Pakistan’s dairy sector could generate nearly Rs. 500 billion in annual government revenue if its informal market is brought into the formal economy, Pakistan Dairy Association Chairman Usman Zaheer Ahmed said.
He said formalizing and taxing even half of the informal dairy sector at a minimum rate of 5 percent could generate Rs. 250 billion in annual revenue, while the sector’s full potential could take the figure close to Rs. 500 billion.
Ahmed was speaking during the Pakistan Agricultural Coalition’s Agri Connections Conference and Expo at the Lahore Expo Center, where officials and industry representatives discussed investment, financing, livestock, exports and technology in agriculture.
Federal Minister for National Food Security Rana Tanveer Hussain said food security is no longer just an agricultural issue but has become a matter of national security.
Speaking at the closing ceremony on Friday, he said agriculture contributes 26 percent to GDP and supports the livelihoods of more than 100 million Pakistanis.
He said farmers are facing growing challenges as floods become more frequent and destructive, damaging crops, killing livestock and wiping out years of farmers’ work.
Tanveer said heat waves are also arriving earlier and lasting longer, while the country’s water situation has become increasingly concerning. Annual water availability per person has fallen from more than 5,600 cubic meters at independence to below 900 cubic meters today, he said.
The minister said agriculture is a provincial subject, but food security is a national responsibility and requires collective action.
He said farmers have continued to support the country through floods, droughts and other difficult conditions, adding that they need better research, access to finance, fair markets and consistent policies.
During the second day of the conference, State Bank of Pakistan Deputy Governor Salimullah identified three major constraints affecting farmers and agricultural lending.
He said the first is the high level of risk faced by farmers and inadequate insurance coverage, which makes banks more cautious about lending to the sector.
The second challenge is the shortage of accredited warehouses, which limits banks’ ability to maintain control over commodities and agricultural produce. The third is access to finance, which is closely linked to the first two issues.
Salimullah said the State Bank is working to develop an ecosystem that would make greater banking-sector investment in agriculture commercially viable.
During a session on livestock investment, Omar Sagga, chairman of Jeddah-based meat trading company Taraf, discussed growing interest from Gulf investors in Pakistan’s meat processing industry.
He said Pakistan has strong human capital and quality livestock, but investor interest alone does not translate into actual investment. A suitable ecosystem is needed to give investors enough confidence to commit capital, he added.
The conference also featured a session on developing Pakistan’s shrimp export industry and a roundtable between investors and the Securities and Exchange Commission of Pakistan on agricultural investment opportunities.
Hello Tractor CEO Jehiel Oliver of Kenya spoke about the future of technology and mechanization in agriculture.
He said the company is looking to expand mechanization in Pakistan, where government programs such as Green Tractor and local manufacturers are supporting the sector.
Oliver said Hello Tractor has developed a model that connects farmers with agricultural machinery that has excess capacity.
He argued that farmers should have access to reliable and affordable equipment without necessarily having to own the machinery themselves, as ownership can place an unnecessary burden on their finances.
PAC CEO Kazim Saeed presented the conference’s resolutions and call to action at the conclusion of the event.
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