Dairy deals

The dairy industry helps sustain the lives of millions of people, by providing employment, serving as a vehicle to alleviate poverty in the rural areas, and contributing to a nation's GDP. In Pakistan, agriculture is the largest sector, contributing approximately 23 percent to GDP and livestock is the largest of the various sub sectors. Livestock accounts for 46.8 percent of agricultural value added and about 10.8 percent of the GDP. Milk is the largest commodity produced in the livestock sector accounting for 51 percent of its total value.
There is consensus among various stakeholders and dairy experts that Pakistan's dairy industry has immense potential for growth. According to statistics, it is the third largest milk producing country in the world. However, the bulk of the total production of milk is marketed through informal, traditional channels and is still unregulated. Only about 3-4% of the total milk produced is handled through formal channels. The lack of dairy policies and regulations, and effective engagement among industry stakeholders in the dairy supply chain are some of the major obstacles hampering the productivity of the dairy industry.
The milk supply and marketing chain involves traditional milkmen or Gawalas, who lack the proper infrastructure for distributing milk, little knowledge and technical dairy expertise, and resort to malpractices such as adulteration of milk to prevent it from spoiling before it reaches consumers. This is a highly alarming practice which not only results in poor quality and unhygienic milk, but also poses a serious health risk to consumers. Furthermore, the poor infrastructure and lack of storage and distribution facilities in rural areas results in wastage of milk, resulting in huge economic losses. An estimated 20% of potential revenue from milk production is lost due to a poor infrastructure for processing and distributing milk.
Due to a lack of regulation, traditional milkmen are mostly unaccountable for their actions and are not punished for their malpractices. According to a Report on the Dairy Industry, "the regulatory structure currently in vogue in the milk sector is archaic and quite inadequate for modern times while the ability of government to implement these regulations is also limited." Globally, one will find that the dairy sector is highly regulated, and in most countries the sale of loose raw milk is outright prohibited.
Australia, for example, has Dairy Australia, a national services body for dairy farmers and the industry. Its goal is to achieve a "profitable, sustainable dairy industry" in Australia. The National Dairy Food Safety Regulatory Framework is "an integrated system involving federal and state regulatory agencies, dairy farmers, dairy companies and Dairy Australia", driven by international Codes and Standards. As part of this framework, industry quality assurance programmes require all sectors of the supply chain to take responsibility for food safety.
Kentucky, USA has the Kentucky Farm Milk Handlers Law and a comprehensive set of rules and regulations for implementing this Law. The Regulatory Services' Milk Programme ensures "fair and accurate marketing of raw farm milk produced or marketed in Kentucky". This body monitors the complete value chain, from the time the producers milk samples are obtained, milk is delivered and tested in the laboratory, and payments are collected. The Kentucky Division of Regulatory Services conducts various activities to ensure quality standards and enforcement of regulations. For example, milk handlers and transfer stations are routinely visited to examine buying records collect samples from haulers, and to examine sample-handling procedures. Furthermore, Kentucky has a proper system in place to ensure that accurate payment is made to milk producers. For this purpose, producer pay audits are conducted at locations responsible for issuing payments.
In Canada, the Canadian On-Farm Food Safety Programme, based on the HACCP - Hazard Analysis Critical Control Point, an internationally accepted food safety control system, provides national producer organisations with the opportunity to develop strategies and tools to educate producers and to implement the programmes. Furthermore, the Canadian Food Inspection Agency (CFIA) is responsible for the administration and enforcement of several acts related to dairy products. The CFIA has strict compliance and enforcement actions for ensuring that domestically-produced and imported products meet Canadian regulations and quality standards. The CFIA also provides key information to consumers such as food safety tips, and information about milk.
India serves as an excellent example of a nation where dairy regulations revolutionised the dairy industry and contributed to its success. The past couple of decades have seen massive developments in India's dairy sector, owing to the country's dairy scientists and technologists, and several institutions such as the National Dairy Research Institute, Karnal, agricultural universities, and most importantly the National Dairy Development Board (NDDB) which played a central role in dairy development, by introducing the Operation Flood model in 1970.
In 1970, NDDB implemented a collective action model as part of operation flood (1970-1996), one of the world's largest rural development initiatives aimed at increasing milk production and the income of dairy farmers. This led to "India's transformation into a milk surplus country." Today, India has emerged as the world's largest milk producer with an estimated 112.5 million tonnes of milk productions since 2010.
This unique model, also known as the dairy co-operative model, transformed the ad hoc milk production system into a structured, continuous dairy supply chain, from production to consumption. The model had a vertically integrated three-tiered structure "with the dairy co-operative societies at the village level federated under a milk union at the district level and a federation of member unions at the state level. While the village co-operatives procured milk from the producers, the district unions transported and processed the milk products". This "national milk grid" linked rural dairy co-operatives in India with major cities, and it also linked dairy producers to urban consumers through dairy co-operatives, trucking networks, chilling plants and processing plants. It helped direct supply milk from surplus producing areas to the urban areas across the country. The structured infrastructure motivated dairy producers and other players in the supply chain to invest and increase their earnings from dairying.
During the last three decades, India's dairy industry has undergone a revolution "from a milk deprived country to a self-sufficient one," owing largely to science and technology and research by dairy farmers, and the operation flood model which organised the disparate rural dairy infrastructure into an efficient, organised network linking dairy farmers and other important players in the supply chain, from production to consumption.
There are many examples of countries where an organised dairy sector, governed by food safety programmes, dairy standards and regulations, is benefiting its stakeholders and the lives of millions of people it affects in the dairy supply chain and outside of it. Currently, in Pakistan's dairy industry there is no implemented food safety management system. There is an urgent need for regulation of the dairy industry to safeguard the interests of all stakeholders in the sector. Enforcement of regulations and rules will discourage unhygienic practices and adulteration, which is a serious issue facing the dairy sector of Pakistan. Regulation will lead to better monitoring and control of the dairy sector, quality controls for dairy suppliers, and licensing of dairy farmers and other key players in the supply chain. It will also help curb malpractices by enforcing a system of fines and punishments to individuals engaged in nefarious activities. Regulation will also allow for stable milk prices and increased productivity, ultimately ensuring the safety of milk being provided to end consumers.