Pakistan Dairy Association Calls for Major Dairy Sector Reforms in Budget 2026
Islamabad – 19 May, 2026 (Adnan Hameed) : The Pakistan Dairy Association (PDA) has urged the government to introduce comprehensive dairy sector reforms in the upcoming Budget 2026, emphasizing the need to improve nutrition, strengthen rural livelihoods, enhance food safety, and expand the national tax base.
Addressing a press briefing at the Islamabad Press Club, PDA representatives highlighted that Pakistan produces approximately 72.4 billion liters of milk annually, making it the world’s fourth-largest milk producer. However, they noted that nearly 95% of the dairy sector remains informal, resulting in low productivity, food safety concerns, and limited economic documentation.
Dr. Shehzad Amin, CEO of Pakistan Dairy Association, stated that safe and affordable dairy products are essential for public health and national development. He pointed out that around 40% of children under the age of five suffer from stunting, while malnutrition causes economic losses of nearly US$7.6 billion annually. He said milk remains one of the most affordable and effective sources of nutrition for child growth, immunity, and maternal health.
PDA Chairman and CEO of Fauji Foods, Usman Zaheer Ahmad, said the dairy sector has significant untapped economic potential. He stated that formalizing even 50% of tradeable milk could create a taxable base of nearly PKR 7.5 trillion and generate more than PKR 1,300 billion in GST revenue, while simultaneously improving farmer incomes and nutrition outcomes.
The Association stated that the dairy sector contributes around 65% to agriculture GDP and 14.7% to Pakistan’s overall GDP, supporting nearly 10 million rural households and around 50 million livelihoods linked to the dairy value chain.
PDA also raised concerns over the current 18% GST on packaged milk, describing it as one of the highest globally. The Association argued that high taxation makes safe packaged milk less affordable for consumers and encourages the use of unsafe loose milk sold through informal channels.
As part of its proposed reform agenda, PDA recommended reducing GST on packaged milk from 18% to 10% from July 2026, removing price caps, reducing import duties on dairy processing and cold chain equipment, introducing subsidized energy tariffs for dairy processing, implementing a National Dairy Policy, and enforcing minimum pasteurization laws nationwide.
The Association further called for investment in farmer productivity through improved genetics, balanced feeding, silage, preventive veterinary services, and modern cold chain infrastructure. It also proposed launching Safe Milk pilot projects in Islamabad and Lahore.
Concluding the briefing, PDA urged policymakers to prioritize dairy sector reforms in the upcoming federal budget, describing dairy as a strategic sector capable of improving nutrition, supporting climate resilience, strengthening the rural economy, and contributing to Pakistan’s long-term economic growth and public health objectives.
