The per capita consumption of milk among the masses of Pakistan is not at an optimum level due to a gnawing gap between the demand and supply and rising prices. The major share of production of milk is from buffaloes (66 per cent) followed by cows (32 per cent) and sheep and goats (two per cent).

Buffalo is the main producer and dairy farmers, on an average, keep 75 milking buffaloes and three cows. The milk produced thus fetches higher price due to its quality and fat percentage value. Each farm raises around six dry and 14 pregnant buffaloes, and 11 calves with one breeding bull.

The start-up investment of a dairy farm is on the means of production like machine, raw material, tools and buildings etc., and includes the cost of plot or land, shed, animals, water and electricity connections, and fodder-cutting machine.

According to a study in Hyderabad region, the average initial investment comes to Rs34,83,208 per farm with 97 animals. The fixed cost includes rent of space, containers for keeping milk, iron chains, pegs and ropes for animals, and the labour to take care of the place and animals.

On an average, each dairy farm incurs Rs20,7,865 per year as fixed cost which includes Rs13,774 for chains or ropes, Rs10,010 on a tank for milk, Rs2,761 for tub, Rs1,320 for balti, and Rs1,80,000 for permanent labour. As each farm has 97 animals, therefore the fixed cost comes to Rs2,142 per animal on a yearly basis.

The variable cost includes all outlays met during the production period. Such costs are governed by the qualitative and quantitative aspects of inputs. These, in the present study include cost of feeding, rent of animals, electricity charges and medical treatment bill. On an average, each dairy farm incurs Rs31,10,340 per year as variable cost which includes Rs17,28,000 for concentrates, Rs8,15,760 for wheat straw, Rs3,92,980 for green fodder, Rs93,600 for sarson oil, Rs38,880 for medicines, Rs21,720 for electricity, Rs11,640 for water, and Rs7,760 for vaccination. The variable cost per animal comes to Rs32,065.

The total fixed costs after adding variable for each unit represent the aggregate and unitary costs on each category of farm in the study area.

Producers contact city buyers to sell the milk. Terms and conditions are decided mutually with the written agreement quite very rare. Once the deal is finalized, the producer is bound to supply the agreed quantity and the buyer has to accept the agreed price.

Milk prices are prone to seasonal fluctuations as production increases in winter and price decrease in the open market without benefiting the consumer. In summer the price increases because of the demand of curd and Lassi.

The market forces play an important role in determining the price as according to the survey, retail per litre price in winter is Rs19 and in summer Rs21, bringing the average to Rs20 per litre. The market at producer’s level is fairly competitive.

The average milk production of animal is 8.5 litres per day but the average of a year is calculated at 6.5 litres per day and 2,366 litres in a year with an earning of Rs47,320 per year. Each dairy farm produces 2,29,500 litres of milk in a year and earns an income of Rs45,90,000.

Conclusion and recommendations: The information is collected from peri-urban areas of Hyderabad city and the study findings reveal that the milk production is labour-intensive. There are a number of biological, technical and socio-economic constraints like the shortage of feed, high mortality rate, poor genetic potential, high input cost and scarcity of sources and inadequate marketing system. All these render this sector undeveloped and in a miserable condition.

Milk is transported through pick-ups, public transport and motorcycles for long distances and bicycle and horse or donkey carts for short distances. Poor road linkages between rural and urban areas do not allow producers to transport milk to distant markets due to its perishable nature.

Lack of quality check is the most neglected aspect of the whole system. There is no test at any stage along the marketing chain. For example, those who handle milk right from the beginning till it reaches the final consumer are not conscious of hygiene. Many shops in urban areas are exposed to dust and flies. Very few shops have refrigeration facility; the milk is of poor quality. The containers used in transportation are unhygienic since it is a difficult to clean them. Adulteration is another issue.

The sale and purchase of milk is done directly. But in some cases commission agents also negotiate the prices. They bargain with the seller to reduce the price while negotiating with the purchaser higher rates. Milk is usually sold in litre, kilogramme or maund and the agent charges Rs10 on sale every 40 litres.

Animals with high genetic potential for milk production always remain the cornerstone of production strategy. Pakistan owns a quite a number of breeds having the characteristics of high milk production and are well adapted to local environment. There is a need for genetic evaluation and breed organization techniques. Artificial insemination is also required to be extended in the province.

Superior fodder should be identified and propagated in the field. Year round fodder production systems should be devised. Legume, non-legume crop combination can improve the feeding status of livestock. Better feeding could be achieved if vertical expansion of production is followed. Different rations should be formulated to achieve better utilization of nutrient in animals. Feeding should be aimed at keeping in view the physiological stage of the animal rather than feeding it haphazardly.