Milk processors decry measures; small farmers happy

LAHORE: The budgetary measures for livestock, dairy, poultry and fisheries sectors brought respite for small and medium farmers, although they annoyed the milk processing industry. 

The federal government, in the budget for the fiscal 2016/17, imposed 25 percent regulatory duty (RD) on the import of powdered milk and whey powder, jacking up total duties, including 20 percent customs duty, on them to 45 percent. 

Chief Operating Officer Haroon Lodhi at Haleeb Foods said the steps announced in the federal budget will lead to an increase in the cost of inputs for processors. 

Lodhi termed the withdrawal of zero rating status as a step to marginalise the dairy processing industry. “This will be a killer as it will increase the cost by at least 10 percent,” he commented. 

He further said sales tax claim on inputs is not refundable with proposed taxation measures and it becomes part of the cost of production. He feared that the sale of packaged milk will be hurt from such amendments.

Secondly, Lodhi maintained that 25 percent RD on import of skimmed milk powder and whey powder also tend to increase the cost of processing. 

Talat Naseer Pasha, vice-chancellor at the University of Veterinary and Animal Sciences, was, however, upbeat on the measures announced by the government for the promotion of livestock and dairy sectors. “The budgetary proposals for 2016-17 are good for livestock farmers,” Pasha said.

He termed the RD on imports of skimmed milk and whey powder as a step in the right direction. “Duty should further have been increased to give a fair chance to local dairy farmers,” he said. 

Pasha said livestock is a major source of livelihood for poor farmers. “Therefore we need to focus on the profitability of small farmers,” he added. 

He said incentives announced for the feed industry, fisheries and poultry were also welcomed. “It is really a farmer-friendly budget. It will increase rural enterprises, and improve nutrition and food security,” he added.

Hamid Malhi, director at Livestock Breeders Association, also welcomed the duties on import of powdered milk and whey power. 

“These would directly benefit local dairy farmers,” Malhi said. The demand of locally produced milk was on the decline due to a rampant import of dry milk and whey powder. “Such a trend was detrimental to the growth of local dairy sector,” he added. 

He hoped that local dairy farmers will see a bit improvement in demand of fresh milk.

Malhi called for an outright ban on import of whey powder, which he said is injurious to health. “The food safety should be given paramount importance and thus fresh milk should be given an utmost priority,” he said. “The unchecked import of dry milk and powdered milk should be thoroughly assessed and subsequently a complete ban be imposed on these items.”

The announcements in the budget for the promotion of livestock and dairy would be supportive for the farming community. 

The government also proposed a cut in the customs duty on dairy, livestock and poultry sectors to two percent from five percent. A reduction in customs duty on fish farming and fish feed pellet machines to two percent from five percent and on fish and shrimp feed to zero percent from 10 and 20 percent was also announced.