LAHORE, May 19: At least 27 million rural people, who mainly depend on milk production for their sustenance, are waiting for action by the authorities concerned to save their source of livelihood that has been under threat from heavily subsidized milk powder imports for the last 10 months.

The agriculture ministry, in a recent study, has estimated 25 per cent growth potential in the sector but it is neither ready to prepare a package for it nor raise a voice for the sector along with other departments concerned.

Of the 10 milk powder plants established in the country at a cost of Rs8 billion, two have been closed down, six have slashed their production by 50 per cent while start of production by two new plants has been postponed due to a glut of cheap imported milk in the local market.

The imported milk powder costs Rs2,200 per 25kg bag while the value of the same quantity of the commodity produced locally is Rs2,800.

Pakistan Dairy Association chairman Ikramul Haq argues that the imported milk is cheaper for both the United States and the European Union are offering high export refunds to their respective companies.

According to him, the EU is presently offering 600 euros per metric ton as refund which results in lowering the price of imported powder milk by Rs1,000 per bag in Pakistan.

Under their declared trade policies, both the US and the EU have brought their farm subsidies from 855 euros per metric ton to zero level in July, 2001. But the same was reintroduced after four months when companies from developing countries like Pakistan and Brazil started snatching market share from their European competitors.

With the re-introduction of the subsidies, milk powder imports during the 10 months of the current financial year went up to 13,000 metric tons, more than double than last year’s 6,397 metric ton.

Mr Haq alleges that half of the milk being imported under a government scheme of free school milk programme is dumped in the open market at low rates “to meet expenses for packing and filling.”

The result is that the poor farming community, which used to get Rs30 million per day, is now receiving only Rs15 million per day for their milk production due to a drastic cut in the production capacity of the local units.

He asks the government to immediately levy 55 per cent regulatory duty on imported milk to provide a level playing field to the local industry. India has increased duty on the imported commodity from 30 per cent to 60 per cent in its last budget.

He also seeks local purchase of the milk powder for the free milk scheme for schools.

The government should also activate the Dairy Board, lying unfunctional for the last 10 years, and give representation to all stakeholders, including farmers, breeders, chillers and the dairy industry, to formulate market driven policies, he adds.— Amjad Mahmood