Observer Report

The livestock sector contributed more to GDP value addition in FY16 than large-scale manufacturing, according to the State Bank of Pakistan’s annual State of the Economy report.
The contribution of livestock was 11.6pc against 10.9pc of large-scale manufacturing (LSM), the report reveals; but the sector itself grew only 3.6pc, below the 4pc level growth it had recorded in FY15.
Since the beginning of this century, the livestock sector has been growing steadily however more growth in the sector has come through value-addition in meat and milk processing and less through increase in animal headcount.
“Between FY01-10 we saw a growth (in the livestock sector) supported largely by milk processing; from then on both milk and meat processing have been fuelling growth,” says a senior official of the Ministry of National Food Security and Research.
Milk and meat production, processing and value-addition have achieved several development milestones over the years. The dairy manufacturing industry, which took root though packaged milk still accounts for 5pc of our total milk production.
The establishment of the Pakistan Halal Authority and a set of incentives including tax exemptions and the reduction in customs duty on the import of machinery for meat processing for setting up fresh abattoirs are expected to further boost livestock growth.
Immediately after the authority started issuing Halal certificates, four meat exporting companies got supply order conformations from Malaysia, a hitherto unexplored meat export market, industry sources say.
While milk and dairy product companies continue to thrive, mainly on local demand, meat processing firms are more dependent on exports. They are now able to explore new markets after having access to Halal certification facility at home. Previously, they had to get their export consignments certified as Halal from foreign sources.
Fauji Meat a subsidiary of Fauji Fertiliser that commenced operations this April — has come in as a big morale booster. With a daily production capacity of 100 tonnes of meat (85 tonnes beef and 15 tonnes mutton), the company has started exporting both frozen and chilled meat products primarily to Kuwait and a few other countries, officials say. Al-Shaheer Corporation, an old meat exporting company, has not only maintained its market share in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE but its Meat One and Khaas Meat are doing a roaring business in local markets as well.
In addition to selling its meat products through upscale superstores and its own outlets, the company also makes bulk sales to local institutions, including top hotels and restaurants.
Both Fauji Meat and Al-Shaheer Corporation have their own large animal breeding farms to ensure uninterrupted supply of healthy animals for regular slaughtering. The fact that after 2010, meat processing and exports have made real big progress is evident in several developments. First, it was towards the end of 2010 that the All Pakistan Meat Exporters and Processors regrouped as a formal trade association and now boasts 33 registered members engaged in meat exports to GCC nations, Afghanistan and some North African countries.
Second, meat exports have grown rapidly—from 72$m in FY09 to $269m in FY16. Besides, during the current decade local sales of processed meat have taken a quantum leap so that one can find neatly-arranged frozen and chilled primal cuts of red meat in most sizeable superstores in the big cities.
Officials say the growth potential of the livestock sector is far greater than so far realised, adding that once the animal head-count process has been completed a comprehensive livestock development policy can be formulated, and a more realistic projection on the growth of milk, dairy and meat processing would be possible.
Animal census has already begun in Punjab; other provinces are also preparing to undertake this exercise.
The last livestock census was held in 2006 and the inter-census growth rate from 1996-2006 has served in the last ten years for estimating growth in animal head-count. Going by that estimate, domestic animal population has, on balance, shown a rising trend.
That is also evident in the fact that large-scale animal farming that remained a business exclusive to the rural elite — has gradually started welcoming rural-urban joint ventures.
The corporate sector has also stepped up its presence in animal farming, taking advantage of the growing demand for meat and meat products. The rise in income levels and growing trend towards a higher intake of protein keeps fuelling demand for meat and dairy products across Pakistan.
While local demand for processed meat shows an improved growth rate, it is far lower than the growth in demand for processed milk and dairy products. More than a dozen big brands of packaged milk have become popular. Going forward, livestock sector growth prospects look bright. But some challenges need to be understood and taken care of immediately. One of them is the supply of skilled workforce, officials point out.
Keeping this in mind, the University of Veterinary and Animal Sciences, Lahore, has established a department of meat science and technology. The department owns a small meat processing plant and laboratory where students are being trained in hygienic slaughtering and meat processing.