Since 2006, dairy farming industry became one of the fastest growing industries in Pakistan. Foreign direct investment and conducive fiscal policies for dairy farming motivated renowned Pakistani business houses to invest in dairy farming. Businessmen from textile, leather, sugar and steel diversified their portfolios by investing in dairy farming.
It generated valuable employment opportunities for young and experienced individuals. The situation was all set for increased quality milk production and also earning foreign exchange through developed dairy farming. Seeds of commercialisation and running a dairy farm on modern business lines was being sowed. However, when the time of harvest is nearing the government has imposed a 16% General Sales Tax on all the inputs that include modern milking machines, feed mixer wagons, veterinary devices used for maintaining the health of dairy animals, etc.
At present, there is 5% Income Tax and 16% GST, 21% in total that an end-user of our dairy farmer is paying to run his farm on modern lines. All of a sudden with one stroke of a pen government has suppressed the growth of dairy farming industry by 21%. Suspension of SRO 575 and imposition of 16% GST have changed the whole situation overnight. This is another bold step to bring hurdles in the path of yet another performing Pakistani industry.
The table below clearly shows the growth pattern and this growth and even more is certainly achievable. Government needs to be patient at this stage and should maintain the status quo of fiscal policy for dairy farming industry for another 10 years. I have witnessed passion and willingness of various educated and commercial minded entrepreneurs to venture into dairy farming. Inefficiencies and a lack of organisation and control in income tax collection from wealthy people should not happen at the cost of death of dairy industry. Pakistan cannot afford another dying textile industry!
According to a reliable study in 2006 the following is the growth trend of commercial dairy farms:
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FARM DATA UNIT 2006 2007 2008 2009 2010 2011 2012
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FARMS DAIRY COW NUMBER 1,535,460 1,468,615 1,405,476 1,345,172 1,239,639 1,134,105 1,028,571
FARMS WITH 1-5 COWS NUMBER 1,500,000 1,434,000 1,370,904 1,310,584 1,205,000 1,099,416 993,832
FARMS WITH 6-20 COWS NUMBER 30,000 28,680 28,118 27,566 27,000 26,434 25,867
FARMS WITH 21-100 COWS NUMBER 3,000 3,210 3,435 3,675 3,900 4,125 4,350
FARMS WITH 101-200 COWS NUMBER 1,500 1,665 1,848 2,051 2,250 2,449 2,647
FARMS WITH 201-500 COWS NUMBER 600 660 726 799 900 1,001 1,103
FARMS WITH 501-1000 COWS NUMBER 300 329 360 394 450 506 562
FARMS WITH 1001-3000 COWS NUMBER 30 33 36 40 62 84 106
FARMS WITH > 3001COWS NUMBER 30 38 49 63 77 90 104
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