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Dairy association calls for harmonised food standards

By Jawwad Rizvi
December 08, 2017
LAHORE: The Pakistan Dairy Association (PDA) urged Prime Minister Shahid Khaqan Abbasi to harmonise food standards at the federal level, and to assign the role of monitoring and implementation to the provinces.
Prime Minister Shahid Khaqan Abbasi during the meeting with a PDA delegation promised to take action to protect and promote the dairy industry of Pakistan. PDA said that after the passage of the 18th amendment, various subjects including education, environment, health and foods standards became prerogatives of the provinces.
The delegation said though provincial food authorities were created and have started making independent food standards, those varied from the federal standards making body - Pakistan Standards Quality Control Authority, as well as international standards.
This they said created serious problems related to trans-provincial trade, dairy exports and complex compliance and multiple regulatory regimes, discouraging growth and investments in the sector.
The delegation mentioned that Pakistan was the 3rd largest milk producing nation globally. However, only five percent of it was processed and packed while the remainder 95 percent was unprocessed, unregulated and untaxed.
“Zero rating tax was revoked in 2016 with an exemption regime coming into effect.” This resultant increase in costs has widened the price gap between processed milk prices and loose milk prices, the members of the delegation said.
Lower profitability and decline in volumes has severely impacted the investments in the sector and has hampered the initiatives focused on developing milk farming communities and cool chain infrastructure.
The PDA suggested reinstating the zero rating regime by re-transposing milk and milk related products in the Fifth Schedule of the Sales Tax Act, 1990.
“The processed industry accounts for about 30 percent of powder imports, primarily to manage the seasonality of milk supply, as during summer milk production drops by 60-70 percent at farm level on account of poor fodder availability and lactating cycle,” the PDA delegation said.
Second reason of skimmed milk powder imports was the unavailability of quality milk powder required for specialised categories like infant milk, etc. Presently, regulatory duty is 25 percent and in addition to this Customs Excise duty is 22 percent. This has hugely impacted the profitability, as passing on the price increase will mean even bigger price differential with loose milk and further decline in the volumes. The PDA demanded removal of the RD and excise for dairy processors
A PDA official said, “Across the world and in developing countries milk was recognised as a key source of nutrition, and governments were increasing regulation to safeguard consumers by introducing minimum pasteurisation law to ensure base line milk quality.
Quality milk availability to the citizens of the country will mark and eventually reduce stunting and malnutrition rates amongst children. Minimum pasteurisation law will help the diary industry to become compliant in exporting dairy products and hence boost exports.
The PDA suggested introduction of the law under federal jurisdiction, and it should be adopted and implemented by the provinces. “Business models of Turkey, Egypt, Indonesia and Vietnam are guiding models for us,” the PDA said.
Sikandar Hayat Bosan, minister for National Food Security, was also present during the meeting. The delegation was led by PDA Chairman Syed Yawar Ali along with Ali Ahmed Khan, Aamir Khawa, Sulaiman Sadiq Monoo, Anjum Muhammad Salee, Jorge Montero, and Muhammad Memosh.