An insurance scheme for livestock farmers with an initial allocation of Rs300 million has been provided in the budget for FY2015.

The scheme is aimed at mitigating the risk of losses of livestock farmers who would get the government financing as insurance cover for up to 10 cattle heads. In his budget speech, Finance Minister Ishaq Dar said the scheme was expected to benefit at least 100,000 livestock farmers.

In the gambit of agricultural incentives announced in the next year’s budget, this is the only package exclusively designed for livestock farmers.

Growing population, urbanisation, higher per capita income and export opportunities have created a strong demand for livestock and livestock products.

The present government’s livestock development strategy, as highlighted in recently released Economic Survey of Pakistan aims at “private sector-led development with the public sector providing enabling environment.” But introducing just a symbolic insurance scheme—and that too with a paltry allocation of Rs300 million—can hardly be described as an enabling environment for the growth of the livestock sector.

“The federal budget has disappointed us,” laments an official of Pakistan Dairy Association. “Private parties in Sindh and Punjab have set up new dairy farms. We were looking for some federal initiatives aimed at transforming the livestock and dairy sector on modern lines with big

initiatives. That hasn’t h

Livestock, like other sub-sectors of agriculture needs a lot more. It will become clear in coming days what else is in store for livestock farmers when the provincial budgets are announced.

“But so far the federal budget has disappointed us,” laments an official of Pakistan Dairy Association. Private parties in Sindh and Punjab have set up new dairy farms; meat processing companies like K&Ns and Meat One have increased production, and provincial governments have tried to help in animal husbandry besides participating in public-private partnership projects. “Now we were looking for some federal initiatives aimed at transforming the livestock and dairy sector on modern lines with big initiatives. That hasn’t happened.”

The federal government could have made more financial allocations for promoting indigenous research and if possible with the collaboration of international organisations. That too has not come to pass.

“Lately, pricing of dairy products has become a thorny issue. The federal government could have taken a lead by establishing a platform made up of dairy farmers, milk and meat processing companies and representatives of provinces to address this issue. But it also skipped from policy focus,” complains a dairy farmer from Sindh.

He argues that whereas processing firms purchase milk at Rs40 per kg from small livestock holders and sell processed and packaged milk for Rs80-Rs100 per kg, traditional supply of milk via dairy farmer to wholesalers to retailers leaves little profit margin for dairy farmers. Besides, under this system which controls 95pc milk supply across Pakistan, there are issues in preserving the quality of milk. “If the government can provide us concessional finance to set up milk collection centres like those of milk processing companies, we can ensure supply of hygienically preserved fresh milk at cheaper rates in the retail market.”

The present government has promised time and again that it would improve per unit animal productivity and move from the subsistence-level to market-oriented and commercial livestock farming.

But the federal budget for FY15 does not envisage any plan to help materialise this objective.

According to the Economic Survey of Pakistan gross value-addition of livestock sector increased by 2.7pc in FY14 from a year earlier. But this is apparently too little to meet the broad objective of exploiting full potential of livestock sector.

Population of cattle, buffaloes, goats and sheep is estimated to have increased faster in FY14 than in FY13, according to official records. More encouragingly, production of milk and meat did show an even faster increase, according to the Economic Survey.

But in order to sustain growing trend in population of animals and animal productivity, a lot more ought to be done. The most important of them is to reduce animal mortality and to provide them with the best healthcare. And it is also equally important to introduce artificial insemination and cross-breeding among cattle to have more animals of the best species for higher per-animal milk and meat production. On this account too, we don’t see any initiative in the federal budget for the next fiscal year.

Providing livestock insurance cover, the only incentive in the federal budget for FY15, can be a good beginning if provinces roll out their own plans to build upon this initiative. “How this scheme is implemented is of more importance than the scheme itself,” says a Karachi-based investor who has stakes in a modern livestock breeding farm in the interior of Sindh.

“The scheme could be made a real success if provinces come up with similar plans or they coordinate with the federal government, both financially and administratively, to enlarge the scope of the scheme and to ensure its meticulous implementation.”

Published in Dawn, June 9th, 2014