Pakistan Agriculture Industry: Livestock Sector- New Opportunities University of Veterinary and Animal Sciences, Lahore 16 th July 2012

 Vital sector of Pakistan's economy  Accounts for 21 percent of GDP  Directly supports three-quarters of the country's population, employs half the labor force, and contributes a large share of foreign exchange earnings  Main agricultural products are cotton, wheat, rice, sugarcane, fruit and vegetables, in addition to milk, beef, mutton, and poultry.  Pakistan depends on one of the world's largest irrigation systems to support production.  Vital sector of Pakistan's economy  Accounts for 21 percent of GDP  Directly supports three-quarters of the country's population, employs half the labor force, and contributes a large share of foreign exchange earnings  Main agricultural products are cotton, wheat, rice, sugarcane, fruit and vegetables, in addition to milk, beef, mutton, and poultry.  Pakistan depends on one of the world's largest irrigation systems to support production. Agriculture Sector in Pakistan – An Overview

Pakistan’s Major Crops Production value in 2007 Major Crops RiceWheatCitrus LiveStock Sugarcane MangoMaizeCotton US$ 2.94 bln US$ 3.01 bln Milk and milk products US$ 324 mln US$ 1.02 bln US$ 1.70 bln US$ 302 mln US$ 418 mln US$ 3.36 bln Source:

Agriculture Sector in Pakistan - Endowments 3 rd Largest Producer of Dates Herd of Livestock 5 th Largest Producer of Mango 5 th Largest Producer of Cotton 5 th Largest Producer of Milk The Largest Producer of Kinnow Pakistan’s Agriculture is

Agricultural Sector – Key Statistics Contribution to GDP21.8% (more than US$37 billion to the national economy) Labor Force Employment 45.0% Average Growth past 6 years 3.7% Contribution of different Sub-Sectors in Agriculture 1.Crops (Wheat, Rice, Cotton, Sugarcane)32.8% 2.Livestock 53.2% 3.Fisheries 4.0% 4.Forestry 2.0% Share in Export Earnings (Raw/Processed) 1.Cotton + Cotton Based Products 64.7% 2.Fruits, Rice, Fish, Leather18.2% 3.Others17.1% Contribution to GDP21.8% (more than US$37 billion to the national economy) Labor Force Employment 45.0% Average Growth past 6 years 3.7% Contribution of different Sub-Sectors in Agriculture 1.Crops (Wheat, Rice, Cotton, Sugarcane)32.8% 2.Livestock 53.2% 3.Fisheries 4.0% 4.Forestry 2.0% Share in Export Earnings (Raw/Processed) 1.Cotton + Cotton Based Products 64.7% 2.Fruits, Rice, Fish, Leather18.2% 3.Others17.1%

Livestock Sector - Endowments Livestock contributes 55.1% of Agriculture sector. Livestock accounts for 11.5% of GDP. 2 nd Largest 3 rd Largest Herd of Livestock Sector of economy 4 th Largest Exports Products 5 th Largest Producer of Milk 1 st Largest Segment of rural economy Pakistan’s Livestock

Livestock Sector – Key Statistics Contributed approximately 55.2% of agriculture value added and 11.4% to national GDP in 2010‐11. Gross value addition of livestock at current factor cost has increased from Rs billion (2008‐09) to Rs billion (2009‐10) showing an increase of 17.8 %. Pakistan earned USD717 million from leather exports in FY09 and a meager USD96 million from meat exports. The food industry attracted Foreign Direct Investment of US$ million in Contributed approximately 55.2% of agriculture value added and 11.4% to national GDP in 2010‐11. Gross value addition of livestock at current factor cost has increased from Rs billion (2008‐09) to Rs billion (2009‐10) showing an increase of 17.8 %. Pakistan earned USD717 million from leather exports in FY09 and a meager USD96 million from meat exports. The food industry attracted Foreign Direct Investment of US$ million in

Livestock Sector – Key Statistics This sector generates employment (direct/indirect) and income for about 1.5 million people. Population growth, increase in per capita income and export revenue is fuelling the demand for livestock and livestock products. Poultry sector is one of the organized and vibrant segments of agriculture industry of Pakistan. Poultry meat contributes 23.8 percent of the total meat production in the country. This sector generates employment (direct/indirect) and income for about 1.5 million people. Population growth, increase in per capita income and export revenue is fuelling the demand for livestock and livestock products. Poultry sector is one of the organized and vibrant segments of agriculture industry of Pakistan. Poultry meat contributes 23.8 percent of the total meat production in the country.

Livestock’s Contribution

POPULATION TRENDS Human Population Livestock Population Cattle & Buffalo Sheep & Goat (million) Product Pakistan Punjab% Milk MT26 MT62 % Beef1.549 MT0.589 MT43 % Mutton0.578 MT0.283 MT49 % Poultry Meat MT70 % Product Meat Pro1.485 MT2.061 MT4.107 MT Meat Con1.313 MT1.682 MT3.247 MT Milk Pro MT MT43.307MT Milk Con MT MT MT

Dairy Sub-sector Total milk production (09-10) m tons Milk market: Producers (self or direct selling) 68.0 % Informal market (Gawala operated) 28.5 % Formal dairy industry 3.5 % Dairy industry: Main products are UHT and Pasteurized milk, Milk powder, Yougurt, Cream, Cheese, etc. 3.0 million litres per day being procurement Rs 63 million daily going to rural economy 25 out of 49 dairy plants are operational Main players are Nestle, Engro, Haleeb, Engro, Millac

Milk Production (Buffalo + Cow)

Meat Sub-sector Total meat production (09-10) ml. tons Beef Production ml. tons Mutton Production ml. tons Poultry Meat ml. tons Meat market Butchers operated shops, many slaughter at shops Main players at slaughter house are artees Fresh meat sold, only a few chilled meat selling establishments Meat industry 80 % slaughtering done outside out side slaughterhouses 11 private sector slaughter houses registered by Animal Quarantine Deptt. Total export is <0.6 percent of the production

Meat Production Economic Survey of Pakistan – Tons YearBeefMuttonPoultryTotal

Pakistan –Export of Meat & Meat Quantity(MT) In million US Dollar Quantity(MT) 20, ,

EXPORT OF LIVE ANIMALS

Per Capita Meat Consumption (KG) Countries Developed world Developing world Pakistan Source: Delgado, et al 1999, Livestock to 2020 The Next Food Revolution & GOP 2003, TCP-Pak-0168: Livestock Action Plan Draft Report MINFAL

Punjab Mission of L&DD ‘Support livestock development in a policy & regulatory environment that enables farmers to realize the dividends of livestock farming by smartly deploying public investments in core public goods & inducing private capital / initiative in the sector for poverty alleviation, food security & generation of exportable surpluses’ Punjab Vision 2020 “ To create enabling environment for raising livestock production and use it as a vehicle for social security, poverty alleviation and rural development ultimately leading towards domestic food security and creation of exportable surpluses”.

Focus  Pro-poor growth ~ poverty alleviation  Services to smallholders  Providing key services  Creating enabling environment for private sector  Redirecting public investments  Creating food security & exportable surpluses

Livestock Population Buffaloes = 30.8 million ( 18 million in Punjab) Cattle = 34.3 million (14.41 million in Punjab) Goats = 59.9 million (37.1 million in Punjab) Sheep= 27.8 million ( 24.3 million in Punjab)

Rural Livestock Livestock Production 2 nd biggest economic activity 67% rural population ~ million engaged in livestock 88 % livestock raised by small and landless farmers 30 – 35 million rural population engaged in livestock 40% dependent on livestock for income

More focus on Buffaloe m Buffalos (75% of them habitat in Asia) Pakistan has 14% of the world’s Buffalo Population. Black Gold(Nili Ravi).

Livestock Products Milk Production =39 million tonnes annually. Beef Production =16 million tonnes / anum Mutton Production =6 million tonnes / anum Poultry Meat=7 million tonnes/ anum Exportable Commodities: Meat = 60.2 million US $( year ) Animal Export = 13.9 million US $ ( ) ( Total export is about 40 billion rupees 11% of the total foreign exchange)

Potential Livestock has significant potential for poverty reduction, growth and export Increase in Livestock Product use in domestic and international market Population growth increases food safety and security threshold Livestock for Livelihood Livestock Strategy Document Strategic Review

OPPORTUNITIES Productivity Enhancement Value Addition Milk Processing Plants Modern Abattoirs & Processing Units Building Supply Chains ~ market linkages Genetics ~ Artificial Insemination, breed improvement Vaccine, Drugs, Semen & Embryo Production & Marketing Units

OPPORTUNITIES Global Halal market

GLOBAL HALAL MARKET

World Muslim population of 1.83 billion in 2009 out of 6.5 billion World population With average annual growth rate of about 1.80% per annum. approximately 117,000,000 per yr. increase which does not include conversion which on the rise currently. Global Halal products market is estimated at US$2.3 trillion excluding Islamic banking. * F&B (67%), pharmaceutical ( 22%), personal care & cosmetics ( 10%) If we include service sectors for the Halal market, the potential size of total market is ASTRONOMICAL… for Global Market for Halal

The trade in Halal food is enormous with est. annual halal food value at US $347 billion globally HALAL – lucrative market and huge opportunities. Awareness and interest in Halal products has increase tremendously among Muslim and Non-Muslims as well. Huge purchasing power among Non-Muslim countries. Consumer’s views on Halal products are not only confined to religious viewpoint but the CONFIDENCE that comes with the Halal Branding. Halal : HEALTHY, WHOLESOME & HYGIENE for Global Market for Halal

Muslim Population by Regions PEW Research Centre’s Forum on Religion & Public Life.Mapping the Muslim Population. October 2009

Estimated 2009 Muslim Population Percentage of Population that is Muslim Percentage of Population Muslim Asia-Pacific 972,537, % Middle East-North Africa 315,322, Sub-Saharan Africa 240,632, Europe 38,112, Americas 4,596, World Total 1,571,198, Muslim Population by Regions

 Key Halal Market  Algeria Bahrain Egypt Indonesia Iran  Iraq Jordan Kuwait Lebanon Malaysia  Morocco Oman Qatar Saudi Arabia Syria  Tunisia Turkey UAE Yemen Pakistan  Combined population of key Halal markets : 652 Million  Key Halal Markets in Non-Muslim countries  India 140million France 6 million  China 40 million Germany 3 million  USA 8 million UK 1.5 million  Phillippines 6 million Canada 800,000 Global Halal Market

 Nestle – world’s largest food manufacturing corporation  McDonalds – the world’s largest leading restaurant chain  KFC – fully integrated poultry chain  Tesco & Carrefour – world’s number one & two retail chain  Port Rotterdam – Europe’s largest & the world’s 3 rd largest port  Westports – one of SEA top 10 ports  MISC – the world second biggest shipping company  CIMB – SEA biggest investment bank  Allanasons – India’s biggest meat exporter  Al-Islami – UAE halal food produces Some Notable Players

Livestock Farmers & Producers Halal Products Buyers and Sellers slaughtering and processing equipments Animal health and pharmaceutical products Breeding animal enterprises Forage grass and feed Animal farm equipments. Livestock Breeding – Cattle, Sheep, Goats – Animal Husbandry Genetics and Selection – Herd Management – Race Registration – Artificial Insemination Animal Health and Hygiene – Laboratory and Veterinary Instruments – Veterinary Medicine and Vaccines – Obstetric & Gynecology Instruments – Ultrasound & X-Ray Instruments – Care Products and fertilizer Farm Buildings and Equipments – Farm Houses and constructions – Scrapers & Mats – Barns, Sheds and Buildings – Anti - freeze Drinkers – Mowers & Swathes – Farm Vehicles Animal Feed & Animal Nutrition – Seeds – Vitamins and minerals – Silos & Elevators – Mill & Mix Machinery – Grain handling Equipments Dairy Farm – Milking Systems – Cooling Tanks – Logistic systems – Handling and Packaging Equipments Counseling Services – Turn - key projects – Bank - and Insurance Companies – Sector Universities and Education – IT and Software Systems – Public Organizations – Associations, Unions, Chambers) – Laboratory and Test services – Patent and Brand rights Alternative Energies and Environment Livestock Farmers & Producers Halal Products Buyers and Sellers slaughtering and processing equipments Animal health and pharmaceutical products Breeding animal enterprises Forage grass and feed Animal farm equipments. Livestock Breeding – Cattle, Sheep, Goats – Animal Husbandry Genetics and Selection – Herd Management – Race Registration – Artificial Insemination Animal Health and Hygiene – Laboratory and Veterinary Instruments – Veterinary Medicine and Vaccines – Obstetric & Gynecology Instruments – Ultrasound & X-Ray Instruments – Care Products and fertilizer Farm Buildings and Equipments – Farm Houses and constructions – Scrapers & Mats – Barns, Sheds and Buildings – Anti - freeze Drinkers – Mowers & Swathes – Farm Vehicles Animal Feed & Animal Nutrition – Seeds – Vitamins and minerals – Silos & Elevators – Mill & Mix Machinery – Grain handling Equipments Dairy Farm – Milking Systems – Cooling Tanks – Logistic systems – Handling and Packaging Equipments Counseling Services – Turn - key projects – Bank - and Insurance Companies – Sector Universities and Education – IT and Software Systems – Public Organizations – Associations, Unions, Chambers) – Laboratory and Test services – Patent and Brand rights Alternative Energies and Environment Some Products….

NEW SECTORS

Quality Assurance & Certification Export Orientation Supply Chain Management ~ backward & forward linkages Land New animals ~ Ostrich New fields ~ blood rendering, hormones, gelatin,…. Breed Development Quality Assurance & Certification Export Orientation Supply Chain Management ~ backward & forward linkages Land New animals ~ Ostrich New fields ~ blood rendering, hormones, gelatin,…. Breed Development New Sectors

MILK PROCESSING PLANTS

SCOPE OF INVESTMENT billion liters of milk provide a promising enterprise, where only 3% is being processing. Small scale farming is not covering the full economic cost. Significant element of economies of scales exist resulting in cost reduction by 30-50% between the small and large scale farms. Cost of milk production yet favorable for mass scale milk collection and processing. Huge consumer market exists.

INVESTMENT PLANS Creation of milk collection network and transportation facilities in the milk catchments ~ Nestle Establishment of milk processing plants leading to production of value added exportable products like reconstitute able milk powder, cheese, butter and yogurt. Establishment of mini pasteurization plants in Peri-Urban Areas.

ESTABLISHMENT OF MODERN ABATTOIRS

SCOPE OF INVESTMENT million buffalo, million cattle, million sheep and million goats are being maintained for meat and milk production MT of beef and MT of mutton is being produced annually. Less then 5% id being processed and packed for local consumption and export purpose. 6.5 million cattle and buffalo marketable calves are available for strategic interventions in meat processing. Hide & Skin processing for value addition as leather goods exists.

INVESTMNET PLANS Establishment of Modern Abattoirs in 10 big cities of Pakistan for value addition of the meat. Creation of disease free zones for supply of quality meat. Construction of mini slaughter houses in mutton production areas of Pakistan. Organization of the environmentally controlled meat markets & provision of cold chain facilities. Establishment of leather tanning units in Punjab.

MEAT MARKETING NETWORK AND COLD CHAIN IN BIG CITIES

SCOPE OF INVESTMENT million ruminants are being maintained in a manner where an average herb size is 1-4 animals per house hold (71% of total). Small herb size owes to high cost of production and basic impediment in commercialization of the livestock enterprise. Corporate livestock farming through induction of better quality especially exotic meat breeds into the livestock production systems is likely to enhance the productivity. Introduction of certified/ tested technologies through corporate livestock farming by Public Private Partnership.

INVESTMNET PLANS Corporate livestock farming through Public Private Partnership for introduction of better quality beef breeds. Feed lot fattening of four batches of (one thousand each) cattle calves for value added meat products. Establishment of sheep development farms through introduction of exotic sheep breeds. Introduction of two stages meat production system in goat farming through private sector.

VACCINE, DRUGS, SEMEN

SCOPE OF INVESTMENT million large animals and 407 million poultry birds require adequate vaccination and drugs for prophylaxis and treatment respectively. Livestock Farmers keeping million breed able cattle and buffalo are facing dire shortage of breeding services. Breeding Bulls and Artificial Insemination Services are at low ebb. Less then 10% breed able cattle and buffalo are being provided with Artificial Insemination Services while less then 60% are being bred with breeding bull. Introduction/Marketing of exotic Semen & Embryos may lead to Breed Improvement of cattle and buffalo.

INVESTMNET PLANS Marketing of Exotic Bovine Semen & Embryo for Breed Improvement of indigenous cattle. Establishment of Holstein Friesian Semen Production Units. Establishment of Exotic Beef Breed Semen Production Units. Establishment of Bovine Embryo Transplantation Centers in Pakistan. Organization of animal disease vaccine production units in Pakistan. Establishment of medicine production centers in Pakistan

POULTRY MEAT PROCESSING PLANTS

SCOPE OF INVESTMENT 407 Million Poultry birds are being maintained. (372 million commercial while 35 million rural) million metric ton poultry meat and 9618 million eggs are produced which is very low when compared to production standard of the developed countries. Every family in rural areas and every fifth family in urban areas is associated with poultry production activities. Great scope for interventions in Grand Parent, Breeder & Commercial Poultry Breeding exists for foreign investment.

INVESTMENT PLANTS Establishment of Exotic Poultry Grand Parent, Breeding Services in Pakistan. Introduction and Marketing of Modern Hatcheries for Grand Parent and Breeder Poultry. Establishment of Poultry Meat Processing Plants in Pakistan. Establishment of Poultry Disease Diagnostic Laboratories in Pakistan.

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