Dairy Industry in Pakistan: A Scenario

DAIRY INDUSTRY IN PAKISTANA SCENARIO

Prepared By:MUHAMMAD ASJAD KHURAM1652-411036EMBA Final Year

TABLE OF CONTENTS

Acknowledgment04Preface05Executive Summary06Introduction07History08Milk Production System in Pakistan09Pakistan Dairy Farming12Processing Of Milk13Milk Consumption15Main Feature of Dairy Sector in Pakistan17Population of Bufallo and Cattle17Dairy Breeds and Breedings18Feeds and Feedings22Usage Of Treated Straws 25Animal Health25Dairy Production System261: Grazing System262: Mixed Farming System273: Peri Urban Dairy Colonies27Global Milk Production29Milk Consumption Pattern30Milk Marketing32Milk Production and Procurement35Milk Procurement Types36MPS38

Crucial Factors and Steps39Strength39Weaknesses39Oppertunities40Milk Production40Future Prospectus 42Consulting and Planning44PLDDB48Pakistan Dairy Association48Future Strategy49 Key Success Factors50Summary of Articles51Conclusion 53References53

ACKNOWLEDGEMENT

ALL PRAISES AND THANKS FOR THE GOD, THE SOURCES OF ALL KNOWLEDGE AND WISDOME ENDOWED, WHO BESTOWED US WITH, A POTENTIAL AND ABILITY TO CONTRIBUTE A DROP MATERIAL TO THEEXISTING OCEAN OF KNOWLEDGER.THANKS ARE ALSO DUE TO OUR TEACHER SIR YASSAR HASSAN FOR PROVIDING NECESSARY LITERATURE AND OTHER MATERIAL, WHICH HAS BEEN EXTENDIVLEY RELIED UPON, FOR CARRYING OUR THIS STUDY AND PREPARATION OF THIS PROJECT.MAY ALMIGHTY BLESS ALL OF THEM, WHICH PARTICIPATED ME IN THIS EFFORT.

MUHAMMAD ASJAD KHURAM

PREFACE

Pakistan Dairy industry is one of the most essential sectors in the country GDP contributions and it is the spine of Pakistan economy. Capital structure is very important for the firm particularly Dairy Industry sector. Because it has an impact on long term corporate profits, firms valuation and capital budgeting decisions. Dairy Industry is influenced by many factors like size, growth, profitability and specific industry also plays its role in economic growth. Dairy Industry is the most important segment of Pakistan which contributes main part in countrys exports. Performance of this segment has a powerful influence on state economy. Study initiates the major determinants of Dairy Industry and their different aspects. It determines the impact of Milk Production on profitability of Dairy industries in Pakistan.

Executive SummaryThe livestock sector plays a vital role in the economies of many developing countries. It provides food or more specifically animal protein in human diets, income, employment and possibly foreign exchange. For low-income producers, livestock also serves as a store of wealth; provide draught power, and organic fertilizer for crop production as well as means of transport.Milk provides relatively quick returns for small-scale livestock keepers. It is a balanced nutritious food and is a key element in household food security. Smallholders produce the vast majority of milk in developing countries where demand is expected to increase by 25% by 2025. Dairy imports to developing countries have increased in value by 43% between 1998 and 2001. Informal market traders handle over 80% of milk consumed in developing countries. Two thirds of total world milk is produced by Brazil, India, Pakistan, Poland, Russian Federation, USA, and 15 EU member states. Developing countries produced one third of total world milk production in 2000 (216 million metric tones) and it is increasing. Various animals including buffalos, cows, sheep and goats produce milk. Total world milk production is dominated by cows milk followed by buffalo, goat and sheep.There is a dearth of research and documentation regarding the dairy sector in Pakistan. No serious effort has been made to understand dynamics of this important sector. Its importance could be judged from the fact that in terms of market value, its contribution to Gross Domestic Product (GDP) surpasses all the major crops.

Pakistan is the fourth largest milk producer in the world. About a third of the total milk produced by the rural families flows out to urban consumers and processing industries. In urban areas milk is available to common consumers in two ways: loose / unprocessed milk and packed/ processed milk. IntroductionThe livestock sector plays a vital role in the economies of many developing countries. It provides food or more specifically animal protein in human diets, income, employment and possibly foreign exchange. For low-income producers, livestock also serves as a store of wealth, provide draught power, and organic fertilizer for crop production as well as means of transport.Milk provides relatively quick returns for small-scale livestock keepers. It is a balanced nutritious food and is a key element in household food security. Smallholders produce the vast majority of milk in developing countries where demand is expected to increase by 25% by 2025. Dairy imports to developing countries have increased in value by 43% between 1998 and 2001. Informal market traders handle over 80% of milk consumed in developing countries. Two thirds of total world milk is produced by Brazil, India, Pakistan, Poland, Russian Federation, USA, and 15 EU member states. Developing countries produced one third of total world milk production in 2000 (216 million metric tones) and it is increasing. Various animals including buffalos, cows, sheep and goats produce milk. Total world milk production is dominated by cows milk followed by buffalo, goat and sheep.There is a dearth of research and documentation regarding the dairy sector in Pakistan. No serious effort has been made to understand dynamics of this important sector. Its importance could be judged from the fact that in terms of market value, its contribution to Gross Domestic Product (GDP) surpasses all the major crops.Pakistan is the fourth largest milk producer in the world. About a third of the total milk produced by the rural families flows out to urban consumers and processing industries. In urban areas milk is available to common consumers in two ways: loose / unprocessed milk and packed/ processed milk.History:Livestock sector in Pakistan contributes almost 50 percent to the value addition in the agriculture sector, and almost 11 percent to GDP, which is higher than the contribution made by the crop sector (47.4% in agriculture and 10.3% in GDP). The role of livestock sector in the rural economy is very crucial as 30-35 million rural population of the country is engaged in this sector for its livelihood. Within the livestock sector, milk is the largest and the single most important commodity. Pakistan also has an industrial production capacity of approximately 47.5 million liters per year of ice cream.Pakistan's dairy industry is plagued by a number of problems which include lack of commercial dairy farms, low productivity due to poor nutrition, a weak infrastructure, lack of financial facilities, and the ready availability of raw milk to a poor and uneducated population. Although Pakistan was ranked fourth among the five leading milk producing countries in the world, with an estimated 24 million animals having produced closely to 28 million tons of milk in year 2003 and over 31 million tons during 2005-06 as the 5th largest producer of milk in the world, its yield per animal is only one-fifth of that of Western Europe.Government, after ignoring the dairy sector has taken cognizance if the importance of the dairy sector and embarked upon a number of initiatives to boost the dairy sector. Under the new programmes, Pakistan government has created National Dairy Development Board (NDDB) and Livestock & Dairy Development Board (LDDB). Following are some of such initiatives.During the years 2002-2005 milk and milk products worth US $ 10.167 million were exported from Pakistan. Pakistan imports dry/powered milk from Eastern Europe, and Centrally Independent States (CIS). In Pakistan only 3-4% of the total milk is processed and marketed through formal channels whereas the remaining 97% of the milk reaches end users for immediate consumption through an extensive, multi-layered distribution system of middlemen. However the processed milk consumption is growing at the rate of 20% per year. Pasteurized and UHT milk in tetra packs are very popular products.Large dairy shops also produce Desi ghee and butter. Processing plants have also introduced a number of dairy products like yogurt, drinking yogurt, flavored milk, cream, butter, ghee, cheese, ice cream etc. The quantities sold however are small except for yogurt & butter. Industrial processing units in addition to the traditional traders of sweetmeats, milk, yogurt, ghee and other dairy products have been set-up. Most of processing capacity is concentrated near larger markets and away from potential sources of milk. More than 53 modern milk processing facilities were established before 1974. By 1974 less than half were operating and after the introduction of the first UHT, long-life milk plant came into operation.Milk Production System in PakistanThe average farm gate price of milk is Rs 10 per liter. It varies from Rs 8 to Rs 16 per liter. Variation of farm gate price is not linked to the quality of the milk. It is rather determined by two factors. One is the financial arrangement between the buyer and seller. The second factor is the geographical location. In areas where livestock rearing is difficult due to very hot weather or scarcity of fodder like in Rawalpindi, farmers get a better price for their milk. But when the price of the fodder is taken into account, the net income of these farmers is not significantly higher than the income of farmers from other areas of Punjab. Currently, there are no policies to regulate milk prices at the farm level. The middlemen, contractors, Gawalas (local milk collection, transportation, and distribution people) processors, processed unpacked milk, loose milk, and processed milk are the segments of the dairy value chain. The processed packed milk costs Rs. 35 per liter whereas the loose milk costs Rs 24 per liter. Around a third of the total milk produced by the rural families flows out to urban consumers and processing industries. More than half of the milk collected by urban traders and processing industries comes from small herd families. The family's decision to sell milk and the amount to sell is clearly poverty driven. Small farmers sell milk only because they have no other source of cash income. Milk in urban areas is accessible to common consumers in two ways: loose, unprocessed milk and packed, processed milk. Each has its own price regime. The unprocessed milk passes through the middle persons before it reaches the urban retailer. The price of milk increases by one rupee per liter at every stage of sale. The 'Dodhees (Gawalas) generally have undocumented contracts with farmers for regular milk supply. They pay farmers an average price of Rs. 10.74 per kg. Some 'dodhees' have milk storage and chilling system and transport system. Transportation generally costs Rs.0.50 to Rs.1.0 per liter. 'Dodhees' make one rupee per liter.The urban retailers deliver milk door to door, by motorbike or sell it in a shop to consumers. Consumers pay between Rs.18 to Rs.28 per liter depending on the fat content of the unprocessed milk. Farmers are forced to sell milk for cash income. But the market forces operating in a totally unregulated environment are exploiting the poor farmers by offering low prices for their produce. There is also no restriction on the quantity of milk that a company can collect from an area.Pure Food Rules of 1965, Cantonment Pure Food Rules of 1967 (for military areas), and parts of the Pakistan Penal Code of 1860 are applicable to the dairy industry along with the other food items. Legislative and regulatory measures that affect the milk market in Pakistan are dictated primarily by the salient features of laws that govern the milk industry. The dairy industry of Pakistan is constrained due to a number of factors that include low genetic potential of animals, animal health, improper feeding and housing for animals, transportation and quality of milk. Lack of commercial dairy farms is also a limiting factor the dairy sector in Pakistan. The current process of collecting milk from a large number of subsistence farmers is time-consuming, costly and prone to adulteration. Agriculture sector with its integral component of livestock (animal agriculture) is regarded as most vital part of the national economy since the emergence of Pakistan. Agriculture not only contributed importantly to the national GDP of Pakistan during last five decades but also the provision of employment and food to rapidly growingnation remains important obligations of this sector. In the changing scenario of economy of Pakistan and other developing nations, agriculture is still the largest sector. In Pakistan, agriculture contributes slightly above 25% to GDP, employs around 44% of work force, is the main source of foreign exchange earnings and provides linkages through which it can stimulate growth in other sectors (Economic Survey of Pakistan, 1999-2000). Livestock is the most important sub sector of agriculture in Pakistan that accounts for nearly 37% of agriculture value added and about 9% of the GDP. The net foreign exchange earnings were about 35 billion rupees in 1999-2000, which was about 9% of the overall export earnings of the country (Economic Survey of Pakistan, 1999-2000). Livestock sector has its due importance in Pakistan due to the fact that 30-35 million rural population is engaged in livestock keeping (Economic Survey, 1999- 2000). Milk plays a tremendous role in building a healthy society and can be used as vehicle for rural development, employment and slowing down the migration of the rural population. Pakistan stands 7th position among the top ten worlds milk producing countries. Milk and milk products provide nearly one third of worlds intake of animal protein (FAO, 1998). This is not true for Pakistan where milk provides more than half of the 17.4 g of animal protein available for each person daily and so traditional diets assign a balancing role to milk (Anonymous, 1996). However, per capita availability of milk is far less than the recommended levels (0.5 liter per person per day) of World Health Organization. About 80 thousand tones of dry milk was imported in Pakistan during the last year to meet local demands of milk (Agriculture Statistics, 1999-2000). The total milk yield in Pakistan is 26.4 million tones and entire dairy processing industry was using only about 15% of it (Hemani & Khan, 1997). The importance of milk as a cash crop is always neglected in the past. While comparing the value of milk with other cash crops, it was mentioned that milk had a value about 60% higher as compared to both wheat and cotton together. The land of Pakistan is benefited with both irrigated plains through mighty Indus river with its tributaries and desert areas like Cholistan and Tharparker. Pakistan is expended from costal range areas in the south to the alpine pastures in the north and has variability in topography, rainfall, humidity, temperature, plant and animal species, social and cultural heritage. So dairy development is not only needed to meet the growing demands of animal protein but for socioeconomic reasons as dairy animals provide regular cash income, economic utilization of family labor, create social security and supply growing markets.Milk production is an extremely labor intensive occupation, however, in many countries of the world including Pakistan, it is the most productive way of converting crop residues and agro industrial wastes into valuable food. But due to biological and technical constrains like shortage of feed, high mortality rate, poor genetic potential etc; socio economic constraints like high input cost, scarcity of sources, inadequate marketing systems, commercial feed industry and policy constraints render this sector undeveloped and truly in a miserable condition. The main objective of this article is to review the potentials, problems and solutions pertaining to dairying in Pakistan.Being major player in national economy livestock sector has been selected as an economy engine for poverty alleviation from Pakistan. According to economic survey of Pakistan 2011-12, its contribution to agriculture value added is approximately 55.1 % and to national GDP is 11.6 %. Livestock is raised by more than 8.5 million small and landless families in the rural areas and 35-40 million rural populations are dependent on this.Pakistan Dairy Farming: In Pakistan livestock includes cattle, buffalo, sheep, goat, camels, horses, asses and mules. Milk, meat, wool, hair, bones, fat, blood eggs, hides and skins are the main livestock products among which milk and meat are taken as major products. Besides this, these animals are used for draught purposes. Pakistan is fourth largest milk producing country in the world. Milk is produced by buffalo, cattle, sheep, goat and camel but being major contributor in milk production, cattle and buffalo are considered as major dairy animals and are always mainly focused and discussed. These dairy animals are also used as draught and beef animals. When a dairy animal has spent her productive life and becomes uneconomical for milk production then she is used as a beef animal. Male calves of dairy animals and dairy bulls when no further required for breeding purposes are also utilized for beef purposes.Buffalos found in Pakistan make up 47%of Pakistan's major dairy animal's population providing more than about61% ofthe total milk produced in the country. Buffalo breeds found in Pakistan are Nili Ravi, Kundi and Aza Kheli. Nili Ravi is considered best buffalo breed in world and known as Black Gold of Pakistan. Cattle constitute about 53% of the national population of major dairy animals in Pakistan and contribute the share of almost34.9%to the total milk production in country. The cattle breeds found in the country are Sahiwal, Cholistani, Red Sndhi, Achai, Bhagnari, Dajal, Dhanni, Gibrali, Kankraj, Lohani, Rojhan, and Thari. Out of these, Sahiwal, Cholistani, and Red Sindhi are main dairy breeds and well known internationally due to their distinct characteristics. Other than well-defined cattle breeds, there are a large number of nondescript cattle breeds and crossbred cattle.Processing of Milk:In Pakistan, modern milk processing in the dairy sector started in early 1960s, and by mid-1970s 23 milk pasteurization and sterilization plants were set up. With one exception, all of them are closed due to low consumer acceptance, the short shelf-life of the product and lack of trained manpower. The first UHT plant was set up in Pakistan in 1977. The success of this plant attracted many other investors also and during 1983-87, 20 new plants were set up. In the current situation, UHT capacity in the dairy industry is more than the demand for the product. Existing plants are operating below capacity and growth in demand is not likely to keep pace with the demand for relatively high-priced UHT milk.Goat is considered as `poor man's cow'. Some rural and urban people keep goats and sheep and use their milk for domestic consumption. The same is true about certain nomads who raise camels and use their milk to meet family needs. Some camel men when in peri urban situation sell milk in urban areas. Certain breeds of camels in Pakistan have the potential to be called as dairy animals, but being slow breeders they remained ignored since long.More than96%of the milk produced in Pakistan comes from cattle and buffalo. The rest of it is collectively produced by sheep, goat and camel which, most of the time, is not sold as such, rather mixed with buffalo and cow milk. Estimated national livestock Population and milk production of 2011-12 based on National Livestock Census 2006 is given below:SpeciesPopulation (Million)Milk Production (Million Tons)

Cattle36.916.741

Buffalo32.729.565

Sheep28.40.037

Goat63.10.779

Camel1.00.829

Total162.147.951

Current Estimated Province Wise Livestock Population is given below:(Millions)ProvinceCattleBuffaloSheepGoatCamel

Punjab18.121.26.823.30.22

KPK7.42.33.711.30.07

Sindh8.58.84.314.50.30

Balochistan2.90.313.613.90.41

Milk Consumption:Milk is favorite food in Pakistan and is consumed as fresh, boiled, powdered and in processed form as yogurt, ghee, lassi, butter, cheese, ice cream, sweets and in other confectioneries. The interesting thing regarding the dairy sector of Pakistan is that although we are fourth largest milk producing country in the world but still this production falls short to meet national demand. As a result milk is to be imported to fulfill this demand. Human milk consumption in Pakistan for year 2011-12 is given below:SpeciesHuman Milk Consumption (Million Tons)

Cattle13.393

Buffalo23.652

Sheep0.037

Goat0.779

Camel0.829

Total38.690

Let's have a look on different production systems of Pakistan.Till late eighties, more than 60% of buffaloes and some cows were maintainedunder the system ofRural Subsistence Production System. In this system on an average there were 3 to 4 dairy animals with one or two adult females. Almost 50 to 60% of the feed requirements of these animals were fulfilled from grazingalong with wheat straw and some green fodder. th of milk produced was sold out and remaining was utilized for domestic use. This system still exists in some areas of Pakistan.With the time being Rural Subsistence Production System changed into Rural Market-Oriented Smallholder Production System.Under this system, on an average there were 5 to 7 animals per herd, inclusive of cow; 3 to 4 adult lactating animals, one or two heifers, and one or two male calves, but most often no bull. Feeding requirement of lactating animals were fulfilled from fodder along with wheat straw and seed cake. More than 70% of milk produced was soldeither directly or through middlemen. This system was practiced by those smallholders who have accessto nearby livestock markets.In 1980s, dairy sector in Pakistan moved towards commercial side anddevelopment of rural commercial dairy farms started. A typical rural dairy farm running on commercial basis consisted of about 30 animals of which 70% were females, including some cows. Approximately 40% of these adult females were in milk during most of the year. Fodder crops provided 50% and straws about 35% of the feed requirements and concentrates made the rest of it. More than 90% of the milk produced at the farm was sold.Withgrowing demand for milk in urban areas rural commercial dairy farming moved toward peri-urban areas.In peri-urban areas there are large and small dairy herds consisting of 20-50 animals withnearly 90% of adult females in production. Male calves are disposed off within first two weeks of birth. These animals are fed chopped green fodder andwheat straw and concentrate mixture with target to sell almost total milk produced.Due to enhanced rate of urbanization over the last 2 to 3 decades, large peri-urban commercial dairy farming is going towards urban commercial farming. Targets of these farms are to get maximum milk production with economical and quality feeding and good management. Animals on these farms are fed good quality green fodder or silage along with concentrate mixture. Dairy animals maintained at these farmsare considered elite animals, hence their yields per lactation are considerably higher than those of animals maintained underother production systems. Milk produced on these farms is either sold out in processed/fresh form through outlets or departmental stores or supplied to dairy companies.During last ten years major changes has been occurred in dairy sector of Pakistan and due to these change this sector is on the way to become an industry. A large number of modern dairy farms have been established in different areas. Most of these dairy farms have exotic animals and number of these animals is in hundreds and even in thousands. Dairy farms with more than 3000 animals also exist and with 5000 animals are in plan. Such farms have adopted most modern manage mental and feeding practices and well trained man power.Milk produced on these farms is either sold out in processed/fresh form through outlets or departmental stores etc. or supplied to dairy companies. Main features of dairy sector in Pakistan. Dairy industry in Pakistan has similar characteristics, like other developing Asian nations, which include small herd, poor genetic potential of animals for milk, low quality feeds, high risks of epidemics, improper marketing channels, lack of technical man power for dairy industry, high environmental stresses, reproductive failure and high udder abnormalities, orthodox management practices, poor extension services and lack of commercial rations. Despite of all above problems, dairy animals, mainly buffalo and cattle are producing 26.4 million tons of milk in Pakistan (Agriculture Statistics, I999-2000). Per capita availability of milk in Pakistan is 82.4 kg annually. This quantity of milk provides more than half of the 17.4 g of animal protein available for each Pakistani daily. But Pakistan still has to import dry milk and other milk products e.g. butter, cheese, yogurt, cream, whey etc. every year to fulfill the ever increasing demands for milk and milk products. During year 1999-2000 Pakistan expended about 1213.5 million rupees of valuable foreign exchange to import the milk and milk products (Agricultural Statistics, 1999-2000). The increasing demands for dairy products are attributed to high population growth rate and rapid urbanization. Population of buffalo and cattle.Species2009-102010-112011-12

Cattle34.335.636.9

Buffalo30.831.732.7

Sheep27.828.128.4

Goat59.961.563.1

Camel111

Pakistan owns about 23.3 million heads of buffalo (Agriculture Statistics 1999-2000). The buffalo population increased about 14.7% during the last 6 years from 1996 to 2001 in Pakistan. Population trends indicate that their number is likely to further increase in future (Khan, 1998) Punjab, Sindh, NWFP and Balochistan provinces contribute 64, 28, 7 and 1%, respectively, to the total buffalo population of the country (Livestock Censes, 1996). These figures indicate that most of the buffaloes are present in irrigated areas and along riversides of the country. About 60% of the total buffalo stock is, female buffalo stock, of above three years of age. It is estimated that about 8.7 million heads of buffalo are in milk, remaining either in dry stage or not yet calved. About 0.42 million buffalo bulls are available either for breeding or for work purposes.According to Economic Survey (1999-2000) of Pakistan about 22.4 million heads of cattle are available in the country. Data about cattle population in Pakistan from 1996 to 2001 indicated about 9.36% increase cattle population as shown in Fig. 1. It was estimated that around 10.4 and 4.1 million heads of mature cows and bulls are present in Pakistan. However, cattle population data from 1986-1996 suggest a negative growth for bull population. This may be supported by the fact of increased mechanization in agriculture sector or it may be due to the preference for artificial insemination in cattle by the farmers. However, second factor seemed to be ineffective because data in 1996 livestock censes indicated a positive growth trend for cattle breeding bulls and negative for cattle bulls engaged in work. Dairy breeds and breeding.

Worldly two well-known breeds of buffalo (Nili Ravi & Kundi) are major contributors to buffalo stock in the country. Buffaloes are the main dairy animals in Pakistan (Khan, 1998). According to Livestock Censes (1996) about 33 and 20.8% of the total buffalo population belongs to Nili Ravi and Kundi breeds, respectively. Other buffaloes belong to either their crosses or some other breeds of the region. Khan (1998) reported that milk yield in Nili Ravi buffaloes ranged from 1835 to 2543 kg per lactation.

Fig. 1. Population trend of buffalo and cattle from 1990 to 2001

Ahmad (1999) reported that production recording on civil and military dairy farms in an organized manner was undertaken in 1920. Under field condition, the first milk recording was undertaken in 1979. Progeny testing of buffalo bull was started in 1980. In 1996, Pakistan government approved a technical document entitled production of breeding bulls in Pakistan for implementation. The production of breeding sires is a multiple step process that requires simultaneous action on production recording and identification of Elite cows, identification of male bull calves and their raising up to performance testing, raising of donor bulls at semen production units, artificial insemination and progeny testing of donor bulls. As follow up, various actions were initiated during 1996-1999 for implementation of the above steps. In spite of prolonged efforts, the proposed and planned actions have failed to achieve required objectives. Khan (1998) reported that breeding values for milk yield averaged 9.3 and 32.2 kg in Nili Ravi buffaloes and bulls, respectively. Variation in the breeding values of tested bulls was lower than expected. He reported that genetic trend in buffaloes was negative but sire used in the recent years was better than those in the past. The negative trend in the buffalo population merely depicts lack of effectiveness of the selection procedures employed in the past. Selection based on the physical condition of the bull, or the type in general, and dams performance failed to bring any genetic improvement in the past. He stated that policy of choosing on the basis of genetic worth is likely to be a step in right direction. However extensive studies are required in refining the procedures of data collection and evaluation. He suggested that with millions of small buffalo farmers, sustainable development of buffalo requires national and international programs. Payne and Wilson (1999) described that Sahiwal, Red Sindhi and Tharparker (a dual purpose cattle) breeds of cattle are important cattle milch breeds of Pakistan. Sahiwal is a large, heavily built, long deep rather flashy animal. The coat color varies, but reddish dun is common. Red Sindhi is medium to small animal having round droopy quarters. Coat color is usually red to dun yellow. The origin herd is found at Malir in Sindh province. They survive under subtropical and semiarid environment. It is considered one of the best breeds of subtropics. It has been exported all over the tropical world and is used for upgrading indigenous cattle, especially for milk. Tharparker (white Sindhi) breed is present in Thar Desert in south west of Sindh province. This is an arid area where rainfall averages 200 mm per annum and during drought years cattle have had to be removed to surrounding areas where they have crossbred with Kankrej and Red Sindhi. They are strongly built, medium size animals with comparatively short, straight limbs and good feet. The coat color is white to gray with gray strip along top line. This is one of the best dual purpose, milk and work, breeds found in Pakistani subcontinent. It has been documented that age of first calving in Sahiwal and Red Sindhi varies between 30 and 43 months. Milk production in Sahiwal ranges from 1200 to 3100 liters with maximum record of 5500 liters in a lactation (Nagarcenkar, 1983). Length of lactation in Sahiwal and Red Sindhi varies between 270 and 490 days (Pyne & Hodges, 1997). Sahiwal is one of the most productive tropical dairy breeds. In Jamaica, they have been crossed with jersey to provide the foundation stock for the milch breed known as Jamaica Hope. In Australia, the Sahiwal has been used in the development of two new dairy breeds, the Australian Milking Zebu and Australian Friesian Sahiwal. In both Australia and New Zealand a new export trade has been developed that of crossbred (Sahiwal European milking breeds) dairy heifers to Southeast Asia (Nagarcenkar, 1983). Payne and Wilson (1999) reported that unless crossbred animals were managed in closely controlled environment, it is very doubtful whether crossbred dairy cattle should be used under tropical conditions. Ahmad (1990) reported that crossbreeding of local cattle with Bos taurs was started in 1900 on military dairy farms and by 1937 sufficient information and data had emerged and published. He further reported that for a long time after independence, the introduction of cross breedingin the country remained controversial. However, it has been well documented that indigenous cattle have been adapted to the local conditions through natural selection over generations. In view of the impressive results obtained from selection in many temperate dairy breeds, there should be considerable scope for improving indigenous cattle. The variability, in terms of the coefficient of variation is generally higher in Zebu than in temperate cattle so there is possible scope of improving milk production in Sahiwal and Red Sindhi cattle through application of modern animal selection techniques.In modern dairy cattle breeding programs in temperate countries, 60-70% of genetic progress was derived from the selection of bulls on the basis of progeny testing. Dahlin (1998) reported that genetic trend in Sahiwal cattle for all traits were closed to zero over the period studied, but substantial deterioration in the performance caused by environmental factors was observed. It was concluded that selection against milk production and poor reproduction in cows was desirable, but feeding and body condition call for greater attention if reproductive performance is to be improved. He reported that alternative selection strategies showed that the expected annual genetic gain by selection for 305-day milk production might be in the range of 0.7 to 1.1% of the mean. The number of pure Sahiwal breeding and crossbred cows was ranging from 9000 to 10500 and 100,000, respectively in Pakistan (Pyne & Hodges, 1997). Although the Sahiwal is the premier dairy breed among the zebus, the pure bred population has been decreasing. By virtue of its unique characteristics the Sahiwal represents a genetic resource, which is of the utmost importance. Dahlin suggested that in the long run it was likely that best course of action to maintain and to conserve the breed, was to keep it commercially viable. He reported that a much quicker improvement, measured in kg per animal, could be achieved with Sahiwal. By using better methods for genetic evaluation and modern reproductive techniques, genetic gain can be increased considerably. Feeds and feeding.

Feeding and nutrition have repeatedly been highlighted as the major constraint in animal production (ILRI, 1995) and also sub regionally in South East Asia (Devendra et al., 1997) and South Asia (Devendra et al., 2000). The significance of improved nutrition in dairy production is therefore a major consideration. The report of working group on milk (1999) indicated that the feed/fodder deficit was variously estimated at 15-30% of the total animal requirement in terms of total digestible nutrient. However, the shortage will be probably larger in terms of digestible protein and energy. Sarwar et al. (2001) explained that in Pakistan dairy animals are raised under 3 different managerial feeding circumstances. In irrigated rural areas (Punjab & Sindh provinces) in the form of small herds where buffaloes and cattle mainly rely on crop residues and fodder crops. Under peri urban environment where dairy animals are maintained on fodder crops, agro industrial wastes and concentrates (oil cakes). Large herds of cattle are raised under range and barani conditions where they are kept on naturally grown grasses, shrubs and tree leaves. The major constraint in the development of dairy sector in Pakistan is poor availability of nutrients in quality and quantity for dairy animals. In Pakistan nutritional requirements of dairy animals mainly met through fodder crops, shrubs, grasses and agro industrial wastes. It has been reported that livestock are getting 51, 38, 3, 6 and 2% of their required nutrients from green fodder/ crop residues, grazing/vacant lands, post harvest grazing, cereal by products and oilcakes/meals, respectively (Hanjra et al., 1995). In advance countries where dairy animals are fed liberal grains forage still contribute about 75% of the nutrients but when grains are not available like in Pakistan, 95% nutrients are obtained through forages (Bula et al., 1977) It was reported by the working group on milk (1999) that the shortage of feed and fodder in the country affected the production potential of dairy animals. The situation is further aggravated by the continuous increase in the number of dairy animals. Fodder yields have not significantly increased and low productivity per acre has further worsened its availability. It has been reported that Livestock are getting only 75% of the required amount of total digestible nutrient (TDN) and there is also shortage of digestible crude protein (CP) up to 60% (Akram, 1990). Improvement in quantity and quality of feeds could bring improvement of livestock production up to 50% from exiting genetic pool of animals (Hasnain, 1983). The nutrient reservoir like rangelands are subjected to deterioration and still no proper attempt hasbeen made to sustain and improve their productivity. Livestock farmers hesitate to use agro-industrial byproducts or non-conventional feed resources to improve livestock feeding because they are unaware of the usefulness of such materials and so strictly adhered to their traditional feeding patterns. Area under fodder production is decreasing @ of 2% after each decade (Gill, 1998). According to Fig. 2, June-July and October-November are fodder scarcity periods in our region. Livestock policies in Pakistan are supportive to the horizontal expansion of livestock rather than vertical expansion of the sector, which cause further problems. Currently, 121.1 million heads of animals require about 10.92 and 90.36 million tons of CP and TDN, respectively, annually in Pakistan. However, the respective availability of these nutrients is only 6.7 and 69.00 million tones, which indicate a deficiency of 38.10 and 24.02% of CP and TDN, respectively, per year (Sarwar et al., 2001). Thus the existing available feed resources can only fulfill the maintenance requirements of animals. There is an immediate need to explore the available feed resources and to suggest remedies to minimize the gap between nutrients availability and nutrients requirements of animals (Sarwar et al., 2001). The gap between requirement and availability of nutrients could be minimized through proper fodder research and extension policies in terms of better quality seed, seed rate, improved agronomic practices and improved inputs (fertilizers, water, pesticides). Rangelands are 60% of the total area of Pakistan and proper range management and improvement policies like artificial reseeding, introduction of exotic species, water conservation methods and community organization could bring improvement in the supply of quality biomass in sufficient quantity. Urea and poultry litter as a source of NPN could help a lot to minimize the gap between protein availability and protein requirements of ruminants if proper coupling of nutrients at feed, digestive and cellular level is achieved. Agro industrial byproducts and non-conventional feed resources could be used for feeding of livestock if farmers are trained to do so. Situation may be further improved if year round fodder Fig. 2. Seasonal availability of fodder in Pakistan

system and fodder conservation techniques are introduced in livestock feeding systems. Establishment of cattle feed industry is required to provide dairy mixes to the farmers at cheaper rates.

Usage of treated straws.

Methods to improve the quality of straws have not gained popularity among the animal owners because the scientists contributed so little to increasing animal outputs in developing countries. There seems to be a number of reasons but among the strongest influences have been1) The lack of opportunity for farmers to communicate their priorities for animal improvement to scientists and have the appropriate research undertaken, 2) The preoccupation of scientists with accurately describing the nutritional constraints under controlled conditions rather than to work on problems of farmers as they pertain to the field conditions, 3) The largely unrecognized or ignored differences in nutrient requirements of livestock in the tropics as compared with temperate countries, 4) An inability of many scientists to translate their research results into appropriate developments and apply them to farming systems, 5) Logistic problems in taking the technology to the massive number of farmers in the developing countries who in general own only 1-5 animals,6) gender considerations - often information is not given to the real managers of livestock on a farm, 7) An unwillingness of farmers, who are risk averse to take up new technologies unless the rewards are large and/or immediate and8) Lack of market access, often aide programs push technology on to farmers rather than pull them into a production area by creation of markets. There appears to be an increasing ground swell for change and acceptance of innovation by farmers in many developing countries who are presently experiencing a substantial increase in demand for animal products, particularly in Asia, as the population expands and standard of living improves. The increase in demand for animal products is likely to be much higher than for plants in the less-well developed countries over the next 20-50 years (i.e. 3.6% as compared with 2.4% per annum for crops) There are other influences which have seen a change in attitude, particularly the need to consider environmental pollution in development projects and in particular the value of curbing greenhouse gas emissions into the atmosphere from agriculture.

Animal health.

The importance of maintaining animals health does not need to be expressed. This is the basic requirement, but despite the widespread veterinary hospitals and dispensaries, the prophylactic measures are not reaching down to farmers. Regular vaccinations program against foot and mouth disease, which affects the production severely and not only seasonally but has a lasting effect, and the prevailing bacterial/viral diseases, which cause mortality, should be effectively launched. In addition, heavy worm burden and arthropod borne diseases inflict high production losses in dairy animals. Among helminthes, Fasciola hepatica invades dairy population, and nematodes cause severe parasitic gastro-enteritis leading to low production. The parasitic problems further multiply due to poor management and unawareness of the farmers about the common control measures.

Dairy production system.

Dairy production in Pakistan competes with crop farming and under traditional agriculture farming; preference always goes to crop production because of high grain demand for human population. Existing livestock production systems in Asia have been well documented by various investigators such as that by Devendra et al. (1997). Pakistan has similar dairy production systems like other developing nations in the region with little difference. Under Pakistani conditions dairy animals are kept under different production set ups including1) Grazing systems 2) Mixed farming system and 3) Peri-urban dairy colonies (Devendra et al., 1997; Devendra, 2001). Now this third category of dairy production is becoming important to supply fresh milk for urban population. Grazing system.

This system is especially important for small ruminant (goat and sheep) and to lesser extent to the dairy animals (buffalo) in Pakistan. In this system, animals depend on grazing in open grasslands or lands not suitable for cropping. Pakistan has 63% of its area as rangelands that supports most of the cattle population in Balochistan, Sindh and to lesser extent in Punjab province. Alpine pastures of northern high lands are vital for yak, which is the only milk source in northern areas. However buffaloes in Punjab and sindh provinces may use the natural vegetation around canal riverbanks, along roadsides and in wastelands. According to livestock censes (1996) only 8.69% of cattle and 6.28% of buffaloes in Pakistan totally reside on grazing and about 40.8% of grazing cattle and 49.3% of grazing buffaloes are kept in less than 10 animals/herd. Now it is being realized that grazing systems for animal production will become likely to deteriorate in future due to rising demands for food by high population growth rate in Pakistan.

Mixed farming system.

The ownership of 2-15 animals, in which milk production is major component of farm income, is the main characteristic of this system. This system is prevalent in Pakistan in which fodders, crop residues, agro industrial by products and weeds in cropland after harvest are used as animal feed. The much advance farm of mixed system is smallholder dairying, which with additional input like mixed concentrate feeding and slightly better managemental practices are going to make its place in Pakistan. Devendra (2001) reported that among the avenues of food production of animal origin, smallholder dairy production systems are potentially important. They areCharacterized by their rapid expansion, strong market orientation in rural areas and the many opportunities for increasing the current level of production. Some of the milk produced is used for home consumption, but most of it is sold directly by the farmer or to middleman. It is evident from the figures in livestock censes (1996) that this system is most important contributor to total milk production in Pakistan. According to livestock censes (1996) about 59.3% 425 of total cattle and 45.5% of the total buffalo population is dependent on both stall feeding and grazing that is the main characteristic feature of mixed farming system. About 57.4% of buffalo and cattle population that is raised under this system is kept in small herds below 10 animals. This system is of a subsistence nature and resource-poor situation has not enabled intensification and specialization, mainly because of access to services and resources.

Peri urban dairy colonies.

The government of Pakistan had launched a campaign to depopulate the livestock from metropolitan cities to avoid pollution problems. As a result of this campaign, a large number of buffaloes and cattle colonies have erupted in the periphery areas of big cities like Lahore, Karachi and Faisalabad to meet the urban demand for fresh milk. The aim of confining milk production to rural areas is to reduce pollution and traffic load, mass migration to urban areas, to curtail genetic degradation of dairy stock and provision of employment opportunities in the rural areas. This system is more advanced and mature when compared to other systems. It is formed from a natural aggregation and concentration of small dairy holder units.The peri urban dairy colonies enable the farmer to improve their competitive edge in open market economies. Devendra (2001) reported that Landhi cattle colony in Karachi had about 220,000 animals in a 5 km radius. Pregnant animals are purchased from rural areas, and they are completely stall-fed on cereal straws, green fodders and concentrates. After calving, female calves are sold except for a small number, which are kept as replacements for breeding while male calves are fattened for four months and slaughtered. At the end of lactation, dry animals are also sold out which are consequently slaughtered. Indiscriminate growth of these colonies in the absence of any regulatory and policy interventions has given birth to a serious situation, which is further complicated by poor hygiene, health hazards such as contaminated ground water, ever increasing unused manure. All this has adverse impact on the environment. Under this system of dairying stall feeding is preferably practiced, fodder crops, agro industrial wastes and concentrate dairy mix are importantly contribute to the daily nutrient requirements of dairy animals. According to livestock censes (1996) about 31.99 and 48.71% of total cattle and buffalo population, respectively, is being wholly dependent on stall-feeding. In peri urban dairy colonies dairy animals (mainly buffalo) are kept under better feeding, managemental conditions and a good veterinary cover is now being advocated. However, number of problems likes fodder availability, milk collection and transportation facilities, proper manure disposal and availability of artificial insemination facilities are needed to be solved (personnel communication). As peri urban dairy colonies have large number of animals in specific areas so it is viable and feasible to develop these setups in to a modern dairy enterprise with relatively more ease.

GLOBAL MILK PRODUCTIONINDIA92 billion lit / annualUSA78 //Pakistan48 //RUSSIA 33 //GERMANY 29 //The dairy buffalo is the major contributor to the milk production by accounting for roughly 75% of all milk produced in Pakistan. Cattle account for the remaining production with small share coming from goat, camel and sheep. The Nili Ravi is most popular breed of buffalo and is liked due to its high productivity standards in terms of high fat %age and milk production. Dairy cattle farms are less popular in Pakistan due to consumers demand for buffalo milk and preference of buffalo by farmers because of its abilities to effectively utilize poor quality fibrous feeds and withstands high environmental temperature. However, Sahiwal, red Sindhi, Cholistani and Tharparker breeds of cattle are considered worthy for milk production in areas of Punjab and Sindh province as previously mentioned. Crossbred cattle (Bos taurs and Bos indicus crosses) are also becoming considerable contributor to total milk production in the country. However, unplanned crossbreeding practices in combination with poor feeding and managemental conditions rendered the crossbred cattle as poor performer in Pakistan. Pakistan economic analysis network project (1989) reported that a cow annually produced 2530, 1840, 860 and 450 kg under progressive dairy farming, peri urban, irrigated and arid (barani) dairy production systems, respectively. However, in contrast to this it was estimated that under commercial, peri urban, rural market oriented and rural subsistence setups buffalo annually produced 2510, 2460, 2060, and 1200 kg milk, respectively. It was also established that commercial and peri urban dairying could only able to market their product (milk).

The calving season of buffaloes is concentrated during the autumn and start of winter months so they reach their peak milk production after two months from November to February. The abundant legume fodder available at that time resulted in high milk production. But during summer season milk production of buffaloes drops rapidly due to low feed availability, high environmental temperature and late lactation. This is not true for dairy cows, which are more productive during summer, however, as noted earlier, most milk produced in Pakistan is from dairy buffalos. During the summer when demand for milk is high and supply is low, adding water and ice to fresh milk fills the gap. This excessive milk production during winter and less milk production during summer month causes many problems in milk marketing. Currently 26.6 million tones of milk are being produced in the country.

Milk consumption patterns.

Milk and its products are important food items in diets, representing 27% of total household expenditures on food items (Economic Survey,1999-2000). As food group milk and its products are second only to cereals in terms of per capita consumption and by weight milk makes up about one third of the food consumed by each Pakistani. About 55% of the total milk produced in the country is consumed as fresh and remaining is used in the form of processed milk, as yogurt, lassi (butter milk),Fig. 3. Milk production trend in Pakistan

butter, cheese, ice cream, sweat meals and other confectioneries (Agricultural Statistics, 1999). Out of the total milk produced in the country about 25% is consumed in urban areas and about 70% in rural areas (Hemani & Khan, 1997). An about 80 thousand tone of dry milk was imported in Pakistan during last year to meet local demand of milk. According to Agricultural Statistics (1999-2000) per capita availability of milk is 82.4 kg /annum which is increasing at the rate of 2.44% annual (Fig. 4).

Milk marketing.

Milk is a highly perishable commodity so prompt collection from producer and its quick transportation to consumer is prerequisites to market it properly without any change. The prerequisite of successful production of high quality dairy products is that the raw milk must be of good quality. Efficient cleaning of equipment dealing with milk handling is of paramount importance. All possible efforts must be made to preserve its quality during storage and transportation. The basic method to preserve a high milk quality is cooling or activation of naturally occurring Lacto peroxidase system in milk. In Pakistan, the landless dairy owners in remote areas either use milk for their own consumption or sell out surplus milk, as a supplementary income source to meet their daily monetary needs. Fig. 4. Per capita availability of milk in Pakistan

The general backwardness of dairy production and marketing can be judged from the fact that although the value of milk produced (26.2 million tones) is second only to wheat crop, the commercial herds comprise only 0.5% while 54.4% comprise rural subsistence herds with out any proper market out let with only 33.5% as having rural market orientations and 11.5% as peri urban herds that provide milk to urban areas (Anjum et al., 1989). At present condition is almost similar with smaller increase in peri urban milk production and marketing system. This indicates that more than half of the milk produced in rural areas has no access to market. This resulted in an annual import of about 1.4 million tons of dry milk and milk products that costs about rupees 1213 million of valuable foreign exchange (Agricultural Statistics, 1999-2000). In terms of volume, it is estimated that out of the total production of 26.2 million tone milk about 50% (13.1 million tons) only is marketed; 35% is used by the producer themselves either at home or converted to ghee or other milk products and 15 % is used for calf feeding or wasted. Marketing channels for milk are largely determined by the location and nature of the producer. The farmers usually sell their milk to first stage collector katcha dodhis who are the backbone of our present day milk collection system. Katcha dodhis collect the small marketable surpluses of fluid milk from several small producers and transport it either direct to consumers or to milk shops or to the milk collection centers. The transportation facilities used in this system are poor and Katcha Dodhis usually own a bicycle to transport milk. They usually carry about 100 liters of milk in each trip. To ensure the milk supply around the year they advance some money to the producer. Pacca dodhi (second stage milk collector) have better transportation facilities so they are able to collect the milk from more remote areas and in large quantities. Pacca dodhis usually own a horse driven cart or van and usually carry about 1000 liters daily in two trips. Pacca dodhis supply their milk to collection center or milk shops, usually after decreaming. Peri urban milk producers usually sell their product directly to consumers, milk shops and to larger establishments through contracts. The adulteration and decreaming of milk are common practices of all milk collectors. The milk marketing channels are given in Fig. 5. If the pacca dodhis sell milk to decreamer or hire his services, the milk is separated into cream and skim milk. The skim milk is mixed with other whole milk and sold to urban milk shops. Anjum et al. (1989)reported that this multi-layer marketing system appears to buffer the producer from the price and purchase signals given by the consumer. The producer appears not to receive a premium for summer milk or for milk with higher milk fat content except for that paid by the milk collection centers that are operated by processors. Also the producer is not known to receive a premium or penalty for solids not fat. However, the apparatus and procedures used by the collection centers are not reliable to estimate milk fat% accurately. It is suggested that digital fat measuring instruments should be used on milk collection centers. The investment of public and private sector in dairy industry is scarce. The financial institutions do not have a pleasant experience with the milk processing industry. During 70s and 80s huge loans were sanctioned by banks (particularly Agriculture Development Bank) and about 23 milk processing plants for pasteurizing and sterilizing were imported in the country to establish milk processing industry on modern lines. The milk products and byproducts produced in the country are pasteurized milk, UHT milk, milk powder, cream, butter, ghee, yogurt and cheese. However, no consolidated information is available to assess the production of above cited products. Report of working group on milk in Punjab (1999) showed that a large number of milk plants are not in operation. The possible reasons of failure of these milk plants may be unskilled and inexperienced management, high level capitalization due to kick backs at the time of setting up, resulting in misuse of funds, conventional purchasing system, high price of processed milk, low demand of processed milk, high production cost and the over build UHT milk processing capacity to suit the needs of consumers. Anjum et al. (1989) reported that after all experimentations a new set up of Milk Pack Ltd., Pakistan, could only able to sell its UHT treated milk in the country. At present Choudry Dairy Pvt. Ltd. Is also making a great contribution in production and sale of UHT milk. However, at present Tetra Pack Pakistan Ltd. is the only domestic plant producing aseptic packaging material for UHT milk. This monopoly position and its implications for cost and quality of material are of major concern to the present day and future UHT milk manufacturing industry in the country. Anjum, et al. (1989) further reported that on overall bases, UHT is an inherently expensive process. If all the various taxes and regulations were removed then it would still remain as a relatively high priced product beyond the purchasing capacity of most consumers. Under 1987 market conditions, UHT milk was nearly 40% higher priced than raw milk (Anjum et al., 1989) whereas at present it almost costs double than the price of raw milk. To promote the consumption of hygienic milk among a large segment of population, Pakistan will have to look towards alternative technologies, particularly pasteurization as previously reported by Anjum et al. (1989) and in report of working group on milk in Punjab (1999). As reported previously that the experience with pasteurization plants in 1970s was not successful, a large part of the failure was probably due to the public sector orientation with emphasis on recombined milk, poor management and inadequate marketing. Conditions for marketing of pasteurizing milk are now favorable because the marketing infrastructure has improved. Pasteurized milk, because of its low processing and packaging costs, could compete more effectively with unprocessed milk and the future development of the dairy industry may lie in this direction.

MILK PRODUCTION AND PROCUREMENT

Pakistan has one of the highest per capita milk and dairy products consumption rates in Asia (150-200 liters per year) and is the fourth largest milk producing country in the world with approximately 29-32 billion liters annual milk production. Higher milk yield is indeed a notable aspect of the milk sector. According to an expert, yield per animal has gone up from 700 liters per year to 1,200 liters in the last six to seven years. This is significant in more than one way and opens the door of success wide for the livestock sector as also for national economy. In spite of the dairy sector, identified by the government as one of the key priority sectors for development, the farmers which are the key players were still facing constraints, inherent because of their small size, can not reach consumers or industry directly. They have little influence, therefore, on the price or quality of their milk. It has been estimated that over 90 percent milk is produced by a large number of small holders or landless farmers in the remote rural areas.Milk producers foremost problem is marketing the milk, a highly perishable item. The Punjabs Department of Dairy Development and Livestock is collaborating with the Idara Kisan (IK), a non-profit organization active in the procurement and marketing of milk to ensure fair rates. Their efforts now cover 13 districts in Punjab. According to SMEDA findings, it is generally understood that the primary hurdle to industrys growth is the non-availability of milk in the right quantities and of good quality, especially in the lean production months of May to August when milk consumption is also the highest. To formulate appropriate strategies for development of the sector and identifying suitable strategic initiatives for the implementation of the same, a Strategy Working Group (SWOG) has been constituted under USAID, supported by Pakistan Initiative for Strategy Development and Competitiveness (PISDAC).The need of a dedicated national entity for better sector management was realized by the Dairy SWOG at an early stage. The importance of a sector-level management company was further realized after study of benchmarked countries with respect to sector management. Successful models of entities working in other countries like Dairy Australia in Australia, Dairy Insight in New Zealand and National Dairy Development Board of India were studied, particularly. The concept of Dairy Pakistan has been evolved as a dedicated company in the private-public partnership (PPP).Milk Procurement Types:

Milk Procurement is the starting point of dairy industry supply chain. The procurement process starts on the farm, where producers are advised, quality is monitored and raw milk is collected daily from various Farmers/progressive farmers by mini-suppliers and village milk collection centers countrywide and transported to factories in the most cost-effective manner. Raw milk quality is the cornerstone of excellent dairy products. Milk Procurement guards this quality with an eagle eye and ensures that company?s production needs are met. Through teamwork within the supply chain, procurement teams of companies ensure that raw milk losses are kept to the absolute minimum. Milk procurement is basically of two types :1. Suppliers collection2. Self-collectionSupplier Milk collection system :In this case supplier brings milk with their own sources at factory. The milk is scrutinized by quality assurance department of dairy as per their standards. If milk pass all the quality test then this milk is received otherwise the milk is rejected. Mini/Hilux contractor :In this type of milk collection local supplier of area, collects milk with their own resources and bring this milk to companies sub center. If milk is according to company?s standard that milk is received otherwise rejected. All types of collected milk are brought to sub centers, where it is chilled (by chiller or by ice) and transported to Main center either through 1.7, 5 or 9 tons of tankers depending upon the quantity of milk, here milk is chilled through chillers and transported to plant.Self Milk collection system :Village Milk Collection (VMC) : In this case a local community nominated person (VMC agent) collect milk from local farmers on behalf of company by using company facilities. The VMC agent get commission from company on per litter collected milk. After collection VMC agent either himself approach the near by center of company for handing over of collected milk or company vehicle collect milk from that VMC agent as per written agreement. Very good quality milk is collected through the VMCs.. No doodhi is involved in this type of collection.Progressive formers : Having 10 adult buffalo or minimum 25 liters milk.Direct Farmer : Having one or more milch animal and bring milk directly to sub center or MCC.Bulk milk transport:Milk procurement teams of companies ensures that milk is collected and transported to factories daily. Milk cooled on the farm or cooling centre may be transported in bulk tankers. Bulk tankers are insulated, so the milk will remain cold until it reaches the plant (provided the transport is fast, i.e. short distance or good roads enabling milk to be delivered before the temperature of milk rises above 10? C). Reception of milk at plant : At reaching plant quality assurance staff of reception lab takes the representative sample of whole milk tanker and analyses it for various parameters as per standards of company. If milk found as per quality norms of company the tanker is weighed and production department staff receive the milk for further processing otherwise the sub standards raw milk tanker is rejected.Milk Procurement System (MPS) : The primary function of any Milk Procurement System (MPS) is to expedite dairy milk producers payroll process. This is accomplished using a complex system that documents the pickup, testing, delivery of milk, and issues payment to producers of milk and those responsible for its transport. In addition to tracing the movement of milk as it is picked up, tested, and transported to the plant, the Milk Procurement System issues checks and records financial information for producers, haulers, and vendors. MPS facilitates the dairy?s milk producer payroll process from beginning to end. Role of MPD of any Company in Milk Procurement : Milk procurement department of any company provides a value-added service to all their milk producers, ensuring that milk of the correct quality is produced and that sufficient raw milk is always available to satisfy companys needs, through the use of strategies, processes, projects, systems and policy. Procurement teams of companies manage a number of Milk Procurement responsibilities including :Ensuring that the producers are paid promptly and accurately. Purchasing raw milk from producers and transporting it to factories effectively and efficiently. Successful clean milk route development in various new identified areas. Installation of bulk coolers in the area.Milk yield improved. Hygiene practices improvement at all levels of milk production and procurement Reduction of Bacterial Count of milk. Advanced training to drivers in the handling of mass milk in case of emergencies. Trainings to field staff for handling of sample and client. CRUCIAL FACTORS & STEPS

Dairy production is all-inclusive activity, related to animal care, reproduction, feeding, and management. It is defined as all those aspects and activities relating to rising of dairy animals during their various phases of life to get wholesome milk. Before making the decision, whether to invest in the dairy and livestock farming or not, one should carefully analyze the associated risk factors. A SWOT analysis can help in analyzing these factors, which can play important role in making the decision.

Strengths Concentrated production. Favorable breeding backgrounds. Relatively cheap farmland. High domestic consumption Good milk quality. Major source of food, i.e. Milk& Meat Ample human resource employment sector. Low cost living standard. Full family involvement, Devoted & Hardworking Sector.Weaknesses High production costs. Low levels of bulk feed production. Poor management level in quite a few cases. Lack of education and initiative in farmer. Unorganized sector, unaware of basic farm management practices. No or low application of research work and pedigree record keeping.Opportunities Govt. of Pakistan & Sate Bank of Pakistan priority sector. Dairy products needs are much higher than supply. Commercially viable sector with great credit potential and absorption capacity. Vast range of area of operation, more needs and scope of development. Value added dairy products are in demand. Cooperatives can play a big role for development in dairy sector like India.Threats High risks of diseases in livestock. Imbalance between prices of inputs & outputs. Rising trend of cost of production with higher rate of interest as compared to profit ratio. Increasing level of poverty.

Milk Production The buffalo and the cow and to a very limited extent the goat are the main milch animals in the Indo-Pak sub-continent. The buffalo contributes some 64 percent, the cow 33 percent and the goat 3 per cent of the total milk produced in Indo-Pak. There are several well recognized breeds of cows and buffaloes in the region such as Red Sindhi, Gir, Tharparkar, and Sahiwal among the cows, and Murrah and Neeli Ravi among the buffaloes, are outstanding breeds. The milk of the buffalo is comparatively richer in fat content than that of the cow. Because of the lack of scientific animal husbandry and nutritional practices, the yield of the milch animals in Pakistan has been rather low compared to that of the dairy cow (especially) in the advanced dairy countries. In order to increase milk production we must have to : Upgrade our animals Better feeding practices andWell organized veterinary services, including artificial insemination. The population of the cross-bred cows and the upgraded buffaloes is expected to increase the milk production significantly.

Milking Conditions and Hygiene

Most of the milk in Pakistan is produced in the villages by farmers with small land holdings and also by landless agricultural laborers. Although an increasing portion of the milk produced is collected by the Supplier and other organized dairies, a significant portion of the milk is still being converted into traditional dairy products due to lack of refrigeration and transportation facilities. Conditions under which milk is produced in the villages are far from satisfactory, mainly because of the economic backwardness of the producers. The milk animals are housed in a part of the living space of the family or in small closed or open yards adjacent to the family house. Flooring is usually a plaster of mud. The cows are rarely washed before milking. Buffaloes generally wallow in ponds, especially in the hot summer months.Milking is done by hand, usually after suckling by the calf. Except in a few modern large farms, milking machines are not used. Because of the distances between the producing and consuming points, milk is unavoidably held at ambient temperatures for a significantly long time leading to high microbial growth. The high ambient temperatures in the region for the major part of the year support rapid microbial growth.The predominant types of micro flora in milk received in dairies are coliforms, micrococci, lactic streptococci, spore-forming aerobes and corynebacteria, the majority of these being contaminants from milk utensils. There is also a high incidence of thermoduric bacteria.

Future ProspectusPakistan is the world's highest milk producer and all set to become the world's largest food factory. In celebration, Pakistani Dairy sector is now ready to invite NRIs and Foreign investors to find this country a place for the mammoth investment projects. Be it investors, researchers, entrepreneurs, or the merely curious Pakistani Dairy sector has something for everyone.Milk production is relatively efficient way of converting vegetable material into animal food. Dairy cows buffaloes goats and sheep can eat fodder and crop by products which are not eaten by humans. Yet the loss of nutrients energy and equipment required in milk handling inevitably make milk comparatively expensive food. Also if dairying is to play its part in rural development policies , the price to milk producers has to be remunerative. In a situation of increased international prices, low availabilities of food aid and foreign exchange constraints, large scale subsidization of milk conception will be difficult in the majority of developing countries.Hence in the foreseeable future, in most of developing countries milk and milk products will not play the same roll in nutrition as in the affluent societies of developed countries. Effective demand will come mainly from middle and high income consumers in urban areas.There are ways to mitigate the effects of unequal distribution of incomes. In Cuba where the Government attaches high priority to milk in its food and nutrition policy, all pre-school children receive a daily ration of almost a litre of milk fat the reduced price. Cheap milk and milk products are made available to certain other vulnerable groups, by milk products outside the rationing system are sold price which is well above the cost level. Until recently, most fresh milk in the big cities of China was a reserved for infants and hospitals, but with the increase in supply, rationing has been relaxed.In other countries dairy industries have attempted to reach lower income consumers by variation of compositional quality or packaging and distribution methods or blending milk in vegetable ingredients in formula foods for vulnerable groups. For instance, pricing of products rich in butter fat or in more luxury packaging above cost level so as to enable sales of high protein milk products at a some what a reduced price has been widely practiced in developing countries. This policies need to be brought in Pakistani Dairy scenario.

Objectives

Facilitate 71% landless/small holding farmers Genetic improvement of non descript cattle herd for higher productivity & poverty alleviation. Accelerated promotion of livestock in the corporate sector for exploiting the consumer market potentials Promotion of producers owned/controlled co-operative organizations & mediums of dairy farm in Establishment of State of the Art SPUs Preservation & genetic up-gradation of local breeds to compete international standards/market Facilitation & adoption of modern technologies for developing high pedigree pure bred and cross bred cattle herd Providing professional services of Consultation, Assistance & Advice in all fields associated with Livestock Arrange training programs, seminars and courses Facilitate progressive farmers in establishing modern livestock farms Undertake Joint Ventures with any persons, firms, companies, institutions, corporations, entities, entrepreneurs local or foreign engaged in livestock Promote Concept of Silage & Hay for yielding higher growth through better Nutrition Resource Management Mission

Exploit the potentials of Livestock sector as an Economy Engine for the poverty alleviation / employability & transforming into a viable industry through Public Private PartnershipVision To make Punjab a Livestock hub for meeting the indigenous demand and compete the international market Milking SystemsA modern dairy business makes it possible to produce high quality milk profitably. At the same time, it gives workers and animals a safe and friendly environment. DairyCare Pakistan offers a complete range of Milking Systems of Milkline Italy, from the most traditional types up to the most technologically advanced solutions, with both standard and customized options able to suit any breeder's requirements. Milking System type and size are the result of designing activities carried out by Milkline's Technical Department to the pursuit of offering solutions ensuring farming systems that are fast and comfortable for all type of animal, while also smooth and safe for operators at the same time.Consulting & PlanningConsulting

During the development stage of your dairy farm business, you need to consider important factors such as: Animal health and reproduction, Herd and system management, Milking routine, Efficiency, Future expandability. DairyCare Pakistan technical expert will help you identify and define your needs and then guide you through the selection of the various blocks that will meet your dairy farm requirements and budget.Dairy DesigningDuring the planning stage, your DairyCare Pakistan expert will consider the whole dairy facility. Well-designed systems around your farm improve the animals' environment, while equipment that functions smoothly also facilitates and helps the farmer. This whole planning process is supported by the knowledge, tools and resources made available through the Milkline Team in Italy. With a international team of professionals experienced in dairy design and planning, DairyCare Pakistan brings a wealth of knowledge and expertise to you. Using precision technology Milkline keeps its international team up to date with the latest dairy design information and tools, regardless of their location. This all means that when you talk to a DairyCare Pakistan expert you are not only benefiting from their knowledge and experience but that of a international team. An example of the DairyCare Pakistan Team services is in the planning of cow traffic. Smooth cow traffic with quick management in and out of the parlour reduces the cycle time and raises the efficiency of the installation, independent of the choice of milking system type. Efficient cow traffic and management minimizes the time to change groups and increases the throughput of the parlour. The holding pens and gate systems help smooth animal friendly flow into the parlour.

Milking parlour positioningMilk pick up, feed deliveryMilking parlour selectionReduction of working hoursMilking easeCattle-friendly housingGroup sizes of animalsOptimal cow trafficCow comfortDairy Farm Integration

Parlour Layout

Only a well laid out milking parlour assures a high milk yield, guarantees the health of the cattle and pays for itself by efficiency. Parlours designed for cow comfort and smooth cow flow not only reduce the stress on the cows but also the operators as well.

From the milking cluster to the cooling system, your DairyCare Pakistan expert will match every component in the system exactly to ensure that the whole system will meet your requirements. If your system smoothly and efficiently extracts the milk from the cow but your cooling system cannot handle the load then you only have half a system! Only with well designed and matched systems can you minimise the total cost of ownership.

Installation

DairyCare Pakistan places a lot of value in offering you the benefit of its knowledge and making sure you are 100% satisfied with the end product. This is especially important during installation, farmer training and starts up of the system.

DairyCare Pakistan will help plan the installation around your schedule in order to keep time and financial costs at minimum possible levels without compromising quality. Trained and experienced professionals from DairyCare Pakistan will use their expertise to install your system to meet the very high Milkline quality standards.

After installation, the technical expert will train you with your new milking system. Quality assurance is about setting a system so that a quality outcome is guaranteed. This is why we place so much value on helping you understand the system and the process from the very start.

All Milkline milking systems and components are manufactured in Italy and meet strict Conformit Europenne standards.

Dairy animals with high genetic potential for milk production always remain the corner stone of dairy production strategy in any country of the world. Pakistan owns a quite a number of breeds having the characteristics of high milk production and are well adapted to the local environmental conditions. The genetic potential for milk production in indigenous cattle and buffalo could beimproved by selective breeding.

Feeding management .

Superior fodders germplasm should be identified and propagated in the field. Hybrid seeds either imported or endogenously produced should be distributed among the farmers. With the seed provision a complete package of agronomic practices should be transferred to the farmer. Year round fodder production systems should be devised. Legume, non-legume crop combination could improve the feeding status of livestock. Farmer training is required so that they can use cheaper feed resources (nonconventional feed resources) for feeding of animals. BetterMilk marketing channels

feeding of livestock could be achieved if vertical expansion of livestock production is followed. Ensiling and hay making systems should be devised and extended to the farmers according to local livestock production system. Different rations should be formulated to achieve synchrony of nutrient utilization in animals. Feeding should be aimed keeping in view the physiological stage of the animals rather than feeding animals haphazardly.

Coordinating research and extension activities. There should be close collaboration amongst different institutions (universities, livestock research stations and research institutions) so that they can benefit from each others results and also avoid any duplication of work. The rural small holders should be trained in the skills of efficient dairy production. Specially designed literature and audio visual aids be used for this purpose. The small holders (maintaining about 80% of total dairy animals) must get due attention of policy makers for support and necessary assistance in running their day-to-day activities. There is no price motivation for the milk producers. Most of the milk is produced on subsistence basis rather than commercial basis. It needs to be organized on a commercial basis.Disease control.

Proper vaccination against different diseased to maximum dairy stock should be carried out. Manufacturing of different vaccines in quantities to meet demand of livestock population is essential. All viral vaccines being prepared by conventional methods should be shifted to tissue culture technology. Control of internal and external parasites through efficient and adequate drenching and dipping operations especially in crossbred is needed to avoid morbidity and mortality. Expansion and modernization of diagnostic facilities at least at district level can be helpful. Education of farmers regarding, mastitis, vaccination, and metabolic nutritional and reproductive problems is required to avoid monetary losses in dairy sector.

Public sector participation.

Short-term interest free loans to help small farmers may be extended so that they could able to use optimum level of farm inputs. To attract, motivate and encourage private sector to invest in the livestock sector, facilities like tax holidays/ rebates and duty free import of necessary machinery pertaining to dairy should be provided.

PLDDB

Punjab Livestock & Dairy Development Board (PLDDB) has been established on the direction of Chief Minister Punjab with the aim to promote, develop, facilitate, improve and expand livestock industry, sector, farming, business and infrastructure in Punjab for accelerating investment therein and maximizing the potentials of the sector, using most modern technology and as a tool for poverty alleviation and economic growth of Punjab.

Punjab Livestock & Dairy Development Board is a not for profit company, established under Section 42 of Companies Ordinance 1984. The Board of Directors comprises of representatives from the private as well as public sector. Three major wings of board i.e. Farm Production & Planning, Nutrition Resource Management and Field Service & Capacity Building have set their priorities in the field of reproduction & breeding services through skill development, empowerment of women from rural Punjab as extension workers, establishment of semen production units, promotion of silage and hay for higher milk production, provision of unadulterated milk to consumers through milk dispensers at an affordable price in Lahore and establishment of model dairy farms. The board also encourages and facilitates the private sector to enter into joint venture with the board for the development of Livestock sector.Punjab Livestock & Dairy Development Board aims at developing milk and meat industry by interventions at every tier i.e. production, processing and marketing, complying with all requites of national/international quality standards for human consumption.

Pakistan Dairy Association.

To comply with all the requirements of the Trade Organization Ordinance 2006 read with Trade Organization rules 2007 as amended from time to time, and directives issued, there under.

To collaborate with R & D Organizations, bodies in private and public sector & NGO at national, regional or global level for the socio-economic improvement of rural masses through uplift of live, took sector from family subsistence to economically viable production and awareness.

To co-operate with other charitable trusts, societies, associations, institutions or companies formed for all or any of these objects and statutory authorities operating for similar purposes and to exchange information and advice with them.To provide opportunities for the dissemination and exchange of knowledge and ideas gained from experiments and experience through meetings, conferences, seminars and for collaboration between persons and/or institutions interested in research & planning and those in production, processing and marketing.

To take such actions as are considered necessary to raise the status or to promote the efficiency of the Association. To carry out all such other lawful functions as may be incidental or conducive to the attainment of the above aims and objects.

Future Strategy

There is an urgent need for launching a comprehensive policy for breed improvement of both buffalo and cattle for dairy and beef.Controlled legislation for local cattle semen and buffalo semen production.(SPUs)Improvement in method of data collection to formulate authentic statistics of the livestock sector.Reinforce quality production of local vaccines and ensure proper vaccination of livestock in rural areas. Quality controls to be enforced on raw/loose milk. The aims and objectives for which the Association was formed are:-

To diffuse among the members information effecting their trade, commerce and industry and to collect, print, publish, issue and circulate papers, periodicals, books, statistics and such other publications as may be deemed to be conducive to the objects of the Association.Key Success Factors/Practical Tips for SuccessCommercial dairy farmers depend on land, labor and animals as the major resources. The thrust in modern dairy farming is on the increased use of capital and management.Successful dairy farming harnesses all available resources into productive and profitable unit. Dairy farming is highly complex as it includes breeding, management, feeding, housing, disease control and hygienic production of milk on farm. The judicial use of means and resources to achieve clearly defined goals is the key success factor in modern dairy farming i.e. the art of maximization and optimal utilization of resources and meansfor maximizing productivity and profits.The low yielder animals are uneconomical to keep, hence these should be culled. Theover all genetic improvement of all the dairy animals is necessary for improved milkproduction. It involves milking records at equal intervals, selection of bull from highproducing mothers, progeny testing of breeding bull and then making extensive use ofthese bulls by well-organized Artificial Insemination (AI) program.Feeding dairy animals on nutritious and high yielding hybrid varieties of forages can be adopted. The surplus forage should be preserved as silage or hay. Other farmmanagement practices include feeding for growth, lactation, pregnancy or maintenance, hygienic milk production, comfortable and ventilated barns, spraying/ wallowing of animals in summer, timely detection of heated, mating, with selected bull or AI service. If animals are bred within the 60-90 days of calving provided with clean surroundings, drinking water and feed according to the requirements, the over all performance of herd can be improved.Timely vaccination against Rinderpest, Black Quarter, Foot and Mouth Disease,Brucellosis along with the prevention of mastitis and parasitic control will also improve the over all performance of dairy herd. Hygienic milk production depends upon healthy animals, clean surroundings, clean hands of milkman and clean utensils.Pakistan has one of the highest per capita milk and dairy products consumption rates in Asia (150-200 liters per year) and is the fourth largest milk