Pakistan Agriculture Industry: Livestock Sector- New Opportunities

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

2. Agriculture Sector in Pakistan – An Overview • Vital sector of Pakistan's economy • Accounts for 21 percent of GDP • Directly supports three-quarters of the country's population, employs half thelabor 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.

3. Pakistan’s Major CropsProduction value in 2007 US$ 1.70 bln US$ 3.36 bln US$ 302 mln US$ 2.94 bln US$ 3.01 bln Milk and milk products US$ 324 mln US$ 1.02 bln US$ 418 mln Source: http://faostat.fao.org/site/339/default.aspx

4. Agriculture Sector in Pakistan - Endowments Pakistan’s Agriculture is 5thLargest 5thLargest The Largest 3rdLargest 3rdLargest 5thLargest Producer of Kinnow Producer of Cotton Producer of Milk Herd of Livestock Producer of Dates Producer of Mango

5. Agricultural Sector – Key Statistics • Contribution to GDP 21.8% • (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 • Crops (Wheat, Rice, Cotton, Sugarcane) 32.8% • Livestock 53.2% • Fisheries 4.0% • Forestry 2.0% • Share in Export Earnings (Raw/Processed) • Cotton + Cotton Based Products 64.7% • Fruits, Rice, Fish, Leather 18.2% • Others 17.1%

6. Livestock Sector - Endowments Pakistan’s Livestock 3rdLargest 4thLargest 5thLargest 1stLargest 2ndLargest Segment of rural economy Sector of economy Exports Products Producer of Milk Herd of Livestock Livestock contributes 55.1% of Agriculture sector. Livestock accounts for 11.5% of GDP.

7. 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. 1304.6 billion (2008‐09) to Rs. 1537.5 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$ 108.3 million in 2009-10.

8. 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.

9. Livestock’s Contribution

10. POPULATION TRENDS (million)

11. Dairy Sub-sector • Total milk production (09-10) 36.299 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

12. Milk Production (Buffalo + Cow)2010-11

13. Meat Sub-sector • Total meat production (09-10) 2.965 ml. tons • Beef Production 1.655 ml. tons • Mutton Production 0.603 ml. tons • Poultry Meat 0.707 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

14. Meat Production 000 Tons Economic Survey of Pakistan –2010-11

15. Pakistan –Export of Meat & Meat

16. EXPORT OF LIVE ANIMALS

17. Per Capita Meat Consumption (KG)1983-2020 Source: Delgado, et al 1999, Livestock to 2020 The Next Food Revolution & GOP 2003, TCP-Pak-0168: Livestock Action Plan Draft Report MINFAL

18. Punjab 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”. 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’

19. 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

20. 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)

21. Rural Livestock • Livestock Production 2nd biggest economic activity • 67% rural population ~ 30-35 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

22. More focus on Buffaloe • 165.72m Buffalos (75% of them habitat in Asia) • Pakistan has 14% of the world’s Buffalo Population. • Black Gold(Nili Ravi).

23. 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 2009-10 ) Animal Export = 13.9 million US $ ( 2009-10 ) ( Total export is about 40 billion rupees 11% of the total foreign exchange)

24. Potential

25. 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

26. OPPORTUNITIES • Global Halal market

27. GLOBAL HALAL MARKET

28. Global Market for Halal • 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…

29. 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 theCONFIDENCE that comes with the Halal Branding. • Halal : HEALTHY, WHOLESOME & HYGIENE

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

31. Muslim Population by Regions

32. Global Halal Market • 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

33. Some Notable Players • 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 3rd 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

34. Some Products…. • 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

35. NEW SECTORS

36. 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

37. MILK PROCESSING PLANTS

38. SCOPE OF INVESTMENT • 33.23 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.

39. 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.

40. ESTABLISHMENT OF MODERN ABATTOIRS

41. SCOPE OF INVESTMENT • 27.335 million buffalo, 29.559 million cattle, 26.488 million sheep and 53.787 million goats are being maintained for meat and milk production. • 1.237 MT of beef and 0.827 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.

42. 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.

43. MEAT MARKETING NETWORK AND COLD CHAIN IN BIG CITIES

44. SCOPE OF INVESTMENT • 137.17 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.

45. 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.

46. VACCINE, DRUGS, SEMEN

47. SCOPE OF INVESTMENT • 137.17 million large animals and 407 million poultry birds require adequate vaccination and drugs for prophylaxis and treatment respectively. • Livestock Farmers keeping 20.00 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.

48. 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

49. POULTRY MEAT PROCESSING PLANTS

50. SCOPE OF INVESTMENT • 407 Million Poultry birds are being maintained. (372 million commercial while 35 million rural). • 0.514 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.