The Pakistan dairy sector could generate nearly Rs500 billion in additional annual revenue if its vast informal market were brought into the formal economy, Pakistan Dairy Association Chairman Usman Zaheer Ahmed said on Friday. He argued that taxing even half of the informal dairy trade at a minimum rate of five per cent would alone yield around Rs250 billion a year.
The case for formalising the milk trade
Ahmed was speaking at the Pakistan Agricultural Coalition’s Agri Connections Conference and Expo at the Lahore Expo Centre, where officials and industry representatives spent the day discussing investment, financing, livestock, exports and agricultural technology.
Pakistan has one of the world’s largest dairy herds, yet most milk changes hands through informal channels that sit outside tax records and quality standards. The association’s argument is that documentation, cold-chain investment and regulated collection would raise both government revenue and milk safety.
Food security a national issue
Federal Minister for National Food Security Rana Tanveer Hussain told the closing ceremony that food security had become a question of national security. Agriculture contributes 26 per cent of GDP and supports more than 100 million livelihoods, he said, warning that floods, heat waves and falling per-capita water reserves were squeezing farmers from every side.
Banks told to fix three lending bottlenecks
On the second day of the conference, State Bank of Pakistan Deputy Governor Salimullah identified three constraints holding back agricultural lending. First, farmers face high risks with inadequate insurance cover, which makes banks cautious. Second, a shortage of accredited warehouses limits banks’ ability to keep control over stored commodities and produce. Third, access to finance itself, which is tied closely to the first two problems.
Salimullah said the central bank was working to build an ecosystem that would make larger banking-sector investment in agriculture commercially viable.
Gulf interest in meat processing
A session on livestock investment heard from Omar Sagga, chairman of Jeddah-based meat trading company Taraf, who said Gulf investors were showing growing interest in Pakistan’s meat processing industry. Pakistan has strong human capital and quality livestock, he said, but interest alone does not turn into investment. A suitable ecosystem is needed to give investors the confidence to commit capital.
The conference also ran a session on developing Pakistan’s shrimp export industry and a roundtable between investors and the Securities and Exchange Commission of Pakistan on agricultural investment opportunities.
Mechanisation push
Hello Tractor CEO Jehiel Oliver spoke about the future of mechanisation in agriculture, saying his Kenyan company was looking to expand in Pakistan through a model that connects farmers with machinery that has excess capacity. PAC CEO Kazim Saeed presented the conference’s resolutions and call to action at the conclusion of the event.
Frequently asked questions
How could the Pakistan dairy sector add Rs500 billion a year?
Pakistan Dairy Association Chairman Usman Zaheer Ahmed said formalising the informal dairy market would bring it into the tax net. Taxing half of informal trade at five per cent would yield Rs250 billion, with full formalisation potentially taking the figure near Rs500 billion.
What lending problems did the State Bank identify?
Deputy Governor Salimullah named three: high farmer risk with poor insurance coverage, a shortage of accredited warehouses, and constrained access to finance. The State Bank is working on an ecosystem to make agricultural lending commercially viable for banks.
What did the food security minister say at the expo?
Rana Tanveer Hussain said food security had become a matter of national security, noting agriculture’s 26 per cent share of GDP and warning about floods, heat waves and falling per-capita water availability.
