Pakistan pioneers lead epic struggle for more milk

NAROWAL, Pakistan Sun Aug 26, 2012 5:27pm EDT

1 of 6. Milkmen gather outside a distribution point in Sahiwal, located in Punjab province, August 14, 2012.

Credit: Reuters/Mian Khursheed

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NAROWAL, Pakistan (Reuters) - Pakistani Shahzad Iqbal abandoned the jet-set lifestyle of a corporate executive because he wanted to do something worthwhile for his country. So he invested his life savings in world-class bull semen.

He imports the sperm from potent bulls in the West, with names like Socrates, Air Raid and Liberator, and sells it at affordable prices to farmers so they can breed cows that produce higher volumes of quality milk.

Iqbal is one of a band of trailblazers - from small-town entrepreneurs to managers in multi-national companies - who want to transform Pakistan's ramshackle dairy industry into a multi-billion dollar enterprise.

"It's going to take a revolution to turn it around," said Iqbal, as his farm workers moved metal cylinders filled with liquefied nitrogen gas that store the semen at -196 Celsius (-321 Fahrenheit).

If Iqbal and his comrades can succeed in their mission to overturn centuries-old practices and introduce modern techniques, they could open the door to a revolution in the livelihoods of millions of impoverished farmers.

The dismal state of the dairy industry is a striking example of Pakistan's habit of missing opportunities throughout a 65-year history tainted by military coups, political infighting and a form of crony capitalism that has stifled entrepreneurship.

With 63 million cows and buffaloes, Pakistan has one of the world's biggest herds, but it cannot export milk because the animals' yields are so low.

Preoccupied by power struggles and tension with the army, successive governments have failed to realize the potential of the sector, which engages about 35 million people, or 20 percent of the population, in direct or related work.

While other countries worked on ways to improve livestock gene pools, fodder and veterinary medicine, Pakistan largely left its farmers to fend for themselves over the decades.

The result is a haphazard supply chain riddled with inefficiencies stretching from the cow's udder all the way to the tea cup.

"CHASING MY ANIMALS"

The challenge for Iqbal and his fellow pioneers starts with men like 65-year-old Abdul Rashid, a farmer limping along with a cane made from a branch, trying to keep up with his cows and buffaloes wandering through flooded fields in Punjab, Pakistan's agricultural heartland.

Unlike in the West, where livestock is neatly organized in high-tech farms for maximum efficiency, Pakistan's dairy industry is fragmented.

The majority of suppliers are individual farmers who own three or four cows and buffalos and are scattered in remote villages along crumbling roads or cart tracks.

There is no modern marketing system, so it is up to the farmers to find a buyer for their meager yields.

"I have no one to turn to for help," said Rashid as he struggled to stop his animals wandering across a road.

"I spend my time chasing my animals and they don't give me enough milk to improve my family's life."

Rashid and millions of farmers like him rely on middlemen, or dodhis in Urdu, to sell their milk to households, transporting it in rusty cans tied to old Yamaha motorcycles.

In the potholed town of Sahiwal, dodhis dropped dirty ice cubes into the churns. Dead flies floated on the surface, a reminder of the bacteria that often contaminates Pakistan's milk supplies.

"Nothing has changed in 40 years," said one of the middlemen, Mohammed Akram, 55, wearing worn-out plastic sandals and standing near a pile of fetid garbage.

"We get up at four in the morning to buy the milk, two kilograms from here, four kilograms from there. We get it from far and wide. It's a lot of hard work."

Only about three percent of Pakistan's milk is processed, unlike in many countries where supermarket shelves are stacked with various domestically produced brands.

DREAMS

After 15 years of making good money as an executive for Western beverage and tobacco companies overseas, Iqbal decided he wanted to do something for Pakistan.

To Iqbal, there was no more glaring example of the gap between Pakistan's potential and its performance than the dairy industry.

Rather than despair, he saw an opportunity, pouring his savings of $1 million into creating a breed improvement project called Jassar Farms.

He dreams of the day when the average Pakistani cow, which yields about 1,600 liters (420 U.S. gallons) of milk after it calves, can compete with the top of the line Israeli Holstein that churns out 12,500 liters (3,300 gallons).

Iqbal acknowledges the odds are stacked against entrepreneurs in Pakistan because of red tape, corruption, poor governance, chronic power cuts and a Taliban insurgency that keeps many investors away.

"I'm not saying I'm mad, but certainly I'm not absolutely normal either, because it takes a lot of persistence to undertake this kind of challenge," said Iqbal, wearing a pink polo shirt and jeans.

BIG MONEY

Iqbal can take comfort from the fact that he is not alone in his quest for reform. Some international companies are also working for change.

Nestle has installed 3,200 industrial-size milk refrigerators at collection points across the country to lay the foundations for the kind of cold storage chain essential for a modern dairy industry, and give farmers a steady market for their milk.

At a training centre with manicured lawns and spotless dormitories for farmers in Punjab, Nestle holds workshops to drive home a simple message - properly managed cows produce more milk.

Instructors show farmers how to treat their animals - the Nestle cattle lounge around on soft sand under powerful fans, chewing nutritious fodder. They have constant access to water - essential practices of which most farmers are ignorant.

So far, Nestle has put 9,000 farmers through the program. Some have doubled their milk output, says the company, which estimates it could make about $450 million in milk exports from Pakistan.

"The potential is very large but it will only succeed if we can develop milk of export quality because we need to be able to trade in the commodity export market," said New Zealander Bill Stevenson, head of milk collection and dairy development at Nestle Pakistan Ltd.

Like Iqbal, he has found that deep in rural Punjab, attitudes are hard to change.

Many farmers still view their animals as status symbols, not assets that can help turn around the economy, where some believe a lack of opportunities for a frustrated, youthful population may pose as big a threat to stability as militancy.

Cows are often sold to pay for weddings or dowries and are seen as four-legged insurance policies for hard times, usually living beside farmers' mud and brick homes.

"It's a full-time job," said farmer Mukhtar Ahmed as he lay on a rope bed outside his home, a cow defecating nearby.

"And farmers can't always sell their milk because it's not easy to transport and find buyers. Many are left with unsold milk."

(Editing by Robert Birsel)

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