Tetra Pak Dairy Hub Initiative : A Community Dairy Development Programme

The livestock sector in Pakistan contributes approximately 12 percent of the country’s GDP, 50 percent of the agricultural produce and employs directly or indirectly about 8 million farming households, states a report by Pakistan Dairy Development Company. It is an integral part of the socio-economic activities of rural Pakistan. Within the livestock sector, milk is the largest commodity, accounting for 51 percent of the total value of the sector, SMEDA estimates. Milk has the potential to become Pakistan’s ‘White Oil’, states Tetra Pak CSR Report.

A small comparison can give us a fair idea of how this sector can be instrumental in economic uplift of rural areas: Pakistan is the fifth largest producer of milk in the world with 34 billion litres of milk produced annually through an animal base of 50 million, according to various estimates in year 2009. The USA produces 94.5 billion litres of milk annually through an animal base of a mere 3.4 million animals. The livestock and agriculture market is untapped and is expected to grow an additional 3 billion litres in the next few years at a growth rate faster than most sectors, and 30 percent by 2015.

Pakistan’s dairy sector is at an important crossroads. Milk demand is growing annually by 15 percent while supply has been increasing by only 3 – 4 percent. This ever widening supply gap is going to increase to 3.6 billion litres by 2015, resulting in increa-sing competition for decreasing supply of milk.

Wheat straw enrichment process

Wheat straw enrichment process

The dairy sector operates mostly in the informal economy and needs a consistent effort to formalize and be able to contribute better to the national economy. The annual milk production of 34 billion litres in Pakistan is shared between a 71 percent share for the rural economy and a much smaller urban share of 29 percent. Only 3 percent of the milk production is processed and marketed through formal channels.

Presently 97 percent of raw milk produced in the rural economy is not linked to the market mechanism because of a number of reasons. This is mainly due to problems in collection of good quality milk as well as storage and delivery.

Challenges Facing the Dairy Industry in Pakistan

The dairy industry faces multiple challenges, and a collective approach engaging all stakeholders, is imperative to drive its development. Pakistan’s huge animal population of 50 million suffers from low productivity compared to global players although it is quite reasonable in comparison to the rest of Asia.

Small and marginal landholding farmers and landless labourers dominate milk production in Pakistan. The smallholding farms suffer from problems of low animal productivity, poor animal hygiene, lack of water availability, old dairy farming practices and also lack of new animal breeding methodologies.

The low productivity has several causes, but is mainly due to imbalanced feeding which is practiced according to the farmers’ experience, without any training or knowledge of ration formulation based on production levels. Pakistan faces shortages of fodder and water two to three times a year.

The major challenge is to upgrade smallholding farmers by solving their productivity and farm management constraints, and at the same time substantially increasing the number of commercial farms. This will support the farmers to connect directly to processors and consumers and become less dependent on the middlemen, thus improving access to formal market mechanism.

This is required to enhance profitability and improve quality through the supply chain and to the final consumer. With improved productivity and profitability, increased investment in farming will solve issues related to milk shortage. This can be done through mobilizing research, capacity building of farmers, training vets, promoting high quality milk, improving breed, facilitating credit financing to dairy farmers and formalizing the industry.

Dairy development impacts a wide range of stakeholders, including the government, donor agencies, processors, farmers and consumers. A leading food processing and packaging solutions company, Tetra Pak, together with Engro Foods and DeLaval, has been actively promoting sustainable economic development of the dairy sector in Pakistan, through its inno-vative dairy development project, the Dairy Hub. Its key objectives include improving quality, quantity and market access of milk, by creating an efficient value chain to enhance small-holder competitiveness. This initiative serves to formalize and improve dairy infrastructure, and enable the farmers to have direct contact with processors and consumers. The Dairy Hub is a one-herd concept, consisting of 20 villages located within 15 – 20 km radius, that organises and develops smallholder farmers’ milk production, which is then collected by the dairy that owns the Dairy Hub. Equipped with facilities for cooling, testing, agriservices and trainings, dairy hubs enable registered smallholders to supply their milk and access the formal sector.

Establishment of the first Dairy Hub is underway in 20 villages of Kassowal, in District Sahiwal of the Punjab province. A veterinary doctor supervises genetic advancement and improvement in productivity of milking animals in each village.

As part of this initiative, Engro Foods is establishing milk collection centres (MCC) in the 20 villages in order to meet milk supply shortages and improve the quality and quantity of milk procured.

The key stages of the Dairy Hub project are currently underway such as training of farmers in the Dairy Hub area, wheat straw treatment to improve the nutritional value of wheat straw, and 3-day vaccination camps, whereby vaccination of Hemorrhagic Septicaemia (H.S), a fatal disease, was induced to 1500 animals.

Tetra Pak in collaboration with The University of Veterinary & Animal Sciences (UVAS), Lahore is also providing training to professionals, farmers and other stakeholders on modern dairy farm management. More than 1500 farmers have been trained already on mastitis and nutrition in the five villages of the Dairy Hub area.

The corporate sector can play a key role, as part of its corporate social responsibility, in contributing to the growth of the economy via viable social and economic development efforts which bring long-term benefits. Pakistan’s dairy sector has immense potential to grow and holds huge significance in terms of contri-bution to economic growth.

Tetra Pak Dairy Hub is a case in point of a sustainable Corporate Social Responsibility activity, bringing long-term benefits for all stakeholders across the value chain and contributing to the development and overall growth of the economy.

The White Revolution “Doodh Darya”. June 2006.
Daily Times. Ban on ATT, rationalisation of ITP demanded. April 21, 2009

Pakistan Agricultural Research Council.

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Author Information

Rutaba Ahmed is Managing Editor of tbl. She holds a Bachelors in Business Management from University of Georgia, USA and a Masters in Communications Studies from University of Leeds, UK.

7 Responses to “Tetra Pak Dairy Hub Initiative : A Community Dairy Development Programme”

  1. Dr.Talat nisa Qureshi #

    This is Great contrubution to uplift small farmers,, Those farmers not enough understanding of farm managment, Nutrition value, I apprecaite role of Tetra and Engro foods, aware million farmers impart skill throught livestock managment.. Dairy Hub is key objective to strengthen Business of farmers, through this Quality of milk and meat, animal health is improved. Through these dairy hub great human resource build that make big difference, now farmers minds change , through adaptation of best managment practice the grow , learn, sustain in dairy business.. Regards, Dr,Talat Qureshi..

    May 7, 2013 at 10:20 pm Reply
  2. Dear Sirs,

    I represent Dewan Group of Companies.Dewan group is now entering in Dairy Farm Business and want to start this with 250 Asutrlian cows.

    We have already purchased land and other equipment.Our animals are expected in mid of august from Austrlia.

    Kindly let us know as to how we can meet you to explain our project and to see your facility.

    Best Regards

    Group General Manager
    Dewan Group of Companies

    April 13, 2010 at 3:46 pm Reply
  3. Iftikhar Pervaiz #

    Dr, Nasir Javed sahib,

    I have just visited this site, I really want to appriciate these efforts for dairy sector in Pakistan.

    At presently I am also thinking about a small project in this regard at Jhang rural area. I belong to Jhang but presently living in Karachi.
    Please send me some promotional programe details.
    Iftikhar Pervaiz

    January 13, 2010 at 3:14 pm Reply
  4. Favad Soomro #

    ** New drug threat to Asian vultures **
    A veterinary pain drug can be lethal to vultures that eat the
    carcasses of treated livestock, say scientists.

    December 10, 2009 at 5:41 pm Reply
  5. Favad Soomro #

    Thank you Dr. sahab; I must appreciate your project’s extensive outreach. I agree the best way to attain longer term impact is through educating farmers. However ‘development’ quite often has conveniently ignored environmental implications. I hope your organization will engage relevant stakeholders to ensure a truly sustainable development.

    December 8, 2009 at 4:01 pm Reply
  6. Dr. Muhammad Nasir Javed #

    Dear Favad Soomro

    Thanks for your valuable input regarding Dairy Hubs in Pakistan. I am the Project Manager Dairy Hubs working in DeLaval Pakistan.
    We feel our social responsibility as private organization to help improvement of dairy sector through capacity building of small farmers in remote areas of Pakistan. As we understand the best investment in Livestock is to educate the small farmers.
    In Pakistan 92 % of animals are being reared by small holders in traditional way along lack of agri services and modern dairy techniques. We in dairy hub are providing farmers not only know how of Modern dairy techniques but also have our team inside the villages to demonstrate the best farming practices.
    We have appointed one agri service officer in each village under the supervision of Vetrinary Doctor (responsible for 4 villages). Following are the main key performance indicators for this dairy hub team
    1; To improve milk yield per animal per farm
    2: To reduce calf mortality through better nutrition and management
    3; To improve milk quality through farmer training and better supply chain provision
    4; To reduce milk production cost through better breed and feed program
    5; Fodder planning with the help of silage and Hay introduction for small holders

    We are hopeful enough for the success of this project in Pakistan as we are working since 8 months in Punjab we are getting results in shape of interest of small holders in this and the level of motivation for improvement in this, which will certainly leads to profitable dairy farming trend.


    Dr. Muhammad Nasir Javed
    Project Manager Dairy Hubs
    DeLaval Pakistan 316 upper Mall Lahore Pakistan
    Phone 00 92 3008432595


    December 8, 2009 at 2:40 pm Reply
  7. Favad Soomro #

    The efforts of dairy sector are surely laudable. No one will question the utility of imparting animal husbandry skills and its impact on well being of animal-owners; it’s a win-win situation. However, the real test comes only when there is a conflict between corporate and social/ environmental goals. I wonder if the above initiative is holistic enough to address negative (and established) impacts of hormones used for increasing milk production and use of medicines (diclofenac something) which has directly contributed to virtual extinction of vultures in Pakistan. I am sure there’ll be plenty of other ‘contentious’ areas which this intervention does not address. Some one knowledgable can perhaps comment. In my opinion, sustainability defined by a business will always remain in business’s narrower context which in this case is probably promotion of UHT milk consumption. There’s nothing wrong with it, but they surely need not be euologized for bringing in environmental sustainability.

    October 28, 2009 at 11:37 am Reply

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