People & Society Tapestry

Cash cows

Updated Feb 01, 2017 08:51pm

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Milk is the largest commodity within the livestock sector
Milk is the largest commodity within the livestock sector

The year was 1974. Amanullah ran a tobacco-and-tea shop on the Grand Trunk Road near Shahdara, just outside Lahore. Around the bend of the dusty road where Mughal emperor Jehangir’s tomb lurked in the distance, he would pull up the shutters of his shop everyday at 7 am. As soon as the shop opened, his friend Tariq the milkman, would arrive with brass containers full of milk. He would leave two large cans of fresh milk at the shop and continue on his delivery route.

At the end of each day, Tariq would come back to pick up the cans and share a cup of tea with Amanullah, who couldn’t help but notice the amount of money the milkman had made during the day. One evening, he asked Tariq how his business was doing. “Milk is white gold. I am unable to keep up with demand,” came the response.

This was enough for Amanullah to shut down his shop and set up a small dairy farm on a piece of land he owned in a village called Jahman, about 30 kilometres to the east of Lahore. He spent all his savings on procuring buffaloes and buying utensils for collecting and distributing milk. Left with nothing to build a house, he turned an abandoned military bunker next to the Pakistan-India border into his residence.

Jahman also houses an ancient Sikh temple – Gurdwara Rori Sahib – which, like Saadat Hasan Manto’s Toba Tek Singh, found itself on the wrong side of a hastily drawn border. Desolate and decrepit, the gurdwara had witnessed the village grow into a major dairy hub in recent times.

As his children and buffaloes increased in number, Amanullah built a small mud house adjacent to the gurdwara. He was doing well for himself. He made enough money to send his younger children to school. When his daughter had to get married, he sold a couple of buffaloes to fund the wedding and arrange her dowry.

Four decades later, Amanullah lies buried in an unmarked grave just outside Jahman. He has left behind a big family, a number of buffaloes and an immensely changed dairy business.

Sanaullah the milk seller delivers milk on his motorcycle
Sanaullah the milk seller delivers milk on his motorcycle

Today, his son Sanaullah rides a motorcycle on a small road linking Jahman with nearby villages. Brass containers hang on both sides of the vehicle as he travels from one tea shop to the next to deliver milk. The demand is high and the business is brisk but Sanaullah never gets to make the kind of money that once lured his father into rearing buffaloes and selling milk.

The daily yield of his animals is 42 litres. His daily income is approximately 1,700 rupees but his daily expenses of keeping his herd fed are 2,000 rupees. He knows no economics but understands well that he cannot go on like this forever.

He has been trying to economise. Early every morning, his wife takes the animals to a nearby canal where buffaloes can bathe, drink water and munch on any vegetation that they may find on the way. This routine is repeated in the afternoon and yet it is not sufficient. The animals still require nutritious fodder to yield milk in good quantity.

Green fodder mixed either with wheat husk or stems of rice plants is the best Sanaullah can get for his animals in this corner of the earth. Getting the mix right, however, is neither easy nor cheap. While land under fodder cultivation is shrinking, wheat husk and rice stems are disappearing courtesy technological changes in the agriculture sector. Between 2007-2008 and 2013-2014, says the Pakistan Economic Survey, there has been 0.5 per cent average yearly decrease in the number of acres sown with crops which include fodder. The number of dairy animals in this period, however, has been increasing at an average yearly rate of 3.34 per cent.

With more animal mouths to feed but less land-growing fodder, an increase in per-acre yield could have helped. This has not happened. According to the Pakistan Economic Survey, average fodder yield in Pakistan has remained stagnant at 24 tonnes per hectare for quite some time (average yield in Australia is 70 tonnes per hectare). Static or even depressed supply means that price for green fodder must rise, especially when demand is going up rather than coming down.

Fodder farmers have their own economics to worry about. Cost of production has gone up manifold in recent years due to increase in the price of inputs, such as irrigation water drawn with electric or diesel tubewells, fertilisers and pesticides. Some of them have already quit sowing fodder crops, as the statistics above testify. Others want to sell their produce at asking price even when dairy farmers like Sanaullah don’t like, or cannot afford, to pay that.

There is no reason that small dairy farmers should get out of business to make way for the large ones. Better genetics will lead to higher yield, allowing even dairy farmers with a few animals to make more profit.

To make matters worse, combine harvesters are fast replacing traditional reaping of wheat and rice, leaving behind almost no husk and stems which can be used as dry fodder. As the use of harvesters increases, availability of these two commodities decreases and their price increases.

Changes in the milk market, similarly, do not care much about small-scale dairy farmers such as Sanaullah. Industrial-size dairy farms – mostly rearing foreign-bred, high-yield cows – have sprung up across Punjab. Milk collection and processing have been industrialised and demand for packaged milk has registered a phenomenal increase in urban centres which were once the most lucrative markets for milkmen such as Amanullah.

A 2011 report by Tetra Pak Pakistan, the local subsidiary of the world’s leading food processing and packaging solutions company, shows the market for processed milk in Pakistan has expanded by 19 per cent during 1999 and 2010. The report cites a growing middle class, a larger number of young consumers and increased health awareness being among the most important reasons for that expansion.

At a big dairy farm near Raiwind, about 40 kilometres to the southeast of Lahore, a young man in jeans and polo shirt manages a herd of more than 3,000 cattle — imported animals known for their high milk yield. Inside the purpose-built sheds, cows actively feed on a diet of green and brown fodder mixed with minerals and other nutrients. The walls and ceilings of barns are insulated. The temperature inside never rises above 26 degrees Celsius. Cows imported from countries with colder climate than that of Pakistan cannot survive in higher temperatures.

Sheds have built-in ventilation; the animal odour is bearable and fresh air finds easy access to get in. Sunlight pours down on white cows with big black patches on their hide. Even during the night, the sheds need little artificial lighting, if any at all. No cow dung litters the place. The cows are perched on raised but sloping platforms. As a farm worker sprays water on the platforms, the dung flows into small channels that take it outside the sheds.

Many such farms have recently sprung up in villages dotting the vast fertile plains of central Punjab, most of them within 100 kilometres from Lahore, the biggest milk market in the area. Their exact number is hard to place, but the biggest of markets is set up in Hafizabad district near Kot Sarwar Interchange on The Lahore-Islamabad Motorway. Owned by Nishat Dairies, a subsidiary of Nishat Group of Companies, it is spread over 147 acres of land and houses 6,000 cattle imported from the Netherlands.

These are Holstein Friesian cows. Each one of them can produce more than 30,000 litres of milk in its lifetime — a yield unmatched by any other breed. In comparison, a local Sahiwal cow may yield as little as two litres of milk a day.

A dairy farm near Raiwind
A dairy farm near Raiwind

Food companies have also invested heavily in milk collection technologies. Nestlé Pakistan, the local branch of a multinational giant, has installed 3,200 industrial-size milk refrigerators – called chillers – at collection points across Punjab. Thousands of dairy farmers bring milk in small quantities to these collection points where it is tested, measured, chilled to a temperature where it can last longer than it otherwise would and then sent off in large containers to a factory for processing and packaging.

These sleek operations make the old-style dairy farmer-cum-milk seller look extremely unhygienic — and economically unfeasible. The companies are also never reluctant to show off their financial muscle to cow down competitors and browbeat dairy farmers.

For one, they have turned the whole of Pakistan into a single market as far as milk collection and consumption are concerned. A litre of milk produced by a buffalo in Rahim Yar Khan travels many hundred kilometres to Kabirwala for processing and packing and then many more hundred kilometres before it is consumed in Karachi or Quetta. Milk collected from Chakwal will similarly travel to a factory in Sheikhupura before making its way to a dinner table in Peshawar or Islamabad.

The two biggest companies in the field have divided the milk collection market in half — Punjab, Khyber Pakhtunkhwa, Azad Kashmir and Gilgit-Baltistan are Nestlé Pakistan’s preserve while Sindh and Balochistan are the exclusive domains of Engro Foods.

This duopoly contrasts sharply with market practices elsewhere in the world. In most countries, producers and consumers of milk prefer localisation over standardisation. In the Gulf Arab states, for instance, brands such as Almarai, Al Rawabi and Al Ain cater to markets within 100 kilometres from where their cattle are, says Shehryar Hamid, a dairy expert. The brand of milk changes after every 50 kilometres in Australia, he says. Instead of setting up a 20 million US dollar logistics chain, as companies in Pakistan have done, milk producers in Australia focus on collection and supplies in a small area, he adds.

The way most dairy farmers feed and treat their animals, it is highly likely that most milk consignments have higher than accepted toxin levels.

A localised system may also help small dairy farmers get the right price for their produce. With costly supply chains to maintain, the companies keep collection price low. But a local company catering to a local market can give the farmers a better price by saving money required for running an elaborate supply chain. This will make the operations of a small-scale dairy farmer profitable, keeping him interested in his business, says Hamid.

Most small-scale producers who supply milk to big companies will, indeed, opt out if they have an option. The biggest factor, as Hamid points out, is the low price they are getting for their produce. Using a complex formula, the companies base their collection price on the fat content of milk. (Being illiterate, or half-literate at best, most dairy farmers don’t understand that formula in any case.) In its simplified version, the formula is all about the milk’s fat contents: the higher the fat content, the higher the collection price and vice versa. The best price a dairy farmer can expect to get is 40 rupees a litre, which is well below his average production cost which stands somewhere between 55 rupees and 65 rupees, depending on fodder prices.

The livestock sector contributes 11.3 per cent to Pakistan’s Gross Domestic Product (GDP), provides employment to 10 million farming families and is currently valued at 26 billion US dollars, read statistics put together by the Pakistan Dairy Development Company, a non-profit organisation set up by the government. Within the livestock sector, milk is the largest and single most important commodity, write economists Abid A Burki, Mushtaq A Khan, and Faisal Bari in a 2004 paper, The State of Pakistan’s Dairy Sector. Every year, Pakistan produces 47.9 billion litres of milk which, in terms of market value, contributes more to the GDP than any major crop, they point out. Yet, the dairy sector is not performing even close to its potential in terms of income generation.

The most important reason, the economists argue, is that there is no competition in the milk market. The two big operators have divided collection and consumption markets, driving smaller players out of their respective domains. This has helped them control milk prices — both at the collection and sales levels.

A milk carrier outside Lahore
A milk carrier outside Lahore

And they will go to any extent to keep things that way. Sometimes they completely stop milk collection from local dairy farmers (this, indeed, has happened many times over the last decade or so). Instead, exploiting a flawed tax regime – the import of dairy products attracts no tax in Pakistan – they import powdered and liquid milk. Whenever prices for powdered milk drop in the international market, Pakistani milk-processing companies import it in huge quantities, spending less than what they would if they had collected milk from the local market.

In an effective administrative set-up, these imports must attract anti-dumping duties. If and when, however, the government tries to impose those duties, the importers of powdered milk start complaining that the imposition of tax will result in milk shortages — a prospect no administration wants to face due to the unrest it may cause among politically vocal urban consumers.

The outcome is a surprise if not a downright irony. A country ranked as the third-largest milk producer in the world imports thousands of tonnes of powdered milk every year from countries with much smaller milk markets such as Turkey, New Zealand and even Singapore. This, in turn, brings the government under pressure from another segment of the society. The National Assembly’s standing committee on national food security and research – which mostly represents the interests of farmers – has demanded that the government impose 100 per cent duty on the import of milk products. At a meeting held in February 2015, Rao Muhammad Ajmal Khan, a member of the committee representing a rural constituency in Okara, said that Nestlé Pakistan alone imported dry milk worth 10 billion rupees in 2014. This, he said, “[has] damaged the interest of local farmers”.

Milk companies say they have genuine reasons for importing powdered milk. Collection from local farmers never meets their demand; it does not fulfil their quality criteria and it falls well below international safety standards, they say. The most important standard that the local dairy farmers fail to fulfil is the acceptable level of toxins in milk. The World Health Organization’s Codex Alimentarius stipulates that this level should never exceed 0.49 parts per billion (ppb).

The livestock head out for grazing at a dairy farm near Pattoki
The livestock head out for grazing at a dairy farm near Pattoki

Zeeshan Suhail, public affairs manager at Nestlé Pakistan, explains. “Toxins arise in milk from feed which is of inferior quality.” When farmers use such feed, he says, they are asked to “improve their quality of milk”. He chooses to stay silent when asked what his company does to milk found with higher-than-permissible level of toxins.

Muhammad Ibrahim, a dairy farmer in Pattoki, about 80 kilometres to the southwest of Lahore, tests his milk produce in front of me (testing kits made in China are available in the market at 1,600 rupees per piece, but most farmers don’t know how to operate them) and shows me the high level of toxins in it. Yet, he claims, Nestlé never rejects his milk supply even when it has been highly toxic. Fiaz Ahmed, another dairy farmer operating near Raiwind Road just outside Lahore, tells me how once toxin levels in his milk consignment reached 1.05 ppb yet the milk company bought the consignment since “there was shortage of supply”. A third farmer, living near Balloki headworks on the Ravi River, about 60 kilometres downstream from Lahore, similarly claims having sold milk to Nestlé Pakistan in spite of high level of toxins in it.

Farmers say they cannot control toxin levels because they feed their animals whatever they can afford — which is generally green and dry fodder, supplemented with khal, the residual cake produced during oil extraction from cotton seed. The cake rots quickly and acquires fungus rapidly. Farmers working with very low production budgets cannot afford to throw away the rotten khal and keep feeding it to their animals. (Large-scale dairy farms do not use khal. They, instead, use soybean and other nutrients which do not produce toxins.)

Farmers say they cannot control toxin levels because they feed their animals whatever they can afford — which is generally green and dry fodder

Milk companies claim they offer farmers all possible help to improve animal feed. Nestlé Pakistan officials say they regularly send out field staff to give farmers detailed presentations on the need for using non-toxic feed and have helped local entrepreneurs set up 29 feed-manufacturing plants meant for supplying quality feed at affordable prices. Most dairy farmers that the Herald interviewed deny having received presentations on feed. They also do not know about the location of feed manufacturers in their area, or their sale points.

On the other hand, they claim the company uses high-toxin contents as an excuse to purchase milk at a reduced rate. “For every litre of high-toxin milk, I get three rupees less than I otherwise would,” says Ibrahim. The deduction goes into paying for taking the toxins out, he quotes the company officials as telling him. Nestlé Pakistan rejects his claim. It says it never imposes price penalties on farmers. Yet, the company says it purchases milk with higher than acceptable toxin content.

All across farmlands in Punjab, dairy farmers are known to inject their buffaloes with oxytocin
All across farmlands in Punjab, dairy farmers are known to inject their buffaloes with oxytocin

No amount of heating, pasteurisation and homogenisation (different procedures done on milk before it is packed) can rid milk of the toxins which once get into it. The companies acknowledge this, but claim the quantity of milk with high level of toxins is always much smaller in relation to the overall amount of milk they collect. Once low-toxin and high-toxin milk are mixed, ppm count goes down substantially, making milk safe for consumption, they argue.

No independent study has been done so far to confirm or deny this assertion, raising another difficult question: What if the actual situation is the other way round and high-toxin milk is more than the low-toxin one in a company’s total purchase? The way most dairy farmers feed and treat their animals, it is highly likely that most milk consignments have higher than accepted toxin levels.

At a government veterinary hospital in Sheikhupura, Shahbaz Khan explains the science of milking. A buffalo needs its calf to stimulate its udders physically before hormones kick in and the animal starts giving milk. Cows, however, do not need this stimulant. “From a financial viewpoint, the amount of milk consumed by the calf affects the ultimate yield,” says the veterinarian. Since the farmer cannot control the amount of milk a calf will consume, he utilises other means to stimulate the buffalo.

All across farmlands in Punjab, dairy farmers are known to inject their buffaloes with oxytocin hormone for the purpose. This works like dope: the animal gets into a high and has no idea what is happening to it, allowing the farmer to take out more milk than usual — at least initially. Oxytocin is cheap and readily available. Medical and grocery stores across Punjab advertise it as a “magic injection” which can boost milk production to very high levels.

Buffaloes in a dairy farm
Buffaloes in a dairy farm

Khan says the injection is not dangerous or injurious for the animal or its produce if it is used only once a month — as a cure for a disease. But some farmers use it every time they have to milk a buffalo. The overdosage, says the veterinarian, increases the number of carcinogens inside the animal, making its milk highly toxic.

I meet Babar Ali, a small-scale dairy farmer in Lahore. He runs a successful home delivery service near the Allama Iqbal International Airport, selling milk to a select group of customers at 70 rupees to 75 rupees per litre. I ask him whether he uses injections to boost milk production. He quickly says no and cites this as the main reason why he can sell his produce at a high price. Consumers are willing to pay extra if you can assure them that you don’t use these injections, he adds.

No amount of heating, pasteurisation and homogenisation (different procedures done on milk before it is packed) can rid milk of the toxins which once get into it

Many dairy farmers in Karachi, Faisalabad and other parts of the country frequently use these dangerous jabs, he claims. Not that they are crooks. They just do not know about the injection’s harmful impact on their animals as well as on the quality of milk they produce.

The end result is that our food chain is completely messed up. For one, milk produced by animals receiving the injection can cause problems in both female and male reproductive systems, sometimes resulting in infertility, says Dr Mariam Richards, a gynaecologist based in Lahore.

On a Sunday morning in Lahore, I drive to a posh café and wait for its owner, Shehryar Hamid. A seasoned finance professional, he has advised many companies working in the dairy sector in the Gulf states. After extensive research on Pakistan’s dairy market, he launched a modern dairy farm of his own, Infinita Dairies, in Sargodha a few years ago.

Over coffee, he blames the dodhi – the traditional middleman between dairy farmers and milk consumers – for most problems in milk collection and distribution. “Consider a dodhi in a village where dairy farmers have about 1,000 animals. His minions are running around collecting milk in blue jerrycans usually meant for containing oils and chemicals. He dictates prices which are usually below market rates and also traps farmers in debt by selling them feed on deferred payments.

The other problem with dodhi-collected milk is its exposure to bacteria. Farmers usually milk their animals with unwashed hands, they collect milk in utensils which are not quite clean and they use ice, usually made from unclean water, to keep milk cold during transportation. All this helps bacteria to enter milk and flourish. “Multiplication of bacteria in milk happens at a very fast rate anyway,” says Akbar Mumtaz, a veterinarian working in Islamabad. If bacteria gets into milk at any stage, it is difficult to get rid of it without using technology-intensive heating and packaging systems not available to dodhis.

Milk being transported
Milk being transported

Believing that heat will take care of all the germs, people just boil their dodhi-provided milk and consume it. Slow boiling, in fact, is the most commonly used traditional way of judging the purity of milk. If it produces a thick layer of balai, or concentrated fat, it is good for consumption — the thicker the layer of balai, the purer the milk is believed to be.

By this traditional yardstick, packaged milk will always be perceived as less pure than the one supplied by a dodhi since the former never yields balai, no matter how long or how slow you boil it. Yet advertisers employ nothing but tradition when it comes to popularising packaged milk brands — remember the televised images of pristine rural life, children in white running through lush green fields. This is smart marketing; it hides all the ugly aspects of milk processing and packaging behind beautiful scenery.

“Green fields are used to evoke the traditional rural imagery associated with agriculture and farming. This is done to establish that the source of the advertised product is local,” says Jamil Akhtar, an advertising expert based in Islamabad. These ads also give the impression that milk is reaching a consumer directly from a farm, without any chemical or mechanical intervention in between. “The simple charm of rural life is also used to establish the perceived purity of the product,” he says. Some campaigns bring science and medicine to the mix, too, promising germ-free and nutrient-fortified products. “What they are trying to establish is that their product has all that is expected from nature but with added health benefits,” says Akhtar.

If traditional ways of procuring milk are unclean and the modern industrial systems are suspect, if not deceptive, then where should one go to have a glass of good milk? In Hamid’s opinion, most consumers are either too tradition-bound or too brand-conscious to ensure that milk in their diet is pure. In either case, they don’t want to pay the right amount of money for the right amount of quality. “A lot of people in Lahore ask me to sell my dairy’s milk to them. I tell them that it will cost them 100 rupees per litre, but they are not willing to pay the premium for quality,” he says. “These same people will later pick up packaged milk selling for 110 rupees to 120 rupees a litre,” he adds.

For many insiders, supply and demand cause most of the problems that afflict milk production and consumption in Pakistan. Small-scale dairy farmers add unclean water to their produce to increase quantity, feed toxic khal to their animals or use deadly hormones to increase their supplies. Dodhis are careless about hygiene because they want to secure maximum supply in minimum time and at a price which earns them sizeable profit. Food companies accept toxic milk and sometimes sell imported powdered milk as a fresh product in order to maximise the quantity of the products they can sell.

Fix the supply side and many problems will go away. Rear high-yield animals, set up large-scale dairy farms catering to consumers living close to them and mechanise the supply chains — these are the solutions experts come up with.

Milk companies say they have genuine reasons for importing powdered milk. Collection from local farmers never meets their demand; it does not fulfil their quality criteria and it falls well below international safety standards, they say.

“In order to cater to the rising demand for milk, we need to improve the genetics of our animals,” says veterinarian Mumtaz. The average daily milk yield of a Pakistani cow is three litres; that of a local buffalo is 5.5 litres to 6 litres, according to a survey conducted by the University of Agriculture, Faislabad. Australian cattle, in contrast, produce 15 litres to 16 litres of milk each day. “Al Ain Dairies in the United Arab Emirates culls animals which give less than 38 litres of milk a day,” he adds.

Some experiments to improve the cattle stock in Pakistan have already taken place. In the 1960s, an Australian firm came to Pakistan and selected the Sahiwal cow for cross-breeding with Australian cattle. It was a great success; the resulting breed did very well in dry conditions – such as in Africa – where fodder was much less abundant and temperatures much higher than in Australia. I ask Hamid if imported cattle are a solution. He says imports make sense to “jump-start improvements” in the genetic pool of local animals but they do not make financial sense beyond that.

“An imported animal costs 3,000 US dollars,” he says. In comparison, a local cow can be bought with as little as 50,000 rupees. “Clearly, we don’t have money to import all the animals we require to meet local demand.” (The total number of cows and buffaloes in Pakistan was close to 73 million in 2013-2014, according to the Pakistan Economic Survey. To replace all of them with foreign imports will require a mind-boggling 219 billion US dollars.)

A man enjoys some roadside tea
A man enjoys some roadside tea

Secondly, he says, there is no reason that small dairy farmers should get out of business to make way for the large ones. “Better genetics will lead to higher yield, allowing even dairy farmers with a few animals to make more profit.”

No matter how eye-popping the changes in genetics sound, they neither happen quickly nor do they come cheap. Due to the long periods of time they require and the huge amount of money and technology they need, no individual farmer – whether big or small – can afford to experiment with them. Even big businesses are not willing to invest. “Private investors don’t see immediate returns in improving the gene pool of local animals which, admittedly, is a long-term process,” says Mumtaz.

They, instead, import animals in large numbers. In 2008, for instance, former federal minister Jehangir Tareen imported cross-bred cattle from Australia in thousands for his dairy farm in Rahim Yar Khan.

Mumtaz says the government must take the lead in the process of improving livestock genes. “It is the government’s responsibility to invest in the quality of local animals.”

The year is 2015. As the sun sets on the horizon, Sanaullah gathers his animals and heads home. He is now older than his father was when he started his small dairy farm back in the 1970s. As I walk with him behind his herd, he points to the gurdwara and asks me a strange question. “Are we all stuck in enemy territory like this temple here?” I look at him quizzically. “Every day I sell milk for a price which makes me poorer. Maybe selling the tobacco-and-tea shop wasn’t a very good idea,” he continues.

As I leave him with his animals and children, he shoots another question in my direction. “How can I have a cleaner dairy farm with healthier and higher yield?” In the world blessed with huge dairy farms, foreign cows and packaged milk, I have no answer to give to him.


Nestle Pakistan responded to the points raised in this story after publication. Excerpts follow:

1. Nestlé’s milk collection areas are based largely in Punjab and some in Sindh. We don’t collect milk from the other areas mentioned. We face un-distorted competition in the procurement of fresh milk from EngroFoods as well as many other packaged milk producers. Loose milk has an estimated market share of 95 per cent in Pakistan, with the remaining five per cent made up of the volumes of packaged milk. Moreover, Nestlé does not engage in dividing markets, neither where we procure our raw materials nor where we sell our products. It is argued that because “there is no competition in the milk market” the two big operators are driving smaller players out of the market and are thus able to control milk prices both in collection and retail stores when in fact the opposite is true. There has been an increase of small players in the packaged milk category which we consider a positive development as it shows increased acceptance for packaged milk in Pakistan. On both the buying and the selling side Nestlé neither does nor would be in a position to control prices.

2. Our main focus is to provide consumers with not only the best tasting but also the safest milk which meets – with no exception or compromise – all regulatory standards. All collected milk undergoes 27 quality and safety tests to ensure that every single pack meets the strict standards imposed by both the regulatory body and the even more stringent requirements of Nestlé worldwide.

3. The piece claims that the two operators (Nestlé, Engro) exploit a “flawed” tax regime by importing powdered and liquid milk into Pakistan. Flawed because “the import of dairy products attracts no tax in Pakistan”. Fact is that the import on dairy products into Pakistan carries an import duty of 25 per cent and is almost always more expensive than local fresh milk. Nestlé does not import liquid milk into Pakistan but procures high quality milk powder products from abroad. However, this is not for reasons of price or cost or to put local farmers under pressure, but because we require dairy material with certain specifications that are simply not available in Pakistan.


This article was originally published in Herald's May 2015 issue. To read more, subscribe to Herald in print.

All photographs are by the author.