Pakistan is the fourth largest milk producer in the world with an annual production of over 33 billion litters of milk, yet the sector faces numerous issues. One of the major challenges facing the dairy sector is the growing gap between milk supply and demand. The supply-demand gap was 1.5 billion litres in 2009 and is expected to increase to 3.6 billion litres by 2015.
Another major challenge arises from the fact that more than 92 percent of the animals are owned by smallholders who had little ownership of land to manage them. The small farmers do not have sufficient resources and lack training in animal husbandry that leads to poor animal health and low milk yield. Furthermore, the small farmers lack knowledge of modern breeding practices. As a result cows of Pakistani breed only produce 1300 litres of milk annually as compared to 9000 litres produced by an American cow.
This case study aimed to unpack these challenges, and provide some more context as to the dairy sector in Pakistan. A better understanding of dairy hub operations and its sustainability can provide the government grounds for developing the dairy hubs all over Pakistan and for starting other similar development projects in the sector. Government’s full-fledged involvement in establishment of dairy hubs and other developments in dairy sector may help in improving average farmer productivity and as a result milk collection for processors.
This case study is part of IGC Pakistan’s work on Firms with support from Secretary, Department of Industries, Punjab.