Milk Production and Procurement in Pakistan PDF
Milk Production and Procurement in Pakistan PDF
Milk Production and Procurement in Pakistan PDF
39, No 4, 2010
_________________________________________________________________________________________"
Abstract: The objective of this study is to define the prevailing Supply Chain Management system in Milk
Collection and distribution across Pakistan. Moreover, the study also suggests that how these supply chain
management and distribution systems can be improved in order to save cost and enhance the overall productivity of
this industry. In this study, economic share of dairy system has also been discussed. The vision 2015 also discussed
in this study.
Key Words: Supply Chain Management, Milk Collection & distribution, Dairy Industry
1. INTRODUCTION
Pakistan with current estimates is the 4th largest milk producing country in the world with 33 Billion liters of milk
produced annually. The potential is huge but the sector operates mostly in the informal economy and needs a
consistent effort to formalize and be able to contribute better to the national economy. Out of the total milk
produced, 97% is in the informal sector (i.e. loose milk consumed in the villages and or sold in the cities through
"Gawallas" in unhygienic conditions and without any quality standards). There are 8 Million farming households in
Pakistan with a total herd size of 50 million animals. 97% of these farmers are not linked to formal markets and
hence are not progressing in economic terms. Moreover, the overall animal herd of Pakistan is thinly spread across
thousands of square kilometers with an average of 2 to 5 animals per household. Dairy farming practices are very
old and traditional and need overhauling. To formalize and improve the industry, a private sector led Pakistan Dairy
Development Company has emerged with guarantee backup by government of Pakistan [1].
The platform proposes to improve the dairy sector through improved research facilities, training and capacity
building of farmers, training veterinarians, improving the cold chain through milk chillers, promoting healthy
pasteurized milk, develop model commercial dairy farms, focus on breed improvement, facilitation of credit
financing to dairy farmers and linking the rural area based farmer to the market mechanism. This will improve and
___________________________________________________________________________ 130
___________________________________________________________________________ 131
___________________________________________________________________________ 132
Dairy&Farmer&
Gawala&(Milkman)&
Sweet/Milk&Shop&
Consumer&
___________________________________________________________________________ 133
___________________________________________________________________________ 134
Dairy&Farmer&
Gawala&(Milkman)&
VMCC&
PHE&
Company&Vehicle&
Sweet/Milk&
Shop&
Company&Milk&Plant&
Retailer&
Consumer&
2.1.3
Contract collection
It is the system in which HFL deals with the different private milk collecting persons and enters into a contract with
them to provide milk to the company. They may include the following:
i. Mini Contractors
Mini contractors are those who provide milk about 1000 liter of milk per day. They collect milk on their own. In
this type of collection, the company identifies personnel who are willing to work and are of good repute with fair
dealings. The contract is mainly verbal and no written type of contract was observed during our survey. The mini
contractor collects milk from the farmers of the area as well as from the other areas. Milkmen from different areas
also supply milk at mini contractors place. A company vehicle collects milk from these mini contactors. The MOT
with that vehicle tests the milk according to their quality standards. If it passes the tests, it is accepted and rejected
otherwise [15].
___________________________________________________________________________ 135
ii. Sub-Contractors
Sub Contractors are almost the same as that of mini contractors but the main difference is that milk is collected from
the mini contractors place but sub contractor has to transport milk to the PHE of the company.
2.2. Milk procurement
Manager Milk Procurement (MMP) Plant is responsible for all the milk procurement in the milk area. Milk
collection area, which consists of mainly the provinces of Punjab and Sindh, is divided into four regions headed by
an MMP (Region). These regional offices are at Arifwala, Chishtian, Jhang and R. Y. Khan. Each region consists
of 3-4 zones, which is headed by a Zonal Manager. There are 14 zones under these 4 regions. Each zone is headed
by Executive Zonal Manager or an Area Executive depending upon the size of daily collection. Each zone consists
of 2-3 sub-zones. At sub-zonal level, there are PHE (Palate Heat Exchanger). Under these sub-zones come
VMCCs, mini contractors and sub contractors, which are further responsible for the milk collection [16].
2.2.1 Milk collection area
There are 14 zones for self-collection of milk having 28 Main centers (PHE)
Jhang
Arifwala
Pakpattan
Bahawalnagar
Okara
Bahawalpur
10
Bhowana
11
Shah Jewna
Mian Channu
12
Narowal
Haveli
13
Upper Sind
___________________________________________________________________________ 136
Suppliers collection
2.
Self collection
1.
Supplier Milk collection system: In this case supplier brings milk with his or her own sources at factory.
Quality assurance department of dairy as per their standards scrutinizes the milk. If milk passes the entire
quality test then this milk is received otherwise the milk is rejected.
Mini/Hilux contractor: In this type of milk collection local supplier of area collects milk with their own
resources and brings this milk to companies sub center. If milk is according to companys standard that
milk is received otherwise rejected. All types of collected milk are brought to sub centers, where it is
chilled (by chiller or by ice) and transported to Main center either through 1.7, 5 or 9 tons of tankers
depending upon the quantity of milk, here milk is chilled through chillers and transported to plant [17].
2.
A. Village Milk Collection (VMC): In this case a local community nominated person (VMC agent) collects
milk from local farmers on behalf of company by using company facilities. The VMC agent gets
commission from company on per litter-collected milk. After collection VMC agent either himself
approach the nearby center of company for handing over of collected milk or company vehicle collect milk
from that VMC agent as per written agreement. Very good quality milk is collected through the VMCs. No
doodhi is involved in this type of collection.
B. Progressive formers: Having 10 adult buffalo or minimum 25 liters milk.
C. Direct Farmer: Having one or more milk animal and bring milk directly to sub center or MCC.
> Bulk milk transport: Milk procurement teams of companies ensure that milk is collected and transported to
factories daily. Milk cooled on the farm or cooling centre may be transported in bulk tankers. Bulk tankers are
insulated, so the milk will remain cold until it reaches the plant (provided the transport is fast, i.e. short distance or
good roads enabling milk to be delivered before the temperature of milk rises above 10? C).
> Reception of milk at plant: At reaching plant quality assurance staff of reception lab takes the representative
sample of whole milk tanker and analyses it for various parameters as per standards of company. If milk found as
per quality norms of company the tanker is weighed and production department staff receive the milk for further
processing otherwise the sub standards raw milk tanker is rejected.
___________________________________________________________________________ 137
2. Second System:
Quality assurance department support the procurement department for procurement of good quality of
raw milk.
___________________________________________________________________________ 138
___________________________________________________________________________ 139
___________________________________________________________________________ 140
REFERENCES
[1]. Aazim, M. (1997), Milk powder price on the rise. The Dawn [Electronic version] retrieved on July 21, 1997.
[2]. Ahmed, R. R., and Sattar, I., 2009. Distribution Channels in Pakistani Pharmaceutical Industry, European
Journal of Scientific Research, 38 (4): pp. 321-327.
[3]. Rizwan Raheem Ahmed and M. Shafi Azam, 2006. Devolution Plan 2000: Effectiveness of Citizen Community
Boards (CCBs) in income generation, Independent Study for MS, Shaheed Zulfiqar Ali Bhutto Institute of Science
& Technology, Karachi, December, 2006.
[4]. Ahmad, S. (1962), An investigation into supply, consumption and marketing of milk into Lyallpur City.
Unpublished M. Sc. Thesis, West Pakistan Agricultural University, Lyallpur.
[5]. Ali and Saifullah (2006), Milk production and marketing. The Dawn [Electronic version] retrieved in January
2006.
[6]. Ali, T. (2006), A case study of milk production and marketing by small and medium scale contract farmers of
Haleeb Foods Limited, Pakistan. Faisalabad: University of Agriculture.
[7]. Anjum, M. S. (1978), A note on economic analysis of consumer demand for raw and processed fluid milk in
Lahore. The Pakistan Development Review, Volume 17, pp. 495-510.
[8]. Bhatti, M. Y. (1992), Emerging role of livestock in agricultural economy of Pakistan. Progressive Farming,
Volume 12, pp. 50-53.
[9]. Burki, A. A., M. Khan and F. Bari (2005), The state of Pakistans dairy: An assessment. CMER Working Paper,
05-34, LUMS, Lahore.
[10]. Government of Pakistan (2006), Economic Survey 2005-06. Islamabad: Ministry of Finance.
[11]. Drabner, Hans J. (1989). The importance of nomadic animal husbandry in E. Africa- requirements and
possibilities of its development.Beitr. trop. Landwirtsch. Vet. Med. 27: 5-15
[12]. Ahmed, R. R., and Jalees, T., 2008. Pharmaceutical Industry in Pakistan: Unethical Pharmaceutical Marketing
Practices, Market Forces Index, 4 (2): pp. 30-39.
[13]. Kurwijila, R.L. (1990). Rural Dairy Technology Appropriate to Rural Smallholder Production: The Tanzania
Experience. Proc. Symposium on Dairy Marketing in Sub-saharan Africa. 26- 30 Nov. 1990. ILCA, Addis Ababa,
Ethiopia, pg. 131 - 142.
[14]. Massae, E. E. (1993). Experiences with dairy development in Tanzania. In: Seminar Proceedings: Dairy
development policy and implementation: sharing experiences between Africa and Asia. Harare, Zimbabwe 12-16
July 1993.
[15]. Mchechu, J.E.U. (1983). The present status of the livestock industry in Tanzania. Proc. 10th Sci. Conf.
Tanzania Soc. Anim. Prod. Vol. 10: 8-43
[16]. Scheinman, D., Kingazi, R., Moshi, G. and J. Mshana (1992). Milk production and Marketing in the West
Usambaras. Unpublished Report for The Soil Erosion Control and Agro Forestry Project (SECAP), Tanga.
___________________________________________________________________________ 141
___________________________________________________________________________ 142