Dairy Development

Dr. Naveed Niazi

Contact# 0333-430-11-18
d
drnaveedniazi@gmail.com
d i i@ il
Pakistan Dairy at a Glance
• Physical Resources
▫ Dairy Animals
x 27 million
▫ Dairy
D i F Farms
x 8.14 million
▫ Milk Production
x 35
35.2 million tonn
Pakistan Dairy at a Glance

• Average farm size 1.8 Animals

(IFCN 2009))
(IFCN,
• Milk Production Growth Rate
2.9%
%
• Demand Growth rate 5%
x Share of Dairy in Livestock
products 66%
• Milk price Growth Rate 7.5%
Milk Production
Type of Gross Annual Production % Change Between
Animal (Million Tonnes)

1986 1996 2006 1986 & 1996 1996&2006

Cows 7.07 9.36 13.33 32.4 42.4

Buffaloes 14.82 18.90 25.04 27.5 32.5

Total 21.89 28.26 38.37 29.1 35.6

Source. Economic Survey, 2006-07

Region wise Milk Distribution
NWFP

Province Wise Milk Production

Punjab
3.96% 0.66%

23%
Punjab
Baluchistan
Sindh
63% NWFP
Balochistan

Sindh
Dairy Economy
• 1.5
5 billion ltr. is p
processed (3%
(3 of
Total Production)
• Per Capita Consumption/yr 190 L
• More than 75% of Milk comes from
small holder
GOP 2005-06
Dairy
y Economy
y
• 20 milllion families are engaged
with dairy farming
• Low Productivity = 1333
liters/animal/yr
• 15-19% wastage from spoiling
• Milch Animals 27 Million
▫ Buffaloes 13.6 Million
▫ Cattle 13.4 Millions
• 63% of production in Punjab
D i Economy
Dairy E
• 43.6
6 billi
billion lit
liters produced
d d

• 20% is wastage
g in

• 6.7 billion liters is household

use

• 28.5
28 5 billion liters marketed
▫ 29% urban share

▫ 71%rural share
Supply Demand Situation
10 Bio
3.6 Bio

250 mio

2007 2013 2023

Demand Supply
Strengths

• Back bone of economy.

• Major source of food, i.e. Milk & Meat
• Provides raw material for Leather
industry.
y
• Source of Farmyard Manure (FYM).
• Sizeable foreign exchanges earning
through
g exports.
p
• Wide scope of Milk Production, ranking
4th in the world.
• Availabilityy of ample
p human resource .
• Huge demand and supply gap in dairy
sector
Weaknesses
• Lack of appropriate knowledge, research extension
• Lack of commercially viable breeds of animal
• Unorganized sector, unaware of basic farm
management practices.
• Remote area, lack of farm to market approach &
transportation.
• Lack of record keeping on farm.
farm
• Negligible application of research work on pedigree
record keeping. Management of dairy farm is a
challenging
h ll i jjob.
b
• Less availability of Nutrition .
• Enormous production losses due to endemic
diseases every year.
D i Development
Dairy D l t Program
P
June 30, 2008
• D
Duration
i 20066 – 2011
• Budget Rs 1568.350 m
• Execution Livestock and Dairy y Development
p
Board
• Components
▫ Milk Collection and Marketing from Small and Landless
Farmers (300 Milk cooling units in 500 villages)
▫ Support to Market-oriented Rural Dairy Farmers /
Production of Quality Breeding Animals (1000 farmers)
▫ Production of Progeny-tested Bulls (Expansion of progeny
testing program of Sahiwal cattle & Nili-Ravi buffaloes and
i i i i off program for
initiation f Red
R d Sindhi
Si dhi cattle
l anddK
Kundhi
dhi
buffaloes )
Working Mechanism of Milk Collection, Marketing from
Small and Landless Farmers

MPG: participatory
System organized by
community, more
sustainable

Local
problems,
local Milk Collect. Centre
solution & Community shop
Through (Seed, balanced ration,
capacity medicines etc
building

Better marketing and better price

Uplift in socio-economic
status
 Dairy
y Development
p
Program
Milk Producer Groups: 186
• Punjab 66 (Kasur 26, Noshwhra Virkan 23, M.B.din 17)
• NWFP 43 (Mardan 7, Noshehra 14, D.I Khan 12, Charsada 4,
Haripur 6)
• Balochistan
l hi 22 (Pashin
hi 16, Kuchlak
hl k 6)
• Sindh 28 (T.M.Khan 5, Tando Allahyar 10, Badin 10,Thatta 3)
• Northern Areas 12 (Gilgit 7, Skardu 1, Astor 1, Ghanche 1, Ghizer
1 Hunza 1)
1,
• Azad Kashmir 15 (Bhimber 7, Kotli 7, Mirpur 1)
 Dairy Development Program

Milk Cooling Tank Installed: 150

‰ Punjab 60 (Kasur 2323, N
N.Virkan
Virkan 20
20, M
M.B.Din
B Din 17)
‰ NWFP 33 (Nowshehra 12, D I Khan 7,
Mardan 7, Charsada 4)
‰ NA 12 ((Gilgit
g 7,, Hunza 1,, Astore 1,Ghizer
, 1,,
Ganche 1, Sakardu 1)
‰ Sindh 21 (T.M. Khan 5, T Allahyar 6, Thatta 3,
Badin 7)
‰ Azad
A d Kashmir
K h i 13 (Kotli
(K tli 6,
6 Bhimber
Bhi b 6, 6 Mirpur
Mi 1)
‰ Balochistan 11 (Kuchlak 4, Pashin 7)
Dairy Development Program

VLW MCTO
‰ Punjab 42 67
‰ Sindh 21 14
‰ NWFP 32 30
‰ Balochistan 13 16
‰ AJK 09 13
‰ NA 09 16
AVERAGE PRICE DIFFERENCE (PER LITER) RS = 4.5

AVERAGE MILK MILK

PRICE BENEFIT
COLLECTION COLLECTION

P
Per Chiller
Chill (Per
(P Day)
D ) 437 Lit.
Lit R 1 966 5
Rs.1,966.5

60 Chillers (Per Day) 26,220 Lit. Rs.1,17,990/-

60 Chillers
7,86,600 Lit. Rs.35,39,700/-
(Per Month)
Dairy Farming as Business
The feasibility study by SMEDA suggests an
initial herd size of 100 animals, which is
economical
i l to
t jjustify
tif th
the overhead
h d cost.
t Th
The
farm size will increase to aprox. 500 animals
within 10 years.
years Herd mixes of 100% cows are
recommended to get the maximum milk
production round the yyear.
p
Project Investment

• The total cost of the project is Rs. 25,628,616, out of which the capital cost of the project is
Rs.24,375,270 for purchasing the animals and constructing the building and the rest is used to meet the
workingg capital
p requirement.
q
• Project Costs (Rs)
Account Head Total Cost (Rs)
Capital Cost
• Land 1,000,000
• Building/Infrastructure 8,197,930
• Animals 10,500,000
• Machinery & equipment 3,844,340
• Office vehicles 505,000
• Pre-operating costs 328,000
• Total Capital Costs 24,375,270
Working Capital
• Raw material inventory 473,346
• Upfront land lease rental 350,000
• Land lease for fodder 350,000
• Cash 80,000
• Total Working Capital 1,253,346
• Total Investment (Rs) 25,628,616

• The proposed pre-feasibility is based on the assumption of 50:50 debt equity ratio.
Business Economics

Viability Project
IRR ((%)) 4
41%
NPV @17% (Rs) 54,832,286
Pay Back Period (year) 4.06
Opportunities for Specialized
Enterprises
• Dairy Feed Industry- Naked field if commercial
farming emerges,
emerges there are big chances for dairy
feed industry to grow
• Fodder seed Production, limited private
operations
• Herd replacement
p farms
▫ Specially for peri urban production system
• Feedlot fattening farms
Opportunities
• Bio Gas Production Units
• Milk Processing
g

Numerous opportunities
pp and a smart Business
Mind can make most out of these

Good News: Local Expertise available for all

technical aspects
 O l k
Outlook
• Dairy Farming will
continue as subsistence
activityy for manyy yyears in
Pakistan
• The Corporate Farming
has its own space in
market to Emerge and
Grow
Outlook
• The Development of
Sector in Pakistan
d
depends
d on th
the
Emergence of Dairy as
Industry
Thank You