Pakistan’s local dairy farming, bedeviled with a host of inbuilt problems, now faces fresh threat from cheap import of skimmed milk powder.

Big players in dairy industry are using milk powder to prepare fresh milk and refusing to buy milk from local farmers in equal measure.

According to the Pakistan Dairy Association, unofficially substantiated by the industry as well, the organised sector is using around 30 per cent SMP to manufacture milk and has reduced or stopped purchases from local farmers. In certain cases, where the industry is legally bound to purchase from local farmers, it has dropped theprice. For the last many months, local purchase has dipped by 30 per cent and price by 10 per cent, hitting the farmers hard.

The process started by the end of last year and everyone thought it was seasonal, and would go away within next few months.

But, it has not been the case.

The earlier shocks are now turning into tidal waves for farmers, especially smaller ones who are the worst hit. In the village setting, a huge majority of 30 per cent landless farmers depend on two things: livestock and seasonal work on land. But, livestock is a source of sustained livelihood  At the heart of the current crisis lies the tea whitener, which contains cooking oil, sugar and SMP — necessitating the import of skimmed milk powder, which is now finding its way into the milk industry.

With its price dropping by around 30 per cent for the last many months,  it became a God-send opportunity as the SMP is easier to import, ensures assured  supply and is 30 per cent cheaper.

The industry found it easier because instead of  expensive collection of milk from far and wide areas, it could get SMP in bulk and as much as it wanted to. It also ensured supply, taking it out of seasonal variation  that rules milk production.

All these factors understandably pushed the big players into the SMP import.

Within next few months, their competitive edge, smaller players also went for the same option, putting the economy of local milk producers upside down. That is precisely the situation for the last one year. The problem is yet to move the officialdom.

The problem is particularly severe in Punjab because it produces 75 per cent of national supplies, followed by Sindh’s share of14 per cent, Khyber-Pakhtunkha’s 10 per cent and Balochistan’s one per cent.

Punjab knows that livestock sector in general and milk production in particular sustain a huge majority of rural population.

Experts believe that livestock makes the only difference between farmers in India and Pakistan, saving the latter from poverty-driven suicides that the former suffers regularly. In India, livestock farming is separated from agriculture farming, depriving farmers of their economic fallback. In Pakistan, both of them overlap. With this new phenomenon, if it remains unchecked, that advantage of farmers is at a great risk on this side of the border.

Another factor that should form a reason for the Punjab to move is that only seven per cent of total milk production goes for processing. The rest 93 per cent is un-processed. Even that seven per cent is now under threat with the industry going for powdered milk rather than processing of fresh milk.

Instead of promoting milk processing and then sustaining it through policy measures, the province seems to falling back even on what it already has achieved.

Milk producers and suppliers are equally important stakeholders in the industry and they also need to be saved through policy measures and enabling environment.

Officially, Punjab has Livestock Department and a host of other agencies  to create such a balance. All of them, however, have turned out to be silent spectators, at least so far because of conceptual bias in favour of ‘private sector and open market.’ Their social cost, however, is turning out to be prohibitive in this case.

If the situation continues as it is now, the smaller farmers would soon be selling their animal to sustain their livelihood – getting permanently trapped in poverty.

The sector is already stuck in a vicious circle of low genetic stock, even lower productivity and less nutrients for animals; all of these factors feeding one another other. But even with all these problems, it has been absorbing people thrown out by other sectors of the economy and has, along with farming, turned out be employer of last resort.

All these factors must move Punjab to take care of the sector, which contributes 11 per cent to country’s GDP. It means industry should not be promoted at the cost of farmers; both of them are equally important and must be treated at par so that they both contribute to the national economy. It can only be done with right kind of policies and scrupulous implementation.