With time, costs of dairy products are increasing because live stock farming is

not growing with the increase in population & not match with the pace of
urbanization. In such conditions the best way to control cost is to develop
industry on scientific & modern lines to increase milk & meat production. Pakistan
is spending $40 million/annually on the import of formula milk which is highest
amount spent by any country.

Agriculture is contributing 20.9% of the total GDP & 43.4% of the total Workforce
is associated with agriculture in Pakistan. Livestock is important part of
agriculture in Pakistan & contributing 50% in agriculture. In 1996, livestock was
contributing 25.3 percent of agricultural growth but this figure changes to 49.6
percent in 2006

Milk is the largest livestock product in Pakistan. In 2006-07 Pakistan was

producing 40,872 TT of milk, 62 percent was contributed from just buffalo and 34
percent from the cattle, but in 2008-09 total milk production was 43,562 TT, same
contribution from both buffalo & cattle. Population of buffalo has increased from
28.2 million to 29.9 million & cattle from 30.7 to 33.the meat production has
decreased from 2618 TT to 2515 TT during 2006 to 2009.
Dairy enterprise is mostly private & scattered, while government has only
regulatory role. According to the Livestock Census held in 2006, among 8.4
million dairying households, 51 percent has herd size of 1-4 animals.

The price of milk is increasing day by day. Various regulatory measures to

control the price of milk are performed with continuous Increase in input prices.
These input prices are affecting farm profitability. especially Large dairy farmers
having considerable investments in large dairy herds, which are using hired
labor, purchasing feed not growing their own & using veterinary facilities, and
having marketing infrastructure. These cost factors have led to the pulling out of
many well known & established large farmers.

These factors are also discouraging new farmer investing in dairy production &
marketing. Small & subsistent livestock holders hardly bear this regulatory &
economic environment. The main reasons for the survival of small & subsistent
farmers are that they are using family labor on the farm & free grazing; these two
factors are keeping the production costs low. These are only fake calculation of
costs we all know that no price is put on family labor.

Approximately, 80% of the total milk is produced in rural areas, while Peri-urban
& urban areas are contributing 15% & 5%, respectively. Only 3-5% of total milk
production in the country is soled through proper formal channels. While
remaining 97% is produced & marketed in raw form by informal agents present in
the marketing chain.
Small & subsistent dairy producers are facing the daunting challenges which are;
financial insecurity, quality assurance, price regulation, untrained labour,
environmental problems. Fragmented farms with low productivity make the
collection practices difficult. Less & limited use of technology such as cold chains
making post harvest losses up to 20% in rural areas

Recently private corporate sector has invested heavily in dairy processing. The
government is also now providing unprecedented assistance to the sector. But
this support is limited to the medium and large scale dairy farmers. For
development of diary in the country, it is important that support should be
provided to the smallholder producers.

Smallholder based dairy development is important and should be improved by

organizing farmers, integrating production with good marketing, enhancing
access to credit, improving milk marketing chains by adopting modern
technology, enhancing market information, also by improving farm profitability.