Interview of Memosh Khwaja Vice Chairman Pakistan Dairy Association and CEO Haleeb Foods. Crisis of Dairy Industry and High Taxes
The structural and operational dynamics of Pakistan’s dairy and livestock sectors are heavily shaped by fiscal policies, regulatory frameworks, and international investment initiatives. A major milestone for the formal sector came with the announcement of a multi-million dollar investment roadmap exceeding US$200 million by the global agribusiness giant Cargill, which committed to modernizing the country’s agricultural supply chains, edible oils, dairy, meat, and animal feed businesses over a three-to-five-year period. These views were expressed by Memosh Khwaja while discussing crisis of dairy industry and high taxes.
This injection of foreign direct investment aligns with broader recommendations from platforms like the International Buffalo Congress (IBC 2019), which called for transforming subsistence farming into highly organized, commercialized, and technology-driven models by integrating advanced genetics, precision breeding, and harmonized international data standards.
To safeguard these advancements and expand international meat trade avenues, legislative breakthroughs like the Punjab Animal Health Act 2019 have been enacted to legally establish certified disease-free zones and streamline the control of economically damaging conditions like Foot-and-Mouth Disease (FMD). Furthermore, inter-provincial collaboration and academic oversight from institutions like the University of Veterinary and Animal Sciences (UVAS) play a vital role in maintaining high educational and diagnostic standards necessary to uplift rural livestock healthcare and welfare.
Despite these progressive steps, the sector faces severe internal conflicts, regulatory bottlenecks, and governance challenges. On the industrial front, the corporate dairy sector has faced significant growth restrictions due to the unchecked dumping of substandard, imported skimmed milk powder, which has discouraged new capital investments and left local producers vulnerable.
This issue is further aggravated by aggressive fiscal measures, such as the introduction of a 10% sales tax on fat-filled milk products and the withdrawal of zero-rated tax statuses; these policies disproportionately burden the formal, packaged milk sector—which accounts for only 5% of the market—and inadvertently push lower-income consumers back toward unregulated, un hygienic loose milk.
This regulatory pressure has drawn sharp criticism from groups like the Dairy & Cattle Farmers Association, who argue that generalized political claims labeling loose milk as synthetic chemical mixtures run contrary to ground realities, harm consumer choice, and threaten the livelihoods of rural farmers. Compounding these systemic market tensions are deep-seated governance and financial issues, highlighted by high-profile accountability investigations into the alleged embezzlement of billions of rupees within breed improvement programs and livestock development boards.
Additionally, illicit activities such as the systematic smuggling of thousands of animals to Gulf countries in direct violation of state export bans underscore the critical need for stricter institutional oversight and rigorous enforcement by bodies like the Federal Investigation Agency (FIA).
مسائل اور تذبذب کا شکار ڈیری سیکٹر ۔۔ پروفیسر ڈاکٹر طلعت نصیر پاشا
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