Sadly, people including under-nourished poor children will not get enough milk of even inferior quality till such time a modernised dairy sector improves productivity and reduces wastage to match supply of milk with the demand at a reasonable price.

Entry of new corporate entities and expansion in capacities by old market players has created a situation where growth in demand has outpaced the increase in the supply of milk by a big margin.

The demand and supply imbalance is tilting the dairy field in favour of bigger players and market manipulators. This has increased the demand for imported powdered milk on one hand and encouraged adulterators and manipulators on the other. The situation penalises quality conscious suppliers. In the end, consumers suffer as they fail to get value for the price paid. Over the last few years, there is evidence that the price of this essential drink has increased steeply but the quality has actually deteriorated.

According to data compiled by Pakistan Dairy Development Company in its white paper on the sector titled ‘The white revolution: Doodh darya’, Pakistan is the fourth largest milk producing country with 13 billion litres of milk produced annually.

The report acknowledges the huge potential of the dairy sector. It identifies weaker links in the value chain of the harvested milk that is produced by eight million farming households scattered all over the country. Of the total herd size of 50 million animals, an average farming household has two to five animals.

About 97 per cent of these farmers are not linked to formal markets and rely on archaic dairy farming practices.

On recommendation of strategy working group (SWOG) of USAID funded Pakistan initiative for strategic development and competitiveness (Pisdec) efforts are afoot to formalise and improve industry that needs overhauling. With involvement of J.E. Austin, a management consulting firm and with full involvement of representatives of all stakeholders in the value chain, a comprehensive proposal has been evolved.

It proposes”to improve research facilities, training and capacity building of farmers, training veterinaries, improving the cold chain through milk chillers, promoting healthy pasteurised milk, developing model commercial dairy farms, focus on breed improvement, facilitation of credit financing to dairy farmers and linking the rural area based farmers to market mechanism”.

The efforts of the company, led by the private sector with guaranteed backup of the government, import tariff structure for imported machinery was revised from 25-30 per cent bracket to zero rated regime to facilitate technology induction in the sector.

Raza Khan, sector strategy advisor of J.E.Austin, providing technical assistance to ‘Dairy Pakistan’ is upbeat about the prospects of the dairy sector. He told Dawn from Lahore that 700 chillers (milk cooling tanks) have already been installed by micro milk farmers and their companies. Out of these, only 7-10 are installed in Sindh, the rest are installed in Punjab.

”At long last things have started to change. The beauty of our mechanism is that we involve all stakeholders in the strategy working group. We expect to reduce milk wastage especially the evening harvest significantly after installation of milk chillers acquired by farmers on soft credit where mark up is provided by Pakistan Dairy Development Company also called Dairy Pakistan”.

People in the ministry of industries in Islamabad were not readily available for comments on the subject.

The introduction of new milk brands in urban markets confirms the view that the supportive government policies have encouraged profit making organisations such as Engro, awash with liquidity, to enter the dairy sector in a big way. The old players with strong market presence have expanded their milk processing facilities eyeing increasing demand for packaged pasteurised milk. This massive increase cannot be matched immediately by the suppliers of milk that comprise several hundred thousand farming families scattered all over the country.

”The situation will take another four to five years to stabilise. During this time lag, the poor children will be deprived of whatever little nutrition they used to get from their daily intake of open or packaged milk”, an insider upset over falling standards of milk told Dawn over telephone from interior of Punjab.

”If we indicate flaws in the system, the government snub us by sending inspectors one after another at our farms and factories. If some malpractices of multinationals in the field are pinpointed the big boys gang up against us pushing the culprit in the dark corner”, said another local dairy businessman who heads his medium-sized company.

Supply of quality milk at affordable rates is a necessity that cannot be ignored. Introduction of competition in the market and guarantee of standards are important. Transformation of dairy sector, however, must not lead to commercialisation dominated by multinationals, many of which are insensitive to needs of the people.

An appropriate market environment including legal framework is necessary to prevent big multinationals from driving small and medium dairies out of the domestic market.