Milk, milk, everywhere, and unlike the Ancient Mariner’s water, there are plenty of drops to drink. In fact, Pakistan could almost be said to be awash with milk.

Pakistan is rated to be among the top producing milk countries in the world (rankings vary from the top five to eleven), accounting for, according to the Pakistan Dairy Development Company (PDDC), an estimated 38 billion litres annually. Of this total output, however, only 1.3 billion is processed and sold in packaged form, be it liquid or powder. The rest is either consumed in situ on the farms, sold as khula (open) milk by the neighbourhood milkman or largely wasted. Viewed from this perspective, the market is hugely underexploited.

It is also unstructured and undocumented. Not surprisingly, the PDDC figure of 38 billion litres is unverifiable.

Pakistan is said to produce an estimated 38 billion litres annually. Of this total output, only 1.3 billion is processed and sold in packaged form, be it liquid or powder.

This is typical of how much of Pakistan operates. Other countries with a significant dairy industry have regulatory bodies in place to protect the interests of their consumers. Such bodies are charged with enforcing regulations and codes of practices covering animal care, milk processing and transportation, among a slew of other milk safety measures. Added to this, those government departments that are tasked with livestock and related responsibilities by routinely documenting their sphere through data collection, monitoring implementation and regulatory compliance and working with both the private and public sectors to develop their industry further through better capacity building at all levels. In Pakistan none of this applies. The Ministry of Livestock is inert and has little motivation to take a more proactive role. Apart from the PDDC, there is the Pakistan Dairy Association. However, both bodies, like the Ministry of Livestock are somnolent at best.

Under such circumstances, one can only wonder at how Pakistan has managed to find itself counted among the top ranked milk producing countries in the world. It does, however, explain why the industry remains so underexploited and with such large coefficients of substandard quality and sheer wastage. The good news is that the private sector, in the guise of MilkPak which was established in 1979 (a Nestlé company since 1988), spotted the business opportunity and to a large extent pioneered what one may legitimately term to have become Pakistan’s mainstream dairy industry.

Due to the absence of credible documentation, it is hard to determine the value of the industry in either dollar or rupee terms, however what is certain is that dairy is the big business opportunity of the moment in Pakistan. Industry players, such as Nestlé and Engro, having focused on the upper urban consumer segments, are pushing down into the pyramid by offering packaged milk at lower prices, thereby encouraging the switch from khula to packaged. They are able to do so not only because the demand for their products has the potential of achieving a significant tipping point, but because they have, despite the overall lack of structure within the industry, been able to streamline their collection services by dealing directly with farmers across Pakistan. This has involved opening milk reception centres, investing in milk cooling tanks and supply chain infrastructure as well as setting up processing plants. For this and more, Pakistan’s dairy companies need to be commended. However, the lack of any sort of serious regulation by the government or an independent body leaves it entirely up to the dairy companies to ensure that consumers are sold milk that is safe. This is not an ideal situation, simply because health and safety regulations are always best undertaken by independent watchdogs.

Another issue to ponder is why Pakistan’s formal dairy sector is almost purely UHT driven? Countries with significant dairy industries have all adopted the pasteurised method. People usually buy UHT milk for longer life storage purposes. An explanation offered is the lack of cold chain infrastructure that pasteurisation requires. That may be true, but is not entirely satisfactory. Investment in cold chain may be considerable, but so was the investment required to set up UHT processing facilities. Perhaps now that the UHT infrastructure is in place, the milk companies are reluctant to bifurcate their investment. Yet the point is that pasteurised milk is a better option, certainly in terms of taste, if nothing else. Like so much else, Pakistani consumers will just have to put up with what they get.