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Divine Bovination: How Cross Breeding can Save the Dairy Industry in Pakistan




  • When Shahzad Iqbal’s parents sent him off to the elite Lahore University of Management Sciences, they had no idea he would one day make a living out of selling bull semen.

     

    In many ways, Shahzad started out like a typical LUMS graduate – securing a well-paying job at a local bank and rising through its ranks to become head of consumer banking. But Shahzad was not satisfied with the yuppie dream he was living and decided to quit it all, go back to his ancestral village in Narowal and become a dairy farmer.

    When Shahzad Iqbal’s parents sent him off to the elite Lahore University of Management Sciences, they had no idea he would one day make a living out of selling bull semen.

    In many ways, Shahzad started out like a typical LUMS graduate – securing a well-paying job at a local bank and rising through its ranks to become head of consumer banking. But Shahzad was not satisfied with the yuppie dream he was living and decided to quit it all, go back to his ancestral village in Narowal and become a dairy farmer.

    Yet even though he left the hectic pace of the city behind, he kept his business school training with him. He organised his farm into a corporate structure (Jassar Farms) and focused on raising productivity. Shahzad single-mindedly devoted his attention to raise the most important variable in dairy farming: his average cow’s milking yield.

    Pakistani cows yield an average of 4 litres of milk per day, much lower than the 33 litres of milk per day that cows in the developed world produce. The standard method used by most well-capitalised dairy farmers was to import cows from the United States or Australia, which could cost thousands of dollars per cow.

    Shahzad decided to adopt a cheaper alternative. Rather than importing whole cows, he began crossbreeding local cows with elite bulls through artificial insemination. He started importing the semen from the United States at a cost of between $40 and $100 per dose – far higher than the $0.50-$4 that local doses cost but much cheaper than an imported cow.

    Jassar Farms was able to raise its productivity far beyond the national average. But Shahzad was not happy about the input costs. He wanted to have a cheaper, local, but still high-quality alternative to American bull semen. And so, with funding from the Acumen Fund – a New York-based social venture capital firm – he started producing his own bull semen in Pakistan at a much cheaper rate than the American alternatives, using it to inseminate his own cows as well as selling the high-quality sperm to other local farmers.

    The plan worked: Jassar Farms averaged 15 litres of milk per day per cow when its first cows started lactating in 2010, nearly four times higher than the national average.

    While Pakistan has the eighth largest population of cattle in the world (with about 30 million heads), most farmers have only two to three cows, which produce only four to five litres of milk per day. Jassar Farms hopes that the increased productivity offered by his high-quality bull semen will help raise the incomes of Pakistan’s cattle farmers, most of whom are amongst the poorest people in the country.

    An internal analysis at Jassar Farms calculates that in just the first generation of cows born through artificial insemination, the average farmer will see their production rise by a minimum of 2,000 litres per animal per year. That increment translates into $706 in additional income for every cow, a substantial increase given that average per capita income in Pakistan is about $1,250 per year.

    Now, Jassar Farms is seeking to partner with aid organisations such as Project Tamkeen to distribute the high-quality bull semen for free in areas that were most affected by the 2010 summer floods. Shahzad calculates that for every $1 that Project Tamkeen spends on the semen, it will generate a net benefit of $17.60 per year to every beneficiary.

    If the model proves successful in Pakistan, Jassar Farms hopes to take its model of social entrepreneurship to other developing countries around the world.

     

    Published in The Express Tribune, August 29th,  2011.

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