Investigation of Livestock Value Chain: Constraints and Policy Implications
The potential of livestock sector in alleviating rural poverty (Arif and Farooq, 2014) and improving food security (Balagamwala and Gazdar, 2013) has been under-exploited. Animal source foods are not only high-quality and readily digested protein and energy, but are also a compact and efficient source of readily available micronutrients. Both policy-makers and development practitioners consider livestock sector as a supplement to agriculture by more focusing on staple crops over rich nutritious foods like animal based diets, fruits, and vegetables (FAO, 2010). With depleting farm incomes, dairying is seen as a most viable diversification option for the rural economies.
Milk, in terms of value addition, is the single largest commodity in the livestock and agriculture sectors. We can assume that only 50 percent of the total milk produced from cattle and buffalo in the country is marketed and remaining 50 percent is consumed at home. The cash that milk embedded to rural economy at PKR 70 per liter (which is lower bound estimate) during 2019-20 is PKR 2,031 billion per annum or Rs.5.5 billion per day (GOP, 2020).
Pakistan is the 4th largest milk producing country in the world (Sattar, 2020), but fails to capture its respective share in international milk market due to noncompliance of Sanitary and Phytosanitary Standards (SPS) of quality and safety. Meat is the second largest product of livestock sector, but Pakistan’s meat export is only 1.95% of its total meat production (GOP 2019). It is mainly because of lack of investment in up gradating value chains.
However, increase in per capita income, development of supermarkets in metropolitans and trade liberalization are playing vital role in upgrading the value chains of livestock products. Supply of processed milk and meat and their byproducts in supermarkets is rapidly gaining consumer’s attention. The investigation of livestock value chains (e.g. milk as shown in Figure 1) is systematic process to identify the problems/constraints faced by different stakeholders at different nodes of value chain. Such investigation helps to generate knowledge-based solutions.
A rapid investigation of livestock value chains leads to identify the following problems/issues in the sector.
Issues of Breeding, Vaccination and Fodder Seed
Statistics reveal that livestock numbers in the country is growing but per animal productivity is stagnant or even declining. More than 90% livestock farmers are smallholders and resource poor and are using traditional breeding techniques, outdated managerial tools, poor quality and inadequate quantity of feed and fodder. The access to veterinary services is almost negligible at these farms. The total economic losses due to different contagious diseases among buffalo and cow respectively, have been estimated to Rs.25,000 and Rs.22,000 per animal (Ashfaq et al., 2015). The uncontrolled semen supply by public and private sector leads to extinct animals with higher genetic makeup.
Hence, identification of animals with higher genetic makeup and development of high yielding breeds for milk and meat production for different ecological regions can significantly contribute to enhance productivity of livestock sector. This will not only help to make the sector competitive in international market but also reduce poverty in rural areas. Further, tight monitoring of public and private sector specifically involved in artificial insemination (AI) is prerequisite to sustain the purity of breeds in each ecological region. The development of area specific high yielding fodder seed could be another milestone in breaking the barrier of achieving cost effectiveness. Investment in R&D can play a pivotal role in developing high yielding breeds and fodder seeds.
The lack of a suitable and efficient institutional framework has been one of the major impediments for both domestic and foreign investment. Currently, different departments (research, extension and academia and private sector etc.) are working in isolation and there is lack of coordination across institutes and even among departments within institutes. For example there is negligible coordination between biggest agriculture university of Pakistan (i.e. University of Agriculture Faisalabad, UAF) and National level research institute (Pakistan Agriculture Research Council. PARC). Without developing strong coordination and functional relationship between research, academia, extension, and private sector, it is unlikely to resolve the issues of low productivity, food quality and safety. The factors responsible for production inefficiency are utilization of unproductive and low quality semen, poor managerial capacity and low yielding fodder seed.
Research organizations and universities can take lead to develop cost effective solution of these problems, necessitating a paradigm shift from supply base to demand driven research. Higher Education Commission (HEC) and Ministry of Food Security and Research can allocate financial resources to develop such need based technologies.
Public Private Partnership
Financial resources are required to develop and disseminate technologies at different nodes of value chain. However, most of the innovations in livestock sector are considered as public property because it can easily imitate. Therefore, private sector is reluctant to invest in agricultural research, implying that development of innovations has to take place under public sector. However, dissemination process has to be derived by market forces between stakeholders and service providers. Therefore, private sector will take lead to disseminate new technology under contractual arrangement with developer.
Private extension with the coordination of public sector may have an imperative role in improving the livestock value chains. Therefore, evolving public private partnership in extension could lead to market-based solutions to address the critical issues of low productivity and quality in livestock value chains. For example there are number of firms supplying semen to farmers without knowing that majority of these semen are unproductive or dead. However, by establishing public private partnership the situation could be significantly improved.
Quality and Safety
Majority of our livestock farmers are small holders (92%) and not raising animals on commercial basis. They are using traditional approaches to preserve feed and fodder, resulting to appear deadly myctotoxins (aflatoxins) in milk. Financial constraints and motivation for higher profit encourage poor farmers to use cheap sources of feed like dry chapatti. They do this without knowing its substantial negative effects on quality of milk in terms of aflatoxin. Research has pointed out the prevalence of deadly mycotoxins (above safe limits) both in raw and packed milk. This implies poor safety measures have been adopted.
Despite being the 4th largest milk producer, Pakistan is unable to capture a significant share in the international market. Mainly because sanitary and phytosanitary (SPS) measures have not been implemented in their true spirit. Experts and food quality control authorities could develop and implement SOPs to improve quality of milk and its byproducts.
Based on issues and constraints discussed above, the following policy interventions are proposed:
- Research institutes and academia need to focus on identification of animals with higher genetic makeup, development and multiplication of area specific high-quality breeds both for milk and meat and high yielding fodder seeds. The private sector can play a leading role in the dissemination of these technologies under contractual arrangements with the technology developers.
- Government needs to play its effective role in developing and implementing SOPs for public and private semen suppliers to conserve the purity of livestock breeds.
- To improve coordination across institutes and within institutes; role, aims and responsibilities of institutes and departments in public sector involved in livestock value chains need to redefine precisely and quantitatively, calling for an amendment in the SOPs of employees of these institutes.
- Strengthening public private partnership in research and services delivery may lead to shift the production frontier and resolving the quality and safety issue in livestock value chains.
- Interventions in the livestock sector have been mostly of technical nature, but inadequate attention has been paid to its policy and institutional dimensions. Hence, effective livestock policies with the consultations of technical experts from academia, industry, research institutes, farmer bodies and planning departments need to be formulated.
 See Iqbal et al., 2014; Aslam et al., 2015; Tahira et al., 2015.
Arif, G.M. and Farooq, S. (2014). Rural Poverty Dynamics in Pakistan: Evidence from Three Waves of the Panel Survey” The Pakistan Development Review, 53:2(Summer 2014) pp.71–98
Ashfaq, M; Razzaq, A; Shamsheer-ul-Haq and Muhammad, G. (2015). “Economic analysis of dairy animal diseases in Punjab: a case study of Faisalabad district”. Journal of Animal Plant Sciences. 25(5), 1482-1495
Aslam, N., Rodrigues, I., McGill, D., Warriach, H., Cowling, A., Haque, A., 2015. “Transfer of aflatoxins from naturally contaminated feed to milk of Nili-Ravi buffaloes fed a mycotoxin binder”. Animal Production Science 56, 1637–1642.
Balagamwala, M. and Gazdar, H. (2013). “Agriculture and Nutrition in Pakistan: Pathways and Disconnects”. Institute of Development Studies (IDS), Bulletin Volume 44(3).
FAO (2010). Livestock sector policies and programmes in developing countries – a menu for practitioners, by U. Pica-Ciamarra, J. Otte and C. Martini. Rome, pp. 150
GOP (2019). Agricultural Statistic of Pakistan. Pakistan Bureau of Statistics, Government of Pakistan. Plot # 21, Mauve Area, G-9/1, Islamabad, Pakistan
GOP (2020). Pakistan Economic Survey 2019-2020. Finance Division, Islamabad, Pakistan
Iqbal, S. Z., Asi, M. R., Selamat, J., 2014. Aflatoxin M1 in milk from urban and rural farmhouses of Punjab, Pakistan. Food Additive Contaminants: Part B 7, 17–20.
Sattar, A. (2020). What is Holding Back Milk Production in Pakistan? PIDE Blog series 2020. Uploaded on June 18, 2020.
Tahira et al. (2015). Determination of aflatoxin M1 in raw and processed milk samples by Elisa technique. Paper presented in 3rd International Workshop on Dairy Science Park at the University of Agriculture Peshawar held on November 17, 2015.