy products in Pakistan would rise primarily dueto increase in population over the years and also the rise in income levels. It was also made clear that thisdemand could be met only through increasing the productivity per animal as the number of animals wasalready touching the maximum in terms of land and resources. The policy identified milk as the mainproduct and beef and mutton as the by-products in livestock. It also identified the immense export potentialof the livestock and dairy sectors.Displaying the competitiveness of the livestock and dairy sectors, the policy contained a study in which acomparison of cost of milk production in 31 countries reflected that the Pakistani rural farmers produce milkat just US$ 11 per 100 kg and remained most competitive after Argentina. In fact the country’s rural farmswere found to be more competitive than India, Bangladesh, Western Europe, North America and evenOceania.The policy also identified the constraints faced by the livestock and dairy sectors including: (i) nonavailabilityof superior germplasm, (ii) inadequate feed resources, (iii) epidemics of infectious diseases, (iv)poor marketing infrastructure, (v) low public sector investment, (vi) poor institutional infrastructure, (vii)outdated regulatory framework and (viii) limited availability and access to the farm credit.To balance the above mentioned constraints, the policy provides for a “Private sector-led development withthe public sector providing the enabling environment and building capacity.” The strategy included thefollowing four elements:i. Private sector-led livestock growthii.iii.iv.Productivity enhancement of existing livestock resourcesMoving away from subsistence farming to market-oriented commercial farmingTargeting entire value chain to enhance productivity and profitability52
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