October 13, 2003

Outlook of Pakistan Livestock Industry

The way in which dietary patterns are changing in the world as economic growth and development proceeds is now well documented.

Due to factors such as income growth, urbanization and modernization of marketing infrastructure, consumption patterns are switching from an emphasis on traditional foods such as cereals to non-traditional foods like value-added processed and high-protein foods derived from animal products.

In other words, we can say that an emphasis on a balanced diet is increasing with the passage of time. Livestock contribute in many diverse ways to rural livelihoods through provision of food, generation of income and employment, and as suppliers of inputs and services for crop production.

Livestock is an important sector of agriculture in Pakistan, second largest contributor in agricultural GDP after crop husbandry, which accounts for 39% of agricultural value added and about 9.4% of the GDP. Its net foreign exchange earnings were to the tune of Rs51.5 billion in 2001-02, which is almost 11.4% of the export earning of the country. The role of livestock in the rural economy may be realized from the fact that 30-35 million rural populations is engaged in the livestock raising, having household holdings of 2-3 cattle/buffalo and 5-6 sheep and goat per family deriving 30-40% of their income from it.

In the developing countries buffalo/cattle rearing have shielded the poor against dire poverty by ensuring them reasonable livelihood. The livestock include cattle, buffalo, sheep, goats, camels, horses, asses and mules. The major livestock products include milk and meat whereas livestock byproducts include wool, hair, skins, hides, blood and bones.

The World Trade Organization (WTO) came into being with the profound slogan of free and fair trade but since eight years of its birth, the dream of free and fair trade is yet to be materialized. The real problem behind this is the discriminatory response from the North because subsidy provisions and imposition of other barriers in developed countries for the protection of their domestic agricultural producers distort patterns of global trade.

Such supports for domestic producers are the highest in the European Union, followed by North America. They have contributed to the decline in world agricultural prices.

In the livestock sector producers, particularly those of milk and beef have received and are still receiving high-level subsidies, despite pressures from the WTO to reduce all such barriers. The impact on developing countries, as net importers, is low meat and milk prices. This may benefit consumers, which acts as a disincentive for producers and a brake on development.

In this scenario, to face the highly subsidized exports from the developed countries, the developing countries like Pakistan are forced to give support to their agriculture sector. Under the provision of domestic support in 'agreement on agriculture', de minimis payments are the domestic agricultural support payments representing only a small percentage of transfer to producers. This is 5% for developed and 10% of production value (GDP) for developing countries.

These payments could be paid in addition to the green, amber and blue boxes. These payments are exempted from reduction commitments even if the effects of such support are potentially production or trade distorting. Pakistan's Gross Domestic Product (GDP) is Rs4018.1 billion. The share of agriculture sector in total GDP is 24% (Rs964.34 billion); ten percent of it i.e. about Rs96.43 billion is given as domestic support to agriculture sector.

In the coming regime of the WTO, the countries need to get their specialities patented under Agreement on Trade Related Intellectual Property Rights (TRIPS). So the species, which are considered to be the special privilege of Pakistan, should be documented with the World Intellectual Property Organization (WIPO). For this purpose, Pakistan has to first register these species with the Pakistan Intellectual Property Rights Organization (PIPRO) and then with the WIPO.

Different important breeds of buffaloes (Nili,Ravi and Kundi), cattle (Sahiwal, Red Sindhi), goats (Beetal, Nichi and Kamori), sheep (Lohi, Keghani, Damani and Salt Range) etc. are assets for Pakistan and need to be registered.
  
There are two other bilateral agreements, which can have implications in future for the animal products in Pakistan. Those include the International Dairy Agreement and the International Bovine Meat Agreement. These two agreements aim at expanding, liberalizing and stabilizing trade in livestock, meat, milk and their products.

Pakistan remains deficient in the production of milk. 55% of the total milk is consumed as fresh milk whereas import of dry milk is necessary to fulfil the needs. With a little change in attitudes the productivity of the existing stock can be improved and avoid losses. For this purpose the department of agriculture should give training to the livestock holders in better management techniques with proper methods for getting milk under hygienic conditions.

In the coming years, investment in dairy sector should be directed towards export-oriented joint ventures. It will reduce import of milk products and encourage production of competitive value added quality milk products for exporting to the Gulf States and Middle Eastern countries along with meeting the local demand of milk products.

Being a Muslim country, Pakistan has a great scope for exporting livestock on the Hajj occasion. According to agricultural statistics, Pakistan exported live animals worth Rs 420.8 million in 2001-02. In order to increase the exportable surplus from Pakistan, careful prevention of diseases in animals through effective vaccination programme is highly recommended because the livestock or their products with disease residual effects would not be allowed to enter in the international market.