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Pakistan and India Dairy Development Case Studies Steven J Pro-Poor Livestock Policy Initiative Dairy Development for the Resource Poor Part 3: Pakistan and India Dairy Development Case Studies Steven J. Staal, Alejandro Nin Pratt, and Mohammad Jabbar A Living from Livestock PPLPI Working Paper No. 44-3 TABLE OF CONTENTS Preface .............................................................................................................. iii Acronyms ............................................................................................................ iv Executive Summary ................................................................................................. v Overview of the Study .......................................................................................... v A Conceptual Framework for Dairy Development .......................................................... v Comparative Trends in Dairy Development among Countries in East Africa and South Asia....... vii Country Case Studies from South Asia and East Africa – Kenya, Ethiopia, Pakistan and India.....viii Synthesis of Regional and Country Results: Defining an Agenda for Pro-Poor Dairy Policy and Development .................................................................................................... ix An Agenda For Pro-Poor Dairy Policy and Development ................................................. xii Dairy Development in Pakistan ................................................................................... 1 Introduction: Some Dairy Development Trends ............................................................. 1 Policies and Institutions for Improving Dairy Production and Marketing ................................ 4 Other Policies Indirectly Affecting the Dairy Sector ....................................................... 9 Explaining Differences in Dairy Development Between Punjab and Sindh.............................11 Income and Employment Opportunities in Milk Production and Marketing ............................19 Main Lessons from Pakistan’s Dairy Development .........................................................25 Dairy Development in India.......................................................................................29 Introduction......................................................................................................29 Dairy Development Policy .....................................................................................29 Changing Demand Patterns for Dairy Products.............................................................41 Analysis of Regional Differences in Dairy Development in India ........................................43 Income and Employment Generation in the Indian Dairy Sector ........................................54 Main Lessons from Indian Dairy Development ..............................................................59 References ..........................................................................................................63 Tables Table 1: Buffalo and cattle population, Pakistan 1960-2002 (millions) .................................. 2 Table 2: Patterns of household expenditure on food, 1990 and 2000.................................... 3 Table 3: Indicators of milk production growth and related factors for Punjab Province.............13 Table 4: Indicators of milk production growth and related factors for Sindh Province. .............14 Table 5: Employment and income from milk production in Punjab and Karachi. .....................20 Table 6: Income and employment in milk marketing and processing in Lahore, Punjab, and Karachi, Sindh. ........................................................................................24 Table 7: Summary of the Indian dairy sector policy and market environment. .......................30 Table 8: Annual growth rate (%) of production of major livestock products in India. ................32 Table 9: Applied and bound tariffs (%) on selected dairy products in India............................35 Table 10: Growth pattern of livestock population in India: 1951-1992 (million). ......................40 Table 11: Per capita consumption of milk‡ and share of consumer expenditure spent on milk & milk products (kg per capita per year). ........................................................41 Table 12: Income/expenditure elasticity of demand for milk in India. ..................................42 Table 13: Indicator of development of the dairy sector and variables affecting development for different states grouped by level of development indicator (Index of the number of cross-bred cows and milking buffaloes per worker in agriculture)............................46 Table 14: Average values for the indicator of development of the dairy sector and variables affecting development for two groups of states.................................................47 i Table of Contents Table 15: Comparison of values for the indicator of development of the dairy sector and variables affecting development between Punjab and Maharashtra and Uttar Pradesh and Madhya Pradesh. ................................................................................................48 Table 16: Parameter estimates for dairy development in Indian district level information for years 1982, 1987, and 1992, three different dependent variables...................................51 Table 17: Parameter estimates for dairy development, including role of co-operatives, from Indian district level information for years 1982, 1987, and 1992, for three different dependent variables................................................................................................53 Table 18: Employment in dairying in major states of India (in 1,000s) and its distribution in rural and urban areas. ......................................................................................55 Table 19: Percentage distribution of employment in dairying across social groups in major states of India (1999-2000). ....................................................................................55 Table 20: Income and employment in milk production on average in Haryana and Punjab, under different scales of production. .....................................................................57 Table 21: Employment generation in informal milk markets in Punjab and Haryana, and national predictions. ............................................................................................58 Figures Figure 1: Values of milk and various crops in Pakistan, 1997-2002. ...................................... 1 Figure 2: Milk production trends from cattle and buffalo, 1960-2002.................................... 2 Figure 3: Artificial insemination coverage in Punjab Province, 1971-2000.............................. 5 Figure 4: Annual growth in demand for processed milk, 1992-2001. ..................................... 8 Figure 5: Milk production per capita, Punjab and Sindh, 1960-2000. ...................................15 Figure 6: Milk production per worker, Punjab and Sindh, 1960-2000. ..................................15 Figure 7: Sources and intensity of feed use for animals, 1960-2000.....................................17 Figure 8: Per capita milk consumption, Punjab and Sindh. ...............................................17 Figure 9: Real prices and per capita consumption of milk, Punjab and Sindh provinces, 1960-2000. ............................................................................................18 Figure 10: Share of the total number of farmers and milk production by farm size in Punjab and Sindh, 2002............................................................................................21 Figure 11: Share of employment generation in milk production by farm size in Punjab and Sindh, 2002. ...................................................................................................22 Figure 12: Share of different livestock products in total value output from livestock products, 2000-01 ................................................................................................29 Figure 13: Comparison of milk and dairy product flows through alternative markets in India. ......36 Figure 14: Changes in milk utilization patterns in India, 1951 and 1995. ................................43 Figure 15: Index of the number of cross-bred cows and milking buffaloes per worker as a measure of development of the dairy sector plotted against GDP per capita.........................45 Figure 16: Milk procured to co-operatives and development of the dairy sector measured as number of cross-bred cows per worker in agriculture by state.........................................49 Figure 17: Relationship between milk procured by co-operatives and development of the dairy sector measured as an index of the number of cross-bred cows and milking buffaloes per worker in agriculture (district level)..............................................................49 ii PREFACE This is the 44th of a series of Working Papers prepared for the Pro-Poor Livestock Policy Initiative (PPLPI). The purpose of these papers is to explore issues related to livestock development in the context of poverty alleviation. Livestock is vital to the economies of many developing countries. Animals are a source of food, more specifically protein for human diets, income, employment and possibly foreign exchange. For low income producers, livestock can serve as a store of wealth, provide draught power and organic fertiliser for crop production and a means of transport.
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