PEST ANALYSIS POLITICAL Dairy Sector in the Policy Conte xt: The planners in Pakistan have always been more
concerned about development of the crop sector than dairying in the agriculture economy of the country. After in dependence, the livestock population in Pakistan significantly deteriorated due to good stock was taken away by evacuees, indiscriminate slaughter of animals by incoming refugees, dry cows and buffaloes brought from rural areas by milk dealers for supply of milk in urban areas were slaughtered at the end of lactation period, and increased demand for meat due to growth of population and incomes. Urban areas faced acute shortage of milk and dairy products. The planners faced a policy dilemma of how to increase draught power and milk production simultaneously. fforts were made to improve stock of cattle by breeding of indigenous animals, but output of improved stocks was inade!uate to make a dent on the dwindling supplies of improved cattle and buffaloes in the country. The "irst "ive #ear Plan $%&''()*+ recognies the importance of improving breeding centers, operating more hospitals, dispensaries and mobile dispensaries to check spread of contagious diseases for animals, in addition to providing for research on increasing supplies of feeds and fodders, and starting pilot schemes for artificial insemination for improvement of cattle -overnment of Pakistan $%&'/+0. The "irst Plan was very specific in removing gu1ar $a cast of milkmen+ colonies from cities like 2ahore to outskirts and in recommending milk supply schemes for 3arachi and 2ahore on a pilot basis. Under the scheme government was to buy bu y milk from gawalas $milkmen+ residing in gu1ar colonies and supply pasteuried milk in sealed bottles through registered milk depots. To reduce adulteration in milk, the Plan recommended testing of milk for purity. The Plan also suggested that most of the milk would be produced in villages near the cities where small farmers would specialie in dairying by keeping half doen or more cows, produce their own feed and organie them selves in to cooperatives for assembling, transport and even processing of milk. 4oon it became clear that the "irst Plan, which articulated the problems at hand !uite well proved to be too ambitious in their implementation as compared to the Plan target. The !uestion of how to improve milk production capacity remained un(addressed even in the 4econd "ive #ear Plan $%&)*( $%&)*()'+ )'+,, which which experie experienced nced ma1or ma1or policy policy shift shift toward toward develop developmen mentt of the large( large(sca scale le manufacturing sector. 5ence there was very little planned effort, if any, for the development of
the dairy sector.67n the Third "ive #ear Plan $%&)'(/*+ there was renewed emphasis on agriculture development with the help of the seed(fertilier(water technologies $the reen 8evolution technologies+ for higher yields in the crop sector. 5owever, the dairying sector went into oblivion. The milk supply schemes envisaged in the "irst Plan for 3arachi and 2ahore first became operational in 3arachi in %&)'. 9ith the support from U7;" $United ations ;hildrenilk 4upply Pro1ect in 2ahore also went into production in %&)/, but like the pro1ect in 3arachi this pro1ect also failed to receive the patronage of successive government sand hence was abandoned. >ilk processing industry got a boost as part of the development of the manufacturing sector in the country somewhere between sixties and seventies, when the private sector established 6? milk pasteuriation and steriliation plants around three big cities, e.g., 3arachi, 2ahore, and twin cities of 8awalpindi and 7slamabad. These plants relied on supplies of skim milk powder coming under the auspices of the 9orld "ood Program, which was recombined and pasteuried before being sold to consumers. These plants failed mainly due to weak acceptance of the recombined milk by consumers and its short shelf life. 7n other words, inade!uate supplies of fresh milk to milk processing industry proved to be the ma1or hurdle in their success. There was a renewed interest in the milk processing industry in late(seventies and early(eighties when policy support was provided by the overnment in the form of exemptions in income tax, duty free import of machinery and e!uipments, and availability of domestic and foreign currency financing -overnment of Pakistan $%&&*+0. overnment has always tried promoting dairy industry within the country. "or this government has given lots of relaxation to milk industry for instance there is no tax or excise duty on milk products. overnment has a complete and comprehensive legal framework for milk industry to keep things in flow and up to mark within the industry. At the same time government keeps on revising its policies that could help improving overall industry. @ut when we say that there are good policies and regulations to promote industry it also re!uire some attention in terms of implementation of these regulations and governments have never been able to make industry follow these regulations and promotional policies due to not so keen interest of governments
officials and also the implementation process has been designed so complicatedly that things never go smooth when it comes to implement or adopt these policies for industry players. The reason comes as government couldn
suppliers of raw material, so lots of raw material is affected in terms of its !uality and preservation issues and a big percentage of raw materials go to waste before its being processed. @ut at the same time U5T milk doesn
4ocially the most important thing for the industry is that people have realied the importance of U5T milk because of its safety and better health issues than ordinary milk that could carry lots of bacteria and germs during its complete delivery to the end user. @ut at the same time people avoid using U5T milk due to its cost factor, being costly consumption of U5T milk is far less than other un processed milk, but with the time and awareness among people they have realied that the cost they are paying does pay them back good enough in terms of health issues and !uality of milk. 4o with time this issue is decreasing as people have got to know the value of what they are paying for. ;ritical social issue going around among consumer about U5T milk is that its something treated or created artificially, which is re!uired to be taken care of by industry player through their awareness and information campaigns for their consumers to make them clear about such thoughts they carry about U5T milk to utilie better potential from the market. TECHNOLOGICAL:
"irst of all because the farmers or awala don
function of capital. 7n milk and specially U5T milk industry technology is a critical factor in terms of barriers to entry. Although the market is already saturated, downward pressure on U5T milk prices could be created through either meeting existing capacity, or the establishment of new U5T plants. The downward price pressure would then induce new section of socio( economic cross section to enter the market as consumer of U5T milk. ;ustom duties on the import of packaging machinery, which is at the heart of the U5T segment of the industry $either TetraPack technology, or alternatives+, are prohibitively high. The artificial cap on increase on demand of U5T there fore creates a negative impact on small farmers, who must continue to supply to the informal sector where they are sub1ect to the awala. 4o because being expensive as high capital investments are re!uired for establishing U5T milk plants due to heavy capital cost on machinery this industry is suffering.
