Value Chain Analysis of The Meat Sector in Pakistan

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VALUE CHAIN ANALYSIS OF THE MEAT SECTOR IN PAKISTAN
Working Paper · December 2009

DOI: 10.13140/RG.2.2.18110.18240
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SSI Working Paper No. 02-09
SOCIAL SCIENCES
INSTITUTE
VALUE CHAIN ANALYSIS OF THE MEAT

SECTOR IN PAKISTAN
SERIES
PAPER
Muhammad Sharif
Zafar Altaf
Hassnain Shah
Nadeem Akmal
WORKING
General Editor
Haleem Hasnain
SSI
National Agricultural Research Centre
Pakistan Agricultural Research Council, Islamabad
December, 2009
Contributors
A Value Chain Analysis of the Meat Sector in Pakistan
Planning  Dr. Zafar Altaf, Chairman, PARC

 Dr. Muhammad Sharif, CSO/Sr. Director (SSI), NARC
 Dr. Arifa-un-Nisa Naqvi, Member (AS), PARC
Review of Literature  Dr. Muhammad Sharif, CSO/Sr. Director (SSI), NARC
 Hasnain Shah, SSO (SSI), NARC
 Nadeem Akmal, SO (SSI), NARC
 Dr. Arifa-un-Nisa Naqvi, Member (AS), PARC
Check List for Data  Dr. Muhammad Sharif, CSO/Sr. Director (SSI), NARC
Collection  Hasnain Shah, SSO (SSI), NARC
Data Collection  Dr. Muhammad Sharif, CSO/Sr. Director (SSI), NARC
Secondary Sources  Waqar Akhtar, SO (SSI), NARC
Data Collection  Nadeem Akmal, SO (SSI), NARC and Hasnain Shah, SSO
Primary Sources/First (SSI), NARC visited Lahore, Gujranwala and Khushab where
Hand Information they had indepth meetings with different stakeholders of meat
value chain from September 5-10, 2009
 M. Asif Masood, SSO (SSI), NARC and Waqar Akhtar, SO
(SSI), NARC visited Attock, Faithjang, Rawat, Rawalpindi
and Islamabad from September 5-12, 2009
 Mazhar Abbas Sipra, SSO/Director, TTI, Faisalabad and
Ather Mehmood, SO (TTI), Faisalabad visited Faisalabad and
complied first had information from different stakeholders of
meat value chain from September 14-17, 2009
 Nadeem Akmal, SO (SSI), NARC and Waqar Akhtar, SO
(SSI), NARC visited Peshawar and Multan where they had
indepth meetings with different stakeholders of meat value
chain from September 14-19, 2009
 Hasnain Shah, SSO (SSI), NARC visited Karachi and Quetta
where he complied first hand information from different
stakeholders of meat value chain from September 14-19, 2009
Data Analysis  Dr. Muhammad Sharif, CSO/Sr. Director (SSI), NARC
Report Writing  Dr. Muhammad Sharif, CSO/Sr. Director (SSI), NARC
 Dr. Zafar Altaf, Chairman, PARC
 Hassnain Shah, SSO (SSI), NARC
Comments  Dr. Aaleem ul Hasnain, Ex-Member (AS), PARC
 Dr. Muhammad Afzal, CS-II, PARC
ii
Table of Contents
Pages
1. Introduction 1
2. Objectives of the Study 2
3. Methodology 2
3.1 The Value Chain Analysis (VCA) Model 2
4. Organization of the Report 3
5. Characteristics of Meat Sub-Sector 4
6. Meat Supply Chain in Pakistan 4
7. Red Meat Value Chain in Pakistan 6
7.1 Input Provision/Supplies --- 1st Segment of Value Chain 8
7.1.1 Feed 9
7.1.2 Pasture resources 9
7.1.3 Veterinary services 10
7.1.4 Animal genetics resources 10
7.2 Meat Animal Production --- 2nd Segment of Value Chain 12
7.2.1 Cost of production of meat animals at feed lot farmers 13
7.2.1.1 Cost of production of beef animals 13
7.2.1.2 Cost of production of mutton animals 14
7.3 Marketing of Meat Animals ---3rd Segment of Meat Value Chain 16
7.3.1 Market infrastructure 16
7.3.2 Live animals market intermediaries 17
7.4 Processing (Slaughtering) ---- 4th Segment of Meat Value Chain 17
7.4.1 Animals for slaughtering 17
7.4.2 The Slaughtering system 19
7.4.3 Red meat production 20
7.4.4 Trends in Red Meat Production 20
7.4.5 Cost of production of meat 22
7.4.5.1 Cost of production of beef 22
7.4.5.2 Cost of production of mutton 22
7.5 Meat Marketing ---- 5th Segment of Meat Value Chain 26
7.5.1 Marketing of red meat 26
7.5.2 Meat marketing in domestic market 26
7.5.3 Meat marketing infrastructure 26
7.5.4 Transportation of meat 27
7.5.5 Market information and pricing mechanism 27
7.5.6 Structure of meat marketing cost for market intermediaries 27
7.5.7 Sale Price, Marketing Cost and Net Profit Margins of Market 28
Intermediaries
7.5.8 Meat Consumption (per capita consumption) 29
7.5.9 Meat Marketing for Export Markets 30
7.5.10 Revealed Comparative Advantages for Meat Export 31
8. Summary of Meat Value Chain 33
9. The SWOT for Meat Value Chain 37
iii
9.1 Strengths 37
9.2 Weaknesses 37
9.3 Opportunities 38
9.4 Threats 38
10. Proposed Action Plan for Meat Value Chain 38
11. Logical Framework for the Development of Meat Sub-Sector in Pakistan 38
11.1 Logical framework for development of meat sub-sector in Pakistan 39
12. Summary and Conclusions 41
13. References 46
iv
List of Tables
Pages
Table 1: Key characteristics of meat sub-sector, 2008-09 5
Table 2: Feed availability for livestock census years 9
Table 3: Area of rangelands in Pakistan, 1988 9
Table 4: Status of rangeland in Pakistan during 1988 10
Table 5: Livestock veterinary services 10
Table 6: Animal Genetic Resources of Pakistan 10
Table 7: Milk and meat animals and gross value 2008-09 12
Table 8: Cost of production of beef animals at feed lot farms 13
Table 9: Cost of production of mutton animals 14
Table 10: Total number of animals slaughtered and value, 2009 19
Table 11: Red meat (beef and mutton) production 2009 21
Table 12: Trends in production of meat and annual growth rate 21
Table 13: Cost of production of beef at feed lot farms 23
Table 14: Cost of production of mutton 24
Table 15: Structure of marketing cost for Contractor/Beopari 27
Table 16: Structure of marketing cost for commission agent 28
Table 17: Structure of marketing cost for Butcher/Retailer 28
Table 18: Sale price of meat at different market intermediaries 29
Table 19: Marketing costs of meat producers and other market intermediaries 29
Table 20: Net profit margin of market intermediaries for meat 29
Table 21: Meat per capita consumption Kg/Annum 30
Table 22: Quantity and value of meat export from Pakistan from 2000-2007 30
Table 23: Synthetic RCA measures: Regional perspective 31
Table 24: Proposed action plan for meat value chain 39
Table 25: Logical framework for increasing availability of quality meat in Pakistan 40
v
List of Figures
Pages
Figure 1: Capital Flow 3
Figure 2: Supply Chain for Red Meat 7
Figure 3: Red Meat Value Chain in Pakistan, 2008-09 8
Figure 4: “Inputs” 1st segment of meat value chain 11
Figure 5: “Production” 2nd Segment of Meat Value Chain 15
Figure 6: “Live Animals Marketing” 3rd Segment of Meat Value Chain 18
Figure 7: Trend of red meat production 22
Figure 8: “Processing (Slaughtering)” 4th Segment of Meat Value Chain 25
Figure 9: Trend of meat export from Pakistan 30
Figure 10: Trend of meat export value 31
Figure 11: “Meat Marketing” 5th Segment of Meat Value Chain 32
Figure 12: Summary of Meat Value Chain 35
vi
A Value Chain Analysis of the Meat Sector in Pakistan
1. Introduction
Livestock production in Pakistan is still more of a way of life rather than an industry. It is an
integral part of the rural economy contributing significantly to the agriculture (52%) and the
national (12%) GDPs. Livestock raising in Pakistan is primarily a subsistence activity and is
characterized by small flocks with widespread ownership – over 8 million farmers, more than
one million of which are landless. It is also deeply integrated with crop production. Livestock
complement crop and grain production and are still a major source of fertilizer and cooking fuel.
The contribution of draft power and farmyard manure to crop production is yet to be fully
quantified. As livestock are more evenly distributed than land and other assets, it forms the main
asset base that meets the dietary needs and provides income to the rural poor. Women are deeply
involved in almost all aspects of livestock farming (Hasnain and Khan, 2007).
The geographical marketing of the buffalo, cattle, goat and sheep populations within Pakistan
indicates the regional importance of the red meat industry. Nearly 57 percent of the national
cattle and buffalo herd of 56.89 million head is located in Punjab, and the majority of Pakistan’s
48 percent sheep and 22 percent goat are located in Balochistan. The marketing of livestock is
not even among different provinces as the Punjab province has about half (43%) of the livestock
inventory including cattle (49%), buffaloes (65%), sheep (24%), goats (37%) and others (47%).
Balochistan harbours majority of sheep as this province alone has 48 % of the sheep population
of the country. Similar to cattle, sheep are also evenly distributed in rest of three provinces.
The major products of livestock are milk and meat which are an important source of animal
protein in human diet. Traditionally, beef and mutton are relatively more consumed as compared
to poultry meat and fish. The marketing of beef and mutton starts from slaughtering of animals
in the abattoirs and in the backyard of butchers’ meat shops. The meat shops usually deal only
one type of meat, i.e. either beef or mutton.
Present exercise is aimed to contribute the process of value chain analysis (VCA) of red meat
(beef and mutton) industry in Pakistan because it facilitates the identification of binding
constraints to growth and competitiveness and the effective targeting of institutional and
policy-related issues, at the sub-sector (meat), at the sector (livestock) and economy-wide
levels alike (FIAS, 2007).
VCA are sometimes “stand-alone” studies that provide direct inputs to government strategies.
For example, in Indonesia, the value chain analyses of selected sectors were key inputs for the
government’s export competitiveness strategy and are a good way to understand relationships
and linkages among buyers, suppliers, and a range of market actors in between (FIAS, 2007). For
example, a coffee value chain links coffee producers to processors and multinational buyers at
one end of the chain, and to suppliers of inputs (such as fertilizer producers) at the other end.
Many VCAs also incorporate the role of transportation, utility, and financial service providers,
among others. However, the focus on inter- and intra-industry and firm relationships - although
extremely useful in its own right - captures mainly market-related insights and often misses the
1
policy and regulatory environment (e.g., taxes, licensing, standards, etc.) in which private firms
operate as well as policies and regulations often have a significant effect on firm-level
competitiveness and the performance of the chain. By explicitly synthesizing government policy
issues with market relationships, the type of value chain analysis used in this report will help to
clarify which binding constraints to growth and competitiveness are affecting the firms that
comprise the meat industry in Pakistan (FIAS, 2007). This study also aimed to contribute to the
process of linking rural industries and enterprises into the mainstream markets to harness the
benefit from the meat value chain. In addition to this study will also develop strategic linkages
with its targets livestock producers, market players and consumers in the country.
2. Objectives of the Study
The objectives of this research are as under: (i) to review the size and nature of meat
farming/industry; (ii) to discuss meat value chain emphasizing the role of key industry players
and the extent of their direct or indirect control on meat animal raising practices; (iii) to identify
key binding constraints to growth and competitiveness of the players in the meat industry for
their specific leverages, either through their linkages to meat industry or through their overall
market position; (iv) to identify and compare the top players of meat value chain; and (v) to
suggest the institutional and policy measures at the sector and economy wide level.
3. Methodology
Maximum efforts were made to gather the relevant information and literature on meat value
chain from various government departments, academic, research and development institutions,
ministries, offices of international organizations, NGOs and journal articles. After the extensive
review of the gathered literature, various stakeholders in the marketing chains, officials in
agricultural research institutions, agricultural universities, L&DD department and private sector
enterprises were consulted on plan for improvement of meat value chain in Pakistan.
Moreover, the farmers/producers and marketing intermediaries were also consulted in order to
get updated first hand information about meat value chain for validating and updating the
information grasped from the literature reviewed. Overall, 16 secondary livestock markets (both
large and small ruminants) were visited. In meat marketing chain, 10 abattoirs, 40 butchers (both
urban and rural), and 100 consumers were consulted.
The problems and issues related to meat production and marketing inefficiencies were therefore
identified through this exercise and prepared proposed plan of action to improve this chain for
the national level.
3.1 The Value Chain Analysis (VCA) Model
VCA model emphasizes on the diverse interrelationships among market opportunities constraints
and directives at various levels of the supply chain and at different levels of influence, from
which specific value addition takes place. This feature of the VCA lends to its completeness, as a
strategic tool in exploring different alternative strategies for poverty reduction. The value chain
2
analysis model used for this study adopted from Asean Foundation and Asia DHRRA (2008)
which is presented in Figure-1.
Capital Flow
Exporters
Input
Suppliers Producers
Processors Wholesalers Retailers Consumers
Information Flow
Enabling environment
Policies Rules and Infrastructure & Enterprise Research & Technology & Socioeconomic & Cultural
Regulations Development Facilities Institutional Services Consideration
Source: Adopted from Asean Foundation and Asia DHRRA (2008)
VCA is a method for accounting and presenting the value that is created in a product or service
as it is transformed from raw inputs to a final product consumed by end users and typically
involves identifying and mapping the relationships of four types of features: (i) the activities
performed during each stage of processing; (ii) the value of inputs, processing time, outputs and
value added; (iii) the spatial relationships, such as distance and logistics, of the activities; and,
(iv) the structure of economic agents, such as suppliers, the producer, and the wholesaler (FIAS,
2007). Meat industry value chain approach introduced in this technical report relies on the
traditional market related context of value chain analysis in identifying failures in sourcing,
manufacturing, and delivery and this approach is unique in recognizing the key public policy,
institutional and infrastructure factors underlying constraints in the meat business environment in
Pakistan. The policy and reform agenda that typically emerges from the value chain approach
relates to three core areas (i) Product market issues (e.g., trade policy, competition policy, price
distortions, subsidies, licensing, product standards, customs, logistics, property rights,
enforcement of regulations); (ii) Factor market issues (e.g., wages, capital charges, utility
market issues, labor market rigidities, land price, zoning); and (iii) Market related issues (e.g.,
market diversification, research and development, product diversification, supplier linkages).
4. Organization of the Report
Structure of red meat farming/industry in Pakistan is discussed in section 2. Following

introduction, characteristics of meat sub-sector are narrated in section 5. The process of meat
supply chain is briefly explained in section 6. Different segments of red meat value chain (input
provision, meat animal production, marketing of meat animals, processing (slaughtering) and
meat marketing) are discussed in detail in section 7. Section 8 is devoted to summary of meat
value chain in the country. The SWOT of meat value chain is presented in section 9. An action
plan for meat value chain is proposed in section 10. Summary and conclusions in section 11
completes the report.
3
5. Characteristics of Meat Sub-Sector
Livestock can be classified as large ruminants (cow and buffaloes) and small ruminants (sheep
and goat). More than 3/4th of the population of large ruminants falls under the category of herd
size below 10 animal heads. More or less 70 percent of large ruminants farming households have
less than 5 animal units which implies that majority of the large ruminants farming population
have subsistence sized herds of large ruminants, although they represent about two-fifth of the
total population. In case of small ruminants, nearly three-fourth of total sheep farming
households keep about one-fifth of total sheep population by having flock size ranging 1-15
animal heads. On the other hand, about 90 percent of the goat farming households kept half of
the total goat population with the flock size ranged 1-15 animal heads. This again implies that
majority of the small ruminants farming households are subsistence farmers. It can be concluded
that majority of the livestock farming households are keeping small sized herd and flocks of
small and large ruminants respectively.
Four types of cattle farming are prevalent in the country which are known as rural irrigated
(17.34 million heads), rural barani (15.42 million heads), progressive farming (0.025 million
heads) and peri urban (0.213 million heads). There are also four types of buffaloes farming in the
country which are known as rural subsistence (20.369 million heads), rural market oriented
(7.775 million heads), peri urban (1.636 million heads) and commercial (0.143 million heads).
Number of cattle, buffaloes and camels slaughtered were 7.673 million heads, 3.676 million
heads and 0.224 million heads respectively by 4.412 million households. The meat sub-sector
value of slaughtered beef animal was Rs.175.01 billion in the country during 2008-09 (Table 1).
Four types of small ruminant farming are prevalent in the country which are known as nomadic
(5.42 million heads), transhumant (26.98 million heads), sedentary (34.86 million heads) and
households (18.47 million heads).
6. Meat Supply Chain in Pakistan
The supply chain deals with the all the activities from inception (inputs, production, processing
and distribution) of a product to its consumption. The meat supply chain (flow of meat animal to
meat for domestic market and export market) is presented in Figure 2. The meat animals for the
meat industry are mainly comes from the livestock farmers which contribute about 97 percent of
the total meat animals (23.764 million). Feed lot fattening contribute 2.1 percent meat animals
(0.514 million animals). Less than 1 percent meat animals are produced by the meat exporter at
their own farm.
Livestock farmers sell their animals (80%) to beopari, take animals (5%) to live animals markets
and sell to rural butcher (15%). Beopari sell their animals (98%) at live animals markets and 2
percent of them to rural butcher. From live animals markets, 52 percent meat animals are
purchased by contractors, 15 percent by traveler traders, 31 & 2 percent animals are purchased
by urban and rural butchers respectively. The animals contractors sell their 27, 72 and 1 percent
of meat animals to the traveling traders, urban butchers and exporters respectively. The traveler
traders sell their animals to urban butchers (84%) and take to slaughter house (16%). From feed
lot fattening, meat animals are sold to beopari (71%), livestock markets (18%), contractors
(10%) and rural butchers (1%).
4
Table 1: Key characteristics of meat sub-sector, 2008-09
Characteristics Meat sub-sector
Herd size cattle HH reported (million) Cattle inventory (million heads)
1-4 4.37 11.55
5-10 1.46 10.74
11-20 0.28 4.28
21-30 0.05 1.26
> 30 0.04 5.17
6.20 33
Herd size buffalo HH reported (million) Buffalo inventory (million heads)
1-4 4.20 10.01
5-10 1.43 10.35
11-20 0.29 4.45
21-30 0.04 1.18
> 30 0.03 2.92
5.99 29.91
Flock size sheep HH reported (million) Sheep inventory (million heads)
1-15 1.203 6.03
16-50 0.268 7.53
51-150 0.073 6.17
151-350 0.015 3.34
> 350 0.006 4.33
1.565 27.40
Flock size goat HH reported (million) Goat inventory (million heads)
1-15 6.172 29.89
16-50 0.531 14.63
51-150 0.083 7.12
151-350 0.013 3.03
> 350 0.004 3.62
6.803 58.29
Type of farming Cattle Cattle inventory (million heads)
- Rural irrigated 17.342
- Rural barani 15.420
- Progressive 0.0250
- Per urban 0.213
Types of farming Buffaloes Buffalo inventory (million heads)
- Rural subsistence 20.369
- Rural market oriented 7.775
- Peri urban 1.636
- Commercial 0.143
Type of farming Sheep and goat Sheep & goat inventory (million heads)
- Nomadic 5.42
- Transhumant 26.98
- Sedentary 34.86
- Household 18.47
Number of households reported slaughtering – beef animals 4.412 million
- mutton animals 3.985 million
Number of animal slaughted: Cattle 7.673 million
- Bullocks 1.002
- Cows > 3 years 1.552
- Youngstock (male) 0.971
- Youngstock (female) 0.448
Number of animal slaughted Buffaloes 3.676 million
- Male (adult) 0.624
- Female (adult) 1.225
- Youngstock (male) 1.488
- Youngstock (female) 0.339
Number of animal slaughted: Small ruminants 16.82 million heads
- Sheep 3.757
- Youngstock 1.136
- Goat 9.634
- Youngstock 2.293
Number of animal slaughted Camel 0.024 million
- Camel (adult) 0.016
- Youngstock 0.008
Meat sub-sector value of slaughted - beef animals 173.595 billion
- mutton animals 92.960 billion
Key desirable traits Meat production, reproductive capacity
Provinces where product is number one – beef animals Punjab and Sindh
- mutton animals Balochistan, NWFP, Punjab and Sindh
5
Meat (beef and mutton) are marketed from recognized and non-recognized slaughter house to
wholesalers (30%) and retailers (70%). Wholesalers sell their meat to retailers (90%), hotel and
restaurants (5%), food services and suppliers (3%) and super markets (2%). Retailers sell their all
meat to the consumers. Urban butchers sell their meat to consumers (93%), food suppliers (3%)
and hotel and restaurants (4%). The rural butchers sell all the meat to the rural consumers. The
offals are traded by offal contractors who sell to the offal retailers (50%) and to offal processors
(50%). Offal retailers sell all the offals to the consumers. The offals processors sell all their
offals to the offal exporters (Figure 2).
7. Red Meat Value Chain in Pakistan
This section is devoted to the five segments of red meat value chain in Pakistan. The value chain
deals with the diverse interrelationships among market opportunities constraints and directives at
various levels of the supply chain and at different levels of influence, from which specific value
addition takes place. These segments are input provision/supplies, meat animal production, meat
animal marketing, processing and meat domestic and export markets. The basic structure of the
Pakistan meat sub-sector is depicted in the meat value chain in Pakistan for the year 2008-09 in
Figure 3. The first column in the red meat value chain “inputs” refers to the main products and
services that cattle, buffaloes, sheep and goats farmers need in order to raise beef animals,
including feed, veterinary services, and seedstock (breeding).
The “production” column includes three separate stages of beef and mutton animals,
representing three different types of farmers: those with cattle & buffaloes, sheep & goat
operations (where beef and mutton animals are produced under different production system in
the country) and feedlot operators (who confine beef and mutton animals and feed them a high-
energy diet of grains/wanda to bring them to slaughter weight). One important box “dairy beef”
(cow and buffalo) and “dairy mutton” (sheep and goat enters the Pakistan beef and mutton
industry value chain laterally, from the dairy industry. A portion of the Pakistan beef industry is
made up of dairy beef and dairy mutton that comes from cows, buffaloes, sheep and goat culled
from dairy herds because, for age or other reasons, they are not productive for dairy purposes.
“Meat animal marketing” column includes the purchase of these animals by traders in the
country. These traders collect animals from the villages and sell them to wholesalers called
Beopari or take them himself to the local live animals markets. In big cities (Lahore, Karachi,
Peshawer, Quetta, Multan, Gujranwala) and towns commission agents called Arhties also operate
in most parts of the country. In Lahore, there is another group of wholesalers called Rewaitees.
They buy large number of sheep and goats from the Beoparies, through the Arhties, have them
slaughtered and then sell them to the retailers through secret bidding. Several butchers
collectively may also buy several animals from the Arhties, slaughter them and sell the dressed
carcasses/meat to the consumers. There are no commission agents in Baluchistan. The Beoparies
arrange large number of animals from large markets like Quetta and then transport them to main
consumer outlets like Karachi and Lahore.
6
Figure 2: Supply Chain for Red Meat
Exporter own Farms Livestock Farmers (97%) Feed lot Fattening

(<1%) (2.1%)
s 10
o % 18
u %
5% 80% 71
r 52%
98% %
c 100 Contractor Live animal
Beoparies 1%
e % Markets 15%
2%
27% 15%
2%
1% Trader 72% 31%
16 84
% %
m Exporters Recognized U. Butchers R. Butchers

S. House Slaughterhouse (30%) (21%)
a (1%) (49%)
k
e
100 70% 7%
% 100
% 30%
100
Offals Hotels/Food
%
Contractors Retailers Wholesaler
Chains
d 99 s
e % 50% 90% 8%
l
i Offals 93
Retailer %
v 2%
e
r Super Stores
100 100
50% % %
Offals
100 Processor
% CONSUMERS (98.8%)
100
%
EXPORT (1.2%)
7
“Processing (Slaughtering)” column of the value chain includes slaughtering of mutton and
beef animals at recognized and non-recognized slaughter houses both in urban and rural areas.
Distribution is achieved through wholesalers or director sale to retailers (butchers), although the
wholesale role is increasing being perform by the large handlers and processors.
At the end of the meat value chain, in the “Distribution (Meat Marketing)” column includes
retailers, super markets, restaurants, and food service suppliers which provide dining and
vending services for corporate clients such as offices, universities, wedding ceremonies and
healthcare institutions.
Figure 3: Red Meat Value Chain in Pakistan, 2008-09
Processing Distribution
Inputs Meat Animals Production Meat Animals (Meat Marketing)
(Slaughtering)
Marketing
Recognized and Non- Wholesalers

Feed Recognized Urban and
Cattle Farming Buffalo Farming Transport
Rural Slaughter Houses as
well as Eid-ul-Azha
UBs & RBs

Retailers
Handling, Packing
and Loading
Sheep and Goats (Butchers) Hotel and
Veterinary
Services Restaurants
Food Service
Suppliers
Feedlots Fattening Meat Transport
Super Markets
Genetics Culled Beef Culled Mutton Live Export

(Breeds) Animals Animals Meat Export
Consumers
7.1 Input Provision/Supplies --- 1st Segment of Value Chain
The first column in the chain “Inputs” refers to the main products and services that cattle and
buffaloes farmers need in order to raise beef animals, including feed, veterinary services, and
breeding. The current situation of each input and binding constraints to input supply are briefly
discussed here.
8
7.1.1 Feed
Feed includes fodder, concentrates and pastures. Livestock producers reported that fodder and
feed are very expensive due to their limited supplies. Area under fodder crop has declined from
2.75 million hectares in 1986 to 2.45 million hectares in 2006. The number of livestock heads
has increased from 110.238 million heads in 1996 to 154.289 million heads in 2009. The
livestock population and fodder production are inversely related. The fodder area per adult
animal unit has significantly declined from 0.067 ha in 1986 to 0.035 ha in 2006. The fodder
production per adult animal unit also has declined from 1.31 ton in 1986 to 0.80 ton in 2006. The
concentrate and wheat straw availability per adult animal unit has also declined from 1986 to
2006 (Table 2).
Table 2: Feed availability for livestock census years

Items 1986 1996 2006
Fodder area (m.ha) 2.75 2.72 2.45
Fodder production (m.ton) 54.48 60.34 55.47
Fodder productivity (t/ha) 19.60 22.20 22.66
Concentrate availability (m.ton) 1.4 2.1 2.5
Wheat straw (m.ton) 13.9 16.9 21.27
Adult animal units (m) 41.52 52.40 69.26
Fodder area per adult animal unit (ha) 0.067 0.052 0.035
Fodder availability per adult animal unit (ton) 1.31 1.15 0.80
Adult animals units feeded from a hectare of fodder 14.96 19.30 28.29
Adult animal units feeded from a tonne of fodder 0.76 0.87 1.25
Concentrate availability per adult animal unit (ton) 0.034 0.040 0.036
Wheat straw availability per adult animal unit (ton) 0.335 0.323 0.307
7.1.2 Pasture resources

The total pasture area in different parts of Pakistan is 50.88 m.ha in 1988 (Table 3). The numbers
of adult animal units of small ruminants are 10.7 million. The rangeland per adult animal of
small ruminant is 4.76 ha/animal. FAO (1987) has reported a critical stocking rate of 16
ha/animal unit for low potential ranges. Due to misuse and centuries of overgrazing, the
productivity of rangelands has been adversely affected. At present, rangelands are producing
only 10 to 15% of their potential. This low productivity can be increased by adopting various
management practices such as periodic closures, re-seeding, and improved grazing management
etc. (Muhammad, 2002).
Table 3: Area of rangelands in Pakistan, 1988
Province Total area Rangeland area Percentage of provincial
(M ha) (M ha) area
Balochistan 34.7 27.4 79
Sind 14.1 7.8 55
Punjab 20.6 8.2 40
NWFP 10.2 6.1 60
Northern Areas 7.0 2.1 30
Azad Kashmir 1.3 0.6 45
Total 88.0 45.2 51
Source: NCA, 1988
Using the data of pastures available in 1988 and number of small ruminants in 2006, 4.76
hectares of rangeland is available per adult small ruminant in Pakistan (Table 4).
9
Table 4: Status of rangeland in Pakistan during 1988
Area of rangeland 1988
Area (m.ha) 50.88
Adult animal unit (small ruminant) - million 10.7
Rangeland/adult animal unit (small ruminant) - ha/AAU 4.76
Source: Muhammad, 1987
7.1.3 Veterinary services

The number of livestock hospital, dispensaries, artificial insemination centres, livestock professional and
sub-professional is limited in order to cover the livestock population in the country and therefore
veterinary services to livestock are poor (Table 5). Although, there are several research institutes, research
in livestock is rather weak mainly because of shortage of trained manpower, research facilities and
operational funds (Hasnain and Khan, 2007). The availability of veterinary services per adult animal is
very limited in Pakistan.
Table 5: Livestock veterinary services
Livestock extension services 2006
Adult animal units 69.26
Veterinary hospital 800
Veterinary dispensaries/centres 5000
Artificiel insemination (AI) centres/sub-centres 1000
Livestock research institutes 12
Livestock/poultry farms 100
Professional 2000
Sub-professional 5000
Adult animal units/hospital 86575
Adult animal units/dispensary 13852
Adult animal units/AI 69260
Adult animal units/professional 34630
Adult animal units/sub-professional 13852
7.1.4 Animal genetics resources

Reliable data on almost all aspects of livestock biodiversity in Pakistan is very limited. Even the breed
inventory of species particularly of sheep and goats is not complete. Recently, Hasnain and Usmani
(2006) have reviewed the state of animal genetic resources in Pakistan which is reproduced in Table 6.
Pakistan has 9 species of livestock. Several breeds of these cattle, buffaloes, sheep, goats, camels, etc. are
transboundry breeds because these also exist in some other countries of the region (Hasnain and Khan,
2007). Some examples of transboundry breeds are Sahiwal and Thari cattle, Nili-Ravi buffaloes, Beetal
goats and Aseel chickens (Hasnain and Usmani, 2006). Moreover, it is claimed by many professionals
that some breeds of these species particularly of sheep and goats are yet to be identified, characterized and
reported (Hasnain and Khan, 2007). The input use level in the form of genetics/breeds, feed (green
fodder, dry fodder, concentrates and pastures) and veterinary services (medicines, vaccination and a.
insemination), increasing/declining trends for using these inputs regarding their access and use and their
effect on meat animal production and productivity are summarized in the Figure 4.
Table 6: Animal Genetic Resources of Pakistan
Species No. of breeds
Cattle 10
Buffaloes 3
Sheep 28
Goats 25
Camels 20
Horses 2
Donkeys 1
Yaks 1
Chicken 3
Source: Hasnain and Khan, 2007
10
Figure 4: “Inputs” 1st segment of meat value chain
“INPUTS”
Genetics/Breeds
Feed
Veterinary Services
GENETICS/BREEDS FEED VETERINARY

 Cattle (10)  Green fodder SERVICES
 Buffaloes (3)  Dry fodder  Medicines
 Sheep (28)  Concentrates  Vaccination
 Goat (25)  Pastures/grazing  A. insemination
 Fodder availability/ adult animal
unit declined 1.5 ton from 1996 to  High disease incidence and
0.80 ton in 2006 high mortality
Transboundry breeds– Shaiwal  Wheat straw availability per adult  Limited access to livestock
and Thari cattle, Nili-Ravi animal unit has declined from 0.323
buffaloes and Beetal goats services
ton in 1996 to 0.307 ton in 2006
 Concentrates availability per adult  Low level of farmer’s
animal unit declined from 0.04 ton
satisfaction
in 1996 to 0.036 ton in 2006  High cost of veterinary
Haphazard breeding  Rangeland per adult animal unit – services
Traditional unscientific
small ruminants is only 4.76  A veterinary hospital, a
ha/annum – low productivity of veterinary dispensary and a
management rangeland due to over grazing and
artificial insemination centre
exploitation
is available for 86575, 13852
 During the current era these children and 69260 adult animals unit
prefer to go for daily wage work respectively during 2006
rather than grazing and grass cutting
There are no beef breeds of cattle livestock census
due to social status of herders
and beef is at best a by-product in
 High cost of feeds  A veterinary professional and
Pakistan a sub-professional is available
 Number of nomadic from for 34630 and 13852 adult
Afghanistan has disappeared due to animal unit during 2006
war and terror
livestock census
 Such decline of availability for  Medicines are very expensive
green and dry fodders and
Need improved breeding for meat concentrates overtime led to poor  Due to limited availability of
and inadequate nutrition which veterinary services and
animal programme with modern
resulted in low animal productivity expensive medicines,
and scientific management
 Large and small ruminants are livestock herders are using at
performing much below their low level resulting poor
genetic potential due to poor and livestock productivity
inadequate nutrition which lead to
compounded by the low genetic
ceiling of livestock
Issues of “Inputs”
1. Haphazard breeding and traditional unscientific management
2. Availability of feed (green & dry fodders, concentrate and pastures) per adult animal declined overtime led to inadequate
nutrition and feed is expansive
3. Limited coverage of veterinary services (medicines, vaccination & AI) and medicines are expansive
4. Low input system (expansive inputs and therefore farmers are using at low level)
11
7.2 Meat Animal Production --- 2nd Segment of Value Chain
Total milk and meat animals for the year 2008-09 is 154.2 million heads (Table 7). There were
33 million cattle (including both beef and dairy). Out of this, 4.6 million heads were bullock, 7.2
million heads dry cows (beef cow) and 9.7 million heads in-milk cows. 11.5 million heads were
cow young stock. Likewise, there were about 30 million buffaloes (including both beef and
dairy). Out of this, 0.7 million heads were male buffaloes (beef animal), 5.9 million heads dry
buffaloes (beef animal) and 11.1 million heads in-milk buffaloes. There was 12.2 million heads
of buffaloes young stock. Total sheep was 27.4 million heads. Out of this, male sheep was 4.5
million heads (mutton animal) and female sheep was 14.2 million heads. There was 8.7 million
heads sheep young stock. Just more than 58 million heads of goat was recorded for the year
2008-09. Out of this, 7.2 million heads was male goat (mutton animal) and 38.8 million heads of
female goat. There was 17.3 million heads goat young stock during 2008-09 (Table 7).
Table 7: Milk and meat animals and gross value 2008-09

Type of Animal Livestock Census Extrapolated* Price Gross Value
(Million heads) for 2009
1996 2006 (Rs./Animal) (Rs. Billions)
Milk and Meat Animals
(i) Total Cattle 20.4 29.6 33 793.1
Bullocks (3 years & above) 3.7 4.1 4.6 42000 193.2
Dry cows (3 years & above) 3.7 6.5 7.2 17000 122.4
In-milk cows (3 years & above) 6.3 8.7 9.7 35000 339.5
Young stock (below 3 years) 6.7 10.3 11.5 12000 138
(ii) Total Buffaloes 20.3 27.4 29.9 939.4
Male buffaloes (3 years & above) 0.4 0.6 0.7 50000 35
Dry female buffaloes (3 years & 4.4 5.4 5.9 25000 147.5
above)
In-milk buffaloes female buffaloes 7.8 10.2 11.1 55000 610.5
(3 years & above)
Young stock (below 3 years) 7.7 11.2 12.2 12000 146.4
(iii) Total Sheep 23.5 26.5 27.4 156.15
Male (1 year & above) 3.4 4.4 4.5 9000 40.5
Female (1 year & above) 13.3 13.7 14.2 6000 85.2
Young stock (below 1 year) 6.8 8.4 8.7 3500 30.45
(iv) Total Goats 41.2 53.8 58.3 205.67
Male (1 year & above) 5.2 6.6 7.2 5200 37.44
Female (1 year & above) 22.4 31.2 33.8 3800 128.44
Young stock (below 1 year) 13.6 16 17.3 2300 39.79
(v) Others 4.838 5.687 5.689
Camel 0.815 0.92 0.921 40000 36.835
Horses 0.333 0.344 0.344 40000 13.77
Mules 0.131 0.155 0.156 50000 7.785
Donkeys 3.559 4.268 4.268 10000 42.685
Total 110.238 142.987 154.289 2195.391
Source: Pakistan Livestock Census, 2006
* Economic Survey 2008-09 and extrapolated using the proportion of 2006 census data
12
7.2.1 Cost of production of meat animals at feed lot farmers
During the recent years feed lot fattening is also gaining popularity among the progressive
farmers and there is also shift towards rearing meat animals against the previous practice of
producing beef as a by product of dairy animals and draft animals. There was no practice of
rearing mutton animals as feed lot specifically. The cost of production for feed lot farm for both
beef and mutton is calculated and presented in the subsequent sections.
7.2.1.1 Cost of production of beef animals
The cost of production of beef animals at feed lot farms is calculated and presented in Table 8.
To get a representative estimates, an owner herd size of 40 animals was interviewed for
estimating cost of production. The farm gate price of the beef animal with an average weight of
109 kg including the transportation charges was Rs.9800/head. The cost of production for about
three month was calculated at Rs.5034 with a weight increase of 54 kg. The value of output was
Rs.15270 per animal resulting a profit of Rs.436 without subsidy and Rs.1836 with subsidy per
animal.
Table 8: Cost of production of beef animals at feed lot farms

Items Unit Cost per animal
Purchase Price Rs./Animal 9650
Transportation Rs./Animal 150
Initial Weight Kg/Animal 109
Initial Price Rs./Kg Live weight 90
VC: Labor (2 Persons @ 4000/month/person Rs./Animal 600
Electricity Rs./Animal 45
Rougages (hey,straw,fodder) Rs./Animal 1800
Wanda Rs./Animal 1620
Medicines Rs./Animal 100
Sub-Total 4165
Interest on variable cost Rs./Animal 125.00
Interest on value of animal @ 12 %pa Rs./Animal 294.00
Shed cost at 12% Rs./Animal 450.00
Fixed Cost Rs./Animal 869.00
Cost of Production Rs./Animal 5034.00
Income
Sale of Animal Rs./Animal 15000.00
FYM Rs./Animal 270.00
Total Value of Animal at sale Rs./Animal 15270
Subsidy Rs./Animal 1400.00
Gross Income Without Subsidy Rs./Animal 15270.00
Net Income Without Subsidy Rs./Animal 436.05
Gross Income With Subsidy Rs./Animal 16670.00
Net Income With Subsidy Rs./Animal 1836.05
Initial Weight Kg/Animal 109.00
Final Weight Kg/Animal 163.00
Difference Kg/Animal 54.00
13
7.2.1.2 Cost of production of mutton animals
The cost of production mutton animals for a flock of 150 animals is calculated and presented in
Table 9. The purchase price for a 25Kg animal was Rs.3150 per animal including the
transportation cost. The cost of production to the feed lot farmers for mutton animal is estimated
at Rs.1277 per animal and the value of out put is Rs.4529 per animal. Net income with a weight
gain of about 10.8 kg per animal was estimated at Rs.102 per animal and a subsidy of Rs.400 per
mutton (male) animal was provided to the farmers.
Table 9: Cost of production of mutton animals

Variable Costs
Labor (2 Persons @ 4000/month/person Rs./Animal 160
Roughages (hay, straw, fodder) Rs./Animal 80
Sub-Total 1038
Income
Total Value of Animal at sale Rs./Animal 4529.00
Production of meat animals (beef and mutton) at general farm level, feed lot fattening and culling
from dairy animals, cost of production of meat animal at feed lot fattening and issues related to
production of meat animals are summarized in Figure 5.
14
Figure 5: “Production” 2nd Segment of Meat Value Chain
“MEAT ANIMALS PRODUCTION”

Meat (Beef and Mutton) Animals = 24.493 million heads with a value of Rs.266.557 billion
Beef Animals = 7.673 million heads with a value of Rs.173.5965 billion
Cattle = 3.973 million heads with a value of Rs.93.172 billion
Buffaloes = 3.676 million heads with a value of Rs.79.6245 billion
Mutton Animals = 16.82 million heads with a value of Rs.92.960 billion
Sheep = 4.8993 million heads with a value of Rs.36.0768 billion
Goat = 11.927 million heads with a value of Rs.56.8834 billion
TRADITIONAL MEAT FEED LOT FATTENING CULLING FROM

RAISING ANIMALS DAIRY ANIMALS
Fattening of beef animals
Beef Animals = 0.0956 m.h
Culled beef animals from
Raising of Beef Animals (million heads) Cattle = 0.0496 m.h
dairy animals
Buffaloes = 0.0459 m.h
Cost of production of 40 beef Beef Animal = 1.262 m.h
animals on commercial basis Cattle = 0.655 m.h
Beef Animals = 6.292 (Rs./animal) Buffalo = 0.606 m.h
Output (value of animal at sale) = 15270
Cattle = 3.268 Variable cost = 5034
Fixed cost = 9800
Buffaloes = 3.024 Cost of production = 14834
Gross margin = 10236
Net income = 436 Culled mutton animals from
female sheep and goats
Fattening of mutton animals
Mutton Animals = 0.025252m.h Mutton Animal = 3.365 m.h
Sheep = 0.00734 m.h Sheep = 0.979 m.h
Mutton Animals = 13.436 Goats = 0.0178 m.h Goat = 2.385 m.h
Sheep = 3.912 Cost of production of 150 mutton
animals on commercial basis A portion of meat sub-sector is
Goats = 9.524 made up of dairy meat and
Output (value of animal at sale) = 4529
Variable cost = 1276 mutton that comes from in-
Fixed cost = 3150 milking cows and buffaloes,
Cost of production = 4426 female sheep and female goats
Gross margin = 3253 culled from dairy herds because
Low inputs (no beef breeds of cattle, Net income = 103 for age for other reasons, they
inadequate nutrition and limited Confined to beef and mutton animals with are not productive for dairy
availability of veterinary services) leads concentrate feed (wanda) to bring them to purposes and reproductive
to low livestock productivity slaughter weight which implies higher potential
inputs and better management, feed lot
fattening is profitable enterprise
ISSUES OF MEAT ANIMALS PRODUCTION

1. Weak and unhealthy genetic and breeding lines because no beef breeds of cattle and beef is at best a by-product
2. No concept of herd health management
3. Low output system due to low input system
15
7.3 Marketing of Meat Animals ---3rd Segment of Meat Value Chain
Livestock are generally marketed either at village level by personal contact between buyer and
seller or at special places called livestock markets organized for animal trade. These livestock
markets are organized at sub-tehsil, tehsil, district and division levels on daily, weekly,
fortnightly and monthly bases (Sharif et al., 2003). Both buyers and sellers are well informed
about these market days as the days/dates are remained unchanged since ages.
Smaller or primary markets are present in the rural anterior whereas larger or secondary markets
are usually organized near the urban centers, on the main roads. In addition, some special
livestock markets are also organized on provincial/regional festivals. Daily-based special
markets are also organized at least 2-3 weeks before the eve of Eid-ul-Azha. In addition, some
livestock markets are also introduced in the private sector.
In general, both small and large ruminants are traded in the same markets, however at some
places, buffalo, cattle, sheep and goats are also traded in separate markets. For instance, in
bakker mandies, only small ruminants are marketed. Various types of beoparies, animal traders
and farmers bring their livestock in these for selling (Sharif et al 2003).
In villages, depending upon the nature of need arisen, the farmers choose time, place and agency
for disposing their animals. There are several reasons for sale like urgent domestic need, as
regular means of income, disposal of culled animals and scarcity of feeds/fodders as during
droughts. Cattle and buffaloes are sold generally at the peak of their performance around 5-7
years of age or when they are about to calve. Heifers are disposed off at about 25-30 months of
age. Working bullocks are sold after training as work animals. All culled animals are sold for
meat when no longer fit for work or milk production. Sheep and goats are sold generally before
one year of age (Hasnain and Khan 2007).
7.3.1 Market infrastructure
Majority of the livestock markets are under the direct control of the relevant local administration
and the market holding days/dates are notified. The local administration/cantonment boards for
animal trading provide special places for animal trading. The management responsibilities are
contracted out on annual basis by open auction (Sharif et al., 2003). Depending upon the type,
size of the market and the number of animals traded, and the practice of commission on sale
price of animal or as entry fee only the contractual amount found varied between 0.5 million
rupees to 500 million rupees.
Some of the markets like Karachi, Peshawar and Quetta the individual arthies provide place and
basic facilities for animals to the beoparies and charge on per animal or truck load basis and
there is only entry fee of Rs.10 per small ruminant and Rs.25 per large animal. The contracted
money is received-back by the contractor from the buyers and sellers in the form of commission
or market fee. The local administration decides about the amount/percentage of market/entry fee
to be charged. In Punjab 3-5% of the value of the animal sold is charged as market fee. In
general, basic facilities like boundaries, electricity, loading-unloading facilities, animal watering,
animal shelter, weighing, telephone and communication, easy availability of transport, the
16
services of veterinary doctor etc. are lacking in majority of the markets. Private vendors usually
provide the food and fodder services. In primary markets, the quality of roads leading to these
markets is also poor. In NWFP and Balochistan, at some areas only a piece of land is available as
livestock markets whereas in other areas, farmers have to travel for very long distance to sell
their animals in these markets. It seems that these livestock markets are a source of revenue for
the local governments/cantonment boards. There is no investment of the contracted money for
provision of various facilities in these livestock markets.
7.3.2 Live animals market intermediaries
Beoparies and commission agents are main intermediaries of livestock markets. The market
intermediaries are comparatively well informed about market situations than the farmers.
Although the services of broker or “dallal” are available, but most of the times they extend more
favor to buyers than farmers. Some farmers complained about forming cartels by market
intermediaries by not offering prices beyond some limits.
In this way, both beoparies and commission agents exploit them. The transport means used are
not suitable, therefore, causing physical distress, bruising and other internal/external injuries to
the animals (Sharif et al., 2003). The estimated cost of transport for beef (cattle and buffaloes)
animals and mutton (sheep and goat) animals from farmers to slaughter places via livestock
markets is Rs.6.125 billion and Rs.2.324 billion respectively during 2008-09.
Number of animals marketed both in domestic market and export market, from livestock
farmers, feed lot fattening and exporter own farm, various marketing channels of livestock
farmers, feed lot fattening and exporter own farm, live animals transporting cost in domestic
markets and issues related to marketing of meat animals are briefly presented in Figure 6.
7.4 Processing (Slaughtering) ---- 4th Segment of Meat Value Chain
7.4.1 Animals for slaughtering
Red meat has two components namely beef and mutton. The beef is mainly produced by cattle
and buffaloes in Pakistan. A negligible quantity of beef is also obtained from camel and yaks.
The second part, mutton mainly comes from sheep and goats. Generally speaking, camel meat is
eaten mainly be camel herders but now it is reported that camels are also regularly slaughtered in
Karachi and the coastal areas of Balochistan like Lasbela and Uthal (Hasnain and Khan, 2007). It
is also used for sacrifice during Eid Al Adha. Yak meat is only eaten in the Northern Area of
Pakistan because that is where these animals are maintained (Hasnain and Khan, 2007). There
were 24.493 million heads of beef (7.673 million heads) and mutton (16.82 million heads)
animals which were slaughtered during 2008-09. The gross value of meat industry was
Rs.266.557 billion where the gross value of beef and mutton animals was Rs.173.59 billion and
Rs.92.960 billions respectively (Table 10). Numbers of sheep and goats slaughtered were 16.82
million heads by 3.985 million households. The industry value of slaughtered mutton animal was
Rs.73.65 billion in the country during 2008-09.
17
Figure 6: “Live Animals Marketing” 3rd Segment of Meat Value Chain
“LIVE ANIMALS MARKETING”

Meat Animals Marketed = 24.493 million heads
Meat Animals Marketed in Domestic Market for Slaughtering = 24.495 million heads
Meat Animals Exported (Average 2001-05) = 33477 with a export value of Rs.309.01 million
Beef Animals Exported = Average 2001-05 = 23107 with a export value of Rs.284.58 million
Mutton Animals Exported = Average 2001-05 = 10370 with a export value of Rs.24.43 million
LIVESTOCK FARMERS FEED LOT EXPORTER OWN

(97%) FATTENING FARM
23.764 million animals were marketed (2.1%) (< 1%)
from traditional farmers
0.514 million animals were 0.220 million animals were
C-1 marketed from feed lotting marketed from feed lotting
Farmer to Beopari = 80%
Farmer to Live Animal Market = 5%
Farmer to Rural Butcher = 15% Feed lot to R.Butcher = 1% Exporter Own Farm to Exporting
C-2 Destination = 100%
Beopari to Live Animal Market = 98%
Beopair to Rural Butcher = 2%
Feed lot to Beopari = 71%
C-3
Animal Market to Contractors = 52%
Animal Market to T.Traders = 15%
Animal Market to U.Butcher = 31% Feed lot to L. Market = 18%
Animal Market to R.Butcher = 2%
C-4
Contractor to T.Traders = 27%
Feed lot to Contractor = 10%
Contractor to Exporters = 1%
Contractor to U.Butcher = 72%
C-5
Traveler Trader to S.House = 16%
Traveler Trader to U. Butcher = 84%
LIVE ANIMALS TRANSPORTING COSTS

Beef Animals Transport Cost for Domestic Market = Rs.6.075 billion
Mutton Animals Transport Cost for Domestic Market = 3.253 billion
ISSUES OF MARKETING LIVE ANIMALS

1. Inadequate basic facilities at live animals market (watering, shelter, feed and fodder, absence of weighing machine and
market committee) because there is no investment of the contracted money for provision of various facilities in these
livestock markets.
2. Non-availability of specific transport and overloading without refrigeration
3. Delay in live animal delivery
4. Inadequate livestock marketing information system and marketing regulatory agency as well as policy
5. Faulty pricing mechanism of meat animals (per head basis rather than weight basis)
6. Livestock animals smuggling to Afghanistan 18
There are no beef breeds of cattle and it is at best a byproduct. Working cattle, cows and
buffaloes that are no longer able to work or produce milk are slaughtered and consumed as beef
and therefore beef form such animals is of poor quality (Hasnain and Khan, 2007). They further
stated that young male calves particularly of buffaloes are generally not reared and thus
slaughtered at an early age and low live weight. They also further argued that the other reason for
the early slaughter of sucklers is the high cost of milk replacers and non-availability of
economical early weaning diets and therefore beef is the cheapest meat whether it is from cattle
or buffaloes.
Table 10: Total number of animals slaughtered and value, 2009

Type of Animal Slaughtered Animals (million heads) Price Value
2006 2009 (Rs./Animal) (Rs. Billion)
Bullocks 0.893 1.002 40500 40.581
Cow 1.396 1.552 22000 34.144
YS male 0.874 0.971 13000 12.623
YS Female 0.399 0.448 13000 5.824
Cattle 3.562 3.973 93.172
Male Buffalo 0.535 0.624 38000 23.712
Female Buffalo 1.124 1.225 27000 33.075
YS Male 1.371 1.488 12500 18.6
YS Female 0.31 0.339 12500 4.2375
Buffaloes 3.34 3.676 79.6245
Camel 0.016 0.016 40000 0.64
YS Camel 0.008 0.008 20000 0.16
Camels 0.024 0.024 0.8
Total Beef Animals 6.926 7.673 173.5965
Sheep 3.636 3.757 8000 30.056
YS Sheep 1.097 1.136 5300 6.0208
Sheep 4.733 4.893
Goat 8.882 9.634 5000 48.17
YS Goat 2.121 2.293 3800 8.7134
Goats 11.003 11.927 56.8834
Total Mutton Animals 15.736 16.82 92.96
Total Meat Animals 22.662 24.493 266.557
Source: Livestock Census, 2006 and extrapolated for 2008-09 using data from Economic Survey 2008-09
7.4.2 The Slaughtering system
According to the West Pakistan Slaughter Control Act 1963, slaughtering of small and large
ruminants should strictly be undertaken in recognized slaughterhouses with ante- and post-
mortem veterinary inspection (Sharif et al., 2003). Similarly, according to the Pakistan
slaughterhouse act of 1983, the killing of animals outside the boundary of slaughterhouses is
prohibited. Recognized slaughterhouses usually provide separate buildings for slaughtering large
and small animals. There are 295 recognized slaughterhouses, 27 in NWFP, 174 in Punjab, 60 in
Sindh and 34 in Balochistan (Sharif et al., 2003). Presently, slaughtering of small and large
ruminants is done in municipal, cantonment and private slaughterhouses, and in the backyards of
meat retailers in villages. Local municipal corporations operate majority of the urban
slaughterhouses. 16 slaughterhouses are also established in the private sector. Majority of
slaughterhouses are now located in the thick-populated areas.
19
In general, the existing slaughterhouse facilities are highly insufficient than the requirements.
The slaughtering, carcass dressing and by-product handling are done in the same space. They
area also in shortage of various equipments such as pulley hoists, hooks etc. for hanging
carcasses. Ante and post-mortem arrangements, water supply, drainage systems, waste disposal,
handling of by-products are inadequate and sometimes non-existent.
A large portion of the by-products such as blood, glands, intestines, and bones are either wasted
or poorly processed. One of the underlying reasons is that these facilities were not periodically
updated because of various administratively complex procedures involved. It can, therefore, be
generally concluded that the slaughter facilities are mostly obsolete, unclean, and poorly
managed (SMEDA, 2002). This problem is most severe in big cities like Karachi, Lahore and
Faisalabad. Due to the shortage of slaughtering facilities, much slaughtering takes place outside
the recognized facilities, so there is no inspection and even in recognized slaughterhouses there
are no meaningful inspection facilities.
Therefore, official statistics greatly understate the number of animals slaughtered (FAO, 1987;
Alvi, 1988). There are eleven slaughterhouses in Karachi, Lahore and Islamabad that have
modern facilities. These are good indications of developments in the slaughtering systems of
Pakistan, but the process needs to be enhanced keeping in view the national and international
challenges.
7.4.3 Red meat production
The red meat production is estimated on the basis of animals slaughtered at slaughter places
(recognized and non-recognized Slaughter houses), meat from feed lot and animals sacrificed at
the eve of Eid-ul-Azha (Table 11). Total number of animals slaughtered at slaughter places
during 2008-09 was 24.493 million heads. Total beef production originates from beef animals
produced by general farmers slaughtered (1.187 million tons), feed lots (0.016 million tons) and
Eid-ul-Azha (0.40 million tones).
Similarly, total mutton production comes from mutton animals produced by general farmers
slaughtered (0.341 million tons), feed lots (0.012 million tons) and Eid-ul-Azha (0.236 million
tones). The estimated meat production for the year 2008-09 in Pakistan is 2.192 million tones.
Out of this 1.603 and 0.588 m. tones are beef and mutton respectively (Table 11). The production
of cattle, buffalo and camel beef is 0.638, 0.543 and 0.006 m. tones respectively. Production of
mutton from sheep and goat is 0.588 m. tons.
7.4.4 Trends in Red Meat Production
The information on the trends of meat production is presented in Table 12. The meat production
has increased from 1.10 m. tones in 1986 to 1.49 m. tones in 1996 with an annual growth rate of
3.07% and further increased to 1.956 m. tones in 2006 with a growth rate of 2.76%. The current
meat production in 2008-09 is 2.19 m. tones. The beef production is growing faster than mutton
production in the country (Table 12 and Figure 7).
20
Table 11. Red meat (beef and mutton) production 2009
Type of Animal Number of Meat Meat production
animal (Kg/Animal) (Million tons)
slaughtered
(Million heads)
Bullocks 1.002 275.40 0.276
Cow 1.552 160.00 0.248
YS male 0.971 80.00 0.078
YS Female 0.448 80.00 0.036
Cattle 3.973 0.638
Male Buffalo 0.624 243.20 0.152
Female Buffalo 1.225 200.00 0.245
YS Male 1.488 80.00 0.119
YS Female 0.339 80.00 0.027
Buffaloes 3.676 0.543
Camel 0.016 320.00 0.005
YS Camel 0.008 160.00 0.001
Total Beef Animals 7.673
Beef from Slaughtered Animals (1) 1.187
Beef from Feed Lot (2% of total) (2) 0.016
Beef from Eid-ul-Azha (for beef 25%) (3) 0.400
Total Beef (1+2+3) 1.603
Sheep 3.757 25.00 0.094
YS Sheep 1.136 16.56 0.019
Sheep 4.893
Goat 9.634 20.83 0.201
YS Goat 2.293 11.88 0.027
Goats 11.927
Total Mutton Animals 16.82
Total Meat Animals 24.493
Mutton from Slaughtered Animals (1) 0.341
Mutton from Feed Lot (2% of total) (2) 0.012
Mutton from Eid-ul-Azha (40%) (3) 0.236
Total Mutton (1+2+3) 0.588
Total Meat 2.192
Source: Livestock Census, 2006 and extrapolated for 2008-09 using data from Economic Survey 2008-09
Table 12: Trends in production of meat and annual growth rate

Year Annual Growth Rate (%)
Products 1986 1996 2006 2008-09 1986-96 1996-06
Red Meat Total 1101 1490 1956 2191 3.072 2.759
Beef 567 889 1174 1601 4.600 2.820
Mutton 534 601 782 590 1.189 2.668
21
Figure 7: Trend of Red Meat Production
100%
590
000 Tonnes
80% 534 601 782

60%
Mutton
40% 1601
567 889 1174 Beef
20%
0%
1986 1996 2006 2009
Year
7.4.5 Cost of production of meat
During the recent years feed lot fattening is also gaining popularity among the progressive
farmers and there is also shift towards rearing meat animals against the previous practice of
producing beef as a by product of dairy animals and draft animals. There was no practice of
rearing mutton animals as feed lot specifically. The cost of production for feed lot farm for both
beef and mutton is calculated and presented in the following sub-sections:
7.4.5.1 Cost of production of beef
The cost of production of beef at feed lot farms is calculated and presented in Table 13. To get a
representative estimates a herd size of 40 animals was studied. The farm gate price of the beef
animal with an average weight of 109 kg including the transportation charges is Rs.9650/head.
The cost of production of live weight was Rs.93.22/kg where the estimated cost of production of
beef was Rs.169.49/kg (Table 13).
7.4.5.2 Cost of production of mutton
The cost of production mutton for a flock of 150 animals is calculated and presented in Table 14.
The purchase price for 25 Kg animals was Rs.126 per kg live weight. The cost of production to
the feed lot farmers is Rs.118 of live weight and the estimated cost of production of mutton was
Rs.263/kg (Table 14).
22
Table 13: Cost of production of beef at feed lot farms
Variable Costs
Rougages (hey,straw,fodder) Rs./Animal 1800
Sub-Total 1039.00
Income
Total Value of Animal at sale Rs./Animal 15270
Total Cost Rs./Animal 5034.00
Cost per Kg Live Weight 93.22
Cost per Kg Meat @ 55% of Live Weight 169.49
Profit With Subsidy (Rs./Kg) 34.00
Profit Without Subsidy (Rs./Kg) 8.07
Profit Without Subsidy (Rs./Kg meat) 14.68
Profit With Subsidy (%) 12.38
Profit Without Subsidy (%) 2.94
23
Table 14: Cost of production of mutton
Variable Costs
Roughages (hay, straw, fodder) Rs./Animal 80
Sub-Total 1038
Income
Total Value of Animal at sale Rs./Animal 4529.00
Total Cost Rs./Animal 1277.00
Cost per Kg Live Weight 118.00
Cost per Kg Meat @ 45 % of Live Weight 263.00
Profit With Subsidy (Rs./Kg) 46.50
Profit Without Subsidy (Rs./Kg) 9.46
Profit With Subsidy (%) 11.34
Profit Without Subsidy (%) 2.31
Number of animals slaughtered, total meat production during 2008-09, meat production from
traditional farming, meat production from feed lot fattening, meat production from Eid-ul-Azha,
meat further processing, meat transporting and issues of meat processing and further processing
in Pakistan are briefly delineated in Figure 8.
24
Figure 8: “Processing (Slaughtering)” 4th Segment of Meat Value Chain
“PROCESSING (SLAUGHTERING)”
Animal Slaughtered during 2008-09 = 24.459 m.h
Total Meat Production during 2008-09 = 2.192 m.t
Meat Production from Traditional Farms = 1.528 m.t
Meat Production from Feed Lot Fattening = 0.028 m.t
Meat Production at Eid-ul-Azha = 0.636 m.t
MEAT PROCESSING FURTHER MEAT MEAT

(Million tonnes) PROCESSING TRANSPORTNG
(Handling/cutting/packing/ loading)
Total Meat = 2.192 Meat Transporting Costs
Beef = 1.603
Mutton = 0.588 Costs of slaughtering, cutting Meat = Rs.7.076 billion
Traditional Farms into pieces, handling, packing
Meat = 1.528 and loading of meat Beef = Rs.4.752 billion
Beef = 1.187
Mutton = 0.341 Mutton = Rs.2.324 billion
Feed Lot Fattening Meat = Rs.988 million

Meat = 0.028
Beef = 0.016 Beef = Rs.652 million
Mutton = 0.012 Mutton = Rs.336 million
Eid-ul-Azha
Meat = 0.636
Beef = 0.400
Mutton = 0.236
ISSUES OF MEAT PROCESSING

1. Numbers of regulated abattoirs are not sufficient that results to unhygienic meat supply
2. Outdated and unhygienic conditions of abattoirs (primitive public abattoirs) with few exceptions in private sector
3. Lack of basic slaughtering facilities (chilling, incerators and blood processing etc.)
4. Rudimentary disposal system of byproducts
5. No hide and skin treatment at abattoirs
6. No generator facility for backing-up in case of load shedding in order avoid injuries working at night
7. Limited private sector participation
8. Code of practice for slaughter houses stipulating grades for carcasses and animal cases has not observed or enforce
9. Weak ante mortem and post mortem inspection
10. No chilling facilities except in few private abattoirs
11. Limited cold chain and cold storage facilities apart from few export orientated abattoirs which has major risk of meat spoilage and cross
contamination. The microbiological quality of the meat deteriorates rapidly which renders meat unsafe particularly during summer season
12. No veterinary and plant health authority
13. Food safety is the weakest link in Pakistan's regulatory framework with Government unable to provide the framework for the maintenance of food
safety, quality and animal heath, across the supply chain "from farm to fork'. Food safety laws and SPS regulations, directives, standards, policies
and procedures, which form the foundation for a food control system, are weak and their enforcement is poor.
Need to promote regular/legal slaughtering for provision of hygienic meat supply to consumers. For enhancing legal
slaughtering, there is a need for de-skinning machines may increase efficiency for slaughtering large ruminants in the
country with the consideration of employment concerned of manually slaughtering workers.
25
7.5 Meat Marketing ---- 5th Segment of Meat Value Chain
7.5.1 Marketing of red meat
Marketing of meat is closely linked to marketing of live animals. Like the marketing of live
animals, meat marketing is also entirely in the private sector. However, all the slaughterhouses
are established and run by the local governments. A few modern slaughterhouses are now being
established by the private sector for export of meat. There are hundreds of slaughterhouses in the
country – big and small but almost all of them are just basic in the sense that these just provide
some covered shed and floor with poor running water and drainage. Only a few have cold
storage and chilling facilities. The slaughterhouses in Karachi, Lahore and Islamabad may just
qualify as modern. The result is that full carcasses are transported generally in open vehicles to
the butchers in the urban areas who now have deep freezers for storage of unsold meat, at least in
the large cities and towns.
7.5.2 Meat marketing in domestic market
Out of total meat production 2.192 million tones, 2.177 million tones meat distributed in the
domestic market. There were 1.603 million tones beef produced out of which 1.596 million tones
were consumed in the domestic market for the year 2008-09. Likewise, out of total mutton
production of 0.588 million tones, 0.581 million tones was distributed in the domestic market.
7.5.3 Meat marketing infrastructure
The red meat markets operate five days a week. Tuesday and Wednesday are observed as
meatless days throughout country (Rodriguez, et al. 1995). During these days, butchers visit
local livestock markets to buy animals. The marketing of meat starts after buying meat from
slaughter houses. This meat is transferred to meat markets, individual retail meat shops in the
city and mohallas using various transports means (Sharif et al., 2003). These retail meat shops
specialize in the type of meat dealt with, i.e. either beef or mutton shop. These meat shops are
located in the village bazaars. In urban areas, Mohallah meat shops are organized on the same
lines. Mohallah meat shops are either located as the corner-shop or in some main street/business
activity center of the colony.
In urban areas, meat shops are also located in the main grocery markets. Central meat markets
are located in big cities of Pakistan where separate meat markets for mutton and beef exist.
These markets are the constructed keeping in view the norms of sanitation and are fly proof. The
quantity of meat traded on these shops depend upon the daily sales which in turn depends upon
the locality, location of the shop and butcher’s personal dealing with the customers. Very little
quantity of meat is carried over to the next day. Some shops possess deep freezers to preserve the
unsold meat for the following day. A typical meat shop is consisted of one big bench/floor, some
carcass hanging arrangement, one piece of tree trunk cut on the cross-section, some knives and
axes. The carcasses are displayed by hanging barely for attracting the customers (Sharif et al.,
2003).
26
7.5.4 Transportation of meat
The physical transportation of meat begins after slaughtering the animal in slaughterhouses.
From slaughterhouse, the dressed carcasses are transported to the meat retail shops (or butchers’
shops) using various means like bicycles, horse/donkey carts, auto rickshaws and vans. The meat
the transportation cost is nominal and usually paid on per trip basis and rages from Rs.300-1000
depending upon the mean of transport and distance involved. In remote rural areas, the animals
are slaughtered in the backyard of butcher shop, no transportation of carcasses took place.
7.5.5 Market information and pricing mechanism
In urban and peri-urban areas, meat prices are fixed by local administration. Generally beef price
vary between 45-60 percent of the mutton price. In rural areas, the prices of both beef and
mutton are 15-25 percent lower as compared with urban centers. This is because the village
requirements of slaughtering animals are locally met. The costs like transportation,
slaughterhouse costs, taxes and duties are also not involved. However, an increase in the price of
meat in urban centers also increases meat prices in rural areas. The market committees
disseminate the price information by displaying price at some prominent or hanging price
information at prominent place on the meat shops.
Generally, butchers slaughter their animals in the slaughterhouse and take the meat to their
respective shops. Hides and Skins are sold to the hide/skin collectors or representatives of the
commission agents. Some body parts like head, feet and offals are sold to another group of
retailers dealing in these products. However, some intermediaries are also operating in the
slaughterhouses. In big cities like Lahore a group of wholesalers, called rewaitees are also
operating. They deal in dressed carcasses. These “rewaitees” buy many goats and sheep from the
beoparies, through the commission agents, get them slaughtered, and sell the dressed carcasses
to the retailers (Alvi, 1988).
7.5.6 Structure of meat marketing cost for market intermediaries
The information on structure of marketing cost for contractors/beopari, commission agents and
butchers/retailers is presented in Table 15-17 respectively. The marketing cost of meat for
contractors/beopari includes transportation, commission, meal expenditures, entry fees and other
expenditure. The total marketing cost of beef and mutton for contractors and beopari is Rs.7.50
and 14.71 per kg respectively (Table 15).
Table 15: Structure of marketing cost for Contractor/Beopari

S.No. Mutton Beef
Item Rs/Kg Item Rs/Kg
1 Transportation 4.00 Transportation 3.33
2 Commission 3.71 Commission 1.08
3 Meal Expenditures 4.00 Meal Expenditures 1.25
4 Entry fees 2.50 Entry fees 0.83
5 Other Expenditures 0.50 Other Expenditures 1.00
6 Total Expenditures 14.71 Total Expenditures 7.50
7 Gross Income 22.00 Gross income 16.01
8 Net Income 7.29 Net Income 8.51
27
The information on structure of marketing cost for commission agents is presented in Table 16
respectively. The marketing cost of meat for commission agent includes labour, food, telephone
and other miscellaneous expenditure. The total marketing cost of beef and mutton for
commission agent is Rs.0.06 and 4.83 per kg respectively (Table 16).
Table 16: Structure of marketing cost for commission agent

S.No. Mutton Beef
1 labor 2.33 labor 0.23
2 food 1.00 food 0.20
3 Phone 0.50 Shed 0.04
4 Miscellaneous(some 1.00 Residence of selling agent 0.04
5 Total Expenditures 4.83 Phone 0.06
6 Gross income 7.43 Miscellaneous 0.08
8 Net Income 2.60 Total Expenditures 0.64
9 Gross income 1.25
10 Net Income 0.61
The information on structure of marketing cost for butcher/retailer is presented in Table 17

respectively. The marketing cost of meat for butcher/retailers includes transportation,
commission, market fees, meat shop rent, shopping bag, business and slaughter fees. The total
marketing cost of beef and mutton for butcher and retailers is Rs.11.07 and 21.73 per kg
respectively (Table 17).
Table 17: Structure of marketing cost for Butcher/Retailer

S.No. Mutton Beef
1 Transportation 4.00 Transportation 4.17
2 Commission+Market fee etc 5.40 Commission 2.40
3 Rent shop 3.83 Rent shop 1.92
4 Shopping Bag 2.00 Shopping Bag 0.75
5 Fees(business+Slaughter etc) 3.50 Market Fees 0.83
6 Other(If slaughter+ transportation within
Miscellaneous(Food etc) 3.00 locality+Food) 1.00
8 Total expenditure on meat 21.73 Total Expenditures 11.07
9 Gross Income 25.00 Gross Income 20.63
10 A.Net income on meat basis 3.27 A.Net income on meat basis 9.57
11 B. Income from Edible/Non edible offal B. Income from Edible/Non edible offal
12 Skin 10.00 Skin 6.67
13 Head/Paya 5.50 Head/Paya 3.33
14 Liver 8.00 Liver 1.17
15 Intestine 1.00 Intestine 0.83
16 Ojhary 2.00 Ojhary 0.42
17 Total income from Edible/Non edible offal 26.50 Charbi 0.17
18 Total income(A+B) 29.77 Others 0.50
Income from Edible/Non edible offal 13.08
Total income(A+B) 22.64
7.5.7 Sale price, Marketing Cost and Net Profit Margins of Market Intermediaries
The information on sale price, marketing cost and net profit margins for both beef and mutton is
presented in Table 18-20 respectively. The sale price of beef and mutton at producer (feed lot
fattening) level is Rs.184.17 and Rs.280/kg. The sale price of beef and mutton at
28
contractor/beopari level is Rs.200.18 and Rs.302/kg. The sale price of beef and mutton at
butcher/retailer level is Rs.220.81 and Rs.327/kg respectively (Table 18).
Table 18: Sale price of meat at different market intermediaries

Market Intermediaries Beef Mutton
(Rs./kg)
Producer (feed lot fattening) 184.17 280
Contractor/Beopari 200.18 302.00
Commission Agent 0.00 0.00
Butcher/Retailer 220.81 327.00
The marketing costs of beef and mutton at producer level is Rs.169.49 and Rs.262.75/kg. The
marketing costs of beef and mutton at contractor/beopari level is Rs.7.50 and Rs.14.71/kg. The
marketing costs of beef and mutton at commission agent level is Rs.0.64 and Rs.4.83/kg. The
marketing costs of beef and mutton at butcher/retailer level is Rs.11.06 and Rs.21.73/kg
Table 19: Marketing costs of meat producers and other market intermediaries
(Rs./kg)
Producer (feed lot fattening) 169.49 262.75
The net profit margin of beef and mutton at producer at feed lot fattening level is Rs.14.68 and
Rs.17.25/kg. The net profit margin of beef and mutton at contractor/beopari level is Rs.8.51 and
Rs.7.29/kg. The net profit margin of beef and mutton at commission agent level is Rs.0.61 and
Rs.2.60/kg. The net profit margin of beef and mutton at butcher/retailer level is Rs.9.57 and Rs.3.27/kg
Table 20: Net profit margin of market intermediaries for meat

(Rs./kg)
Producer (feed lot fattening) 14.68 17.25
7.5.8 Meat consumption (per capita consumption)
Meat consumption is calculated using FAO (2002) data and projected upto 2009 and presented in
Table 21. Per capita consumption of beef and mutton is 11 and 6 kgs per person per annum in the
country.
29
Table 21: Meat per capita consumption Kg/Annum
Years Beef Mutton
1999 6.00 3.20
2000 6.38 3.40
2001 6.77 3.63
2002 7.20 3.86
2003 7.65 4.12
2004 8.12 4.38
2005 8.63 4.67
2006 9.17 4.98
2007 9.75 5.30
2008 10.35 5.65
2009 11.00 6.02
Source: Calculated using FAO (2002) data
7.5.9 Meat marketing for export markets
The quantity of cattle meat exported was 6986 tonnes during 2007 which was assumed as same
for the year 2009. Likewise, mutton quantity exported was 7388 tonnes. The export value of total
meat was Rs.3.348 billion. The export values of beef and mutton were Rs.1.304 and 2.044
billion. The quantity of cattle, goat and sheep meat and their export values during 2000-2007 is
presented in Table 22 and Figure 9 & 10 respectively.
Table 22: Quantity and value of meat export from Pakistan from 2000-2007
Qty Value Qty Value Qty Value
(tons) (000 US$) (tones ) (000 US$) (tons) (000 US$)
Years Cattle meat Goat meat Sheep meat
2000 597 961 2713 4874 590 921
2001 347 463 968 1586 420 627
2002 813 991 517 841 272 418
2003 1518 2256 2235 4565 1088 1777
2004 1265 1952 4097 10528 653 1284
2005 2054 2934 3650 10604 1502 3064
2006 2794 4229 2833 8761 2313 5278
2007 6986 15708 3505 12944 3883 11678
Figure 9: Trend of Meat Export from Pakistan
8000
7000
6000
Tonnes
5000
4000
3000
2000
1000
0
2000 2001 2002 2003 2004 2005 2006 2007
Years
Cattle meat Goat meat Sheep meat
30
Figure 10: Trend of Meat Export Value
18000
16000
14000
12000
000$
10000
8000
6000
4000
2000
0
2000 2001 2002 2003 2004 2005 2006 2007
Years
Cattle meat Goat meat Sheep meat
7.5.10 Revealed Comparative Advantages for Meat Export

The revealed comparative advantage is an index used in international economics for calculating
the relative advantage or disadvantage of a certain country in a certain class of goods or services
as evidenced by trade flows. It is based on the Ricardian comparative advantage concept. It most
commonly refers to an index introduced by Balassa (1965) and defined as under:
RCAji = (Xji√Xjw) / (Xi√Xw) Where

Xji = exports of product j from country i, Numerator: our share in a product market (e.g.
Xjw = world exports of the product j international meat market)
Xi = exports of country i, and
Denominator: our share in world market
Xw = world exports
RCA index greater than equal to 1 indicates comparative advantage and values less than 1
indicate comparative disadvantage. Riaz (2009) computed RCA for meat and meat preparations
and reproduced in Table 23. The value of synthetic RCA for beef fresh/child/frozen, meat
nes./fresh/chld/froz, meat/offals preserved, meat/offals preserved n.e.s etc. is greater than 1
which implies Pakistan has comparative advantage in meat and meat preparation (Table 23). To
enhance comparative advantage in meat products, need to ensure SPS requirements are met,
improve abattoirs, establish cold chains, control disease (e.g. FMD), improve breeds and fodder
varieties.
Table 23: Synthetic RCA measures: Regional perspective
Meats and Preparations
Product Product Name Group RCA
011 Beef, fresh/child/frozn Gulf Coop Council 5.52
012 Meat nes./fresh/chld/froz Gulf Coop Council 5.48
016 Meat/offal preserved Gulf Coop Council 5.2
017 Meat/offal presvd n.e.s China 2.07
017 Meat/offal presvd n.e.s Gulf coop Council 1.8
017 Meat/offal presvd n.e.s Ro_Eastasia 2.29
017 Meat/offal presvd n.e.s SAARC 3.06
Source: Riaz (2009); IDS, Islamabad
The total meat marketed during 2008-09, the meat marketed from recognized slaughter house to
domestic market, the meat marketed from urban butcher to domestic markets, the meat marketed
from rural butchers, cost of production of meat, the meat marketing channels and issues related
to meat marketing system in the country are briefly presented in Figure 11.
31
Figure 11: “Meat Marketing” 5th Segment of Meat Value Chain
“MEAT MARKETING)”
Total Meat Marketed during 2008-09 = 2.192 m.t
Beef Production = 1.603 m.t
Mutton Production = 0.588 m.t
DOMESTIC MARKETING MEAT EXPORT MARKETS

Domestic Market (DM) (Wholesalers) TRANSPORTING IN
Meat = 2.177 m.t DOMESTIC
Beef = 1.596 m.t Meat Export
Mutton = 0.581 m.t
MARKETS
Recognized slaughter houses (RSH) to DM (49%)
Meat = 1.067 m.t
Beef = 0.782 m.t Export Markets (Wholesalers)
(Assuming same volume and value as 2007)
Mutton = 0.285 m.t
Meat transported for Meat = 0.01436 m.t
Urban butchers (UBs) to DM (30%)
Meat = 0.653 m.t
domestic markets Beef = 0.00697 m.t
Mutton = 0.00739 m.t
Beeft = 0.479 m.t
Mutton = 0.174 m.t
Rural butchers (RBs) to DM (21%) Meat Transporting Costs Value of Meat Export
Meat = 0.457 m.t
Beef = 0.335 m.t Meat export value = Rs.3.348 m
Mutton = 0.122 m.t Meat = Rs.7.076 billion Beef export value = Rs.1.304 m
RSHs Mutton export value= Rs.2.044 m
 RSHs to Wholesalers (30%) and Retailers
(70%) Beef = Rs.4.752 billion
Offals Export
 Wholesalers to Retailers (90%), Hotel and
Restaurants (5%), Food Services and Offals contractors (100%)
Suppliers (3%) and Super Markets (2%) Mutton = Rs.2.324 billion
receiving offals from RSHs and
 Retailers to Consumers (100%) non-RSHs
 Offals retailers receives (50%) from offals
contractors and sell all of it to consumers
 Hotel and Restaurants, Food Services and Offals processors receives (50%)
Suppliers and Super Markets to Consumers offals from contractors and sell all
(100%) to offals exporters
UBs
 UBs to Consumers (93%), Food Suppliers
(3%), Hotel and Restaurants (4%)
RBs
 RBs to Consumers (100%)
ISSUES OF MEAT MARKETING

(1) Controlled retail price of meat causing slaughtering of unhealthy and old animals (2) Absence of meat grading and pricing by quality
(3) Illegal slaughtering leads to poor quality meat (4) Lack of specialized skills in flaying and meat handling (5) Un-hygienic meat sale
(retail outlets) (6) No chilling facilities at butchers shops (7) Few operations for export and poor regulation for export
Opportunities for export: Export increases the source of foreign exchange and it may also increase the income of farmers if facilitation from
government/research institutions and farmers interest to raise meat animals as a business on commercial basis. Moreover, the export of meat offals has a
potential like intestines of small ruminants for European countries and “Patjori” export to China. There is a need to create awareness at local level for
export of offals.
Threats for export: The export of meat exploits local consumers in the farm of price and quality. Likewise illegal smuggling reduces foreign resources
and also exploits the local consumers. There is need of compulsion for exporters to produce a reasonable export quantity at their own farms to avoid
market distortion and protect domestic consumers
32
8. Summary of Meat Value Chain
The summary of meat value chains is presented in Figure 12 where its five segments are
discussed. The components with their values of each segment of meat value chain are described
in detailed.
“Inputs” 1st segment includes genetic (breeds of meat animals), feed (green, dry fodders,
concentrates and pastures) and veterinary services (medicine, vaccination and A. insemination).
There are transboundry breeds namely Sahiwal and Thari cattles, Nili Ravi buffaloes and Beetal
goats. There are no beef breeds of cattle in Pakistan and therefore beef is at best a by-product.
Haphazard breeding is prevailing along with traditional unscientific management that is
compounded by the low genetic ceiling of the livestock. Fodder availability/adult animal unit has
declined 1.5 ton from 1996 to 0.80 ton in 2006. Likewise wheat straw availability per adult
animal unit has declined from 0.323 ton in 1996 to 0.307 ton in 2006.
Similarly, concentrates availability per adult animal unit has declined from 0.04 ton in 1996 to
0.036 ton in 2006. Rangeland per adult animal unit – small ruminants is only 4.76 ha/annum –
low productivity of rangeland due to over grazing and exploitation. During the current era these
children prefer to go for daily wage work rather than grazing and grass cutting due to social
status of herders. The decline in feed resulted to high cost of feeds. Number of nomadic from
Afghanistan has also disappeared due to war and terror. Such decline of availability for green
and dry fodders and concentrates overtime led to poor and inadequate nutrition which resulted in
low animal productivity. Large and small ruminants are performing much below their genetic
potential due to poor and inadequate nutrition which lead to compounded by the low genetic
ceiling of livestock.
The availability of veterinary services (a veterinary hospital, a veterinary dispensary and a

artificial insemination centre is available for 86575, 13852 and 69260 adult animals unit
respectively during 2006 Livestock Census. A veterinary professional and a sub-professional is
available for 34630 and 13852 adult animal unit during 2006 livestock census) is limited due to
which high disease and high mortality are occurring. The veterinary medicines are also very
expensive in the view of livestock and level of farmer’s satisfaction is poor. Due to limited
availability of veterinary services and expensive medicines, livestock herders and flock owners
are using these at low level resulting poor management and productivity of meat animals in
the country.
“Production of Meat Animals” deals with the production of meat animals which were 24.493
million heads with a value of Rs.266.557 billion during 2008-09 in the country. Out of which
beef animals were 7.673 million heads with a value of Rs.173.5965 billion including cattle
(3.973 million heads with a value of Rs.93.172 billion) and buffaloes (3.676 million heads with a
value of Rs.79.6245 billion). The mutton animals (sheep and goats) were 16.82 million heads
with a value of Rs.92.960 billion including sheep (4.8993 million heads with a value of
Rs.36.0768 billion) and goat (11.927 million heads with a value of Rs.56.8834 billion).
33
Analysis of cost of production of large ruminants at feed lot farming revealed that farmers are
earning net income of Rs.436/- per animal. Similarly, cost of production of small ruminants with
feed lot farming revealed that farmers are earning net income of Rs.103/- per animal. This
implies that feed lot farming (raising beef and mutton animals) with concentrate to bring them to
slaughter weight and feed lot farming is profitable enterprise.
A portion of meat sub-sector is made up of dairy meat and mutton that comes from in-milking
cows and buffaloes, female sheep and female goats culled from dairy herds because for age and
other reasons, they are not productive for dairy purposes and reproductive potential. Weak and
unhealthy genetic and breeding lines (because no beef breeds of cattle and beef is at best a by-
product), no concept of herd/flock health management and low output system prevail due to low
input system are major issues of raising meat animals in the country.
Under “Marketing of Meat Animals” meat animals marketed was 24.493 million heads during
2008-09 which includes domestic marketing (24.495 m.h) and animal exported (33477 with a
export value of Rs.309.01 million). Traditional farmers, feed lot fattening farmers and exporter
own farm marketed 23.764, 0.514, and 0.220 million heads were marketed respectively during
2009. Meat animals were marketed through five channels. Channel-1 includes farmer to beopari
(80%), farmer to live animal market (5%), and farmer to rural butcher (15%). Channel-2 deals
with beopari to live animal market (98%), and beopair to rural butcher (2%). Channel-3 includes
animal market to contractors (52%), animal market to traveler traders (15%), animal market to
urban butcher (31%), and animal market to rural butcher (2%). Channel-4 includes contractor to
traveler traders (27%), contractor to exporters (1%), and contractor to urban butcher (72%).
Channel-5 includes traveler trader to slaughter house (16%), and traveler trader to urban butcher
(84%).
On the marketing side, the livestock markets are suffered from shortage of basic facilities like
watering, shelter, feed and fodder. A number of other arrangements like loading/unloading,
communication, services of veterinary doctor, weighing, market boundaries etc. are absent
despite 3-5 percent commission is charged as market fee in Punjab whereas in other provinces
various practices are followed. The contract money of these markets is not invested back for
provision of such facilities. But the most crucial aspect of the marketing system constraining
meat development is the sale of animal on per head basis and not on their live weight basis. This
militates against the success of any meat development program. The meat production is entirely
in the private sector. Delay in live animal delivery is due to non-availability of specific transport
and overloading without refrigeration. However, the government intervention in fixing the price
at the retail end is neither rational nor fair. It makes the situation worse because this retail price
fixation is not applied to the corporate sector.
Under “Meat Production” total meat produced during 2008-09 was 2.192 million ton by
slaughtering 24.493 million heads of meat animals. Total beef production originates from beef
animals produced by general farmers slaughtered (1.187 million tons), feed lots (0.016 million
tons) and Eid-ul-Azha (0.40 million tones). Similarly, total mutton production comes from
mutton animals produced by general farmers slaughtered (0.341 million tons), feed lots (0.012
million tons) and Eid-ul-Azha (0.236 million tones). The estimated meat production for the year
2008-09 in Pakistan is 2.192 million tones. Out of this 1.603 and 0.588 m. tones are beef and
34
Figure 12: Summary of Meat Value Chain
“Inputs” Meat Animals Production Meat Animals Marketing Processing (Slaughtering) Distribution (Meat Marketing)
Meat Animals = 24.493 million heads Animal Marketed in Domestic Meat for DM=2.177m.t
(Genetic/breeds
Beef Animals = 7.673 million heads Market = 24.495 m.h Animal Slaughtered =24.459 m.h Beef for DM=1.596m.t
feed and
Animal Exported = 33477 heads Total Meat Production =2.192 m.t Mutton for DM=0.581m.t
veterinary Mutton Animals = 16.82 million heads
Meat for Export=0.01436m.t
services)
Channel-1 Recognized & non-recognized S.Houses

Farmer to Beopari = 80% at Urban and Rural Areas Export
Feed Farmer to LAM = 5% Meat = 0.01436 m.t
(Green & dry Farmer to RBs = 15% Total Meat Production =2.192 m.t Beef = 0.00697 m.t
Channel-2 From Traditional Farms = 1.528 m.t Mutton = 0.00739 m.t
fodders,
Cattle Farming Buffalo Farming Beopari to LAM = 98%
From Feed Lot Fattening = 0.028 m.t
concentrates and Eid-ul-Azha = 0.636 m.t
(3.973 million (3.676 million
pastures) Beopair to RBs = 2%
heads) heads) Channel-3 Wholesalers
LAM to Contractors = 52% From RSHs=30%
LAM to T.Traders = 15%
LAM to UBs = 31%
LAM to RBs = 2% Further Processing (Handling,
Veterinary Slaughtering, Cutting into Piece,
Sheep and Goats Channel-4 UBs & RBs
Packing and Loading)
Services Sheep = 4.899 million heads Contractor to T.Traders = 27% Retailers
Contractor to Exporters = 1% Further processing cost=Rs.9.88 m
(Medicine, Goat = 11.927 million heads From W.Saller=90%
Contractor to UBs = 72% Beef = Rs.652 million
vaccination and A.
Channel-5 Mutton = Rs336 millin
insemination)
Traveler Trader to S.House = 16% Restaurants
Traveler Trader to UBs = 84% Wholesaler=5%
Feedlots Fattening Retailer = 4%
Beef Animals = 0.0956 million heads
Cattle = 0.0496 million heads Food Service Suppliers
Buffaloes = 0.0459 million heads
Meat Transporting Cost in
Domestic Markets Wholesaler=3%
Transport in Domestic Retailer = 3%
Genetics/Breeds Market
Transportation cost Meat = Rs.7.076 billion
Cattle (10), Culled Beef Culled Mutton Beef = Rs.4.752 billion
Buffaloes (3) Animals Animals Beef animals = Rs.6.075 b Super Markets
Mutton animals = Rs.3.253 b Mutton = Rs.324 billion Wholesaler=2%
Sheep (28) Beef = 1.263 m.h M. Animals = 3.365 m.h
Cattle = 0.655 m.h Sheep = 0.979 m.h
Goat (25) Goat = 2.385 m.h
Buffaloes = 0.606 m.h
Live Export Consumers

Average 2001-05 = 34477 heads
with export value of Rs.309.01 m
mutton respectively. The production of cattle, buffalo and camel beef was 0.638, 0.543 and 0.006
m. tones respectively. Production of mutton from sheep and goat was 0.588 million tons. The
overall productivity of all the species in terms of meat is low. The overall increase in meat over
the years was due to the increased inventory and not because of any increase in their
productivity.
The numbers of abattoirs are not sufficient and they are deprived of many basic facilities like
adequate space, light, shade, water, meat chilling, processing/disposal of byproducts which
implies that outdated and unhygienic conditions of abattoirs with few exceptions in private
sector. Abattoirs have rudimentary disposal system of byproducts. This results in not only in un-
hygienic meat production but also deteriorating the quality of other livestock products like hides
and skins, blood, cases and eatable offal etc. Meat is transport and displayed as uncovered thus
exposed to dust, houseflies and other contaminations. Thus all meat production chain is
unhygienic. Because of fixing the price of meat by the tehsil municipal administration, the
slaughtering of weak, diseased and old animals is very common. Moreover, the prices received
by the farmers are also very low. Primitive public abattoirs, controlled retail price of meat
(causing slaughtering of unhealthy and old animals), absence of meat grading and pricing
35
(affecting meat quality), illegal slaughtering, lack of specialized skills in flaying and meat
handling and un-hygienic meat transportation are serious concerns in the meat production chain.
Under “Meat Marketing” the total meat marketed during 2008-09 was 2.192 million ton out of
which beef and mutton were 1.603 and 0.588 million ton respectively. The meat marketed from
recognized slaughter house domestic market was 1.097 million ton (49%) which includes beef
(0.782 m.t) and mutton (0.285 m.t). The meat marketed from urban butcher to domestic markets
was 0.653 million ton (30%) which includes beef (0.479 m.t) and mutton (0.174 m.t).
The meat marketed from rural butchers was 0.457 m.t. which includes beef (0.335 m.t) and
mutton (0.122 m.t). The meat marketing channels are as under: (i) from recognized slaughter
houses to wholesaler (30%) and retailers/butchers (70%) (ii) wholesalers to retailers (90%), hotel
and restaurants (5%), food services and suppliers (3%) and super markets (2%) (iii) retailers to
consumers (100%) (iv) urban butchers to consumers (93%), food suppliers (3%), hotel and
restaurants (4%) (v) rural butchers to consumer (100%) (vi) offals retailers receives (50%) from
offals contractors and sell all of it to consumers (vi) hotel and restaurants, food services and
suppliers and super markets to consumers (100%) and (viii) offals processors receives (50%)
offals from contractors and sell all to offals exporters. The meat transported cost for domestic
markets Rs.7.076 billion during 2008-09 which includes the transportation cost of beef (Rs.4.752
billion) and mutton (Rs.2.324 billion).
The estimated cost of production of beef and mutton was Rs.169.49/kg and Rs.263/kg
respectively at feed lot fattening producer respectively. The marketing costs of beef and mutton
at producer level is Rs.169.49 and Rs.262.75/kg. The marketing costs of beef and mutton at
contractor/beopari level is Rs.7.50 and Rs.14.71/kg. The marketing costs of beef and mutton at
commission agent level is Rs.0.64 and Rs.4.83/kg. The marketing costs of beef and mutton at
butcher/retailer level is Rs.11.06 and Rs.21.73/kg respectively.
The sale price of beef and mutton at producer (feed lot fattening) level is Rs.184.17 and
Rs.280/kg. The sale price of beef and mutton at contractor/beopari level is Rs.200.18 and
Rs.302/kg. The sale price of beef and mutton at butcher/retailer level is Rs.220.81 and Rs.327/kg
respectively. The net profit margin of beef and mutton at producer at feed lot fattening level is
Rs.14.68 and Rs.17.25/kg. The net profit margin of beef and mutton at contractor/beopari level is
Rs.8.51 and Rs.7.29/kg. The net profit margin of beef and mutton at commission agent level is
Rs.0.61 and Rs.2.60/kg. The net profit margin of beef and mutton at butcher/retailer level is
Rs.9.57 and Rs.3.27/kg respectively.
The exported meat was 0.01436 million ton during 2008-09 (assuming the same as exported in
2007-08) which includes beef (0.00697 m.t.) and mutton (0.0739 m.t) respectively. The value of
synthetic RCA for beef fresh/child/frozen, meat nes./fresh/chld/froz, meat/offals preserved,
meat/offals preserved n.e.s etc. is greater than 1 which implies Pakistan has comparative
advantage in meat and meat preparation. The main inefficiencies of meat marketing are (i)
controlled retail price of meat causing slaughtering of unhealthy and old animals (ii) absence of
meat grading and pricing by quality (iii) illegal slaughtering leads to poor quality meat (iv) lack
of specialized skills in flaying and meat handling (v) un-hygienic meat sale (retail outlets) (vi) no
chilling facilities at butchers shops and (vii) few operations for export and poor regulation for
36
export. The opportunities for meat export increase the source of foreign exchange and it may also
increase the income of farmers if facilitation from government/research institutions and farmers
interest to raise meat animals as a business on commercial basis. Moreover, the export of meat
offals has a potential like intestines of small ruminants for European countries and “Patjori”
export to China. There is a need to create awareness at local level for export of offals. The threat
for export meat is related with the exploitations local consumers in the form of price and quality.
Likewise illegal smuggling reduces foreign resources and also exploits the local consumers.
There is need of compulsion for exporters to produce a reasonable export quantity at their own
farms to avoid market distortion and protect domestic consumers.
9. The SWOT for Meat Value Chain
The SWOT exercise for meat value chain is carried out and presented as under:
9.1 Strengths
 A low input production with low output system prevails
 The large size of national herd
 The population is growing fast and “meat supply cannot keep pace”
9.2 Weaknesses
 The nondescript breeds in the country are inefficient meat producers and there are no beef
breeds of cattle and beef is at best a by-product in Pakistan
 Decline of availability for green and dry fodders, concentrate and pasture led to poor and
inadequate nutrition
 Nutritional and feed shortages are prevalent
 Inadequate nutrition, limited availability of veterinary services and expensive medicines,
livestock herders are using at low level resulting poor livestock productivity
 The production base involves small farmers with practically no contract animal rearing and
farming to enhance quality control and sanitary measures
 Inadequate basic facilities (watering, shelter, feed and fodder, absence of weighing machine
and market committee), non-availability of specific transport & overloading, inadequate
livestock marketing information system and marketing regulatory agency as well as policy,
faulty pricing mechanism of meat animals (per head basis rather than weight basis), and
livestock animals smuggling to Afghanistan
 Outdated and unhygienic conditions of abattoirs (primitive public abattoirs) with few
exceptions in private sector, lack of basic slaughtering facilities (chilling, incerators and
blood processing etc.), rudimentary disposal system of byproducts, no hide and skin
treatment abattoirs, and no generator facility for backing-up in case of load shedding in order
avoid injuries working at night
 Controlled retail price of meat causing slaughtering of unhealthy and old animals, absence of
meat grading and pricing by quality, illegal slaughtering leads to poor quality meat, lack of
specialized skills in flaying and meat handling, and un-hygienic meat sale
 Health hygiene awareness poor
 Weak SPS regulatory framework
 Poor enforcement of SPS laws
 Inefficient disease control and quarantine
37
9.3 Opportunities
 New markets for Halal meat Malaysia and Indonesia
 Domestic and foreign private sector investment interest
 The establishment of feed lots and fattening yards attached to slaughterhouses.
 Donor support to manage SPS issues
 Export increases the source of foreign exchange and it may also increase the income of
farmers if facilitation from government/research institutions and farmers interest to raise
meat animals as a business on commercial basis. Moreover, the exports of meat offals has a
potential like intestines of small ruminants for European countries and “Patjori” export to
China. There is a need to create awareness at local level for export of offals.
9.4 Threats
 Loss of existing markets through competition and their introduction of better quality and
safer meat products.
 Imports, particularly from India
 The introduction of exotic diseases
 The export of meat exploits local consumers in the farm of price and quality. Likewise illegal
smuggling reduces foreign resources and also exploits the local consumers. There is need of
compulsion for exporters to produce a reasonable export quantity at their own farms to avoid
market distortion and protect domestic consumers
10. Proposed Action Plan for Meat Value Chain
The rationale for action plan for meat value chain is derived from the inefficiencies of five
segments (inputs, production, live animals marketing, processing/slaughtering of animals, and
meat marketing/distribution) of meat value chain along with institutions, policy and legislations
for meat sector. The segments of meat value chain are taken as activities of the chain with
associated issues or inefficiencies or obstacles of meat value chains along with strategy/
requirements are summarized in the Table 24.
11. Logical Framework for the Development of Meat Sub-Sector in Pakistan
The comprehensive review of literature, consultations with all the stakeholders of meat value
chain and first hand information from them revealed great scope and potential of this sub-sector
for the development of the country and poverty alleviation. Beside these great potential, there are
number of issues, constraints and obstacles hindering this important sub-sector to harvest its
potential. There is a serious need to overcome these issues. In this connection the action plans are
devised and presented here. In this section, the suggestions and modifications shall be discussed
along with a detailed logical framework for achieving the overall objective of the future
development of meat sub-sector and poverty alleviation especially from small sized livestock
farming households.
38
Table 24: Proposed action plan for meat value chain
Activity Issues Strategy/Requirements
“Inputs” Genetics/  Haphazard breeding and traditional unscientific  Need improved breeding for meat animal programme
breeds, feed and management with modern and scientific management
veterinary services)  The decline of availability for green and dry  Farmers awareness about low cost quality feed for
fodders, concentrates and pasture overtime led to ensuring adequate nutrition
poor and inadequate nutrition  Policies for cheaper inputs (feed and veterinary
 Limited availability of veterinary services and services) for higher use of “inputs”
expensive medicines, livestock herders are using at
low level of veterinary services
 Low input system (expensive inputs are used at low
level by livestock farmers)
“Meat Animals  Weak and unhealthy breeding lines because no  Farmers awareness about raising meat animals on
Production” beef breeds of cattle commercial basis
(traditional meat  No concept of herd health management  Shift to feed lot fattening or farmer production groups
raising animals, feed  Low output due to low input system in rearing yards
lot fattening and  Raising meat animal with traditional system is not  Effective disease monitoring and control for enhancing
culling from dairy profitable enterprise animal productivity
animals)  Policies for reducing ag-inflation
“Live Animal  Inadequate basic facilities at live animals market  Channeling of Contractual money for provision of
Marketing” (domestic (watering, shelter, feed and fodder, absence of basic facilities
and export markets) weighing machine and market committee)  Encouraging Pvt Sector for developing markets with
 Non-availability of specific transport and basic facilities
overloading without refrigeration  Redesigning vehicles suitable for animal transport
 Delay in live animal delivery  Awareness to traders
 Faulty pricing mechanism of meat animals (per  Enforcement of pricing by weight and awareness
head basis rather than weight basis) campaign
 Proposed legal authority with regulatory coverage
“Meat Processing  Abattoirs in disrepair with limited current  Privatization of state owned slaughter houses
(Slaughtering)” expenditure  Foreign/local investment
 Small number of regulated slaughterhouses  SPS management through Veterinary plan
 Limited private sector participation  Health authority
 Code of practice not operational  Meat standards and an industry Code of practice
 Weak ante mortem and post mortem inspection  HACCP for meat processing
 No chilling facilities except in few private abattoirs  Meat inspection laws
 No veterinary and plant health authority  For enhancing legal slaughtering, there is a need for
de-skinning machines may increase efficiency for
slaughtering large ruminants in the country with the
consideration of employment concerned of manually
slaughtering workers
“Meat Marketing”  Through middlemen in big cities, without  A robust value chain, improved linkages with
(wholesaling, retail and chilling/storage facilities producers
export)  Controlled retail price of meat causing slaughtering  Regulated outlets – open price policy like chicken &
of unhealthy and old animals fish
 Absence of meat grading and pricing by quality  Cut-based pricing under free market forces
 Illegal slaughtering leads to poor quality meat  Strict compliance of the legal slaughtering
 Lack of specialized skills in flaying and meat  Awareness, Provision of institutional training &
handling Registration
 Un-hygienic meat transportation and sale (retail  Awareness & implementation of SPS sanitary
outlets) measures
 No chilling facilities at butchers shops  Consumer awareness of the benefits of a hygienic
 Few operations for export and poor regulation for product
export  Investment-driven incentives and effective regulation
and standards
 Exposure visits for exporters
11.1 Logical framework for development of meat sub-sector in Pakistan

The product-based approach has been adopted for designing the logical framework. The
following meta-goals are perceived for various livestock and livestock products:
 To bring 30% improvement in the meat markets of Pakistan by the year 2015.
 Increasing the availability of hygienic meat and its market share by 30% by the year 2015.
 Development of leather industry by increased production and export of high quality leather
by 30% till 2015.
39
Table 25: Logical framework for increasing availability of quality meat in Pakistan
Narrative Summary Measurable indicator Means of verification Important assumptions
Goal
Increased countrywide Gradual reduction in the Meat marketing survey - Consumers are well
availability of hygienic old fashioned meat shops reports aware and conscious
meat through regulated and simultaneous increase about dangers of
meat marketing system in the number of consuming unhealthy
registered meat shops and meat
modern abattoirs -Incentives from
government/ financial
institutions available
Purpose
1. Increased availability of Increased meat sales from Meat slaughtering statistics Consumers prefer buying
quality meat to the regulated markets meat from regulated
consumers Increased legal markets
slaughtering in abattoirs The slaughtering of sick
animals will be stopped
2. Open and cut-based Necessary legislation for Policy documents All stakeholders fully
meat pricing system open price policy for meat cooperate
Output
1.1 Necessary market Necessary market Official documents of Tehsil All stakeholders fully
regulations implemented regulations are available Municipal Administration cooperate
1.2 Increased number of -Rapid decline in the Meat marketing statistics Market committees and
licensed meat shops with number of old fashioned butchers’ associations
good sanitary conditions meat shops fully cooperate
-Increased number of
licensed meat shops
2.1 Increased number of Increased availability of Discouraged meat Consumers prefer buying
modern abattoirs in both hygienically produced production from informal meat came from abattoirs
public and private sectors meat slaughtering
2.2 Open price policy for Daily based fluctuations -Market price statistics Free market shall operate,
meat in meat prices -Meat marketing survey e.g. poultry meat
reports marketing
Activities
1.1.1 Lobbying for Seminars, workshops, Seminars/workshop Cooperation of stake
creating a nationwide meetings, papers, reports, proceedings, reports/articles holders and availability
meat marketing authority articles published, minutes of of funds
meetings
1.2.1. Regulating meat - Infrastructure for Meat marketing statistics and -All stakeholders fully
marketing business training of butchers in reports cooperate
flaying and meat cutting - Adequate funds are
- Registration of meat available
shops
2.1.1 Increased number of Increased number of Meat marketing statistics and -Incentives from
abattoirs with all animals slaughtered reports government/ financial
necessary facilities to formally institutions available
discourage informal -Butchers welcome the
slaughter with up new slaughtering
gradation of old ones facilities
2.2.1 Quality based price -Daily based display of Meat marketing statistics and All stakeholders fully
differentiation prices on meat shops reports cooperate
-Price differentiation
across shops and markets
40
12. Summary and Conclusions
Meat value chain is comprised of five segments namely “Inputs”, “Production of Meat Animal”,
“Marketing of Meat Animals”, “Processing (Slaughtering)” and “Meat Distribution (Domestic
and Export Markets)”.
“Inputs” 1st segment includes genetic (breeds of meat animals), feed (green, dry fodders,
concentrates and pastures) and veterinary services (medicine, vaccination and artificial
insemination). There are transboundry breeds namely Sahiwal and Thari cattles, Nili Ravi
buffaloes and Beetal goats. There are no beef breeds of cattle in Pakistan and therefore beef is at
best a by-product. Haphazard breeding is prevailing along with traditional unscientific
management that is compounded by the low genetic ceiling of the livestock. Fodder
availability/adult animal unit has declined 1.5 ton from 1996 to 0.80 ton in 2006. Likewise wheat
straw availability per adult animal unit has declined from 0.323 ton in 1996 to 0.307 ton in 2006.
Concentrates availability per adult animal unit has declined from 0.04 ton in 1996 to 0.036 ton in
2006. Rangeland per adult animal unit – small ruminants is only 4.76 ha/annum – low
productivity of rangeland due to over grazing and exploitation. During the current era these
children prefer to go for daily wage work rather than grazing and grass cutting due to social
status of herders. The decline in feed resulted to high cost of feeds. Number of nomadic from
Afghanistan has also disappeared due to war and terror. Such decline of availability for green
and dry fodders and concentrates overtime led to poor and inadequate nutrition which resulted in
low animal productivity. Large and small ruminants are performing much below their genetic
potential due to poor and inadequate nutrition which lead to compounded by the low genetic
ceiling of livestock.
The availability of veterinary services (a veterinary hospital, a veterinary dispensary and a

artificial insemination centre is available for 86575, 13852 and 69260 adult animals unit
respectively during 2006 Livestock Census. A veterinary professional and a sub-professional is
available for 34630 and 13852 adult animal unit during 2006 livestock census) is limited due to
which high disease and high mortality are occurring. The veterinary medicines are also very
expensive in the view of livestock and level of farmer’s satisfaction is poor.
The binding constraints/obstacles facing first segment of meat value chain are (i) haphazard
breeding and traditional unscientific management (ii) the decline of availability for green and
dry fodders, concentrates and pasture overtime led to poor and inadequate nutrition (iii) limited
availability of veterinary services and expensive medicines, livestock herders are using at low
level of veterinary services (iv) earlier, the children of small farmers were involved in grazing
animal and cutting of grasses for animal. During the current era these children prefer to go for
daily wage work rather than grazing and grass cutting due to social status. Due to limited
availability of genetics, feed and veterinary services along with expensive medicines, livestock
herders and flock owners are using these at low level resulting poor management and
productivity of meat animals in the country.
41
Under the “Production of Meat Animals” segment of value chain, meat animals produced were
24.493 million heads with a value of Rs.266.557 billion during 2008-09 in the country. Out of
which beef animals were 7.673 million heads with a value of Rs.173.5965 billion including cattle
(3.973 million heads with a value of Rs.93.172 billion) and buffaloes (3.676 million heads with a
value of Rs.79.6245 billion). The mutton animals (sheep and goats) were 16.82 million heads
with a value of Rs.92.960 billion including sheep (4.8993 million heads with a value of
Rs.36.0768 billion) and goat (11.927 million heads with a value of Rs.56.8834 billion). Analysis
of cost of production of large ruminants at feed lot farming revealed that farmers are earning net
income of Rs.436/- per animal. Similarly, cost of production of small ruminants with feed lot
farming revealed that farmers are earning net income of Rs.103/- per animal. This implies that
feed lot farming (raising beef and mutton animals) with concentrate to bring them to slaughter
weight and feed lot farming is profitable enterprise. A portion of meat sub-sector is made up of
dairy meat and mutton that comes from in-milking cows and buffaloes, female sheep and female
goats culled from dairy herds because for age and other reasons, they are not productive for dairy
purposes and reproductive potential.
The major factors contributing towards low productivity are (i) weak and unhealthy stock and
breeding lines because no beef breeds of cattle (ii) no concept of herd health management (iii)
low output due to low input system (iv) raising meat animal with traditional system is not
profitable enterprise and (v) social system has broken due to inflation and ag-inflation is even
higher. All these factors translate into a existing very weak livestock extension services in the
country.
Under “Marketing of Meat Animals” segment of value chain, meat animals marketed was
24.493 million heads during 2008-09 which includes domestic marketing (24.495 m.h) and
animal exported (33477 with a export value of Rs.309.01 million). Traditional farmers, feed lot
fattening farmers and exporter own farm marketed 23.764, 0.514, and 0.220 million heads were
marketed respectively during 2009. Meat animals were marketed through five channels.
Channel-1 includes farmer to beopari (80%), farmer to live animal market (5%), and farmer to
rural butcher (15%). Channel-2 deals with beopari to live animal market (98%), and beopair to
rural butcher (2%). Channel-3 includes animal market to contractors (52%), animal market to
traveler traders (15%), animal market to urban butcher (31%), and animal market to rural butcher
(2%). Channel-4 includes contractor to traveler traders (27%), contractor to exporters (1%), and
contractor to urban butcher (72%). Channel-5 includes traveler trader to slaughter house (16%),
and traveler trader to urban butcher (84%).
On the marketing side, the livestock markets are suffered from shortage of basic facilities like
watering, shelter, feed and fodder. A number of other arrangements like loading/unloading,
communication, services of veterinary doctor, weighing, market boundaries etc. are absent
despite 3-5 percent commission is charged as market fee in Punjab whereas in other provinces
various practices are followed. The contract money of these markets is not invested back for
provision of such facilities. But the most crucial aspect of the marketing system constraining
meat development is the sale of animal on per head basis and not on their live weight basis. This
militates against the success of any meat development program. The meat production is entirely
in the private sector. Delay in live animal delivery is due to non-availability of specific transport
and overloading without refrigeration. However, the government intervention in fixing the price
42
at the retail end is neither rational nor fair. It makes the situation worse because this retail price
fixation is not applied to the corporate sector.
The binding constraints of this segment of meat value chain are (i) inadequate basic facilities
at live animals market (watering, shelter, feed and fodder, absence of weighing machine and
market committee) (ii) non-availability of specific transport and overloading without
refrigeration (iii) delay in live animal delivery and (iv) faulty pricing mechanism of meat
animals (per head basis rather than weight basis).
Under “Meat Production” segment of value chain, total meat produced during 2008-09 was
2.192 million ton by slaughtering 24.493 million heads of meat animals. Total beef production
originates from beef animals produced by general farmers slaughtered (1.187 million tons), feed
lots (0.016 million tons) and Eid-ul-Azha (0.40 million tones). Similarly, total mutton production
comes from mutton animals produced by general farmers slaughtered (0.341 million tons), feed
lots (0.012 million tons) and Eid-ul-Azha (0.236 million tones). The estimated meat production
for the year 2008-09 in Pakistan is 2.192 million tones. Out of this 1.603 and 0.588 m. tones are
beef and mutton respectively. The production of cattle, buffalo and camel beef was 0.638, 0.543
and 0.006 m. tones respectively. Production of mutton from sheep and goat was 0.588 million
tons. The overall productivity of all the species in terms of meat is low. The overall increase in
meat over the years was due to the increased inventory and not because of any increase in their
productivity.
The binding constraints of this part of meat value chain are (i) abattoirs in disrepair with
limited current expenditure (ii) small number of regulated slaughterhouses (iii) Abattoirs have
rudimentary disposal system of byproducts (iv) limited private sector participation (v) code of
practice not operational (vi) weak ante mortem and post mortem inspection (vii) no chilling
facilities except in few private abattoirs and (viii) no veterinary and plant health authority (ix)
because of fixing the price of meat by the tehsil municipal administration, the slaughtering of
weak, diseased and old animals is very common (x) absence of meat grading and pricing
(affecting meat quality) (xi) illegal slaughtering (xii) lack of specialized skills in flaying and
meat handling and un-hygienic meat transportation are serious concerns in the meat
production chain
Under “Meat Marketing” segment of value chain, the total meat marketed during 2008-09 was
2.192 million ton out of which beef and mutton were 1.603 and 0.588 million ton respectively.
The meat marketed from recognized slaughter house to domestic market was 1.097 million ton
(49%) which includes beef (0.782 m.t) and mutton (0.285 m.t). The meat marketed from urban
butcher to domestic markets was 0.653 million ton (30%) which includes beef (0.479 m.t) and
mutton (0.174 m.t). The meat marketed from rural butchers was 0.457 m.t. which includes beef
(0.335 m.t) and mutton (0.122 m.t).
The meat marketing channels observed are as under: (i) from recognized slaughter houses to
wholesaler (30%) and retailers/butchers (70%) (ii) wholesalers to retailers (90%), hotel and
restaurants (5%), food services and suppliers (3%) and super markets (2%) (iii) retailers to
consumers (100%) (iv) urban butchers to consumers (93%), food suppliers (3%), hotel and
restaurants (4%) (v) rural butchers to consumer (100%) (vi) offals retailers receives (50%) from
43
offals contractors and sell all of it to consumers (vi) hotel and restaurants, food services and
suppliers and super markets to consumers (100%) and (viii) offals processors receives (50%)
offals from contractors and sell all to offals exporters. The meat transported cost for domestic
markets Rs.7.076 billion during 2008-09 which includes the transportation cost of beef (Rs.4.752
billion) and mutton (Rs.2.324 billion).
The estimated cost of production of beef and mutton was Rs.169.49/kg and Rs.263/kg
respectively at feed lot fattening producer respectively. The marketing costs of beef and mutton
at producer level is Rs.169.49 and Rs.262.75/kg. The marketing costs of beef and mutton at
contractor/beopari level is Rs.7.50 and Rs.14.71/kg. The marketing costs of beef and mutton at
commission agent level is Rs.0.64 and Rs.4.83/kg. The marketing costs of beef and mutton at
butcher/retailer level is Rs.11.06 and Rs.21.73/kg respectively.
The sale price of beef and mutton at producer (feed lot fattening) level is Rs.184.17 and
Rs.280/kg. The sale price of beef and mutton at contractor/beopari level is Rs.200.18 and
Rs.302/kg. The sale price of beef and mutton at butcher/retailer level is Rs.220.81 and Rs.327/kg
respectively.
The net profit margin of beef and mutton at producer at feed lot fattening level is Rs.14.68 and
Rs.17.25/kg. The net profit margin of beef and mutton at contractor/beopari level is Rs.8.51 and
Rs.7.29/kg. The net profit margin of beef and mutton at commission agent level is Rs.0.61 and
Rs.2.60/kg. The net profit margin of beef and mutton at butcher/retailer level is Rs.9.57 and
Rs.3.27/kg respectively.
The exported meat was 0.01436 million ton during 2008-09 (assuming the same as exported in
2007-08) which includes beef (0.00697 m.t.) and mutton (0.0739 m.t) respectively. The value of
synthetic RCA for beef fresh/child/frozen, meat nes./fresh/chld/froz, meat/offals preserved,
meat/offals preserved n.e.s etc. is greater than 1 which implies Pakistan has comparative
advantage in meat and meat preparation.
The main inefficiencies of meat marketing are (i) controlled retail price of meat causing
slaughtering of unhealthy and old animals (ii) absence of meat grading and pricing by quality
(iii) illegal slaughtering leads to poor quality meat (iv) lack of specialized skills in flaying and
meat handling (v) un-hygienic meat sale (retail outlets) (vi) no chilling facilities at butchers
shops and (vii) few operations for export and poor regulation for export.
The opportunities for meat export increase the source of foreign exchange and it may also
increase the income of farmers if facilitation from government/research institutions and farmers
interest to raise meat animals as a business on commercial basis. Moreover, the export of meat
offals has a potential like intestines of small ruminants for European countries and “Patjori”
export to China. There is a need to create awareness at local level for export of offals. The threat
for export meat is related with the exploitations local consumers in the form of price and quality.
Likewise illegal smuggling reduces foreign resources and also exploits the local consumers.
There is need of compulsion for exporters to produce a reasonable export quantity at their own
farms to avoid market distortion and protect domestic consumers.
44
The proposed strategy/requirements for 1st segment of meat value chain namely “Inputs” are (i)
need improved breeding for meat animal programme with modern and scientific management (ii)
farmers awareness about low cost quality feed for ensuring adequate nutrition and (iii) policies
for cheaper inputs (feed and veterinary services) for higher use of “inputs” .
The proposed strategy/requirements for 2nd segment of meat value chain namely “Production of
Meat Animals” are (i) farmers awareness about raising meat animals on commercial basis (ii)
shift to feed lot fattening or farmer production groups in rearing yards (iii) effective disease
monitoring and control for enhancing animal productivity (iv) need a special focus on social
system and (v) policies for reducing ag-inflation.
The proposed strategy/requirements for 3rd segment of meat value chain namely “Marketing of
Meat Animals: are (i) channeling of Contractual money for provision of basic facilities (ii)
encouraging Pvt Sector for developing markets with basic facilities (iii) redesigning vehicles
suitable for animal transport (iv) awareness to traders (v) enforcement of pricing by weight and
awareness campaign and (vi) proposed legal authority with regulatory coverage.
The proposed strategy/requirements for 4th segment of meat value chain namely “Processing
(Slaughtering) and further Meat Processing” are (i) privatization of state owned slaughter houses
(ii) foreign/local investment (iii) SPS management through Veterinary plan (iv) health authority
(v) Meat standards and an industry Code of practice (vi) HACCP for meat processing (vii) meat
inspection laws and (viii) for enhancing legal slaughtering, there is a need for de-skinning
machines may increase efficiency for slaughtering large ruminants in the country with the
consideration of employment concerned of manually slaughtering workers
The proposed strategy/requirements for 5th segment of meat value chain namely “Meat
Marketing” are (i) a robust value chain, improved linkages with producers (ii) regulated outlets
– open price policy like chicken & fish (iii) cut-based pricing under free market forces (iv) strict
compliance of the legal slaughtering (v) awareness, provision of institutional training &
Registration (vi) awareness & implementation of SPS sanitary measures (vii) consumer
awareness of the benefits of a hygienic product (viii) investment-driven incentives and effective
regulation and standards and (ix) exposure visits for exporters.
Greater product diversification by the processors is needed. Processing of meat can be as simple
as preparation of retail cuts of meat, or it may involve grinding, flaking, sectioning, seasoning,
salting, curing, forming, smoking, heating, fermenting, drying or combination of these
treatments. The improvement of packaging utilizing food grade materials and the greater use of
vacuum packing are also required. Greater research or collaborative research with other countries
into food safety and veterinary and plant health, for example (i) improved detection and
screening techniques for residues of antimicrobials and their metabolism in animal products (ii)
the presence of drug metabolites in animal products destined for human consumption (iii) the
role that antimicrobials or their residues play in food sensitization and subsequent
hypersensitive reactions in humans (iv) the associations and frequency of antibiotic resistance
and (v) detailed studies to assess the microbiological contamination at different stages of
processing.
45
13. References
Alvi, A. S., 1988, “Meat Hygiene and its Importance in Public Health”, Progressive Farming,
Vol.8, # 2, PARC
Asean Foundation and Asia DHRRA, 2008, “Value Chain Analysis Report”, Cambodia,
Philippines and Vietnam, Linking Small Farmers to Market Project.
Balassa, B. 1965, “Trade Liberalisation and Revealed Comparative Advantage”, The
Manchester School, 33, 99-123.
FAO, 1987, “Livestock Sector Study”, Vol 1 & 2, FAO/Asian Development Bank Cooperative
Programme. Food and Agriculture Organization of the United Nations- Rome.
FAO, 1987, “Pakistan’s Experience in Rangeland Rehabilitation and Improvement”. Food and
Agriculture Organization of the United Nations. 70pp.
FIAS, 2007, “Pakistan Value Chain Analysis”, Leaders in Investment Climate Solutions, A
multi-donor service managed by the International Finance Corporation and The World
Bank
Hasnain, H. and M.F. Khan, 2007, “Livestock Sector Review for Pakistan”, Value Chain
Analysis of Prospects and Problem of Livestock. Islamabad, October, 2007.
Hasnain, H.U. and R.H. Usmani, 2006, “Livestock of Pakistan, Livestock Foundation,
Islamabad.
Muhammad, Dost, 2002, “Grassland and Pasture Crops”, Country Pasture/Forage Resource
Profiles.
Riaz, K. 2009, “An Analysis of Pakistan’s Revealed Comparative Advantage in Agricultural
Products”, Innovative Development Strategies with the Assistance from the World Bank
and FAO.
Rodriguez, A., Ali, I., Affzal, M., Shah, N.A. and Mustafa, U. 1995, “Price Expectations of
Sheep and Goat by Producers and Intermediaries in Quetta Market, Pakistan”,
Agricultural Economics. Vol. 12(1): 79-90
Shairf, M., W. Malik, N.I. Hashmi and U. Farooq, 2003, “Action Plan for Marketing of Livestock
System in Pakistan”, SSI-FAO, Islamabad Report.
SMEDA, 2002, “Pre-Feasibility Study on Abattoir”, Small and Medium Enterprise Development
Authority, Government of Pakistan, March 2002.
46
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VALUE CHAIN ANALYSIS OF THE MEAT SECTOR IN PAKISTAN

Working Paper · December 2009

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VALUE CHAIN ANALYSIS OF THE MEAT

National Agricultural Research Centre

Pakistan Agricultural Research Council, Islamabad

Planning  Dr. Zafar Altaf, Chairman, PARC

Figure 1: Capital Flow 3

Figure 2: Supply Chain for Red Meat 7

Figure 3: Red Meat Value Chain in Pakistan, 2008-09 8

Figure 4: “Inputs” 1st segment of meat value chain 11

Figure 5: “Production” 2nd Segment of Meat Value Chain 15

Figure 6: “Live Animals Marketing” 3rd Segment of Meat Value Chain 18

Figure 7: Trend of red meat production 22

Figure 8: “Processing (Slaughtering)” 4th Segment of Meat Value Chain 25

Figure 9: Trend of meat export from Pakistan 30

Figure 10: Trend of meat export value 31

Figure 11: “Meat Marketing” 5th Segment of Meat Value Chain 32

Figure 12: Summary of Meat Value Chain 35

2. Objectives of the Study

3.1 The Value Chain Analysis (VCA) Model

Source: Adopted from Asean Foundation and Asia DHRRA (2008)

4. Organization of the Report

Structure of red meat farming/industry in Pakistan is discussed in section 2. Following

6. Meat Supply Chain in Pakistan

7. Red Meat Value Chain in Pakistan

Exporter own Farms Livestock Farmers (97%) Feed lot Fattening

m Exporters Recognized U. Butchers R. Butchers

Figure 3: Red Meat Value Chain in Pakistan, 2008-09

Recognized and Non- Wholesalers

UBs & RBs

Genetics Culled Beef Culled Mutton Live Export

7.1 Input Provision/Supplies --- 1st Segment of Value Chain

Table 2: Feed availability for livestock census years

7.1.2 Pasture resources

7.1.3 Veterinary services

7.1.4 Animal genetics resources

GENETICS/BREEDS FEED VETERINARY

Table 7: Milk and meat animals and gross value 2008-09

7.2.1.1 Cost of production of beef animals

Table 8: Cost of production of beef animals at feed lot farms

Table 9: Cost of production of mutton animals

“MEAT ANIMALS PRODUCTION”

TRADITIONAL MEAT FEED LOT FATTENING CULLING FROM

ISSUES OF MEAT ANIMALS PRODUCTION

7.3.1 Market infrastructure

7.3.2 Live animals market intermediaries

7.4 Processing (Slaughtering) ---- 4th Segment of Meat Value Chain

7.4.1 Animals for slaughtering

“LIVE ANIMALS MARKETING”

LIVESTOCK FARMERS FEED LOT EXPORTER OWN

LIVE ANIMALS TRANSPORTING COSTS

ISSUES OF MARKETING LIVE ANIMALS

Table 10: Total number of animals slaughtered and value, 2009

7.4.2 The Slaughtering system

7.4.3 Red meat production

7.4.4 Trends in Red Meat Production

Table 12: Trends in production of meat and annual growth rate

80% 534 601 782

7.4.5 Cost of production of meat