DefinePK

Abstract

This study explores the structural challenges contributing to persistent dairy price inflation in Pakistan over the past two decades. Despite being among the world's top milk producers, Pakistan suffers from low milk yields due to a fragmented supply chain dominated by smallholders, poor animal health services, limited access to credit, and weak infrastructure. Rising demand for milk and meat, driven by population growth, income increases, and exports, has worsened supply shortages. Additionally, urbanization and shrinking landholdings are pushing small farmers out of dairy farming. The role of middlemen, who control pricing and often engage in adulteration, further distorts the market. Karachi’s unique challenges, such as high herd maintenance costs, also significantly influence national dairy inflation. The study recommends both short-term measures—such as creating awareness against slaughter of useful animals, and strengthening veterinary services—and long-term reforms, including large-scale corporate farming, breed development, and formalizing cooperatives. Further research is needed to evaluate the effects of meat demand and government price controls on milk production.