In a pivotal move for Pakistan’s agricultural economy, the Ministry of National Food Security and Research, led by Rana Tanveer Hussain, has reaffirmed its commitment to addressing the challenges faced by the dairy sector. Amid growing concerns regarding food security and the economic plight of millions of dairy farmers, the government is set to reassess the taxation and other policies concerning the dairy sector.
Minister Rana Tanveer Hussain has been actively engaging with stakeholders, including the Pakistan Dairy Association (PDA), to explore ways to unlock the full potential of Pakistan’s dairy industry. The minister’s recent statement underscores the government’s resolve to ensure that the tax burden on packaged milk is reviewed in light of the current economic landscape. Despite financial constraints, the government remains focused on creating policies that will enhance food security and dairy farmers’ livelihoods.
The government’s proposed tax relief aims to make nutritious milk more affordable for consumers while encouraging investment in the formal dairy sector. The formal sector plays a critical role in ensuring consistent milk supply, food safety, and fair pricing for farmers. As the industry grows, so too will the sustainability of farmer incomes and the national food security framework.
A lifeline for farmers and consumers
Dairy is the backbone of the livelihoods of eight million Pakistani farming families, who rely on livestock to feed their families and sustain rural economies. However, challenges such as high production costs, poor infrastructure, and limited access to modern farming techniques have hindered the growth of the dairy sector. The government is cognizant that the imposition of a sales tax on packaged milk adds to the financial strain on both farmers and consumers while compromising the formalisation of the sector and the consumers’ health.
The government’s commitment to the dairy sector includes investments in cold chain infrastructure, improved milk collection systems, and incentives for farmers to adopt modern farming techniques.
Yet, despite these challenges, the government remains committed to finding solutions that balance the interests of farmers, consumers, and the wider economy. Minister Tanveer Hussain has recognised the formal dairy sector’s vital role in ensuring safe, hygienic, and nutritious milk reaches consumers. The government is now evaluating the 18 per cent sales tax, as per global best practices, with the awareness that a lower tax could increase consumption and tax revenues over time, benefiting both the dairy sector and the nation’s economy.
Looking forward: a stronger dairy sector for Pakistan
Pakistan’s dairy sector, while facing significant challenges, holds immense potential. With a milk production volume of over 70 million tonnes annually, the industry is poised to become a key driver of economic growth. By addressing the issue of taxation, the government aims to foster a vibrant dairy sector, boost exports, and create long-term job opportunities for farmers, processing plants, and associated industries.
The government’s commitment to the dairy sector includes investments in cold chain infrastructure, improved milk collection systems, and incentives for farmers to adopt modern farming techniques. The formal sector — which processes and ensures milk safety — has long been the backbone of Pakistan’s dairy economy. The government aims to strengthen this sector by creating stable market conditions, providing fair milk prices, and improving rural farmers’ income. The minister has also urged PDA and its members to enhance support for the farmers and infrastructure development.
Balancing policy and public health
In line with its commitment to food security, the government is also prioritising consumers’ health and safety. To make nutritious milk affordable for the general population, tax and other policy incentives are crucial so that every Pakistani has access to safe dairy products. The current evaluation to move towards equitable dairy taxation will lower the price of packaged milk, encouraging people to opt for safe, regulated milk over informal and potentially unsafe alternatives.
By fostering collaboration between the government, industry, and stakeholders, the government is positioning the dairy sector as a key pillar of Pakistan’s economic resilience. Minister Tanveer Hussain has assured that the government is fully committed to ensuring Pakistan’s dairy sector becomes a leader in both regional and global markets, while also supporting farmers and safeguarding consumer health.
A vision for the future
As Pakistan’s dairy industry continues to face multiple hurdles, the government’s active engagement with the Pakistan Dairy Association and other stakeholders offers hope for a more sustainable and prosperous future for the dairy sector, including local consumption and exports.
Under the able leadership of Prime Minister Mian Muhammad Shehbaz Sharif and Rana Tanveer Hussain, the government’s proactive stance in reassessing the dairy tax and the phase-wise implementation of the minimum pasteurisation law/regulations signals a commitment to building a stronger, healthier future for Pakistan. By ensuring the growth of the formal dairy sector, the government aims to improve consumer health and farmer livelihoods, while strengthening Pakistan’s economy for years to come.
