PDA chief says dairy sector has potential to employ 60 million people

LAHORE: The dairy sector has the potential to employ 60 million people. With the growth of this sector, the government can earn up to Rs 25 billion in the form of sales tax and income tax but it is not possible without the government's support, said Pakistan Dairy Association Chairman Dr Shehzad Amin, here on Tuesday.

While talking to Business Recorder, Amin said that currently more than 10 million families are connected with milk processing companies. "Altogether Pakistan produces 60 billion litres of milk per annum and has the potential to double the production through increasing milking yield per animal.

We are the fifth largest producer of milk in the world and the dairy sector contributes 11 percent to the GDP of Pakistan. In an encouraging environment this has the potential to become an economic powerhouse for the country," he added.

However, he said, at present the dairy industry has been declining since the abolishment of zero-rating tax in 2016 and for the past two years the industry is making losses. "If this continues, milk processors will have no option but to close their businesses," he added.

Thus, he urged the government to revive zero-rated sales tax regime for this sector, which will benefit both the government and dairy sector. "Sales and profitability of the industry will grow and it will encourage new foreign direct investments (FDI) for modernization of the industry while the government's revenue will increase," he added.

According to him, if immediate and supportive actions are not taken by the government, the industry will collapse leaving millions of families without employment, and livelihood, and the people will be deprived of safe milk.

The Pakistan Dairy Association was disappointed with the budget 2020-2021 as no steps were taken to revive the dairy sector in Pakistan, although we submitted three proposals to the government. It is high time for the government to revisit the dairy sector and make the necessary decision to support this vital sector.

Sale of raw and loose milk is another challenge that is hurting the milk processing industry. "The gap between the price of loose milk and packaged milk has increased, which is hurting the milk processors; only five percent of the total milk production in the country is processed and thus almost 95 percent of milk consumed in Pakistan is unsafe, unregulated and untaxed," he added.

He pointed out that packaged industry is able to produce safe milk, ensuring quality and nourishment, and this industry also pays taxes and contribute to government revenues. "All packaged milk is tested by a government laboratory periodically to ensure safe milk standards, whereas raw and loose milk may be unsafe for human consumption, because there are no quality and regulatory measurement at the farm level," he added.

Hence, he suggested that minimum pasteurization law should be implemented in big cities like Karachi, Lahore, Faisalabad, Hyderabad, Multan and Rawalpindi/Islamabad so that raw milk is not sold without any format of packaging.

Copyright Business Recorder, 2020